Derivative Liability |
10. |
Derivative
Liability |
|
Due
to the variable conversion price associated with some of these convertible promissory notes disclosed in Note 8 above, the
Company has determined that the conversion feature is considered a derivative liability for instruments which are convertible
and have not yet been settled. The accounting treatment of derivative financial instruments requires that the Company record
the fair value of the derivatives on the date they are deemed to be derivative liabilities. |
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During
the six month period ended December 31, 2020, the Company recorded a change in fair value of derivative $264,818. The Company
will measure the fair value of each derivative instrument in future reporting periods and record the change based on the change
in fair value. |
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Below
is a reconciliation of the derivative liability as presented on the Company's balance sheet as of December 31, 2020: |
Derivative liability as of June 30, 2019 |
|
$ |
1,306,748 |
|
Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2019 |
|
|
1,723,883 |
|
Change in derivative liability during the period |
|
|
(858,774 |
) |
Reclassify derivative liability associated with Notes converted into loss on debt conversion account |
|
|
(581,219 |
) |
Derivative liability as of June 30, 2020 |
|
$ |
1,590,638 |
|
Initial derivative liability accounted for convertible notes payable issued during the period ended December 31, 2020 |
|
|
373,612 |
|
True-up adjustment in debt discount and derivative liability |
|
|
37,360 |
|
Change in derivative liability during the period |
|
|
(264,818 |
) |
Reclassify derivative liability associated with Notes converted into loss on debt conversion account |
|
|
(320,746 |
) |
Balance at December 31, 2020 |
|
$ |
1,416,045 |
|
Change
in derivative liability for the six months ended December 31, 2020 and 2019, totaled $264,818 and $355,625, respectively and change
in derivative liability for the three months ended December 31, 2020 and 2019, totaled $57,294 and $165,563, respectively.
As of December 31, 2020 and June 30, 2020, the derivative liability
related to convertible notes was $ 1,416,045 and $1,590,638, respectively.
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