Nature of Business and Basis of Presentation
Step Out, Inc. (Step Out
or the Company) was incorporated in Nevada on May 2, 2011. Step Out is a Development stage company and has not yet
realized any revenues from its planned operations. Step Out is currently in the business of opening spas featuring salt water isolation
flotation tanks. See Note 8.
On July 18, 2011 Step Out issued 10,000,000
common shares to acquire 100% membership interest in SOI Nevada, LLC, a Nevada limited liability corporation from the sole shareholder
of Step Out, Inc. The membership interest was acquired at book value from the shareholder. SOI Nevada, LLC became a wholly-owned
subsidiary of Step Out, Inc.
Principles of Consolidation
The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned subsidiary, SOI Nevada, LLC. All significant intercompany transactions
and balances have been eliminated in consolidation.
Basis of Presentation
The financial statements of the Company
have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented
in US dollars.
The Company uses the accrual basis of accounting
and accounting principles generally accepted in the United States of America (GAAP accounting). The Company has adopted
an August 31 fiscal year end.
Use of Estimates
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could
differ from those estimates.
Basic Loss Per Share
Basic income (loss) per share is calculated
by dividing the Companys net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Companys net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no such common stock equivalents
outstanding as of August 31, 2012.
The Company has not adopted any policy
regarding payment of dividends. No dividends have been paid during the periods shown.
Concentrations of Credit Risk
The Company maintains its cash in bank
deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking
relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant
credit risk on cash and cash equivalents.
Cash and Cash Equivalents
The Company considers all highly liquid
investments with maturities of three months or less to be cash equivalents. At August 31, 2012 and August 31, 2011, respectively,
the Company had $15,140 and $10,032 of unrestricted cash to be used for future business operations.
Fair Value of Financial Instruments
The Company's financial instruments consist
of cash, accrued expenses, and amounts due to a related party. The carrying amount of these financial instruments approximates
fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed
in these financial statements.
The Company accounts for employee stock-based
compensation in accordance with the guidance of FASB ASC Topic 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 their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to
additional paid-in capital over the period during which services are rendered. There has been no stock-based compensation issued
The Company follows ASC Topic 505-50, formerly
EITF 96-18, Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction
with Selling Goods and Services, for stock options and warrants issued to consultants and other non-employees. In accordance
with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted
for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can
be more clearly determined. There has been no stock-based compensation issued to non-employees.
Income taxes are computed using the asset
and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on
the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted
tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence,
are not expected to be realized. It is the Companys policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of August 31, 2012, there have been no interest or penalties incurred on income taxes.
Development Stage Company
The accompanying financial statements have
been prepared in accordance with generally accepted accounting principles related to accounting and reporting by development-stage
companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have
commenced, there has been no significant revenues therefrom.
The Company is in the development stage
and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery
of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved
by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any
related receivable is probable.