| Significant and Critical Accounting Policies and Practices | Note 2 - Significant and Critical Accounting Policies
and Practices The Management of the Company is responsible
for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application.
Critical accounting policies and practices are those that are both most important to the portrayal of the Companys financial
condition and results and require managements most difficult, subjective, or complex judgments, often as a result of the
need to make estimates about the effects of matters that are inherently uncertain. The Companys significant and critical
accounting policies and practices are disclosed below as required by generally accepted accounting principles. Basis of presentation The Companys financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP)
and the rules of the Securities Exchange Commission. Use of Estimates and Assumptions
and Critical Accounting Estimates and Assumptions 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(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). Critical accounting estimates are estimates
for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly
uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or
operating performance is material. The Companys critical accounting estimates and assumptions affecting the financial statements
were:
(i) Assumption as a going concern
(ii) Valuation allowance for deferred tax assets
(iii) Estimates and assumptions used in valuation of equity instruments These significant accounting estimates
or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions,
and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Management regularly evaluates the key
factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances,
historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those
estimates. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10
of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements
and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques
used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted)
in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair
value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level
3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least
one significant model assumption or input is unobservable. The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the
categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Companys
financial assets and liabilities, such as cash, interest receivable and accounts payable and accrued liabilities, approximate their
fair values because of the short maturity of these instruments. The Companys convertible notes
payable approximates the fair value of such instruments based upon managements best estimate of interest rates that would
be available to the Company for similar financial arrangements at December 31, 2015. Transactions involving related parties
cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings
may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions
were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. Cash Equivalents The Company considers all highly liquid
investments with maturities of three months or less at the time of purchase to be cash equivalents. Method
of Accounting Investments held in
stock of entities other than subsidiaries, namely corporate joint ventures and other non-controlled entities usually are accounted
for by one of three methods (i) the fair value method (addressed in Topic 320), (ii) the equity method (addressed in Topic 323),
or (iii) the cost method (addressed in Subtopic 325-20). Pursuant to paragraph 323-10-05-5 the equity method tends to be most appropriate
if an investment enables the investor to influence the operating or financial policies of the investee. The
Ability to Exercise Significant Influence Pursuant to paragraph
323-10-15-6 the ability to exercise significant influence over operating and financial policies of an investee may be indicated
in several ways, including but limited to the following: (a.) Representation on the board of directors, (b.) Participation in policy-making
processes, (c.) Material intra-entity transactions, (d.) Interchange of managerial personnel, and (e.) Technological dependency.
Pursuant to paragraph 323-10-15-8 an investment (direct or indirect) of 20 percent or more of the voting stock of an investee shall
lead to a presumption that in the absence of predominant evidence to the contrary an investor has the ability to exercise significant
influence over an investee. Conversely, an investment of less than 20 percent of the voting stock of an investee shall lead to
a presumption that an investor does not have the ability to exercise significant influence unless such ability can be demonstrated. Initial
and Subsequent Measurement Pursuant to Paragraph
323-10-30-2 an investor shall measure an investment in the common stock of an investee (including a joint venture) initially at
cost in accordance with the guidance in Section 805-50-30. An investor shall initially measure, at fair value, a retained investment
in the common stock of an investee (including a joint venture) in a deconsolidation transaction in accordance with paragraphs 810-10-40-3A
through 40-5. Pursuant to Section
323-10-35 under the equity method, an investor shall recognize its share of the earnings or losses of an investee in the periods
for which they are reported by the investee in its financial statements rather than in the period in which an investee declares
a dividend. An investor shall adjust the carrying amount of an investment for its share of the earnings or losses of the investee
after the date of investment including adjustments similar to those made in preparing financial statements and shall report the
recognized earnings or losses in income. An investor's share of losses of an investee may equal or exceed the carrying amount of
an investment accounted for by the equity method plus advances made by the investor. An equity method investor shall continue to
report losses up to the investor's investment carrying amount, including any additional financial support made or committed to
by the investor and the investor ordinarily shall discontinue applying the equity method if the investment (and net advances) is
reduced to zero and shall not provide for additional losses unless the investor has guaranteed obligations of the investee or is
otherwise committed to provide further financial support for the investee. If the investee subsequently reports net income, the
investor shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized
during the period the equity method was suspended. If a series of operating losses of an investee or other factors indicate that
a decrease in value of the investment has occurred that is other than temporary the loss in value of an investment that is other
than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to,
absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity
that would justify the carrying amount of the investment. A current fair value of an investment that is less than its carrying
amount may indicate a loss in value of the investment. However, a decline in the quoted market price below the carrying amount
or the existence of operating losses alone is not necessarily indicative of a loss in value that is other than temporary. Disclosure Pursuant to paragraph 323-10-50-3 all
of the following disclosures generally shall apply to the equity method of accounting for investments in common stock:
a. Financial statements of an investor shall disclose all of the following parenthetically, in notes to financial statements, or in separate statements or schedules: (1) the name of each investee and percentage of ownership of common stock. (2) The accounting policies of the investor with respect to investments in common stock. Disclosure shall include the names of any significant investee entities in which the investor holds 20 percent or more of the voting stock, but the common stock is not accounted for on the equity method, together with the reasons why the equity method is not considered appropriate, and the names of any significant investee corporations in which the investor holds less than 20 percent of the voting stock and the common stock is accounted for on the equity method, together with the reasons why the equity method is considered appropriate. (3) The difference, if any, between the amount at which an investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference.
