Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Notes

Note 2 - Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

We use estimates and assumptions in preparing financial statements.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could differ from those estimates.

Fair Value of Financial Instruments

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced sale or liquidation. Significant differences can arise between the fair value and carrying amount of financial instruments that are recognized at historical cost amounts. The carrying value of the company’s financial assets and liabilities approximate the fair value of the short maturity of those instruments.

Accounting Method

The Company recognizes income and expenses based on the accrual method of accounting.

Accounts Receivable

Accounts receivable are recorded when invoices are issued and the amount management expects to collect is reported on the balance sheet.  Accounts receivable are written off when they are determined to be uncollectible.  The allowance for doubtful accounts is estimated based on the Company’s historical losses, the existing economic condition in the industry, and the financial stability of its customers.

Advertising

The Company expenses all advertising costs as they are incurred.

Cash and Cash Equivalents

Cash and cash equivalents are defined as demand deposits, money market accounts and overnight investments at banks.  Cash is maintained in banks insured by the FDIC for an aggregate of up to $250,000.  The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Concentrations of Risk

Financial Instruments which potentially subject the Company to concentrations of risk consist primarily of cash and cash equivalents.  The Company places its cash and cash equivalents with major financial institutions.  At June 30, 2014, the Company has $835,102 in excess of federally insured limits.

Dividend Policy

The Company has not yet adopted a policy regarding dividends.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

Inventories

Inventories are stated at the lower of cost or market.  Cost is determined on a first-in, first-out (FIFO) basis and market is determined on the basis of replacement cost or net realizable value.

Long Term Investments

Non-marketable equity investments are carried at cost.  Investments held by the Company are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the investment may not be recoverable.  In the event that facts and circumstances indicate that the cost may be impaired, an evaluation of recoverability would be performed.

Principles of Consolidation

The accompanying consolidated financials include the accounts of the Company and its subsidiaries from its inception.  All significant intercompany accounts and balances have been eliminated upon consolidation.

Property & Equipment

Property and equipment are stated at cost.  The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the various classes of property, as follows:

Machinery & Equipment	5 to 7 years
Furniture & Fixtures	5 to 7 years
Land Improvements	20 years
Building	40 years

Expenditures for additions, improvements and betterments that extend the useful lives of existing assets, if material, are generally capitalized.  Expenditures for maintenance and repairs are charged to expense as incurred. 

Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.  In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability would be performed.

Revenue Recognition

Revenue is recognized upon the completion of the sale and shipment of the product.  The product is sold via the internet and is delivered to customers or to wholesale resellers using a ground courier service.

Sales Taxes

The State of Florida imposes a sales tax ranging from 6.0% to 7.5% on all of the Company’s sales delivered within the State.  The Company collects that sales tax from customers and remits the entire amount to the State.  The Company’s accounting policy is to exclude the tax collected and remitted to the State from revenue and cost of sales.

Shipping and Handling Costs

The Company classifies freight billed to customers as sales revenue and related freight costs as cost of sales.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. As of June 30, 2014 and 2013, there were no common stock equivalents outstanding.

Recent Accounting Pronouncements

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915)”. The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development stage entities, primarily presentation of inception to date financial statements. The provisions of the amendments are effective for the Company’s calendar year 2015, however, early adoption is permitted and, accordingly, we have implemented this guidance effective June 30, 2014.