v3.22.1
Fair Value Measurements
 9 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 5 - Fair Value Measurements

 

The following table presents information about the liabilities that are measured at fair value on a recurring basis at March 31, 2022 and June 30, 2021 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

      

At March 31, 2022

 

Total

Level 1

Level 2

Level 3

 

Derivative liability, convertible note features

$              -

$            -

$             -

$               -

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2021

 

Total

Level 1

Level 2

Level 3

 

 

 

 

 

 

 

Derivative liability, convertible note features

$1,842,000

$        -

$       -

$1,842,000

 

The Company measures the fair market value of the Level 3 liability components using the Monte Carlo model and projected discounted cash flows, as appropriate. These models were prepared by an independent third party and consider management's best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock's volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible note. In December 2021, the derivative liability was eliminated when the Company entered into an agreement to convert the convertible debt into preferred stock. (See Note 6).

The derivative liability was valued using the Monte Carlo pricing model with the following inputs:

 

At June 30, 2021

 

 

 

Risk-free interest rate:

 

0.17%

 

Expected dividend yield:

 

0.00%

 

Expected stock price volatility:

 

295.00%

 

Expected option life in years:

 

.037 to .70 years

 

The following table sets forth a reconciliation of changes in the fair value of the Company's convertible debt components classified as Level 3 in the fair value hierarchy at March 31, 2022 and June 30, 2021:

 

Balance at June 30, 2021

$

1,842,000

Realized

 

                     (1,842,000)

Unrealized

 

-

Balance at March 31, 2022

$

-

 

 

 

Balance at June 30, 2020

$

246,612

Convertible securities at inception

 

4,000

Realized

 

  (80,924)

Unrealized

 

1,672,312

Balance at June 30, 2021

$

 1,842,000

 

As of March 31, 2022 and June 30, 2021, the only asset required to be measured on a nonrecurring basis was goodwill and the fair value of the asset amounted to $834,220 using level 3 valuation techniques.