Derivatives

6 Months Ended

Feb. 28, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 8 – DERIVATIVES

Embedded Conversion Option Derivatives

Due to the conversion terms of certain promissory notes, the embedded conversion options met the criteria to be bifurcated and presented as derivative liabilities. The Company calculated the estimated fair values of the liabilities for embedded conversion option derivative instruments at the original note inception date and as of February 28, 2018 and August 31, 2017 using the Black-Scholes option pricing model using the share prices of the Company’s stock on the dates of valuation and using the following ranges for volatility, expected term and the risk-free interest rate at each respective valuation date, no dividend has been assumed for any of the periods:

	Note
	Inception	August 31,	February 28,
	Date	2017	2018
Volatility	180% - 350%	291%	294%
Expected Term	0.75 - 1.0 years	0.33 - 0.88 years	0.38 - 1.02 years
Risk-Free Interest Rate	0.83% - 1.40%	1.23%	0.88%

The following reflects the initial fair value on the note inception date and changes in fair value through February 28, 2018:

Note inception date fair value allocated to debt discount	$	111,004
Change in fair value in fiscal year 2017		(8,627	)
Embedded conversion option derivative liability fair value on August 31, 2017		102,377
Note inception date fair value allocated to debt discount		247,958
Change in fair value in fiscal year 2018		235,058
Embedded conversion option derivative liability fair value on February 28, 2018	$	585,393