DERIVATIVE LIABILITIES

9 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITIES

8. 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.

BIOTRICITY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022 (Unaudited)

(Expressed in US dollars)

On May 22, 2020, another 215 Series A preferred shares were issued as a result of a combined transaction that included the conversion of $100,000 in promissory notes and $15,000 in accrued interest for 115 preferred shares, as well as a purchase of 100 preferred shares for cash proceeds of $100,000.

During the three months ended September 30, 2021, an additional 100 Series A preferred shares were issued for cash proceeds of $100,000 (Note 9 d).

During the three months ended December 31, 2021, the Company redeemed $230,000 preferred shares through cash. The total amount of the preferred shares redeemed and derivative liabilities derecognized was $225,919. The difference of redemption value of $230,000 and the carrying value of preferred shares on the day of redemption was $4,081 was recognized as a deemed dividend distribution.

In addition, during the three months ended December 31, 2021, the Company converted $715,000 preferred shares into 288,756 common shares. The difference between the total amount of the preferred shares converted, derivative liabilities derecognized and unpaid interests at the time of conversion ($1,076,513), and the fair value of the common shares converted ($1,226,406) was $149,893 and was recognized as deemed dividend distribution.

During the three months ended June 30, 2022, the Company redeemed $328,904 preferred shares through cash. The total amount of the preferred shares redeemed and derivative liabilities derecognized was $296,032. The difference of redemption value of $328,904 and the carrying value of preferred shares on the day of redemption was $32,872 and was recognized as a deemed dividend distribution

During the three months ended September 30, 2022, the Company redeemed $69,852 preferred shares through cash. The total amount of the preferred shares redeemed and derivative liabilities derecognized was $65,062. The difference of redemption value of $69,852 and the carrying value of preferred shares on the day of redemption was $4,790 and was recognized as a deemed dividend distribution.

During the three months ended December 31, 2022, the Company redeemed $496,800 preferred shares through cash. The total amount of the preferred shares redeemed and derivative liabilities derecognized was $469,116. The difference of redemption value of $496,800 and the carrying value of preferred shares on the day of redemption was $27,684 and was recognized as a deemed dividend distribution.

The Company analyzed the compound features of variable conversion and redemption embedded in the preferred shares 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.

	Fiscal Year 2023 $			Fiscal Year 2022 $
Derivative liabilities as at March 31, 2022 and 2021		352,402			410,042
Change in fair value of derivatives during the period		195,521			(203,525	)
Reduction due to preferred shares redeemed		(10,605	)		-
Derivative liabilities as at June 30, 2022 and 2021		537,318			206,517
New issuance		-			17,084
Change in fair value of derivatives during the period		168,762			(101,173	)
Reduction due to preferred shares redeemed		(4,444	)		-
Derivative liabilities as at September 30, 2022 and 2021		701,636			121,828
Change in fair value of derivatives during the period		78,026			644,774
Reduction due to preferred shares redeemed		(37,987	)		(479,791	)
Derivative liabilities as at December 31, 2022 and 2021		741,675			286,811

BIOTRICITY INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022 (Unaudited)

(Expressed in US dollars)

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

	December 2022
Dividend yield (%)		12
Risk-free rate for term (%)		4.18 – 4.36
Volatility (%)		92.7 – 93.6
Remaining terms (Years)		1.00 to 2.50
Stock price ($ per share)		0.45 to 0.72

In addition, the Company recorded derivative liabilities related to the conversion and redemption features of the convertible notes, as well as warrants that were issued in connection with the convertible notes, during the year ended March 31, 2021 (Note 5). As the warrant exercise price became final and locked, the derivative liabilities related to those warrants were marked to market and transferred to equity (Note 5). Any noteholder and placement agent warrants that were issued after the finalization of exercise price was accounted for as equity.

	Fiscal Year 2023 $			Fiscal Year 2022 $
Balance at March 31, 2022 and 2021		520,747			3,633,856
Conversion to common shares		(104,118	)		(403,108	)
Change in fair value of derivative liabilities		2,703			502,508
Balance at June 30, 2022 and 2021		419,332			3,733,256
Conversion to common shares		(35,274	)		(2,744,711	)
Change in fair value of derivative		3,280			(295,801	)
Balance at September 30, 2022 and 2021		387,338			692,744
Convertible note modification		14,083			-
Convertible note redemption		(17,979	)		-
Conversion to common shares		(53,402	)		(250,738	)
Change in fair value of derivative		21,679			129,999
Balance at December 31, 2022 and 2021		351,719			572,005

The monte-carlo methodology was used to value the convertible note derivative components, using the following assumptions:

	December 2022
Risk-free rate for term (%)	3.74 - 4.37
Volatility (%)	90.4 - 99.6
Remaining terms (Years)	0.50 - 0.75
Stock price ($ per share)	0.50 - 1.00