Dr Foods Inc. (DRFS)

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From the 10, only half through conversion.
Under FASB ASC 815-40 Contracts in Entity’s Own Equity, the Company must review the possible conversion features under the agreement’s variable price conversion options, which create a derivative in the possible settlement choices of the Lender. As of March 31, 2016, the stock pricing feature for Note A above which provides a 50% discount to the market would have increased the stock necessary to settle the conversion if requested to approximately 1,043,688,000 shares. The Company has calculated the value of this additional liability to be $1,095,872 and has recognized a change of earnings for the effect of such a conversion through March 31, 2016. Additionally, the conversion features on Notes B through G above would have increased the stock necessary to settle the conversion feature on these Notes to approximately 169,682,768 shares. The Company has calculated the value of this additional liability to be $161,515 and has recognized a change of earnings for the effect of such a conversion through March 31, 2016. Total derivative liability was $1,257,387 and $825,712, as of March 31, 2016 and December 31, 2015, respectively. As of March 31, 2016, the derivative liability is classified as $79,261 under current liabilities and $1,178,126 under long-term liabilities. As of December 31, 2015, the derivative liability is classified as $76,955 under current liabilities and $748,757 under long-term liabilities.