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Derivative liabilities
6 Months Ended
Dec. 31, 2021
Derivative Liabilities  
Derivative liabilities

20. Derivative liabilities

 

The derivative liability is derived from the conversion features in note 19 and stock warrant in note 21 All were valued using the weighted-average Binomial option pricing model using the assumptions detailed below. As of December 31, 2021 and June 30, 2021, the derivative liability was $2,222,310 and $2,217,361, respectively. The Company recorded $65,073 loss and $3,992,108 gain from changes in derivative liability during the six months ended December 31, 2021 and December 31, 2020, respectively. The Binomial model with the following assumption inputs:

 

    June 30, 2021 
Annual Dividend Yield    
Expected Life (Years)   0.50-3.00 
Risk-Free Interest Rate   0.01-0.46%
Expected Volatility   89-236%

 

    

December 31, 2021

 
Annual Dividend Yield    
Expected Life (Years)   0.50-3.00 
Risk-Free Interest Rate   0.05-0.53%
Expected Volatility   127-234%

 

Fair value of the derivative is summarized as below:

 

      
Beginning Balance, June 30, 2021  $2,217,361 
Additions  $708,948 
Mark to Market  $65,073 
Cancellation of Derivative Liabilities Due to Cash Repayment  $ 
Reclassification to APIC Due to Conversions  $(769,071)
Ending Balance, December 31, 2021   2,222,310 

 

 

 

Sugarmade, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

December 31, 2021