Derivative Liabilities

9 Months Ended

Mar. 31, 2018

Derivative Liabilities

Derivative Liabilities

7. 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, 2018 and June 30, 2017, the derivative liability was $846,571 and $1,134,000, respectively. The Company recorded $6,449,378 loss and $1,449,000 loss from changes in derivative liability during the nine months ended March 31, 2018 and 2017, respectively. The Black- Scholes model with the following assumption inputs:

	March 31, 2018
Annual dividend yield		—
Expected life (years)		0.01 – 1 year
Risk-free interest rate		1.29% – 1.76%
Expected volatility		103% - 206%

	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, December 31, 2017	5,039,978
Additions	—
Mark to Market	(3,680,512	)
Reclassification to APIC due to conversions	(512,895	)
Balance, March 31, 2018	846,571