| Summary of Significant Accounting Policies | NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Cash and
cash equivalents The Company
considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Cash and cash equivalents consist primarily of cash deposits maintained in the United Kingdom. From time to time, the Company's
cash account balances exceed amounts covered by the Financial Services Compensation Scheme. The Company has never suffered a loss
due to such excess balances.
(b) Fixed
rate cash accounts From time
to time the Company invests funds in fixed rate cash savings accounts. These accounts, at the time of the initial investment,
provide a higher interest rate than other bank accounts, and also require the Company to maintain the funds in the accounts
for a period of time, currently $4.6 million through December 2018. Early withdrawal may generally be made for liquidity
needs. (c) Fair
value of financial instruments The Company's
financial instruments primarily consist of cash, fixed rate cash accounts, accounts payable and other current liabilities.
As of the year-end dates, the estimated fair values of non-related party financial instruments were not materially different from
their carrying values as presented, due to their short maturities. The fair value of amounts payable to related parties are not
practicable to estimate due to the related party nature of the underlying transactions. (d) Property
and equipment Property
and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets,
generally four years for fixtures and fittings. (e) Intangible
assets Intangible
assets consist of licenses and patents associated with the sugarBEAT device and are amortized on a straight-line basis, generally
over their legal lives of up to 20 years and are reviewed for impairment. The Company evaluates its intangible assets (all have
finite lives) and other long-lived assets for impairment whenever events or circumstances indicate that they may not be recoverable,
or at least annually. Recoverability of finite and other long-lived assets is measured by comparing the carrying amount of an
asset group to the future undiscounted net cash flows expected to be generated by that asset group. The Company groups assets
for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely independent of
the cash flows of the other groups of assets and liabilities. The amount of impairment to be recognized for finite and other long-lived
assets is calculated as the difference between the carrying value and the fair value of the asset group, generally measured by
discounting estimated future cash flows. There were no impairment indicators present during the three months ended June 30, 2018
or 2017. (f) Revenue
Recognition Revenue
is recognized when the four basic criteria of revenue recognition are met: (1) a contractual agreement exists; (2) transfer of
rights has been completed; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. The Company
may enter into product development and other agreements with collaborative partners. The terms of the agreements may include nonrefundable
signing and licensing fees, milestone payments and royalties on any product sales derived from collaborations. The Company
recognizes up front license payments as revenue upon delivery of the license only if the license has stand alone value to the
customer. However, where further performance criteria must be met, revenue is deferred and recognized on a straight line basis
over the period the Company is expected to complete its performance obligations. Royalty
revenue will be recognized upon the sale of the related products provided the Company has no remaining performance obligations
under the agreement. (g) Research
and development expenses The Company
charges research and development expenses to operations as incurred. Research and development expenses primarily consist of salaries
and related expenses for personnel and outside contractor and consulting services. Other research and development expenses include
the costs of materials and supplies used in research and development, prototype manufacturing, clinical studies, related information
technology and an allocation of facilities costs. (h) Income
taxes Income taxes
are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases, and operating loss carry forwards. Deferred income tax assets and liabilities are measured using
enacted tax rates 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 income tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred income tax assets
if it is considered more likely than not that some portion, or all, of the deferred income tax assets will not be realized. The Company
recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized
income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition
or measurement are reflected in the period in which the change in judgment occurs. The Company has elected to classify interest
and penalties related to unrecognized tax benefits as part of income tax expense in the consolidated statements of comprehensive
loss. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest
expense related to unrecognized tax benefits recognized for the three months ended June 30, 2018 and 2017. In December
2017, the US Tax Cuts and Jobs Act (the”Act”) was signed into law. Generally, this Act reduces corporate rates
from a top rate of 35% to a top rate of 21%, effective January 1, 2018. As the Company’s US operations are minimal,
and all deferred tax assets are fully allowed for, there is no significant impact to the Company as of and for the three month
period ended June 30, 2018. (i) Earnings
per share Basic earnings
per share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding
during the period. There were no potentially dilutive securities as of June 30, 2018 and 2017. For the three months ended June
30, 2018 and 2017, warrants to purchase 10 million shares of common stock were anti-dilutive and were excluded from the calculation
of diluted loss per share. (j)
Use of estimates The preparation
of financial statements in conformity with accounting principles generally accepted in the United States 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 year. Actual
results may differ from those estimates. (k) Foreign
currency translation The functional
currency of the Company is the Great Britain Pound Sterling ("GBP"). The reporting currency is the United States
dollar (US$). Stockholders' equity is translated into United States dollars from GBP at historical exchange rates.
