Attached files

file filename
EX-23.1 - INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM?S CONSENT - Intelligent Living Inc.f10k2011ex23i_feelgolfcoinc.htm
EX-31.1 - CERTIFICATION - Intelligent Living Inc.f10k2011ex31i_feelgolfcoinc.htm
EX-32.1 - CERTIFICATION - Intelligent Living Inc.f10k2011ex32i_feelgolfcoinc.htm
EX-31.2 - CERTIFICATION - Intelligent Living Inc.f10k2011ex31ii_feelgolfcoinc.htm
EX-32.2 - CERTIFICATION - Intelligent Living Inc.f10k2011ex32ii_feelgolfcoinc.htm
EXCEL - IDEA: XBRL DOCUMENT - Intelligent Living Inc.Financial_Report.xls
10-K - ANNUAL REPORT - Intelligent Living Inc.f10k2011_feelgolfcoinc.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R1.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R5.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R7.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R6.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R9.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R2.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R3.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R4.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R10.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R17.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R14.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R12.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R15.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R13.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R16.htm
XML - IDEA: XBRL DOCUMENT - Intelligent Living Inc.R11.htm
v2.4.0.6
Nature of Organization and Significant Accounting Policies
12 Months Ended
Dec. 31, 2011
Nature Of Organization and Significant Accounting Policies [Abstract]  
NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
NOTE 1 – NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
Nature of Business
Feel Golf Co., Inc. (the "Company") was incorporated on February 14, 2000 under the laws of the State of California in the United States of America. The Company designs, manufactures and conducts international marketing and sales of its golf clubs and golf club grips.  The Company's products are based on proprietary patented technology that is used to produce golf clubs, accessories and golf grips which the Company believes have the best "feel" of any golf clubs and golf grips in the market.
 
Basis of Presentation
The financial statements, prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America, include the assets, liabilities, revenues, expenses and cash flows of the Company.
 
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 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.
 
Reclassification of Financial Statement Accounts
Certain amounts in the December 31, 2010 financial statements have been reclassified to conform to the presentation in the December 31, 2011 financial statements.
 
Cash and Cash Equivalents
For purposes of the balance sheets and cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at time of purchase to be cash equivalents.
 
Concentrations of Risk
The Company’s bank accounts are deposited in insured institutions. The funds are insured up to $250,000 USD. At December 31, 2011, the Company’s bank deposits did not exceed the insured amount.
 
Concentrations of Credit Risk and Customers
The Company is diligent in attempting to ensure that it issues credit to credit-worthy customers. However, the Company's customer base is small and our accounts receivable balances are usually over 90 days outstanding, and that exposes the Company to significant credit risk. Therefore, a credit loss can be significant relative to the Company's overall profitability. However, through the year ended December 31, 2011, the Company had not suffered a significant credit loss and does not expect to incur such losses in the near future. However a major Pro Line Sports customer was allowed year end volume cash rebates of approximately $29,000 which was undisclosed and unexpected.  During 2012 the Company has $62,300 placed with outside collection agencies
 
Trade Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based upon historical write-off experience and current economic conditions. The adequacy of its allowance for doubtful accounts is reviewed on a regular basis. Receivable balances past due over 120 days, which exceed a specified dollar amount, are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts totaled $59,759as of December 31, 2011 and 10,000 as of December 31, 2010.
 
Barter Receivable
The Company is involved in several barter organizations that involve the sale of the Company’s products and the Company has access to goods and services of member organizations of the barter organizations.  The Company applies ADC 845, “Accounting for Non-Monetary Transactions”, the provisions of ASC 840, “Accounting for Barter Transactions Involving Barter Credits” and ASC 840 “Accounting for Advertising Barter Transactions.” Barter sales were $17,636 and $65,937, in 2011 and 2010 respectively.
 
As of December 31, 2011 and 2010, the Company had built up a receivable of goods and services through the barter organizations of $33,043and $15,407 respectively.
 
Inventory
Inventories acquired in connection with our Caldwell acquisition are valued at their fair market value based on an independent appraisal. Our remaining inventories are stated at the lower of cost or market using the first-in, first-out (FIFO) cost method of accounting.  Inventories are adjusted for estimated obsolescence and have been written down to net realizable value based upon estimates of future demand and market conditions.
 
At the close of the year ended December 31, 2011, the Company tested its inventory for potential impairment.  Using a future cash flow model, the Company determined that its inventory’s carrying value exceeded its net realizable value.  Accordingly, the Company has impaired the value of its inventory by $475,832 and recorded the expense to cost of goods sold.
 
Property and Equipment
Property and equipment is located at the Company's headquarters in Sanford, FL and is recorded at cost less accumulated depreciation except for certain equipment acquired in connection with the Caldwell acquisition, which were valued at their fair market value based on an independent appraisal. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service. The Company generally uses the following depreciable lives for its major classifications of property and equipment:
 
Description
 
Useful Lives
 
Computer hardware
 
3-7 years
 
Computer software
 
3-5 years
 
Furniture and Office Equipment
 
7 years
 
Production Equipment
 
7 years
 
Leasehold improvements
 
10 years
 
 
Valuation of Long-Lived Assets
Long-lived tangible assets and definite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the assets is recoverable. If the carrying values of the assets exceed the expected future cash flows of the assets, the Company recognizes an impairment loss equal to the difference between the carrying values of the assets and their estimated fair values.
 
