NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements involves the use of
estimates, which have been made using judgment. Actual results may vary from
The financial statements have, in management's opinion, been prepared within the
framework of the significant accounting policies summarized below:
DEVELOPMENT STAGE COMPANY
The Company is considered to be in the development stage, as defined under
Accounting Codification Standard, (ASC 915) "Development Stage Entities". Since
its formation, the Company has not yet realized significant revenues from its
The Company reclassified $780 and $14,377 in "Transfer and filing fees"; $-0-
and $1,500 in "Travel and entertainment", to "General and administrative"
expenses for the year ended September 30, 2011 and for the period from inception
(May 9, 2007) through September 30, 2011, respectively to conform to the current
presentation. The reclassifications had no effect on the Company's financial
condition, results of operation, or cash flows.
CASH AND CASH EQUIVALENTS
The Company considers highly liquid financial instruments purchased with a
maturity of three months or less to be cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles 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 reporting period.
Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Company's financial instruments, consisting of cash and
accounts payable and accrued liabilities, is equal to fair value due to their
short-term to maturity. Unless otherwise noted, it is management's opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments.
The Company recognizes revenue on an accrual basis. Revenue is generally
realized or realizable and earned when all of the following criteria are met: 1)
persuasive evidence of an arrangement exists between the Company and our
customer(s); 2) services have been rendered; 3) our price to our customer is
fixed or determinable; and 4) collectability is reasonably assured. For the
years ended September 30, 2012 and 2011, the Company recognized no revenues.
PER SHARE DATA
In accordance with "ASC 260 - Earnings per Share", the basic loss per common
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. At September 30, 2012 and 2011,
the Company had no stock equivalents that were anti-dilutive and excluded in the
loss per share computation.
The Company records stock based compensation in accordance with the guidance in
ASC Topic 718 which requires the Company to recognize expenses related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
Accordingly, the Company recognized expenses of $2,429 and $0 during the years
ended September 30, 2012 and 2011, respectively (see Note 5).
WEBSITE DEVELOPMENT COSTS
The Company capitalizes its costs to develop its website and when preliminary
development efforts are successfully completed, management has authorized and
committed project funding, and it is probable that the project will be completed
and the website will be used as intended. Such costs are amortized on a
straight-line basis over the estimated useful life of the related asset, which
approximates three years. Costs incurred prior to meeting these criteria,
together with costs incurred for training and maintenance, are expensed as
incurred. Costs incurred for enhancements that are expected to result in
additional material functionality are capitalized and expensed over the
estimated useful life of the upgrades.
The Company capitalized website costs of $46,750 during the year ended September
30, 2012. The Company's capitalized website amortization is included in
depreciation and amortization in the Company's consolidated statements of
operations, and totaled $5,503 for the period.
Advertising costs are to be expensed as incurred in accordance to Company
policy; for the year ended September 30, 2012, Advertising expenses totaled
The Company records income taxes under the asset and liability method, whereby
deferred tax assets and liabilities are recognized based on the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and attributable to operating loss and tax credit carry
forwards. Accounting standards regarding income taxes requires a reduction of
the carrying amounts of deferred tax assets by a valuation allowance, if based
on the information available it is more likely than not that such assets will
not be realized. Accordingly, the need to establish valuation allowances for
deferred tax assets is assessed at each reporting period based on a
more-likely-than-not realization threshold. This assessment considers, among
other matters, the nature, frequency and severity of current and cumulative
losses, forecasts of future profitability, the duration of statutory carry
forward periods, the Company's experience with operating loss and tax credit
carry forwards not expiring unused, and tax planning alternatives. As of
September 30, 2012 and 2011, the Company did not have any amounts recorded
pertaining to uncertain tax positions.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2011, The FASB issued Accounting Standards Update 2011-11,
"Disclosures about Offsetting Assets and Liabilities." This update requires
entities to disclose both gross information and net information about
instruments and transactions eligible for offset in the statement of financial
position and instruments and transactions subject to an agreement similar to a
master netting arrangement. The scope of this update includes derivatives, sale
and repurchase agreements and reverse sale and repurchase agreements and
securities borrowing and lending arrangements. The Company is required to adopt
this update retrospectively for periods beginning after January 1, 2013. The
adoption of this accounting standard update will become effective for the
reporting period beginning January 1, 2013. Management does not anticipate that
adoption will have a material impact on the Company's consolidated financial
position, results of operations or cash flows.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the American Institute of Certified Public
Accountants, and the SEC did not, or are not believed by management to, have a
material impact on the Company's present or future financial position, results
of operations or cash flows.