Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Note 4. Significant Accounting Policies

Development Stage Enterprise

The Company is a development stage company as defined by the Financial Accounting Standards Board (the “FASB”). The Company is devoting substantially all of its present efforts to establish a new business, and its planned principal operations have not yet commenced. All losses accumulated since inceptions have been considered as part of the Company’s development stage activities.

Basis of Presentation

The interim financial information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all disclosures that are necessary and required by applicable laws and regulations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions principally relate to the fair value and forfeiture rates of stock based transactions, and long-lived asset depreciation and amortization, and potential impairment.

Income Taxes

We account for income taxes under the provision of Accounting Standards Codification 740, “Income Taxes”, or ASC 740. As of June 30, 2013 and December 31, 2012, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest or penalties on our consolidated balance sheets at June 30, 2013 and 2012, respectively and have not recognized interest and/or penalties in the consolidated statement of operations for the years ended December 31, 2012 and 2011. We are subject to taxation in the United States and New York.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.

Concentrations of Credit Risk

A financial instrument which potentially subjects the Company to concentrations of credit risk is cash. The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits to $250,000 per owner. In addition to the basic insurance deposit coverage, the FDIC is providing temporary unlimited coverage for noninterest-bearing transaction accounts from December 31, 2011 to December 31, 2012. At June 30, 2013, there were no uninsured deposits.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Securities Available for Sale and Other Comprehensive Income

Our accounting policy is to book all restricted and publicly tradable securities under Securities Available for Sale and, as such, are carried at fair value based on quoted market prices. The Company owns restricted common stock representing approximately a 5.8% interest in Shrink Nanotechnologies, Inc., a publicly traded company. These shares are valued at their quoted market price. Unrealized holding gains and losses for securities available for sale are excluded from earnings and reported as a separate component of stockholder’s equity as other comprehensive income, until the securities are disposed of. Upon disposal, the changes accumulated in other comprehensive income are to be recognized in income. Under this method, the Company’s share of the earnings or losses of the investments are not included in the Consolidated Balance Sheet or Statement of Operations.

The balance of $43,400 as of June 30, 2013 in securities available for sale on the Balance Sheet reflects a $22,400 mark to market increase adjustment in relation to the December 31, 2012 balance of $21,000. There was no mark to market for the period ending June 30, 2013 since the market value of these securities remained the same in comparison to the value as of March 31, 2013.

The following schedule discloses assets measured at fair value on a nonrecurring basis (adapted from ASC 820).


Assets	Total
Beginning Balance as of 12/31/2013	$21,000
Total gains/losses, unrealized in earnings in other comprehensive income (Level 1)	$22,400
Ending Balance as of 06/30/2013	$43,400

On November 30, 2010, the Company entered into an exclusive agreement with the University of Chicago wherein the Company licensed the exclusive, worldwide right to use and sublicense Chicago’s patent-pending Materials and Methods for the Preparation of Nanocomposites and future patent applications filed by the University of Chicago based on certain other patentable technologies. This intangible asset had a book value of $ 44,853 as of December 31, 2011. The Company did not have adequate capital to meet continuing requirements of the University Chicago License and hence we have been given notice that our license had been terminated. As a result, the Company wrote down the full book value of this intangible asset. The loss on the write down of this intangible asset book value was included in Other Comprehensive Income as of December 31, 2012. As of June 30, 2013, the write down of $44,853 has been reclassified to retained earnings.

Fair Value Measurements

Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. US GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

Basic Net Loss per Share of Common Stock

Basic net loss per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted earnings per share are computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Common stock equivalents resulting from the issuance of stock warrants and convertible notes have been considered, but have not been included in the per share calculations because such inclusion would be anti-dilutive due to the Company’s net loss. Common stock issuable is considered outstanding as of the original approval date for purposes of earnings per share computations.

Accounts Payable

Accounts payable consisted of the following at:


		June 30,		December 31,
		2013		2012
		(Unaudited)
Accounts payable	$	100,469	$	94,468
Total	$	100,469	$	94,468

Concentration of Risk

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

VISION DYNAMICS Corp 10-Q