NOTE 7 - DERIVATIVE LIABILITIES

12 Months Ended

Aug. 31, 2018

NOTE 7 – DERIVATIVE LIABILITIES

The Company accounts for the embedded conversion features included in its convertible instruments as derivative liabilities. The aggregate fair value of derivative liabilities at August 31, 2018 and 2017 amounted to $ 724,313 and $740,953 respectively. At each measurement date, the fair value of the embedded conversion features was based on the lattice binomial method using the following assumptions:

	Years Ended August 31
	2018	2017
Effective Exercise price	0.0007 - 0.00112	0.0095–0.00152
Effective Market price	0.0014	0.0019
Volatility	55.96%	85%
Risk-free interest	2.46%	1.13%
Terms	365 days	365 days
Expected dividend rate	0%	0%

Changes in the derivative liabilities during the years ended August 31, 2018 and 2017 are as follows:

Balance at September 1, 2016	$	1,517,811
Embedded conversion features at issuance		-
Changes in fair value of derivative liabilities		(776,858	)
Balance, August 31, 2017	$	740,953

Balance at September 1, 2017	$	740,953
Embedded conversion features at issuance		-
Changes in fair value of derivative liabilities		(16,640	)
Balance, August 31, 2018	$	724,313