Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Significant Accounting Policies

3. SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the transactions of the Company and its subsidiary.

All inter-company accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

COMMON STOCK ISSUED FOR OTHER THAN CASH

Services purchased and other transactions settled in the Company’s common stock and stock options are recorded at the estimated fair value of the stock issued and options granted if that value is more readily determinable than the fair value of the consideration received.

EARNINGS PER SHARE OF COMMON STOCK

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

The Company had the following potential common stock equivalents at June 30, 2015:

Common stock warrants 3,950,000

Common stock options 465,000

Convertible notes payable 519,117

Total common stock equivalents 4,934,117

Since the Company reflected a net loss as of June 30, 2015 and 2014, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

The following table sets forth the computation of earnings per share:

June 30, 2015 June 30, 2014

Net income (loss) $ (1,853,383) $ (3,312,462)

Weighted average common shares outstanding 60,038,298 56,174,903

Net (loss) per share $ (0.03) $ (0.06)

PROPERTY AND EQUIPMENT

The Company records property and equipment at cost and uses straight-line depreciation methods.

	Estimated Useful Lives	June 30, 2015	December 31, 2014
Computer equipment Office furniture	5 years 7 years	$ 19,056 4,746	$ 13,207 4,746
Less accumulated depreciation		(7,692)	(5,467)
Net property and equipment		$     16,110	$     12,486

INVENTORY

The Company’s inventory is valued at the lower of cost or market using the first-in, first-out (FIFO) method. As of June 30, 2015 and December 31, 2014, all inventory consisted of finished goods.

As the Company begins its transition from the Research and Development phase to production, management has estimated the cost of units sold to be equal to the revenue generated on those units. Other direct costs that may be associated with the production of these units has been reflected in Research and Development expenses.

FOREIGN CURRENCY TRANSLATIONS

The Company’s functional and reporting currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange rate prevailing on the date of transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of other comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist principally of funds on hand, deposit with banks and liquid investment funds having maturity of three months or less at the time of the purchase. The Company has no cash equivalents. The Company had funds on deposit of $208,527 at June 30, 2015.

REVENUE RECOGNITION

Revenue for the sale of goods in the course of the ordinary activities is measured at the fair value of the consideration received or receivable, net of returns. Revenue for sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of the goods can be estimated reliably, there is no continuing involvement with the goods, and the amount of the revenue can be measured reliably.

CONCENTRATION OF RISK

Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash. The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits of $250,000. As of June 30, 2015 and December 31, 2014, the Company had no deposits in excess of federally insured limits in its US bank. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash in bank accounts.