Assets and liabilities are translated at the exchange rates as of the balance sheet date. Income and expenditures are translated
at the average exchange rates prevailing during the reporting period. The translation
rates are as follows:
Three
months ended June
30, 2018 (unaudited) Three
months ended June
30, 2017 (unaudited) Twelve
months ended March
31, 2018
Period end GBP : US$ exchange
rate 1.320 1.294 1.403
Average period/yearly GBP : US$ exchange
rate 1.343 1.275 1.331 Adjustments
resulting from translating the financial statements into the United States dollar are recorded as a separate component of accumulated
other comprehensive loss in stockholders' equity. (l) Recent
accounting pronouncements The Company
continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting
pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change
to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's consolidated
financial statements properly reflect the change. In May 2014,
the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No. 2014-09, Revenue
from Contracts with Customers. ASU 2014-09 has been modified multiple times since its initial release. This ASU outlines a single
comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will replace most
existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09, as amended, becomes effective for annual
reporting periods beginning after December 15, 2017. Early adoption is permitted. As an Emerging Growth Company, the Company is
allowed to adopt new, or updated, accounting standards using the same time frame that applies to private companies. The
Company will adopt this standard on April 1, 2019. Management is currently evaluating the impact of adoption of this ASU
on the Company’s consolidated financial statements. In March
2016, the FASB issued ASU No. 2016-02, Leases. The main difference between the provisions of ASU No. 2016-02 and previous U.S.
GAAP is the recognition of right-of-use assets and lease liabilities by lessees for those leases classified as operating leases
under previous U.S. GAAP. ASU No. 2016- 02 retains a distinction between finance leases and operating leases, and the recognition,
measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from
previous U.S. GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by
class of underlying asset not to recognize right-of-use assets and lease liabilities. The accounting applied by a lessor is largely
unchanged from that applied under previous U.S. GAAP. In transition, lessees and lessors are required to recognize and measure
leases at the beginning of the earliest period presented using a modified retrospective approach. This ASU is effective for public
business entities in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption
is permitted as of the beginning of any interim or annual reporting period. As an Emerging Growth Company, the Company is
allowed to adopt new, or updated, accounting standards using the same time frame that applies to private companies. The
Company will adopt this standard on April 1, 2020. Management is currently evaluating the impact of adoption of this
ASU on the Company’s consolidated financial statements. (m) Risks
and Uncertainties The Company
is in the development stage of one primary product that it expects to introduce to the UK market after completion of clinical
trials and CE mark approval (European Union approval of the product). The Company has entered into sales and marketing agreements
for the product. It has also placed orders for the first commercial batch of transmitter devices with the electronics manufacturer
Datalink Limited. It has not entered into exclusive manufacturing agreements with any of its contract manufacturers. Uncertainties
still exist with regards to regulatory acceptance of the Company’s primary product development efforts and if acceptance
is attained, the cost structure to produce the final product. (n) Preferred
shares On October
5, 2017, the Company entered into common stock exchange agreements with each of its three largest shareholders, to exchange, in
the aggregate, 137,324,000 shares of the Company’s common stock for 137,324 shares of Series A Convertible Preferred Stock.
Each share of Series A Convertible Preferred Stock is convertible into 1,000 shares of the Company’s common stock, automatically
upon the occurrence of all of certain triggering events, as set forth in the Certificate of Designation, namely (a) the sugarBEAT®
device to be commercialized has CE regulatory approval; (b) retail sales having commenced; and (c) retail sales exceeding USD$5
million, inclusive of advanced sales or voluntarily by the holder after February 7, 2018, if these triggering events have not
occurred. Each holder of issued and outstanding Series A Convertible Preferred Stock is entitled to a number of votes equal
to the number of shares of common stock into which the Series A Convertible Preferred Stock is convertible. Holders of Series
A Convertible Preferred Stock are entitled to vote on any and all matters presented to stockholders of the Company, except as
provided by law. The Series A Convertible Preferred Stock has no preference to the common stock as to dividends or distributions
of assets upon liquidation or winding up of the Company (which has been agreed to by the holders of the Series A Convertible Preferred
Stock). The Company determined that the fair value of the preferred shares issued for the common shares was equivalent to
the fair value of the common shares exchanged. On November
6, 2017, the transaction was consummated and 137,324,000 shares of common stock were cancelled. As a result, the Company
had 67,676,000 shares of common stock issued and outstanding as of March 31, 2018. On June
5, 2018, the three holders of our Series A Convertible Preferred Stock (the “Series A Preferred”) each delivered notices
of conversion to voluntarily convert their Series A Preferred, in the aggregate amount of 137,324 of Series A Preferred shares,
into 137,324,000 shares of our common stock. The holders had the right to voluntarily convert each share of Series A Preferred
into 1,000 shares of common stock of the Company. As a result of the conversion, we have 205,000,000 shares of common stock
outstanding as of June 30, 2018. (o) Subsequent
event On June
27, 2018, the Registrant entered into a Master Services Agreement with World Wide Holdings, LLC DBA Invictus Resources, pursuant
to which for an initial three month term, Invictus shall provide services related to advising and assisting company in developing
and implementing appropriate plans and materials for presenting the Company and its business plans, strategy and personnel to
the financial community, introducing the Company to the financial community through the use of social media, digital media and
other online awareness campaigns. The aggregate fees in the amount of $160,000 are payable to Invictus during the initial
three month term. On July 23, 2018 the Company authorized to issue Invictus with a warrant exercisable for 75,000 shares
of common stock at an exercise price of $0.01 per share. |
