DERIVATIVE LIABILITY

6 Months Ended

Dec. 31, 2023

DERIVATIVE LIABILITY

DERIVATIVE LIABILITIES

NOTE 4: DERIVATIVE LIABILITIES

Derivative liability – convertible notes

The Company has certain convertible notes with variable price conversion terms. Upon the issuance of these convertible notes and as a consequence of their conversion features, the convertible notes give rise to embedded derivative liabilities. The Company’s derivative liabilities related to its convertible notes payable have been measured at fair value at December 31, 2023 and June 30, 2023 using the Cox, Ross & Rubinstein Binomial Tree valuation model.

The revaluation of the warrants and convertible debt at each reporting period, as well as the charges associated with issuing additional convertible notes, and warrants with price protection features, resulted in the recognition of a gain of $32,689 and a loss of $33,862 for the six months December 31, 2023 and 2022, respectively in the Company’s consolidated statements of operations, under the caption “Loss in change of fair value of derivative liability”. The fair value of the warrants at December 31, 2023 and June 30, 2023 was $0 and $0, respectively. The fair value of the derivative liability related to the convertible debt at December 31, 2023 and June 30, 2023 is $48,018 and $80,707, respectively, which is reported on the consolidated balance sheet under the caption “Derivative liability”.

The Company has determined its derivative liability to be a Level 3 fair value measurement. The significant assumptions used in the Cox, Ross & Rubinstein Binomial Tree valuation of the derivative are as follows:

	Six Months Ended December 31,
	2023			2022
Effective exercise price	$	0.0082		$	0.058
Effective market price	$	0.0169		$	0.081
Expected volatility		268.04	%		256.8	%
Risk-free interest		5.59	%		4.41	%
Expected terms	60  days			60 days
Expected dividend rate		0	%		0	%

Changes in the derivative liabilities during the six months ended December 31, 2023 is follows:

Derivative liabilities at June 30, 2023	$	80,707
Derivative liability expense		-
Gain on change in fair value of derivative liabilities		(32,689	)
Derivative liabilities at December 31, 2023	$	48,018