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10-K - FORM 10-K - ENTEST BIOMEDICAL, INC.entb0129form10k.htm
EX-32.1 - EXHIBIT 32.1 - ENTEST BIOMEDICAL, INC.entb0129form10kex321.htm
EX-31.2 - EXHIBIT 31.2 - ENTEST BIOMEDICAL, INC.entb0129form10kex312.htm
EX-32.2 - EXHIBIT 32.2 - ENTEST BIOMEDICAL, INC.entb0129form10kex322.htm
EX-31.1 - EXHIBIT 31.1 - ENTEST BIOMEDICAL, INC.entb0129form10kex311.htm
EX-10.37 - EXHIBIT 10.37 - ENTEST BIOMEDICAL, INC.entb0129form10kex1037.htm
EXCEL - IDEA: XBRL DOCUMENT - ENTEST BIOMEDICAL, INC.Financial_Report.xls
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EX-10.39 - EXHIBIT 10.39 - ENTEST BIOMEDICAL, INC.entb0129form10kex1039.htm
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Aug. 31, 2012
Accounting Policies [Abstract]  
BASIS OF ACCOUNTING

A. BASIS OF ACCOUNTING

 

The financial statements have been prepared using the basis of accounting generally accepted in the United States of America. Under this basis of accounting, revenues are recorded as earned and expenses are recorded at the time liabilities are incurred. The Company has adopted an August 31 fiscal  year-end. The Company recognizes revenue from services and product sales when the following four revenue recognition 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. Product sales and service revenues are recorded when the products are delivered and title passes to customers. The customer’s credit card is authorized and charged, or checks/cash are received at the time the services are rendered, thereby providing reasonable assurance of collectability.

PRINCIPLES OF CONSOLIDATION

B. PRINCIPLES OF CONSOLIDATION

 

The consolidated financial statements include the accounts of  Entest CA, the Company’s wholly owned subsidiary. Significant inter-company transactions have been eliminated.

USE OF ESTIMATES

C. 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.

CASH EQUIVALENTS

D. CASH EQUIVALENTS

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

PROPERTY AND EQUIPMENT

E. PROPERTY AND EQUIPMENT

 

Property and equipment are recorded at cost. Maintenance and repairs are expensed in the year in which they are incurred. Property and equipment consist of Office Equipment, medical Equipment and Computer Equipment. Expenditures that enhance the value of property and equipment are capitalized. All property and equipment is depreciated utilizing the Straight Line Method for a period of thirty months , such period being estimated by the Company to represent the useful life of the assets. For the Fiscal Year ended August 31, 2012 the Company incurred depreciation expense of $8,461 and for the Fiscal Year ended August 31, 2011 the Company incurred depreciation expense of $5,591. No depreciation has been recognized in connection with one piece of computer equipment which has yet to be put into service.

Property Plant and Equipment          
               
Acquisition Cost     Estimated useful Life (Months) Total
Office Equipment       30     3,235 
Medical Equipment     30     17,523 
Computer Equipment     30     2,126 
Subtotal             22,884 
Less Accumulated Depreciation         (14,052)
Total             8,832 
FAIR VALUE OF FINANCIAL INSTRUMENTS

F. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Fair value is the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  A fair value hierarchy requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

 

Level 1:  Quoted prices in active markets for identical assets or liabilities

 

Level 2:  Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;  quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

 

Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company’s financial instruments as of August 31, 2012 consisted of $261,831, of Notes Payable, $121,495 of Convertible Notes payable (net of discount), $8,000 due to TheraCyte, Inc, $4,349 of Employee Receivables and $39,140 due from an affiliate. The fair value of all of the Company’s financial instruments as of September 30, 2012 were valued according to the Level 3 input. The carrying amount  of the financial instruments is equal to the fair value as determined by the Company.

 

The Company has determined that there are no Level 1 or Level 2 inputs for determining the fair value of the Company’s financial instruments. Fair value was determined by the Company utilizing its own assumptions and estimation. There were no transfers between levels for the period presented.

INCOME TAXES

G. INCOME TAXES

 

The Company accounts for income taxes using the liability method prescribed by ASC 740, “Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

 

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 August 31, 2011 and 2010, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

 

The Company generated a deferred tax credit through net operating loss carry forward.  However, a valuation allowance of 100% has been established.

 

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

BASIC EARNINGS (LOSS) PER SHARE

H.  BASIC EARNINGS (LOSS) PER SHARE

 

 The Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 260, "Earnings Per Share", which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. ASC 260 requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of ASC 260 effective from inception. Basic net loss per share amounts is computed by dividing the net income by the weighted average number of common shares outstanding. All convertible debt has an anti-dilutive effect on the EPS , therefore Diluted earnings per share are the same as basic earnings per share.