Impairment of long-lived assets is assessed at the lowest levels for which there are identifiable cash flows that are independent from other groups of assets. The evaluation of long-lived assets requires the Company to use estimates of future cash flows. However, actual cash flows may differ from the estimated future cash flows used in these impairment tests. As of December 31, 2011, management does not believe any of the Company’s long lived assets were impaired.
 
 
Below is a table identifying the intangible assets subject to amortization and estimated amortization over the next five years and after.
 
Original values of Intangible assets
     
Purchased patents, copyrights and IP
  $ 871,620  
         
Estimated future amortization (years)
       
To-date
  $ 392,229  
      4  
1
    174,324  
2
    174,324  
3
    130,743  
4
    -  
Thereafter
  $ -  
 
Fair Value of Financial Instruments
In accordance with ASC 820, the carrying value of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to the short-term maturity of these instruments.  ASC 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:
 
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
 
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 then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
 
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 receivable, loans payable, and accounts payable and accrued expenses, approximate their fair market value based on the short-term maturity of these instruments. The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2011, on a non-recurring basis:
 
Assets and liabilities measured at fair
 
 
   
 
   
 
   
 
 
value on a recurring and nonrecurring
                   
Total
 
basis at December 31, 2011:
                   
Carrying
 
Nonrecurring:
 
Level 1
   
Level 2
   
Level 3
   
Value
 
Convertible debenture 
  $ -     $ -     $ (280,918 )   $ (280,918 )
Related party notes payable
      -         -         (1,874,541 )       (1,874,541 )
    $ -     $ -     $ (2,155,459 )   $ (2,155,459 )
 
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodology used to measure fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.
 
Notes Payable and Convertible Debenture: Market prices are not available for the Company's loans nor are market prices of similar loans available. The Company assessed that the fair value of this liability approximates its carrying value.
 
The method described above may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. If a readily determined market values became available or if actual performance were to vary appreciably from assumptions used, assumptions may need to be adjusted, which could result in material differences from the recorded carrying amounts. The Company believes its method of determining fair value is appropriate and consistent with other market participants. However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value.
 
The following tables present the fair value of financial instruments as of December 31, 2011, by caption on the condensed balance sheet and by ASC 820 valuation hierarchy described above.
 
   
Related Party
   
Convertible
 
Level 3 Reconciliation:
 
Notes Payable
   
Debentures
 
Level 3 assets and liabilities at December 31, 2010:
  $ (809,072 )   $ (127,160 )
Purchases, sales, issuances and settlements (net)
      (1,065,469 )       (112,514 )
Total level 3 assets and liabilities at December 31, 2011 
  $ (1,874,541 )   $ (239,674 )
 
Revenue Recognition
In accordance with ASC 605, the Company recognizes revenues from the sale of its products when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price to the customer is fixed or determinable and (iv) collection of the resulting receivable is reasonably assured.  The Company records revenue from foreign customers when payment is received.
 
Shipping and Handling Costs
Shipping and handling costs billed to the customer are classified in revenues. Such costs incurred to ship our products are included in cost of sales.
 
Advertising Costs
The Company expenses the costs of advertising; as such advertising is normally in short-term publications. Total advertising costs for 2011 and 2010 were $46,761 and $266,197, respectively.
 
Contribution of Services
The Company's President and majority shareholder did receive compensation for his services during the year ended December 31, 2010. A total of $33,000 was determined by management to be a fair value of his services to the Company on an annual basis and has been recorded as a contribution of capital for the year ended December 31, 2010.   
 
Stock-Based Compensation
The Company follows the provisions of ASC 718 which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.  The Company uses the Black-Sholes pricing model for determining the fair value of stock based compensation.
 
Equity instruments issued to non-employees for goods or services are accounted for at fair value and are marked to market until service is complete or a performance commitment date is reached, whichever is earlier.
 
Income Taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
 
In July, 2006, the FASB issued ASC 740, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a return. ASC 740 provides guidance on the measurement, recognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. ASC 740 became effective as of January 1, 2007 and had no impact on the Company’s financial statements.
 
The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
 
Basic and Diluted Net Loss per Share
Basic and diluted loss per common share is calculated using the weighted average number of common shares outstanding during the period. For the year ended December 31, 2011 and 2010, the Company did not have any dilutive instruments to be included the calculation of earnings per share.
 
Recently Issued Accounting Pronouncements
Below is a listing of the most recent accounting pronouncements issued since through May 27, 2010. The Company has evaluated these pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.
 
In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160.
 
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.
 
In December 2009, the FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167.
 
In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets. This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166.
 
In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing. This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1.
 
In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. This update changed the accounting model for revenue arrangements that include both tangible products and software elements. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.
 
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under existing US GAAP. This amendment has eliminated that residual method of allocation. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.
 
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This update provides amendments to Topic 820 for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). It is effective for interim and annual periods ending after December 15, 2009. Early application is permitted in financial statements for earlier interim and annual periods that have not been issued.
 
In July 2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) "Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance" ("EITF 09-1"). The provisions of EITF 09-1, clarifies the accounting treatment and disclosure of share-lending arrangements that are classified as equity in the financial statements of the share lender. An example of a share-lending arrangement is an agreement between the Company (share lender) and an investment bank (share borrower) which allows the investment bank to use the loaned shares to enter into equity derivative contracts with investors. EITF 09-1 is effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009 are within the scope. Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009.