b. For those investments in common stock for which a quoted market price is available, the aggregate value of each identified investment based on the quoted market price usually shall be disclosed.
c. If investments in common stock of corporate joint ventures or other investments accounted for under the equity method are, in the aggregate, material in relation to the financial position or results of operations of an investor, it may be necessary for summarized information as to assets, liabilities, and results of operations of the investees to be presented in the notes or in separate statements, either individually or in groups, as appropriate.
d. Conversion of outstanding convertible securities, exercise of outstanding options and warrants, and other contingent issuances of an investee may have a significant effect on an investor's share of reported earnings or losses. Accordingly, material effects of possible conversions, exercises, or contingent issuances shall be disclosed in notes to financial statements of an investor. Related Parties The Company follows subtopic 850-10
of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related
parties include (a.) affiliates of the Company (Affiliate means, with respect to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with
such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments
in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection
of Section 8251015, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit
of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal
owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the
management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties
and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully
pursuing its own separate interests. The financial statements shall include
disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar
items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated
or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s)
involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed,
for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods
for which income statements are presented and the effects of any change in the method of establishing the terms from that used
in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if
not otherwise apparent, the terms and manner of settlement. Commitments and Contingencies The Company follows subtopic 450-20
of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date
the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more
future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves
an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted
claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted
claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Companys financial statements. If the assessment indicates that a potential material loss
contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote
are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Revenue Recognition The Company follows paragraph 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii)
the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Deferred Tax Assets and Income
Taxes Provision The Company adopted the provisions of
paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13 addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph
740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has
a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides
guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires
increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according
to the provisions of paragraph 740-10-25-13. The estimated future tax effects of
temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well
as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded
on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the
interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability.
In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In managements
opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies
from estimates, additional allowances or reversals of reserves may be necessary. Tax
years that remain subject to examination by major tax jurisdictions The Company discloses tax years that
remain subject to examination by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15. Major tax jurisdictions generally
have the right to examine and audit the previous three years of tax returns filed. Earnings Per Share Earnings per share ("EPS")
is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings
or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC
Paragraphs 260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the
numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to
common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not
paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing
operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar
to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that
would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential
dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants. Pursuant to ASC Paragraphs 260-10-45-21
through 260-10-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint
of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting
entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35
through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include
non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260105523).
Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the
treasury stock method: (a.) Exercise of options and warrants shall be assumed at the beginning of the period (or at time of
issuance, if later) and common shares shall be assumed to be issued. (b.) The proceeds from exercise shall be assumed to be
used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through
55-5.) (c.) The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed
purchased) shall be included in the denominator of the diluted EPS computation. The Companys contingent shares
issuance arrangement, stock options or warrants were as follows:
Contingent shares issuance arrangement, stock options or warrants
For the Reporting Period Ended Sep 30, 2016 For the Reporting Period Ended Dec 31, 2015
Convertible Notes Payable Shares and Related Warrant Shares
On December 9, 2013, the Company consummated the closing (the Closing) of a private placement offering (the Offering) of 231 units (Units) for $10,000 per Unit, for aggregate gross proceeds of $2,310,000. No placement agents or brokers were utilized by the Company in connection with the Offering. Each Unit consists of: (i) a $10,000 face value 12% Series A Senior Unsecured Convertible Promissory Note of the Company (collectively, the Notes) convertible into shares of Common Stock at $0.50 per share, and (ii) one detachable Common Stock Purchase Warrant (collectively, the Warrants) to purchase 10,000 shares (the Warrant Shares) of common stock of the Company (the Common Stock) with an exercise price of $.50 per share expiring December 9, 2020. See Note 5 for a discussion of changes in the Notes Payable Shares and Related Warrant Shares (ii) 2,310,000 (i) 4,620,000 (ii) 2,310,000
Sub-total: convertible notes payable shares and related warrant shares 2,310,000 6,930,000
Total contingent shares issuance arrangement, stock options or warrants 2,310,000 6,930,000 There were no incremental common shares
under the Treasury Stock Method for the reporting periods shown above. Cash Flows Reporting The Company adopted paragraph 230-10-45-24
of the FASB Accounting Standards Codification for cash flows reporting, which classifies cash receipts and payments according to
whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect
or reconciliation method (the Indirect Method) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards
Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating
activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected
future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash
receipts and payments Subsequent Events The Company follows the guidance in
Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate
subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards
Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users,
such as through filing them on EDGAR. Recently Issued Accounting Pronouncements In May 2014, the FASB issued the FASB
Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). This guidance amends the existing FASB
Accounting Standards Codification, creating a new Topic 606, Revenue from Contracts with Customer. To achieve that core principle, an entity
should apply the following steps:
1. Identify the contract(s) with the customer
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations in the contract
5. Recognize revenue when (or as) the entity satisfies performance obligations The ASU also provides guidance on disclosures
that should be provided to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue
recognition and cash flows arising from contracts with customers. Qualitative and quantitative information is required about the
following:
1. Contracts with customers
2. Significant judgments and changes in judgments
3. Assets recognized from the costs to obtain or fulfill a contract ASU 2014-09 is effective for periods
beginning after December 15, 2016, including interim reporting periods within that reporting period for all public entities. Early
application is not permitted. In June 2014, the FASB issued the FASB
Accounting Standards Update No. 2014-12 CompensationStock Compensation (Topic 718) Accounting for Share-Based
Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period
(ASU 2014-12). The amendments clarify the proper method
of accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the
requisite service period. The Update requires that a performance target that affects vesting and that could be achieved after the
requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the
grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the
performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite
service has already been rendered. The amendments in this Update are effective
for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. In August 2014, the FASB issued the
FASB Accounting Standards Update No. 2014-15 Presentation of Financial StatementsGoing Concern (Subtopic 205-40):
Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). In connection with preparing financial
statements for each annual and interim reporting period, an entitys management should evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern
within one year after the date that the financial statements are issued financial
statements are available to be issued financial statements are issued financial statements are available to be issued probable When management identifies conditions
or events that raise substantial doubt about an entitys ability to continue as a going concern, management should consider
whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating
effect of managements plans should be considered only to the extent that (1) it is probable that the plans will be effectively
implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about
the entitys ability to continue as a going concern. If conditions or events raise substantial
doubt about an entitys ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration
of managements plans, the entity should disclose information that enables users of the financial statements to understand
all of the following (or refer to similar information disclosed elsewhere in the footnotes):
a. Principal conditions or events that raised substantial doubt about the entitys ability to continue as a going concern (before consideration of managements plans)
b. Managements evaluation of the significance of those conditions or events in relation to the entitys ability to meet its obligations
c. Managements plans that alleviated substantial doubt about the entitys ability to continue as a going concern. If conditions or events raise substantial
doubt about an entitys ability to continue as a going concern, and substantial doubt is not alleviated after consideration
of managements plans, an entity should include a statement in the footnotes indicating that there is substantial doubt
about the entitys ability to continue as a going concern
a. Principal conditions or events that raise substantial doubt about the entitys ability to continue as a going concern
b. Managements evaluation of the significance of those conditions or events in relation to the entitys ability to meet its obligations
c. Managements plans that are intended to mitigate the conditions or events that raise substantial doubt about the entitys ability to continue as a going concern. The amendments in this Update are effective
for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application
is permitted. Management does not believe that any
recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying
financial statements. |
