Sunday, December 31, 2017 12:15:39 PM
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12334879
MUSIC OF YOUR LIFE, INC.
Notes to the Consolidated Financial Statements
August 31, 2017
(Unaudited)
(Z) On June 16, 2017, the Company issued a $37,000 Convertible Promissory Note to a lender for net loan proceeds of $31,000. The note bears interest at a rate of 12% per annum (24% per annum default rate), is due on March 16, 2018, and is convertible at the option of the lender into shares of the Company common stock at a Conversion Price equal to 50% of the lowest Trading Price during the 25 Trading Day period prior to the Conversion Date. See Note 6 (Derivative Liability).
MUSIC OF YOUR LIFE, INC.
Notes to the Consolidated Financial Statements
August 31, 2017
(Unaudited)
The above convertible notes contain a variable conversion feature based on the future trading price of the Company common stock. Therefore, the number of shares of common stock issuable upon conversion of the notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates of the notes and charged the applicable amounts to debt discounts and the remainder to other expense. The increase (decrease) in the fair value of the derivative liability from the respective issuance dates of the notes to the measurement dates is charged (credited) to other expense (income). The fair value of the derivative liability of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model.
Assumptions used for the calculations of the derivative liability of the notes at August 31, 2017 include (1) stock price of $0.0001 per share, (2) exercise prices ranging from $0.00004 to $0.000055 per share, (3) terms ranging from -0- days to 197 days, (4) expected volatility of 434% and (5) risk free interest rates ranging from 0.95% to 1.23%.
Assumptions used for the calculations of the derivative liability of the notes at May 31, 2017 include (1) stock price of $0.0002 per share, (2) exercise prices ranging from $0.00005 to $0.00006 per share, (3) terms ranging from 0 days to 92 days, (4) expected volatility of 490% and (5) risk free interest rates ranging from 0.86% to 0.98%.
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