| NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 BUSINESS DESCRIPTION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Junkiedog.com, Inc. F/K/A Unique Underwriters,
Inc. (the Company) was incorporated in the State of Texas in 2009 in the name of Unique Underwriters, Inc. On June 9, 2014, the Board
of Directors and consenting shareholders holding a majority of issued and outstanding Common Stock approved a change in
domicile of the Company from Texas to Nevada. The change of domicile, or reincorporation, was be effected by means
of a merger between the Company and a newly formed wholly-owned Nevada subsidiary of the Company in name of JunkieDog.com
Inc., in which the subsidiary was the surviving entity. This change of domicile will become effective upon the
filing of articles of merger with the Secretary of State of the states of Texas and Nevada in accordance with applicable
state laws. On June 9, 2014, UUWRs
Board of Directors approved and recommended a change in corporate name to JunkieDog.com, Inc., referred to as Name
Change Proposal. Since it was contemplated that the Name Change Proposal would occur simultaneously with the Reincorporation,
management determined that the objective and substantive effect of the Name Change Proposal would be accomplished under and pursuant
to the Merger Agreement, which would feature that Unique Underwriters, Inc. would merge with and into JunkieDog.com, Inc., with
JunkieDog.com, Inc. being the surviving corporation. The surviving corporation will retain the name of JunkieDog.com, Inc.. On September 19, 2014, JunkieDog.com,
Inc. entered into a Plan of Exchange with First Choice Apparel, an online wholesale website for clothing and other quality items.
Under the agreement JunkieDog.com, Inc. agreed to acquire certain assets and liabilities of First Choice Apparel for 40,000,000
restricted shares of common stock, valued at $3,000,000 on the date of the transaction. Subsequent to entering into this agreement,
both parties agreed to amend the agreement from a Plan of Exchange to an Asset Acquisition Agreement and to account for the transaction,
based on those terms. As reflected in our financial statements, JunkieDog.com, Inc. will report all revenue and expenses, as well
as the agreed upon assets and liabilities, from the original date of the agreement dated September 19, 2014. The stock exchange transaction
has been accounted for as an asset acquisition of the Company whereby First Choice Apparel Company LLC is deemed to be the accounting
acquirer (legal acquiree) and the Company to be the accounting acquiree (legal acquirer). The accompanying consolidated
financial statements are in substance those of First Choice Apparel Company LLC, with the assets, liabilities, revenues and expenses,
of the Company being included effective from the date of stock exchange transaction. Accordingly, the financial position,
results of operations, and cash flows of the accounting acquirer are included for all periods presented as if the recapitalization
had occurred at the beginning of the earliest period presented and the operations of the accounting acquiree are included from
the date of stock exchange transaction. The Company recorded the purchase
consideration and resulting goodwill as follows:
Purchase Consideration:
Common Stock $ 3,000,000
Assumed Debt 117,229
Derivatives 189,200
Assets Acquired:
Cash acquired (37,065 )
Inventory (33,959 )
Plant, Property and Equipment (37,573 )
Goodwill $ 3,197,832 Basis of Presentation and
Consolidation The financial statements include
the accounts of the Company and its wholly owned subsidiary, First Choice Apparel, under the accrual basis of accounting. All
intercompany transactions and balances have been eliminated in consolidation. Interim financial statements The accompanying condensed financial
statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present
the financial position, results of operations and cash flows for the stated periods have been made. Except as described below,
these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included
in the Companys annual financial statements prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. These condensed financial statements should be read in conjunction with
a reading of the Companys consolidated financial statements and notes thereto included in the Companys Form 10-K annual
report filed with the Securities and Exchange Commission (SEC) on January 7, 2015. Interim results of operations for the three
and nine months ended March 31, 2015 are not necessarily indicative of future results for the full year. A Managements Use
of 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 at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The financial
statements above reflect all of the costs of doing business. The Companys significant estimates include the valuation of
stock-based compensation and embedded derivatives. Reclassification Certain amounts in the prior years'
financial statements have been reclassified to conform with the current year presentation. Cash and Cash Equivalents For purposes of the Statements
of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. Revenue Recognition The Company applies paragraph 605-10-S99-1
of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when services are realized
or realizable and earned less estimated future doubtful accounts. 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 services have been rendered and all required milestones achieved,
(iii) the sales price is fixed or determinable, and
(iv) Collectability is reasonably assured. Our wholly owned subsidiary, First
Choice Apparel recognizes revenue from product sales or services rendered when the following four criteria are met: persuasive
evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable,
and collectability is reasonably assured. We evaluate whether it is appropriate
to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when we are primarily
obligated in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have
several but not all of these indicators, revenue is recorded at the gross sale price. We generally record the net amounts as commissions
earned if we are not primarily obligated and do not have latitude in establishing prices. Such amounts earned are determined using
a fixed percentage, a fixed-payment schedule, or a combination of the two. Product sales represent revenue
from the sale of products and related shipping fees where we are the seller of record. Product sales and shipping revenues, net
of promotional discounts, rebates, and return allowances, are recorded when the products are shipped and title passes to customers.
Retail sales to customers are made pursuant to a sales contract that provides for transfer of both title and risk of loss upon
our delivery to the carrier. Shipping and Handling Shipping and handling costs are
treated as a cost of sales and are reflected on the statement of operations as a reduction of gross profit. For the three and nine
months periods ended March 31, 2015, we recorded $-0- and $53,266 in shipping and handling expenses, included in our total cost
of sales of $317,595 and $561,892, respectively. Inventories Inventories, consisting of products
available for sale, are primarily accounted for using the FIFO method, and are valued at the lower of cost or market value. This
valuation requires us to make judgments, based on currently-available information, about the likely method of disposition, such
as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each
disposition category. Currently, all of our inventory are finished goods purchased from other suppliers. Property
and Equipment Property and equipment is recorded
at cost, and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are
retired, or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized.
Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. The range of estimated useful lives
used to calculated depreciation for principal items of property and equipment are as follows:
Asset Category Depreciation/ Amortization Period
Plant Equipment 15 Years
Furniture and Fixture 3 Years
Office Equipment 3 Years
Leasehold improvements 5 Years Loss Per Share Net loss per common share is computed pursuant to section
260-10-45 of the FASB Accounting Standards Codification. Basic net loss per 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 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.
For the three and nine months periods ended March 31, 2015, 378,400 shares of common stock underlying convertible debt are not
included in the calculations of diluted loss per share, as the impact of the potential common shares would be antidilutive. Stock-Based Compensation The Company accounts for stock-based
compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification
for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That
cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the
requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees
do not render the requisite service. Goodwill
and Other Intangible Assets The Company adopted Statement of Financial
Accounting Standard (FASB) Accounting Standards Codification (ASC) Topic 350 Goodwill and Other
Intangible Assets Fair Value for Financial Assets
and Financial Liabilities 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 accounting principles generally accepted
in the United States of America (U.S. 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 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 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 payable, accrued expenses, customer deposits, obligations for factored
receivables and convertible notes payable approximate their fair values because of the short maturity of these instruments. The
Companys derivative liabilities related to convertible debt are measured at fair value on a recurring basis, using
level 3 inputs. There were no assets or liabilities measured at fair value on a nonrecurring basis during the three and nine
months ended March 31, 2015. Recent Accounting Pronouncements
The Company has reviewed all recently
issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may
be expected to cause a material impact on its consolidated financial condition or the consolidated results of its operations. |
