NOTE 2 SUMMARY OF SIGNIFICANT
Use of Estimates
The preparation of the consolidated
interim financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
Reverse Merger Accounting
For accounting purposes, the Merger
Agreement, described above, was treated as a reverse acquisition and recapitalization of Accurate Locators, Inc. and Imaging Locators,
Inc. (accounting acquirer) because, prior to the transaction, the Company was a non-operating public shell and, subsequent to the
transaction, the shareholders of Accurate owned approximately 95% of the outstanding common stock of the Company and exercised
a significant influence over the Company into a non-operating public shell with nominal net assets is considered a capital transaction.
Accordingly, for accounting purposes, the transaction was treated as a reverse acquisition and recapitalization in accordance with
US GAAP. The historical financial statements presented are the consolidated financial statements of Accurate Locators, Inc. and
Imaging Locators, Inc. The common stock and the corresponding capital amounts of the Company pre-merger have been retroactively
restated as capital stock shares reflecting the exchange ratio in the merger. .
The Company accounts for income
taxes in accordance with ASC 740, Income Taxes ("ASC 740"), which requires the recognition of deferred tax liabilities and assets
at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements
or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than
not to be realized.
ASC 740 provides guidance on the
accounting for uncertainty in income taxes recognized in a Company's consolidated financial statements. ASC 740 requires a company
to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical
merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the
amount to recognize in the consolidated financial statements.
The Company performed a review
of its material tax positions. During the period from November 1, 2012 through October 31, 2013 there were no increases or decreases
in unrecognized tax benefits as a result of tax positions taken during period, there were no decreases in unrecognized tax benefits
relating to settlements with taxing authorities, and there were no reductions to unrecognized tax benefits as a result of a lapse
of the applicable statute of limitations. As of October 31, 2013, the Company had no unrecognized tax benefits that, if recognized,
would affect the effective tax rate. As of October 31, 2013 the Company had no tax positions for which it is reasonably possible
that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.
The Company has elected to classify
any interest or penalties recognized with respect to any unrecognized tax benefits as income taxes. The Company did not recognize
any amounts for interest or penalties with respect to any unrecognized tax benefits. As of October 31, 2013, no amounts for interest
or penalties with respect to any unrecognized tax benefits have been accrued.
Cash and cash equivalents
Cash includes all highly liquid
instruments with original maturities of three months or less. The Company had no cash equivalents as of October 31, 2013 and October
Fair Value of Financial Instruments
The Company adopted ASC 820, Fair
Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures
of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
||Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.|
||Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.|
||Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.|
The Company had no such assets
or liabilities recorded to be valued on the basis above at October 31, 2013 and October 31, 2012.
Property and Equipment
Property and Equipment are stated
at historical cost less accumulated depreciation and amortization. Cost represents the purchase price of the asset and other costs
incurred to bring the asset into its existing use. Depreciation is provided on a straight-line basis over the assets' estimated
useful lives. The useful lives of the assets are as follows: machinery and equipment 5 years, office equipment 5 to 7 years, vehicles
5 years, and leasehold improvements use the shorter of the estimated useful life or the remaining term of the agreements, generally
ranging from 3 to 15 years. Additions and improvements are capitalized while routine repairs and maintenance are charged to expense
as incurred. Upon sale or disposition, the historically recorded asset cost and accumulated depreciation are removed from the accounts
and the net amount less proceeds from disposal is charged or credited to other income / expense.
Inventories included metal detectors
for treasure hunting, gold and royal metal prospecting, forensic and military applications and also for locating under-ground utilities.
Inventories are valued at the lower of cost or market. Cost is determined using a weighted-average method. The reserves for obsolescence
are maintained based on historical trends and specific identification, and therefore require management to make assumptions and
to apply judgment about a number of factors, such as market conditions, the selling environment, historical results and current
inventory trends. There were reserves for obsolete inventories of $51,259 as of October 31, 2013 and October 31, 2012.
The Company recognizes revenue
in accordance with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized:
(1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable;
and (4) collectability is reasonably assured. This occurs when the detector devices are shipped to customers or dealers and distributors.
Net Loss Per Share
In accordance with ASC 260-10,
Earnings per Share, basic net (loss per common share is computed by dividing the net loss applicable to common shareholders
by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share is computed by
dividing the loss applicable to common shareholders by the weighted average number of common shares outstanding plus the number
of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the
treasury stock method. The Company currently has no dilutive securities and as such, basic and diluted net income or loss per share
are the same for the period presented.
Recent Adopted Accounting Pronouncements
There are no recently issued accounting
pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results
of operations, or cash flows.