Derivative Liabilities

3 Months Ended

Sep. 30, 2017

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, 2017 and June 30, 2017, the derivative liability was $1,479,052 and $1,134,000, respectively. The Company recorded $145,653 loss and $243,000 gain from changes in derivative liability during the three months ended September 30, 2017 and 2016, respectively. The Black- Scholes model with the following assumption inputs:

		September 30, 2017
Annual dividend yield		—
Expected life (years)		0.01 – 1 year
Risk-free interest rate		0.83% – 1.31%
Expected volatility		91% - 215%
	June 30, 2017
Annual dividend yield		—
Expected life (years)		0.01
Risk-free interest rate		0.21	%
Expected volatility		449	%

Fair value of the derivative is summarized as below :

Beginning Balance, June 30, 2017	$	1,134,000
Additions		419,267
Mark to Market		140,653
Reclassification to APIC due to conversions		(214,868	)
Balance, September 30, 2017	$	1,479,052