iTalk 10-Q 23 Apr 15 2015 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Feb. 28, 2015	Apr. 22, 2015
Document And Entity Information
Entity Registrant Name	iTalk Inc.
Document Type	10-Q
Document Period End Date	28-Feb-15
Amendment Flag	FALSE
Entity Central Index Key	1373444
Current Fiscal Year End Date	-23
Entity Common Stock, Shares Outstanding		349,543,348
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

iTalk_Inc_CONDENSED_CONSOLIDAT

iTalk Inc. - CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Current Assets
Cash	$29,075	$42,870
Prepaid and other expenses	62,231	71,318
Total Current Assets	91,306	114,188
Property and equipment, net	73,671	74,106
Other assets:
Customer lists, net	164,838	164,838
Domain rights	125,400	125,400
Debt issue costs	4,325	28,588
Total other assets	294,563	318,826
Total Assets	459,539	507,120
Current Liabilities
Accounts payable and accrued expenses	257,199	232,907
Deferred revenue	104,565	104,565
Accrued salary -related parties	177,500	102,500
Convertible note payable, net of debt discount of $244,932	989,626	990,825
Stock based payable	14,725	14,725
Settlement payable	348,000	348,000
Advances payable	50,000	50,000
Advances Payable - Related Party	3,300	3,300
Loan Payable - Related Party	36,965	36,965
Derivative liability	840,435	476,429
Total Current Liabilities	2,822,315	2,360,216
Stockholders' Deficit
Preferred stock; $0.001 par value; 50,000,000 and 50,000,000 shares authorized; 50,000,000 and 50,000,000 shares issued and outstanding as of February 28, 2015 and August 31, 2014; respectively	0	0
Series A Preferred Stock, $0.001 par value; 5 and -0- shares designated, 5 and -0- shares issued and outstanding as of February 28, 2015 and August 31, 2014, respectively	0	0
Series B Preferred Stock, $0.001 par value; 49,999,995 and 49,999,995 shares designated, 49,999,995 and 49,999,995 shares issued; 49,999,995 and 49,999,995 shares outstanding as of February 28, 2015 and August 31, 2014, respectively	50,000	50,000
Common stock, $0.001 par value 1,875,000,000 shares authorized; 349,543,348 and 111,249,454 shares issued and outstanding as of February 28, 2015 and August 31, 2014, respectively	349,543	111,249
Additional paid in capital	1,105,638	1,212,815
Accumulated deficit	-3,867,955	-3,227,161
Total stockholders' deficit	-2,362,776	-1,853,096
Total liabilities and stockholders' deficit	$459,539	$507,120

iTalk_Inc_CONDENSED_CONSOLIDAT1

iTalk Inc. - CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, Par Value	$0.00	$0.00
Preferred stock, Shares Authorized	50,000,000	50,000,000
Preferred stock, Shares Issued	50,000,000	0
Preferred stock, Shares Outstanding	50,000,000	0
Preferred stock Series A, Par Value	$0.00	$0.00
Preferred stock Series A, Shares Authorized	5	0
Preferred stock Series A, Shares Issued	5	0
Preferred stock Series A, Shares Outstanding	5	0
Preferred stock Series B, Par Value	$0.00	$0.00
Preferred stock Series B, Shares Authorized	49,999,995	0
Preferred stock Series B , Shares Issued	49,999,995	0
Preferred stock Series B, Shares Outstanding	0	0
Common Stock, Par Value	$0.00	$0.00
Common Stock, Shares Authorized	1,875,000,000	1,875,000,000
Common Stock, Shares Issued	349,543,348	349,543,348
Common Stock, Shares Outstanding	349,543,348	349,543,348

iTalk_Inc_CONDENSED_CONSOLIDAT2

iTalk Inc. - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	3 Months Ended		6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014
Revenues
Sales	$159,301	$137,620	$339,838	$345,952
Cost of sales	80,456	146,169	238,761	332,851
Gross (loss) profit	78,845	-8,549	101,076	13,101
Operating Expenses
Selling, general and administrative	186,950	144,396	301,317	797,762
Research and development expenses	0	20,009	0	28,000
Depreciation and amortization	24,135	35,075	24,898	62,997
Total operating expenses	-211,085	-199,479	-325,671	-888,759
Loss from operations	-132,240	-208,028	-224,595	-875,658
Other income (expense):
Gain (loss) on change in fair value of derivatives	-192,642	-1,134,280	-364,006	154,526
Interest expense	-48,320	-210,249	-52,194	-1,257,375
Total other expenses	-240,962	-1,344,529	-416,200	-1,102,849
Net Loss	($373,202)	($716,003)	($640,795)	($1,978,517)
Net Loss per common share, basic	$0	($0.01)	$0	($0.04)
Weighted average number of common shares outstanding, basic and diluted	278,509,766	49,402,124	231,593,499	48,415,487

