Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE FINANCIAL INSTRUMENTS

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DERIVATIVE FINANCIAL INSTRUMENTS
9 Months Ended
Sep. 30, 2021
Investments, All Other Investments [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS

 

On May 18, 2018, as an inducement to enter into an Amended and Restated Loan Agreement, the Company issued, among other instruments, warrants to acquire 320,000 shares of common stock with an exercise price of $0.10 per share in Canadian dollars. The warrants are valued using the Black Scholes Option Pricing Model and the derivative is fair valued at the end of each reporting period. The Company valued the derivative liability at initial recognition as $30,012. These warrants expired on May 11, 2021.

 

On January 06, 2020, as an inducement to enter into a Loan Agreement, the Company issued, among other instruments, warrants to acquire 5,000,000 shares of common stock with an exercise price of $0.10 per share. The warrants are valued using the Black Scholes Option Pricing Model and the derivative is fair valued at the end of each reporting period. The Company valued the derivative liability at initial recognition as $144,259.

 

On October 30, 2020, as an inducement to extend the principal payment deadline from the previously issued Loan Agreement, the Company issued additional warrants to acquire 5,000,000 shares of common stock with an exercise price of $0.10 per share. The warrants are valued using the Black Scholes Option Pricing Model and the derivative is fair valued at the end of each reporting period. The Company valued the derivative liability at initial recognition as $95,352.

 

 

A summary of the activity of the derivative liabilities is shown below:

 

As of December 31, 2020     183,798  
Additions      
Fair value adjustment     (160,189 )
As of September 30, 2021   $ 23,609  

 

Derivative liability classified warrants were valued using the Black Scholes Option Pricing Model with the range of assumptions outlined below. Expected life was determined based on historical exercise data of the Company.

 

    September 30,
2021
 
Risk-free interest rate     0.0230.28 %
Expected life     1.261.27 years  
Expected dividend rate     0 %
Expected volatility     340 %