Derivative liability

12 Months Ended

Dec. 31, 2021

Derivative Liability

Derivative liability

16. Derivative liability

The short-term convertible notes, together with certain warrants issued to convertible note holders disclosed in note 12 above and note 18 below, have variable priced conversion rights with no fixed floor price and will reprice dependent on the share price performance over varying periods of time. This gives rise to a derivative financial liability, which was initially valued at inception of the convertible notes at $1,959,959 using a Black-Scholes valuation model.

The derivative liability is marked-to-market on a quarterly basis. As of December 31, 2021, the derivative liability was valued at $515,901.

The following assumptions were used in the Black-Scholes valuation model:

Schedule of assumption used in Black Scholes	Year ended December 31, 2021
Calculated stock price		$0.00066 to $0.0055
Risk free interest rate		0.01% to 0.97	%
Expected life of convertible notes and warrants		3 to 60 months
expected volatility of underlying stock		80.9% to 299.1	%
Expected dividend rate		0	%

The movement in derivative liability is as follows: 

Schedule of derivative liability	December 31, 2021			December 31, 2020
Opening balance	$	4,765,387		$	8,694,272
Derivative liability mark-to-market on convertible debt extinguishment		—			126,444,276
Derivative liability on revised convertible notes and warrants arising from convertible debt extinguishment		—			6,349,265
Derivative liability cancelled on debt extinguishment		—			(145,109,526		)
Mark-to-market adjustments on converted notes		(2,914,119	)			—
Derivative liability on issued convertible notes		190,824			1,129,050
Fair value adjustments to derivative liability		(1,526,191	)		7,258,050
Closing balance	$	515,901		$	4,765,387