SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2012

Summary Of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE C – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company, VitaMed and Bocagreen (currently without operations).  All material intercompany balances and transactions have been eliminated in consolidation.

Inventories

Inventories represent packaged nutritional products and supplements which are valued at the lower of cost or market using the average cost method.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with ASC 605, “Revenue Recognition” (“ASC 605”).  Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured.  For its OTC products, the Company generates revenue by sales of products primarily to retail consumers.  The Company’s policy is to recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer.  Outbound shipping and handling fees are included in sales and are billed upon shipment.  Shipping expenses are included in cost of sales.  The majority of the Company’s sales are paid with credit cards and the Company usually receives the cash settlement in two to three banking days.  Credit card sales minimize accounts receivable balances relative to sales.  We provide an unconditional thirty-day money-back return policy whereby we accept product returns from our retail, wholesale and eCommerce customers.  The Company’s prescription products are sold primarily through drug wholesalers and retail chains. Gross sales revenue is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by the customer. Included in revenue are deductions from the gross sales price, including deductions related to estimates for rebates, returns, and other pricing adjustments. The Company records an estimate for these deductions in the same period when revenue is recognized. A summary of each of these deductions is as follows:

● Rebates:

The Company maintains various rebate programs with its sales channel customers in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty.  The rebates generally take the form of a coupon that is returned to the company by the customer and the customer is sent a check for the rebate amount.  An estimated accrued provision for rebate deductions is recognized at the time a product is sold.  Since the Company has no experience in these types of rebates the Company is using an industry average taking into consideration the price of the product and coupon amount.  The Company is monitoring actual rebates granted and comparing them to the estimated provision for rebates to assess the reasonableness of the rebate reserve at each quarterly balance sheet date.  For the three months ended March 31, 2012 and 2011, the Company recorded estimated rebate expense of $1,620 and $0, respectively.

● Returns:

The Company allows its customers to return prescription product if approved by authorized personnel in writing or by telephone with the lot number and expiration date accompanying any request if such products are returned prior to twelve months following the products’ expiration date.  As the Company just began offering prescription products in March 2012, the Company has no experience in their return rate so it is estimating and recognizing an accrued provision for product returns as a percentage of gross sales based on industry average adjusted for the amount of inventory in the wholesaler supply chain.  The Company is monitoring actual returns on a quarterly basis and may record specific provisions for returns it believes are not covered by historical percentages.  For the three months ended March 31, 2012 and 2011 the Company recorded estimated returns of $8,587 and $0, respectively.

Use of Estimates

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.  The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities.  We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.