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2. Critical Accounting Policies and Estimates
12 Months Ended
Aug. 31, 2015
Accounting Policies [Abstract]  
2. Critical Accounting Policies and Estimates

Cash and Cash Equivalents – The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. At certain times, cash in bank may exceed the amount covered by FDIC insurance. At August 31, 2015 and August 31, 2014 there were deposit balances in a United States bank of $273,808 and $63,000 respectively.

 

Fair Value of Financial Instruments

 

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as 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.  FASB ASC 820-10 also establishes a fair value hierarchy which 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.

As of August 31, 2015 all of the Company’s financial instruments are recorded at fair value.

 

Intangible Assets – Intangible assets are comprised of websites, media content and intellectual property related to the websites acquired through the acquisition of Apollo Media Network, Inc. The total value of these assets as of the date of acquisition on August 31, 2015 were $40,053. These balances will be amortized over their estimated useful lives ranging from three to seven years.

 

Note Receivable and Put Payable – As part of the acquisition of Apollo Media Network, Inc. the Company received a note receivable from the principal of Apollo Media Network, Inc. that is due at the payers discretion from two to nine years from formation on August 31, 2014, resulting in a long term note receivable due to the Company on August 31, 2015 to August 31, 2024. This loan accrues interest at a rate of 1.59% and is expected to be repaid through the exercise of the related Put Option payable that was also established at the same time.

 

As part of the acquisition of Apollo Media Network, Inc. the Company issued a put option to repurchase 1,400,000 shares of common stock from the principal of Apollo Media Network, Inc. which is to be outstanding for the same period of time as the Note Receivable described above. The exercise price of the put is stated as being the full satisfaction of the promissory note valued at $250,000.

 

The note receivable for $250,000 and the put payable for $250,000 are linked to one another and will offset each other once the principal of Apollo Media Network, Inc. elects to exercise. Upon their exercise no cash will exchange hands but the asset and offsetting liability will be removed from the Companies records at that time.

 

Notes payable – As part of the acquisition of Apollo Media Networks, Inc. the company assumed liability for various notes payable due to four individual investors ranging from $5,000 to $64,000 principle amount. These notes have a stated interest rate of 5% except for one $30,000 note that bears interest at 40%. These notes matured at various times throughout 2015. The principle balance of all notes totaled $234,100 and accrued interest at August 31, 2015 was $20,095 for a total debt assumed of $254,195.

 

The Company is currently in the process of negotiating terms with the noteholders to convert their notes into convertible notes that can be repaid through the issuance of the Company’s common stock. There is no guarantee that the company will be able to reach terms with investors to convert them into common stock.

 

As of August 31, 2015 $130,800 principle balance of these notes were past due. The remaining $103,300 matured by December 31, 2015.

 

Quasi-Reorganization – During the fiscal year ended August 31, 2015 the Company’s’ shareholders approved a quasi-reorganization which has been reflected in the accompanying financial statements by an elimination of the accumulated deficit of $3,478,477 as of August 31, 2015, and a corresponding reduction of additional paid in capital. As part of the reorganization the Company evaluated its assets to determine if any needed to be written down to fair market value as a part of the reorganization. The Company determined that all assets were currently being carried at fair value and no adjustment in value we required.

 

Loss per share - The Company computes net loss per common share in accordance with FASB ASC 260 (SFAS No. 128 “Earnings per Share” and SAB No. 98). Under the provisions of ASC 260, the basic net loss per common share is computed by dividing the net loss available to common stock outstanding during the period. Net loss per share on a diluted basis is computed by dividing the net loss for the period by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.

 

The Company has no potentially dilutive securities outstanding as of August 31, 2015 and 2014.

 

Recent Accounting Pronouncements - We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.