Derivative Liability

6 Months Ended

Jan. 31, 2021

Notes to Financial Statements

Derivative Liability

Note 8 – Derivative Liability 

The Company issued debts that consist of the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted, and all additional convertible debentures and warrants are included in the value of the derivative liabilities. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period.

Based on the various convertible notes described in Note 7, and the sale of common stock in a private investment in public equity (“PIPE”) described in Note 9, the fair value of applicable derivative liabilities on notes, warrants and change in fair value of derivative liability are as follows as of January 31, 2021:

	Derivative Liability - Convertible Notes			Derivative Liability - Warrants		Derivative Liability PIPE Warrants			Total
Balance as of July 31, 2020	$	742,391		$	574,366	$	—		$	1,316,757
Change Due to Issuances		—			—		21,574,216			21,574,216
Change due to exercise/redemptions		(538,084	)		—		(1,840,530	)		(2,378,614	)
Change in fair value		100,177			493,985		10,643,052			11,237,214
Balance as of January 31, 2021	$	304,484		$	1,068,351	$	30,376,738		$	31,749,573