Derivative liabilities	6 Months Ended
Aug. 31, 2015
Derivative liabilities
Derivative liabilities	6. Derivative liabilities The Company has determined that it needs to account for the Convertible Notes Payable issued as derivative liabilities and apply the provisions of ASC 815. The Company records the fair value of the of the conversion price of the convertible notes disclosed in Note 6 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding changes in fair value recorded in the consolidated statement of operations. During the period ended August 31, 2015, the Company recorded a gain on the change in fair value of derivative liability of $52,490 (2014 - $0). At August 31, 2015 the Company recorded a derivative liability of $423,698 (2014 - $0). For the lattice options pricing model that values the compound embedded derivatives based on a probability weighted discounted cash flow model. The Convertible Note derivative issued April 16, 2015 was valued as of inception and as of August 31, 2015. The following assumptions were used for the valuation of the derivative liability related to the April 16, 2015 Note: The stock price (decreasing from $1.15 to $0.018 in this period which significantly increased the liability) would fluctuate with the Company’s projected volatility; An event of default for the Convertible Note would occur 0% of the time, increasing 1.00% per month to a maximum of 10%; Alternative financing for the Convertible Note would be initially available to redeem the note 0% of the time and increase monthly by 2% to a maximum of 10%; The monthly trading volume would average $5,399,150 to $599,618 and increase at 1% per month; The variable conversion prices ranging from 60% to 65% of the trading prices over 20 trading days have effective discount rates of 57.15% to 52.70%; The Note Holders would automatically convert the notes with variable conversion prices if the registration was effective and the company not in default; The Company recorded the excess fair value of the derivative liability above the proceeds of $13,814 as interest expense

Derivative liabilities

6 Months Ended

Aug. 31, 2015

6. Derivative liabilities

The Company has determined that it needs to account for the Convertible Notes Payable issued as derivative liabilities and apply the provisions of ASC 815.

The Company records the fair value of the of the conversion price of the convertible notes disclosed in Note 6 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding changes in fair value recorded in the consolidated statement of operations. During the period ended August 31, 2015, the Company recorded a gain on the change in fair value of derivative liability of $52,490 (2014 - $0). At August 31, 2015 the Company recorded a derivative liability of $423,698 (2014 - $0).

For the lattice options pricing model that values the compound embedded derivatives based on a probability weighted discounted cash flow model. The Convertible Note derivative issued April 16, 2015 was valued as of inception and as of August 31, 2015. The following assumptions were used for the valuation of the derivative liability related to the April 16, 2015 Note:

The stock price (decreasing from $1.15 to $0.018 in this period which significantly increased the liability) would fluctuate with the Company’s projected volatility;

An event of default for the Convertible Note would occur 0% of the time, increasing 1.00% per month to a maximum of 10%;

Alternative financing for the Convertible Note would be initially available to redeem the note 0% of the time and increase monthly by 2% to a maximum of 10%;

The monthly trading volume would average $5,399,150 to $599,618 and increase at 1% per month;

The variable conversion prices ranging from 60% to 65% of the trading prices over 20 trading days have effective discount rates of 57.15% to 52.70%;

The Note Holders would automatically convert the notes with variable conversion prices if the registration was effective and the company not in default;

The Company recorded the excess fair value of the derivative liability above the proceeds of $13,814 as interest expense

Falconridge Oil Technologies Corp. 10-Q/A