Trans-Pacific Aerospace Company Inc. (fka TPAC)

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The Company analyzed the conversion option of the Auctus Note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instrument should be classified as liabilities due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options for the Auctus Note issued. The Company then calculated the fair value of the conversion option and recorded derivative liability on the issuance date and the subsequent period end dates.



During the three months ended January 31, 2015, $46,129 of the convertible notes was converted to 37,307,826 shares of the Company’s common stock.



For the three months ended January 31, 2015 and 2014, the Company recorded derivative income of $25,799 and $0, respectively. As of January 31, 2015 and October 31, 2014, the derivative liability amounted to $221,353 and $207,891, respectively.



As of January 31, 2015 and October 31, 2014, the outstanding amount of the convertible notes were $202,458 and $233,747, net of discount of $86,413 and $33,753, respectively.

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