Derivative Liabilities

9 Months Ended

Mar. 31, 2017

Derivative Liabilities

Derivative Liabilities

7. Derivative liabilities

The derivative liability is derived from the conversion features in note 5 and stock warrant in note 8. All were valued using the weighted-average Black-Scholes- Merton option pricing model using the assumptions detailed below. As of March 31, 2017 and June 30, 2016, the derivative liability was $2,150,000 and $701,000, respectively. For the three months ended March 31, 2017 and 2016, the Company recorded a $1,337,000 loss and $83,000 gain from changes in derivative liability, respectively. For the nine months ended March 31, 2017 and 2016, the Company recorded a $1,449,000 loss and $5,000 gain from changes in derivative liability, respectively. The Black-Scholes model with the following assumption inputs:

	March 31, 2017
Annual dividend yield		—
Expected life (years)		0.46
Risk-free interest rate		0.90	%
Expected volatility		146	%

	June 30, 2016
Annual dividend yield		—
Expected life (years)		0.01
Risk-free interest rate		0.21	%
Expected volatility		449	%