Summary of Significant Accounting Policies | 3 Months Ended |
Aug. 31, 2013 |
Notes to Financial Statements | |
Note 4 - Summary of Significant Accounting Policies | RECENT ACCOUNTNG PRONOUNCEMENTS |
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The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows. |
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DEVELOPMENT STAGE COMPANY |
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The Company is a development stage company as defined in ASC Standard 915-10-05 and has recognized minimal revenue and devotes substantially all of its efforts on consumer electronic businesses. Its planned principal operations in developing its sports business have commenced. All losses accumulated since October 21, 2009 have been considered as part of the Company's development stage activities. |
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PRINCIPLES OF CONSOLIDATION |
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The accompanying consolidated financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and its subsidiaries. The accompanying consolidated financial statements include the active entity of DoMark International, Inc. and its wholly owned subsidiaries, DoMark Canada, Inc., Solawerks, Inc., Musclefoot, Inc., and South Hill Ltd. The Company has relied upon the guidance provided by Statements of Financial Accounting Standards, ASC 810-10-15-3. |
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USE OF ESTIMATES |
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The preparation of financial statements in conformity with GAAP 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. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. |
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The primary management estimates included in these financial statements are the fair value of its stock tendered in various non-monetary transactions. |
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CASH AND CASH EQUIVALENTS |
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The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At August 31, 2013 and May 31, 2013, cash and cash equivalents included cash on hand and cash in the bank. |
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NET LOSS PER COMMON SHARE |
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Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Dilutive securities having an anti-dilutive effect on diluted net loss per common share are excluded from the calculation. |
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For the three months ended August 31, 2013 and 2012, diluted common shares outstanding excluded the following dilutive securities as the effect of their inclusion was anti-dilutive: |
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| | Three Months Ended | |
August 31, |
| | 2013 | | | 2012 | |
Convertible notes payable | | | 13,435,345 | | | | - | |
Series A convertible preferred stock | | | 50,000,000 | | | | 50,000,000 | |
Warrants | | | 850,000 | | | | 350,000 | |
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Total | | | 64,285,345 | | | | 50,350,000 | |
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INTANGIBLE ASSETS |
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Intangible assets are carried at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the respective assets. |
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IMPAIRMENT OF LONG-LIVED ASSETS |
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In accordance with ASC Standard 360-10-40, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
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STOCK-BASED COMPENSATION |
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The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective - Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. |
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ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505. |
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RESEARCH AND DEVELOPMENT |
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All research and development expenditures are expensed as incurred. |
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REVENUE RECOGNITION |
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The Company recognizes revenues when persuasive evidence of an arrangement exists, delivery and acceptance has occurred or service has been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. |