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Re: mustangowner post# 299

Tuesday, 12/02/2014 4:33:59 PM

Tuesday, December 02, 2014 4:33:59 PM

Post# of 425
I guess their accounting methods are unique...


During the three months ended September 30, 2014, we issued and sold $1.0 million of additional convertible promissory notes, which gives the holders the right to convert the outstanding debt into shares of our common stock. We recorded the fair value of the conversion options on the dates of issuance as a derivative liability and recognized that amount as a discount of our 12% convertible promissory notes. We account for this derivative liability pursuant to ASC 815, and accordingly, we recognized a gain of $46,000 for the three and nine months ended September 30, 2014 as a change in fair value of this derivative liability which was recognized in our statements of operations. The fair value of this derivative liability at September 30, 2014 was estimated to be $111,000.


Just my opinion, of course.

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