Quarterly report pursuant to Section 13 or 15(d)

Derivative Liability

Derivative Liability
3 Months Ended
Nov. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  

The short-term convertible note issued to Power Up Lending Group, disclosed in note 13(m) 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.

The value of the derivative financial liabilities above was re-assessed at November 30, 2019 and a total of $35,547 was credited to the unaudited condensed consolidated statement of loss and comprehensive loss. The value of the derivative liability will be re-assessed at each financial reporting period, with any movement thereon recorded in the statement of loss and comprehensive loss in the period in which it is incurred.

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

    Three months ended
November 30,
Conversion price   $ CAD$0.22 to CAD$0.23  
Risk free interest rate     2.08 to 2.12 %
Expected life of derivative liability     1 year  
Expected volatility of underlying stock     93.9 to 104.2 %
Expected dividend rate     0 %

The movement in derivative liability is as follows:

    November 30,
Opening balance   $ -  
Derivative financial liability arising from convertible notes     130,103  
Fair value adjustment to derivative liability     (35,547 )
    $ 94,556