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Note 1 - Nature of Business and Significant Accounting Policies
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9 Months Ended |
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May 31, 2012
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| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Note
1 – Nature of Business and Significant Accounting
Policies
Nature
of business
Sport
Endurance, Inc. (“the Company”) was incorporated
as Cayenne Construction, Inc. in the state of Nevada on
January 3, 2001 (“Inception”). The Company was
formed to be an independent service provider of ready-mix
concrete, whereby management was to arrange purchases of
ready-mixed concrete by small contractors and customers on a
fee basis. The Company ceased operations in 2002 and was
revived in 2009 with a name change to, “Sport
Endurance, Inc.” on August 6, 2009. The Company intends
to manufacture and distribute a line of sports energy
drinks.
Basis of
presentation
The
unaudited condensed financial statements have been prepared
in accordance with United States generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and reflect all
adjustments which, in the opinion of management, are
necessary for a fair presentation. All such adjustments are
of a normal recurring nature. The results of operations for
the interim period are not necessarily indicative of the
results to be expected for the fiscal year ending August 31,
2012. It is suggested that these interim condensed financial
statements be read in conjunction with the Form 10-K.
The
Company has adopted a fiscal year end of August 31st.
Development
Stage Company
The
Company is considered to be in the development stage as
defined by FASB ASC 915-10-05. This standard requires
companies to report their operations, shareholders equity and
cash flows from inception through the reporting date. The
Company will continue to be reported as a development stage
entity until, among other factors, revenues are generated
from management’s intended operations. Management has
provided financial data since inception (January 3,
2001).
Use of
Estimates
The
preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and
the 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.
Cash and
Cash Equivalents
Cash
and equivalents include investments with initial maturities
of three months or less. The Company maintains its
cash balances at credit-worthy financial institutions that
are insured by the Federal Deposit Insurance Corporation
("FDIC") up to $250,000. Deposits with these banks
may exceed the amount of insurance provided on such deposits;
however, these deposits typically may be redeemed upon demand
and, therefore, bear minimal risk. The Company did not have
any cash equivalents at May 31, 2012.
Income
Taxes
The
Company accounts for income taxes using the asset and
liability method, which requires the establishment of
deferred tax assets and liabilities for the temporary
differences between the financial reporting basis and the tax
basis of the Company’s assets and liabilities at
enacted tax rates expected to be in effect when such amounts
are realized or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment
date. A valuation allowance is provided to the
extent deferred tax assets may not be recoverable after
consideration of the future reversal of deferred tax
liabilities, tax planning strategies, and projected future
taxable income.
Fair
Value of Financial Instruments
Under
FASB ASC 820-10-05, the Financial Accounting Standards Board
establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosures about
fair value measurements. This Statement reaffirms
that fair value is the relevant measurement attribute. The
adoption of this standard did not have a material effect on
the Company’s financial statements as reflected herein.
The carrying amounts of cash and accrued expenses reported on
the balance sheet are estimated by management to approximate
fair value primarily due to the short term nature of the
instruments. The Company had no items that
required fair value measurement on a recurring basis.
Basic
and Diluted Loss Per Share
The
basic net loss per common share is computed by dividing the
net loss by the weighted average number of common shares
outstanding. Diluted net loss per common share is computed by
dividing the net loss adjusted on an “as if
converted” basis, by the weighted average number of
common shares outstanding plus potential dilutive securities.
For the periods presented, there were no outstanding
potential common stock equivalents and therefore basic and
diluted earnings per share result in the same figure.
Recently
Issued Accounting Pronouncements
In
September 2011, the Financial Accounting Standards Board
(FASB) issued Accounting Standards Update (ASU) No. 2011-08,
Intangibles – Goodwill and Other (Topic 350): Testing
Goodwill for Impairment. The guidance in ASU 2011-08 is
intended to reduce complexity and costs by allowing an entity
the option to make a qualitative evaluation about the
likelihood of goodwill impairment to determine whether it
should calculate the fair value of a reporting unit. The
amendments also improve previous guidance by expanding upon
the examples of events and circumstances that an entity
should consider between annual impairment tests in
determining whether it is more likely than not that the fair
value of a reporting unit is less than its carrying amount.
Also, the amendments improve the examples of events and
circumstances that an entity having a reporting unit with a
zero or negative carrying amount should consider in
determining whether to measure an impairment loss, if any,
under the second step of the goodwill impairment test. The
amendments in this ASU are effective for annual and interim
goodwill impairment tests performed for fiscal years
beginning after December 15, 2011. Early adoption is
permitted, including for annual and interim goodwill
impairment tests performed as of a date before September 15,
2011, if an entity’s financial statements for the most
recent annual or interim period have not yet been issued. The
adoption of this guidance is not expected to have a material
impact on the Company’s financial position or results
of operations.
In
June 2011, the FASB issued ASU 2011-05, “Comprehensive
Income (Topic 220): Presentation of Comprehensive
Income”, which is effective for annual reporting
periods beginning after December 15, 2011. ASU 2011-05
will become effective for the Company on April 1, 2012.
This guidance eliminates the option to present the components
of other comprehensive income as part of the statement of
changes in stockholders’ equity. In addition,
items of other comprehensive income that are reclassified to
profit or loss are required to be presented separately on the
face of the financial statements. This guidance is
intended to increase the prominence of other comprehensive
income in financial statements by requiring that such amounts
be presented either in a single continuous statement of
income and comprehensive income or separately in consecutive
statements of income and comprehensive income. The
adoption of ASU 2011-05 is not expected to have a material
impact on our financial position or results of
operations.
In
May 2011, the FASB issued ASU 2011-04, “Fair Value
Measurement (Topic 820): Amendments to Achieve Common Fair
Value Measurement and Disclosure Requirements in U.S. GAAP
and IFRSs” (ASU 2011-04), which is effective for annual
reporting periods beginning after December 15, 2011.
This guidance amends certain accounting and disclosure
requirements related to fair value measurements.
Additional disclosure requirements in the update include: (1)
for Level 3 fair value measurements, quantitative information
about unobservable inputs used, a description of the
valuation processes used by the entity, and a qualitative
discussion about the sensitivity of the measurements to
changes in the unobservable inputs; (2) for an entity’s
use of a nonfinancial asset that is different from the
asset’s highest and best use, the reason for the
difference; (3) for financial instruments not measured at
fair value but for which disclosure of fair value is
required, the fair value hierarchy level in which the fair
value measurements were determined; and (4) the disclosure of
all transfers between Level 1 and Level 2 of the fair value
hierarchy. ASU 2011-04 will become effective for the
Company on April 1, 2012. We are currently evaluating
ASU 2011-04 and have not yet determined the impact that
adoption will have on our financial statements.
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