Derivative Liabilities

9 Months Ended

Mar. 31, 2016

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, 2016 and June 30, 2015, the derivative liability was $299,000 and $304,000, respectively. The Company recorded $83,000 gain and $213,000 loss from changes in derivative liability during the three months ended March 31, 2016 and 2015, respectively.

The Black-Scholes model with the following assumption inputs:

	March 31, 2016
Annual dividend yield		—
Expected life (years)		0.26
Risk-free interest rate		0.21	%
Expected volatility		455	%