Annual report pursuant to Section 13 and 15(d)

DERIVATIVE LIABILITY

v3.19.1
DERIVATIVE LIABILITY
12 Months Ended
Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE LIABILITY
10 DERIVATIVE LIABILITY

 

Certain of the short-term convertible notes disclosed in note 9 above and note 16 below, 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 this derivative financial liability was re-assessed at December 31, 2018 and 2017, and ($4,129,793) and $330,134 was (credited)/debited 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: 

 

    Year ended
December 31,
2018
    Year ended
December 31,
2017
 
Conversion price   $ 0.02 to 0.25     $ 0.08 to 0.40  
Risk free interest rate      1.78 to 2.81 %     1.05 to 1.98 %
Expected life of derivative liability     3 to 12 months       9 to 36 months  
Expected volatility of underlying stock     169.15 to 230.55 %     134.1 to 202.3 %
Expected dividend rate     0 %     0 %

 

The movement in derivative liability is as follows: 

 

   

December 31,  

 2018  

   

December 31,  

2017  

 
                 
Opening balance   $ 3,277,621     $ 113,074  
Derivative financial liability arising from convertible note     2,685,845       2,834,413  
Fair value adjustment to derivative liability     (4,129,793     330,134  
    $ 1,833,672     $ 3,277,621