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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2011
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The Company

-----------

 

Whitemark Homes, Inc. ("Whitemark" or the "Company") was incorporated on July

30, 1975 under the laws of the State of Colorado. On April 1, 2000, Whitemark

disposed of its prior business operations and acquired Whitemark Homes, Inc.

("Whitemark Florida") along with certain related entities (the "Whitemark

Group") in a transaction accounted for as a reverse acquisition. Whitemark

Florida changed its name to Whitemark Homes of Florida, Inc. and the Company

changed its name to Whitemark Homes, Inc. Effective September 30, 2007, the

Company discontinued its real estate development operations.

 

Basis of Presentation and Going Concern

---------------------------------------

 

Management acknowledges its responsibility for the preparation of the

accompanying interim consolidated financial statements which reflect all

adjustments, consisting of normal recurring adjustments, considered necessary in

its opinion for a fair statement of its consolidated financial position and the

consolidated results of its operations for the interim period presented. These

consolidated financial statements should be read in conjunction with the summary

of significant accounting policies and notes to consolidated financial

statements included in the Company's Form 10-K annual report for the year ended

December 31, 2010. The accompanying unaudited consolidated financial statements

for Whitemark Homes and Subsidiaries have been prepared in accordance with

accounting principles generally accepted in the United States of America (the

"U.S.") for interim financial information and with the instructions to Form 10-Q

and Article 8-03 of Regulation S-X. Operating results for interim periods are

not necessarily indicative of results that may be expected for the fiscal year

as a whole.

 

The consolidated financial statements are prepared in accordance with generally

accepted accounting principles in the United States of America. The consolidated

financial statements include the Company and its wholly-owned inactive

subsidiaries, Whitemark Homes of Florida, Inc., a Florida corporation, which

wholly owns Home Funding, Inc, a Florida corporation. White Homes of Florida,

Inc. also holds a 99% interest in two inactive Florida limited liability

partnerships; Whitemark at Fox Glen, Ltd. and Sheeler Hills Ltd. and a

wholly-owned interest in four limited liability companies; Whitemark at Oak

Park, LLC, Whitemark at Corner Lake, LLC, Whitemark at Glenbrook, LLC, and

Whitemark at Little Creek. LLC. All significant intercompany balances and

transactions have been eliminated in the consolidated financial statements.

 

As reflected in the accompanying consolidated financial statements, the Company

had a net loss and net cash used in operations of $163,639 and $0, respectively,

for the nine months ended September 30, 2011 and a working capital deficiency,

accumulated deficit, and a stockholders' deficit of $675,067, $28,010,019, and

$675,067, respectively, at September 30, 2011. In addition, the Company is

inactive as of September 30, 2011, currently has no operations or sources of

revenue and is in default on certain promissory notes. . These conditions raise

substantial doubt about the Company's ability to continue as a going concern The

ability of the Company to continue as a going concern is dependent on the

Company's ability to further implement its business plan which involves

identifying a merger with an operating company, raise additional capital, and

generate revenues. Currently, management is seeking capital to implement its

business plan. Management believes that the actions presently being taken

provide the opportunity for the Company to continue as a going concern. The

consolidated financial statements do not include any adjustments that might be

necessary if the Company is unable to continue as a going concern.

 

Use of Estimates

----------------

 

The preparation of the consolidated financial statements in conformity with

accounting principles generally accepted in the U.S. requires management to make

estimates and assumptions that affect the reported amounts of assets,

liabilities, revenues, expenses, and the related disclosures at the date of the

financial statements and during the reporting period. Actual results could

materially differ from these estimates. Significant estimates in the 2011 and

2010 periods include the valuation of deferred tax assets and the valuation of

the beneficial conversion features on convertible debt.

 

Fair Value of Financial Instruments

-----------------------------------

 

The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820

clarifies the definition of fair value, prescribes methods for measuring fair

value, and establishes a fair value hierarchy to classify the inputs used in

measuring fair value as follows:

 

     o    Level 1-Inputs are unadjusted quoted prices in active markets for

          identical assets or liabilities available at the measurement date.

 

     o    Level 2-Inputs are unadjusted quoted prices for similar assets and

          liabilities in active markets, quoted prices for identical or similar

          assets and liabilities in markets that are not active, inputs other

          than quoted prices that are observable, and inputs derived from or

          corroborated by observable market data.

