Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

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

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. Such estimates include deferred tax assets arising as a result of the operating loss carry forwards. Actual results could differ from those estimates. The Company’s periodic filings with the SEC 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 Services

Common Stock Issued for Services

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

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 September 30, 2016:

Common stock warrants	385,000
Common stock options	370,000
Total common stock equivalents	755,000

Since the Company recorded net losses for the nine months ended September 30, 2016 and 2015, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. Therefore, a separate computation of diluted earnings (loss) per share is not presented.

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

	September 30, 2016		September 30, 2015
Net income (loss)	$	(1,402,713)	$	(2,784,829)
Weighted average common shares outstanding		63,699,791		60,176,839
Net (loss) per share	$	(0.02)	$	(0.05)

Property and Equipment

Property and Equipment

The Company records property and equipment at cost and uses straight-line depreciation methods over estimated useful lives of 5-7 years.

	September 30, 2016		December 31, 2015
Computer equipment	$	22,124	$	22,124
Office furniture		4,746		4,746
Less:  Accumulated depreciation		(13,263)		(9,582)
Net property and equipment	$	13,607	$	17,288

Inventory

Inventory

The Company’s inventory is valued at the lower of cost or market using the first-in, first-out (FIFO) method. As of September 30, 2016 and December 31, 2015, 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 cost that may be associated with the production of these units has been reflected in research and development expenses.

On June 30, 2016, the Company wrote down the value of its finished goods inventory by approximately $264,000 to reflect obsolete items. The corresponding expense was recorded to research and development expenses.

Foreign Currency Translations

Foreign Currency Translations

The Company’s functional and reporting currency is the U.S. dollar. All transactions initiated in other currencies are translated into U.S. dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the U.S. 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

Cash and cash equivalents consist principally of funds on hand, on 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 $30,182 as of September 30, 2016.

Receivables

Receivables

The accounts receivable balance of $41,369 as of September 30, 2016 is comprised of balances due from six customers totaling $11,030, $10,940, $9,884, $6,810, $1,635 and $1,070. The accounts receivable balance as of December 31, 2015 was comprised of balances due from four customers totaling $5,760, $5,568, $3,210, and $3,580. The balance of the allowance for bad debts was $0 as of September 30, 2016 and December 31, 2015.

Revenue Recognition

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 revenue can be measured reliably.

Concentrations of Credit Risk

Concentrations of Credit Risk

Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash and accounts receivable. 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 September 30, 2016, the Company had no deposits in excess of federally insured limits in its U.S. 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. As of September 30, 2016, six customers represented 100% (26.65%, 26.43%, 23.9%, 16.47%, 3.96% and 2.59%) and as of December 31, 2015, four customers represented 100% (31.8%, 30.7%, 17.7% and 19.8%) of our accounts receivable.

As of September 30, 2016 and December 31, 2015, Medical Murray, accounted for more than 10% of our purchases and accounts payable.