Organization and Description of Business (Policies)
 12 Months Ended
Dec. 31, 2015
Policies  
Accounting Method

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

a. Accounting Method

 

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments which are necessary for a fair statement of the results for interim periods have been included.

Revenue Recognition

 

b. Revenue Recognition

 

The Company is currently developing its products. It is anticipated that revenue will be recognized on product sales once the product has been shipped to the customers, persuasive evidence of an agreement exists, the price is fixed or determinable, and collectability is reasonably assured.

Estimates

 

c. Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Cash and Cash Equivalents

 

d. Cash and Cash Equivalents

 

The Company considers all deposit accounts and investment accounts with an original maturity of 90 days or less to be cash equivalents.  
Fixed Assets

 

e. Fixed Assets

 

Fixed assets are stated at cost.  Expenditure for minor repairs, maintenance, and replacement parts which do not increase the useful lives of the assets are charged to expense as incurred. Expenditures, exceeding $500, for new assets or that increase the useful life of existing assets are capitalized.  Depreciation is computed using the straight-line method.  The lives over which the fixed assets are depreciated are five to seven years.
Fair Value

f.  Fair Value

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  FASB Accounting Standards Codification (“ASC”) Topic 820 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

 

Level 1 - Quoted market prices in active markets for identical assets or liabilities;

 

Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and

 

Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

 

All cash, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximates fair value due to the short-term nature of these financial instruments.  Additionally, we measure certain financial instruments at fair value on a recurring basis.  Liabilities measured at fair value on a recurring basis are as follows at December 31, 2015 and 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

   Derivative Liability

 

 

$

196,893

 

$

0

 

$

0

 

$

196,893

   Total Liabilities Measured at Fair Value

 

 

$

196,893

 

$

0

 

$

0

 

$

196,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

Total

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

   Derivative Liability

 

 

$

0

 

$

0

 

$

0

 

$

0

   Total Liabilities Measured at Fair Value

 

 

$

0

 

$

0

 

$

0

 

$

0

 
Derivative Financial Instruments

g.  Derivative Financial Instruments

 

In the 4th quarter of 2015 the Company issued a note payable which terms require that the transaction be accounted for as a derivative financial instrument.  The Company is accounting for this financial instrument in accordance with ASC 815, Derivatives and Hedging, which required that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date.  ASC 815 also requires that changes in the derivatives’ fair value be recognized in earnings.  The Company recorded the effective portion of the gain or loss on derivative comprehensive income in the accompanying consolidated balance sheets.  (See Note 7)
Earnings Per Share

h. Earnings per Share

 

The computation of earnings per share of common stock is based on the weighted average number of shares outstanding during the period of the financial statement.

 

 

For the year ended December 31, 2015

For the year ended December 31, 2014

 

 

 

Net loss (numerator)

       (1,109,897)

         (1,192,732)

Shares (denominator)

35,397,266

32,787,397

Net loss per share amount

                (0.03)

                (0.04)

 

Diluted earnings per share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. During the year there were no outstanding common stock equivalents. Furthermore, due to the net loss for the year, common stock equivalents would not be included in the calculation of the net loss per common share, as their inclusion would be anti-dilutive.

Income Taxes

 

i. Income Taxes

 

Deferred taxes are provided on an asset and liability approach whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Equity Instruments Issued For Non-cash Items

j. Equity Instruments Issued for Non-Cash Items

 

In accordance with ASC Topic 718, the Company records equity instruments issued for non-cash items at the grant-date fair value of the equity instruments issued.