Derivative Liabilities

9 Months Ended

Mar. 31, 2015

Derivative Liabilities

Derivative Liabilities

6. Derivative liabilities

The derivative liability is derived from the conversion features in note 5 and stock warrant in note 7. All were valued using the weighted-average Black-Scholes-Merton option pricing model using the assumptions detailed below. As of March 31, 2015 and June 30, 2014, the derivative liability was $471,000 and $228,237, respectively. The Company recorded $213,000 loss and $86,000 loss from changes in derivative liability during the three months ended March 31, 2015 and 2014, respectively; and recorded $249,737 loss and $68,452 gain for the nine months ended March 31, 2015 and 2014, respectively. The Black-Scholes model with the following assumption inputs:

	March 31, 2015
Annual dividend yield		—
Expected life (years)		1.23
Risk-free interest rate		0.26	%
Expected volatility		396	%