 

     o     Level 3-Inputs are unobservable inputs which reflect the reporting

          entity's own assumptions on what assumptions the market participants

          would use in pricing the asset or liability based on the best

          available information.

 

The carrying amounts reported in the balance sheets for cash, accounts payable,

accrued expenses, notes payable, and amounts due to related parties approximate

their fair market value based on the short-term maturity of these instruments.

The Company did not identify any assets or liabilities that are required to be

presented on the balance sheets at fair value in accordance with ASC Topic 820.

 

Cash and Cash Equivalents

-------------------------

 

The Company considers all highly liquid investments purchased with original

maturities of three months or less to be cash equivalents. The Company had no

cash equivalents at September 30, 2011 and December 31, 2010.

 

Concentrations of Credit Risk

-----------------------------

 

Financial instruments that potentially subject us to significant concentrations

of credit risk consist principally of cash. The Company performs certain credit

evaluation procedures and does not require collateral for financial instruments

subject to credit risk. The Company maintains its cash in accounts with major

financial institutions in the United States. Deposits in these banks may exceed

the amounts of insurance provided on such deposits. As of September 30, 2011 and

December 31, 2010, there was $5,380 and $5,380, respectively, held in an escrow

account maintained by the Company's attorney and bank deposits did not exceed

federally insured limits. Historically, the Company has not experienced any

losses on our deposits of cash.

 

Income Taxes

------------

 

The Company is governed by the Income Tax Law of the United States. The Company

utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the

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. Under this method, deferred income taxes are

recognized for the tax consequences in future years of differences between the

tax bases of assets and liabilities and their financial reporting amounts at

each period end based on enacted tax laws and statutory tax rates applicable to

the periods in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax

assets to the amount expected to be realized.

 

The Company applied the provisions of ASC 740-10-50, "Accounting For Uncertainty

In Income Taxes", which provides clarification related to the process associated

with accounting for uncertain tax positions recognized in our financial

statements. Audit periods remain open for review until the statute of

limitations has passed. The completion of review or the expiration of the

statute of limitations for a given audit period could result in an adjustment to

the Company's liability for income taxes. Any such adjustment could be material

to the Company's results of operations for any given quarterly or annual period

based, in part, upon the results of operations for the given period. As of

December 31, 2011 and 2010, management believes the Company had no material

uncertain tax positions, and will continue to evaluate for uncertain positions

in the future.

 

Stock-based Compensation

------------------------

 

The Company accounts for stock-based instruments issued to employees in

accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in

the statement of operations the grant-date fair value of stock options and other

equity based compensation issued to employees. The Company accounts for

non-employee share-based awards in accordance with ASC Topic 505-50.

 

Advertising

-----------

 

Advertising is expensed as incurred. For the nine months ended September 30,

2011 and 2010, the Company did not incur advertising expenses.

 

Research and Development

------------------------

 

Research and development costs are expensed as incurred. For the nine months

ended September 30, 2011 and 2010, the Company did not incur research and

development costs.

 

Net Loss per Share of Common Stock

----------------------------------

Basic net loss per common share is computed by dividing net loss available to

common shareholders 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,

common stock equivalents and potentially dilutive securities outstanding during

each period. Potentially dilutive common shares consist of common shares

issuable upon the conversion of convertible promissory notes (using the

if-converted method). All potentially dilutive common shares were excluded from

the computation of diluted shares outstanding as they would have an

anti-dilutive impact on the Company's net losses and consisted of the following:

 

                                       Nine Months ended

                                         September 30,

                                  ----------------------------

                                      2011           2010

                                  -------------  -------------

       Convertible notes            97,746,000    146,619,367

                                  -------------  -------------

       Total                        97,746,000    146,619,367

                                  =============  =============

 

These common stock equivalents may be dilutive in the future. The Company's

authorized number of shares of common stock is limited to 100,000,000 common

shares and 97,962,131 were outstanding at September 30, 2011; only 2,037,869

additional shares are authorized for issuance as of September 30, 2011.

 

Recent Accounting Pronouncements

--------------------------------

 

Accounting standards that have been issued or proposed by FASB that do not

require adoption until a future date are not expected to have a material impact

on the financial statements upon adoption.