Derivative Liabilities

3 Months Ended

Sep. 30, 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 September 30, 2015 and June 30, 2015, the derivative liability was $802,000 and $304,000, respectively. The Company recorded $498,000 loss and $136,737 loss from changes in derivative liability during the three months ended September 30, 2015 and 2014, respectively. The Black-Scholes model with the following assumption inputs:

	September 30, 2015
Annual dividend yield		—
Expected life (years)		0.75
Risk-free interest rate		0.32	%
Expected volatility		416	%