Note 3 - Summary of Significant Accounting Policies
|3 Months Ended|
Mar. 31, 2018
|Notes to Financial Statements|
|Significant Accounting Policies [Text Block]||
3– Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Group and its wholly owned subsidiary, Coretec. Intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the disclosure of contingent assets and liabilities. Actual results could differ from the estimates and assumptions used.
Long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
notbe recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company
firstcompares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is
notrecoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and
thirdparty independent appraisals, as considered necessary.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instrument held by the Company:
Current assets and current liabilities- The carrying value approximates fair value due to the short maturity of these items.
Notes payable –The fair value of the Company’s notes payable has been estimated by the Company based upon the liability’s characteristics, including interest rate. The carrying value approximates fair value.
Beneficial Conversion Feature of Convertible Notes Payable
The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic
20,Debt with Conversion and Other Options, Emerging Issues Task Force ("EITF")
5,Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF
27,Application of Issue
5To Certain Convertible Instruments. The beneficial conversion feature of a convertible note is normally characterized as the convertible portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a beneficial conversion feature related to the issuance of a convertible note when issued.
The beneficial conversion feature of a convertible note is credited to additional paid-in-capital. The intrinsic value is recorded in the consolidated financial statements as a debt discount and such discount is amortized over the expected term of the convertible note and is charged to interest expense.
Basic and Diluted Loss Per Common Share
Basic loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.
Basic and diluted loss per shares are calculated the same for all periods presented due to the net loss. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:
The table above for all periods has been retroactively adjusted to reflect the Reverse Split.
The Company evaluates events that have occurred after the balance sheet date but before the condensed consolidated financial statements are issued. Based upon the evaluation, the Company did
notidentify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed in Note
Recent Accounting Pronouncements
The following is a summary of recent accounting pronouncements that are relevant to the Company:
January 2016,the FASB issued ASU
Financial Instruments – Overall (Subtopic
): Recognition and Measurement of Financial Assets and Financial Liabilities(“ASU
01addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments, specifically equity investments and financial instruments measured at amortized cost. ASU
01is effective for public companies for annual and interim periods beginning after
December 15, 2017.ASU
nothave a material impact on the Company’s financial statements.
August 2016,the FASB issued ASU
Statement of Cash Flows (Topic
): Classification of Certain Cash Receipts and Cash Payments(“ASU
eighttargeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU
15is effective for public companies for interim and annual periods beginning after
December 15, 2017,with early adoption permitted. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. ASU
nothave a material impact on the Company’s cash flows.
February 2016,the FASB issued accounting standards update (ASU)
)intended to increase transparency and comparability among companies by requiring most leases to be included on the balance sheet and by expanding disclosure requirements. This is effective for public business entities for fiscal years beginning after
December 15, 2018,including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company is currently evaluating the impact that this new guidance
mayhave on its consolidated results of operations, cash flows, financial position and disclosures.
The FASB has issued ASU
Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in FASB ASC
605- Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. On
July 9, 2015,the FASB deferred the effective date of ASU
09from annual periods beginning after
December 15, 2016to annual periods beginning after
December 15, 2017.This ASU should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the ASU recognized at the date of initial application. The adoption of this standard did
nothave a material impact on the Company’s consolidated financial position and results of operations because the Company currently has
January 2017,the FASB issued ASU
Business Combinations (Topic
): Clarifying the Definition of a Business. This ASU provides a screen to determine when a set is
nota business. The screen requires that when substantially all of the fair value of gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is
nota business. The amendments in this ASU are effective beginning after
December 15, 2017,including interim periods within those periods and should be applied prospectively. The adoption of this standard did
nothave a material impact on its consolidated financial position and results of operations.
January 2017,the FASB issued ASU
Intangibles – Goodwill and Other (Topic
): Simplifying the Test for Goodwill Impairment. This ASU simplifies the subsequent measurement of goodwill by eliminating Step
2from the goodwill test. Under Step
2,an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and labilities following the procedure that would be required in determining the fair value of assets acquires and labilities assumed in a business combination. Instead, an entity should perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendments in this ASU are effective beginning after
December 15, 2019,however early adoption is permitted beginning
January 1, 2017and should be applied on a prospective basis. The Company does
notanticipate that the adoption of this standard will have a material impact on its consolidated financial position and results of operations.
The entire disclosure for all significant accounting policies of the reporting entity.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef