SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECENT ACCOUNTNG PRONOUNCEMENTS
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3 Months Ended |
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Aug. 31, 2012
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECENT ACCOUNTNG PRONOUNCEMENTS | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECENT ACCOUNTNG PRONOUNCEMENTS | NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECENT ACCOUNTNG PRONOUNCEMENTS The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows. DEVELOPMENT STAGE COMPANY The Company is a development stage company as defined in ASC Standard 915-10-05 and has recognized no revenue and devotes substantially all of its efforts on establishing its online retail and product development business. Its planned principal operations in advancing its online product development business have commenced. All losses accumulated since inception have been considered a part of the Company's development stage activities. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP 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. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. The primary management estimates included in these financial statements is the licensing fees, stock option valuation and the fair value of its stock tendered in various non-monetary transactions. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At August 31, 2012, cash and cash equivalents included cash on hand and cash in the bank. INVENTORIES Inventories consist of retail products which are stated at the lower of cost or market. Cost is determined by the specific identification method. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts reflected in the consolidated balance sheets for cash, accounts payable, and accrued expenses approximate the respective fair values due to the short maturities of these items. PRINCIPLES OF CONSOLIDATION The accompanying financial statements represent the consolidated financial position and results of operations of the Company and include the accounts and results of operations of the Company and its subsidiaries. The accompanying financial statements include the active entity of Domark International, Inc. and its wholly owned subsidiaries, Musclefoot Inc., Solawerks Inc and Domark Canada Inc. The Company has relied upon the guidance provided by Statements of Financial Accounting Standards, ASC 810-10-15-3. STOCK-BASED COMPENSATION The Company accounts for share based payments in accordance with ASC 718, Compensation - Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective - Fair Value at Grant Date, the Company estimates fair value of the award using a valuation technique. For this purpose, the Company uses the Black-Scholes option pricing model. The Company believes the model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. Compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expenses includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with provisions of ASC 505. NET LOSS PER COMMON SHARE The Company computes net loss per share in accordance with the Earning per Share Topic of the FASB ASC 260. Under the provisions of ASC, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. As of August 31, 2012, options and warrants were outstanding and have been valued using Black-Scholes. RESEARCH AND DEVELOPMENT All research and development expenditures are expensed as incurred. There was no R&D cost incurred during the Quarter. REVENUE RECOGNITION The Company recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collection of the resulting receivable is reasonably assured. Inventory is capitalized and costs of sales are recognized during the period in which the sales occurred. The Company derived its revenues for the period through internet sales of our solar charging units. The Company recognized these sales once delivery is made from the warehouse (FOB shipping point). |