| SUMMARY OF ACCOUNTING POLICIES | 2. SUMMARY OF ACCOUNTING POLICIES Basis of Presentation and Consolidation
The Companys consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiary. All significant inter-company transactions and balances among
the Company and its subsidiary are eliminated upon consolidation. These interim consolidated financial
statements are unaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) and
disclosures necessary for a fair presentation of these interim consolidated financial statements have been included. The results
reported in the consolidated financial statements for any interim periods are not necessarily indicative of the results that may
be reported for the entire year or any other periods. (a) The consolidated balance sheet as of June 30, 2015, which was derived
from audited financial statements, and (b) the unaudited interim consolidated financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included
in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been
condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate
to make the information not misleading. These unaudited consolidated financial statements should be read in conjunction with the
consolidated financial statements and accompanying footnotes included in the Companys Annual Report on Form 10-K for the
year ended June 30, 2015. Use of Estimates The preparation of the financial statements
in conformity with Generally Accepted Accounting Principles (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 dates of
the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ
from those estimates. These estimates and assumptions include the collectability of accounts receivable and deferred taxes and
related valuation allowances. Certain of our estimates, including evaluating the collectability of accounts receivable, could be
affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these
external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate
all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Inventory The Company values inventory, consisting
of purchased products, at the lower of cost or market. Cost is determined on the first-in and first-out (FIFO) method.
The Company regularly reviews its inventories on hand and, when necessary, records a provision for excess or obsolete inventories
based primarily on current selling price and spot market prices. The Company determined that there was no inventory obsolescence
as of September 30, 2015. Impairment of long-lived assets The Company follows section 360-10-05-4
of the FASB Accounting Standards Codification for its long-lived assets. The Companys reviews it long-lived assets, which
include property and equipment, and patent, for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The Company assesses the recoverability
of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or
group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if
any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using
the assets expected future undiscounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book
values of the long-lived assets are depreciated or amortized over the newly determined remaining estimated useful lives. The Company
determined that there were no impairment of long-lived assets as of September 30, 2015. 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 pursuant to 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. The carrying amounts of the Companys
financial assets and liabilities, such as cash, accounts receivable, inventory, accounts payable, deferred revenues and accrued
liabilities, approximate their fair values because of the short maturity of these instruments. We have no financing assets or liabilities measured at fair value on a recurring basis. Income Taxes The Company accounts for income taxes
under the provisions of FASB ASC Topic 740, Income Tax, which requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.
Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the difference between the tax
bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are
measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. The Company establishes a valuation when it is more likely than not that the assets
will not be recovered. ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken
in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. Revenue Recognition The Companys revenues are derived
principally from utilizing new technology in the medical alarm industry to provide 24-hour personal response monitoring services
and related products to subscribers with medical or age-related conditions. The Company applies paragraph 605-10-S99-1 of the FASB
Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable
and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that
the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured. All revenues from subscription arrangements
are recognized ratably over the term of such arrangements. The excess of amounts received over the income recognized is recorded
as deferred revenue on the consolidated balance sheet. Shipping and Handling Costs The Company accounts for shipping and
handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to
customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred. Stock-Based Compensation We recognize compensation expense for
stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the
award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted
shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, we
calculate the fair value of the award on the date of grant in the same manner as employee awards. However, the awards are revalued
at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee
award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as
calculated on the measurement date, which is the date at which the award recipients performance is complete. The estimation
of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ
from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider
many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Net Income per Common Share Net income per common share is computed
pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income per common share is computed by taking
net income divided by the weighted average number of common shares outstanding for the period. Diluted net income per common share
is computed by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares
of common stock during the period to reflect the potential dilution that could occur from common shares issuable through stock
options, warrants, and convertible debt. These potential shares of common stock were not included as they were anti-dilutive. Commitments and contingencies The Company follows subtopic 450-20
of the FASB ASC to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation,
fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the
assessment can be reasonably estimated. Cash flows reporting The Company adopted paragraph 230-10-45-24
of the FASB ASC for cash flows reporting, 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 (Indirect
method) as defined by paragraph 230-10-45-25 of the FASB ASC 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. The Company reports the reporting currency equivalent
of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes
on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash
and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts
or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification. 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 evaluates
subsequent events through the date when the financial statements are 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. Recent Accounting Pronouncements In May 2014, the ("FASB")
issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive
model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue
recognition guidance. The standard's core principle is that a company will recognize revenue when it transfers promised goods or
services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for
those goods or services. In August 2015, the FASB deferred the effective date of the new revenue standard by one year, which will
make it effective for the Company in the first quarter of its fiscal year ending June 30, 2019. The Company is currently in the
process of evaluating the impact of adoption of this ASU on its financial statements. In June 2014, the FASB issued
Accounting Standards Update No. 2014-12, Compensation Stock 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 (a consensus
of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees
share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after
the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved
after the requisite service period be treated as a performance condition. For all entities, 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.
The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the
impact of adopting ASU 2014-12 on the Company's results of operations or financial condition. In August 2014, the FASB issued
Accounting Standards Update No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), Disclosure
of Uncertainties about an Entities Ability to Continue as a Going Concern(ASU 2014-15). The guidance in ASU 2014-15 sets forth
management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern
as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial
statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's
ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued.
This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date
the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to
address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial
doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter.
Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's financial
statements. In April 2015, the FASB updated the
guidance within ASC 835, Interest. The update provides guidance on simplifying the presentation of debt issuance cost. The amendments
require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from
the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and
interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact on its
consolidated financial statements. There were no other recent accounting
pronouncements that have had a material effect on the Companys financial position or results of operations. |
