Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE LIABILITY

v3.20.2
DERIVATIVE LIABILITY
6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE LIABILITY
10 DERIVATIVE LIABILITY

 

Certain of the short-term convertible notes disclosed in note 9 above, have variable priced conversion rights with no fixed floor price and will re-price dependent on the share price performance over varying periods of time, due to the variable priced conversion rights, all convertible notes and any warrants attached thereto, issued subsequent to the variable priced conversion notes are valued and give rise to a derivative financial liability, which was initially valued at inception of the convertible notes using a Black-Scholes valuation model.

 

During the six months ended June 30, 2020, an additional $296,250 was raised as a derivative liability on variably priced convertible notes.

 

The value of this derivative financial liability was re-assessed at June 30, 2020, and $278,611 was credited to the statement of operations and comprehensive loss, respectively. The value of the derivative liability will be re-assessed at each financial reporting period, with any movement thereon recorded in the statement of operations in the period in which it is incurred.

 

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

 

    Six months
ended
June 30,
2020
    Year ended
December 31,
2019
 
Conversion price*   $ 0.016 to 2.00     $ 0.02 to 2.00  
Risk free interest rate     0.11 to 1.53 %     1.53 to 2.59 %
Expected life of derivative liability     1 to 9 months       1 to 12 months  
Expected volatility of underlying stock     219.1 to 222.6 %     148.5 to 224.3 %
Expected dividend rate     0 %     0 %

 

The movement in derivative liability is as follows:

 

   

June 30,

 2020 

    December 31,
2019
 
             
Opening balance   $ 905,576     $ 1,833,672  
Derivative financial liability arising from convertible note     296,250       1,053,842  
Fair value adjustment to derivative liability     (278,611 )     (1,981,938 )
    $ 923,215     $ 905,576