Derivative Liabilities

12 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liabilities

6. DERIVATIVE LIABILITIES

On December 19, 2019 and January 9, 2020, the Company issued 7,830 Series A preferred shares; 6,000 of these were issued for cash proceeds of $6,000,000 and 1,830 of these were issued on conversion of $1,830,000 of promissory notes that had previously been issued for cash proceeds in October 2019 (see Note 5 and Note 7).

The Company analyzed the compound features of variable conversion and redemption embedded in this instrument, for potential derivative accounting treatment on the basis of ASC 820 (Fair Value in Financial Instruments), ASC 815 (Accounting for Derivative Instruments and Hedging Activities), Emerging Issues Task Force (“EITF”) Issue No. 00–19 and EITF 07–05, and determined that the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcated from the underlying equity instrument, treated as a derivative liability, and measured at fair value.

	Total
		$
Derivative liabilities as at March 31, 2019		-
Derivative fair value at issuance		1,083,952
Change in fair value of derivatives		60,781
Derivative liabilities as at March 31, 2020	$	1,144,733

The lattice methodology was used to value the derivative components, using the following assumptions:

	Assumptions
Dividend yield		12	%
Risk-free rate for term		0.62% – 1.14	%
Volatility		118.8% – to 198.3	%
Remaining terms (Years)		0.01 – 1.0
Stock price ($ per share)		$0.650 and $0.974