Note 2. Summary of Significant Accounting Policies
Use of Estimates
The financial statements of the Company have been prepared
using accounting principles generally accepted in the United States of America. These principles require management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities,
and reported amounts of revenue and expenses. Actual results could differ from those estimates.
The Companys accounts receivable are derived from
direct customers. Collateral is not required for accounts receivable. The Company maintains an allowance for potential credit losses
as considered necessary. At September 30, 2012, the allowance for potential credit losses was $0. The Company performs
ongoing reviews of all customers that have breached their payment terms or for whom information has become available indicating
a risk of non-recoverability. Payment terms are immediately upon receipt of invoice. The Company records an allowance
for bad debts for specific customers identified as well as an allowance based on its historical collection experience. The Companys
evaluation of the allowance for potential credit losses requires the use of estimates and the actual results may differ from these
The Company derives its revenue from the sale of marketing
consulting services through both recurring subscription based arrangements and custom consulting projects. The Company utilizes
written contracts as the means to establish the terms and condition services are sold to customers. Where applicable, the Company
will also look to include performance-based compensation upside in its agreements whereby the Company will share in customers
incremental increases in revenue (Revenue Sharing Arrangements). As of September 30, 2012, the Company has not
established any Revenue Sharing Arrangements.
Marketing consulting service revenues
Because the Company provides its applications as services,
it follows the provisions of Securities and Exchange Commission Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition The
Company recognizes revenue when all of the following conditions are met:
||there is persuasive evidence of an arrangement;|
||the service has been provided to the customer;|
||the collection of the fees is reasonably assured; and|
||the amount of fees to be paid by the customer is fixed or determinable.|
Concentration of credit and business risks
Significant customers. For the year ended September
30, 2012 the Company had three customers whose revenue was in excess of 10% of the total revenue of the Company. Of the $92,500
recorded for the year, the three customers accounted for $54,000 or 58.4% of total revenue.
Stock Based Compensation
Stock compensation arrangements with non-employee service
providers are accounted for in accordance ASC 505-50 Equity-Based Payments to Non-Employees, using
a fair value approach.
Fair Value of Financial Instruments
The carrying amounts reported in the balance sheet for cash,
accounts receivable, accounts payable and accrued expenses and income tax payable approximate their fair values due to the short-term
maturities of these financial instruments.
Derivative instruments consisted of common stock warrants
due to certain cash settlement and down round provisions. These financial instruments are recorded in the balance sheet as liabilities.
Fair Value Measurements
The authoritative guidance for fair value measurements defines
fair value as the exchange price that would be received if an asset were to be sold or paid to transfer a liability (an exit price)
in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date.Market participants are buyers and sellers in the principal market that are (i) independent,
(ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on
the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair
value which are the following:
||Level 1 Quoted prices in active markets for identical assets or liabilities|
||Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data for substantially the full term of the assets or liabilities.|
||Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities.|
Earnings per share
Earnings per share, in accordance with the provisions of
ASC 260-10, Earnings Per Share, is computed by dividing net income by the weighted average number of common stock shares outstanding
during the period. Potentially dilutive securities at September 30, 2012 consist of 82,500 common stock purchase warrants.
Recent Accounting Requirements
Management does not believe that any recently issued, but
not currently effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.