The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

Fair Value Assumptions Used in Accounting for Derivative Liabilities.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.

For the year ended June 30, 2019 and 2018, the estimated fair values of the liabilities measured on a recurring basis are as follows:

	Year Ended			Year Ended
	June 30,			June 30,
	2019			2018
Expected term	0.17 - 4.04 years			0.04 - 5.00 years
Expected average volatility	270% - 683		%	147%-488		%
Expected dividend yield		-			-
Risk-free interest rate	1.75% - 2.94		%	0.96%-2.73		%

The following table summarizes the changes in the derivative liabilities during the year ended June 30, 2019 and 2018:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - June 30, 2017	$	114,316
Addition of new derivatives recognized as debt discounts		285,500
Addition of new derivatives recognized as loss on derivatives		689,272
Settled on issuance of common stock		(295,541	)
Loss on change in fair value of the derivative		223,318
Balance - June 30, 2018		1,016,865

Addition of new derivatives recognized as debt discounts		85,000
Addition of new derivatives recognized as loss on derivatives		461,198
Settled due to conversion of debt		(987,744	)
Loss on change in fair value of the derivative		3,493
Balance - June 30, 2019	$	578,812

The aggregate loss on derivatives during the year ended June 30, 2019 and 2018 was $464,691 and $912,590, respectively.