iTalk_Inc_CONDENSED_CONSOLIDAT3

iTalk Inc. - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
Cash Flows from Operating Activities
Net Loss	($640,795)	($1,978,517)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	24,898	62,997
Amortization of debt discount	23,917	926,656
Bad debt expense	0	80,065
Common stock issued in connection with forbearance agreement	0	106,324
Liability for registration rights	0	155,080
Gain (loss) on change in derivative liabilities	364,006	-154,516
Stock based compensation	46,000	197,021
Changes in operating assets and liabilities:
Accounts receivable	0	-80,065
Prepaid expenses	9,091	-1,270
Accounts payable and accrued expenses	16,788	123,314
Accrued salaries - related parties	82,500	0
Deferred revenue	0	50,199
Net cash used in operating activities	-73,795	-512,712
Cash Flows From Investing Activities
Purchase of equipment	0	-625
Net cash used in investing activities	0	-625
Cash Flows from Financing Activities
Proceeds from common stock subscriptions	0	112,500
Proceeds from notes payable	0	150,000
Proceeds from convertible note payable	60,000	235,000
Net Cash provided by financing activities	60,000	497,500
Net decrease in cash	-13,795	-15,837
Cash at beginning of period	42,870	42,370
Cash at end of period	29,075	26,533
Supplemental Disclosures of Cash Flow Information
Interest paid	0	0
Income taxes paid	0	0
Non cash investing and financing activities:
Common stock issued in payment of settlement payable	0	115,522
Common stock issued in connection with issuance of convertible debt	$85,116	$0

1_SUMMARY_OF_SIGNIFICANT_ACCOU

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Feb. 28, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	A summary of the significant accounting policies applied in the preparation of the accompanying unaudited condensed consolidated financial statements follows:
	Business and Basis of Presentation
	ITALK, INC. (the “Company”) was formed on July 10, 2006 under the laws of the State of Nevada as Sopac Cellular Solutions, Inc. On December 18, 2012, the Company changed its name iTALK, INC. effected by way of a merger with its wholly-owned subsidiary iTalk, Inc which was created solely to facilitate the name change. The Company was formed to sell wireless technology and cell phone service to medium and large corporations, involving a large array of cellular service plans, cell phones, software and accessories.
	In December 2014 iTalk, Inc. formed a subsidiary Limestone Energy Holdings, Inc., a Florida corporation (“Limestone”) to explore a diversification strategy into the oil and gas industry. This new subsidiary was formed whereby the founders of Limestone are the CEO of iTalk, Inc. who owns 7% of Limestone, iTalk, Inc. owns 86%, Wager H.S., LLC owns 5% and Bridle Path Investments I, LLC owns 2%. The minority shareholders in Limestone have a right to convert into a like percentage of common shares of iTalk, Inc. only upon an oil and gas company acquisition by either Limestone directly or by iTalk, Inc.
	The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, iTalk, Inc. and RocketVoL, Inc. All significant inter-company transactions and balances have been eliminated in consolidation.
	Development Stage Company
	The Company has elected to adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements.  The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
	Interim Financial Statements
	The following (a) condensed consolidated balance sheet as of August 31, 2014, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended February 28, 2015 are not necessarily indicative of results that may be expected for the year ended August 31, 2014. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended August 31, 2013 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on December 16, 2014.
	Going Concern
	The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported net losses of $640,795and $1,978,517for the six month periods ended February 28, 2015 and 2014, respectively, accumulated deficit of $2,822,315and total current liabilities in excess of current assets of $2,731,009 as of February 28, 2015.
	The Company has minimal revenues from operations and will be dependent on raising funds to satisfy its ongoing capital requirements for the next 12 months. The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or by in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, or on acceptable terms, or at all. In any of these pressures, any of these circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations.
	The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
	Revenue Recognition
	The Company follows the guidance in Staff Accounting Bulletin (SAB) No. 104, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 104 states that revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured.
	Revenues are primarily derived from fees charged to terminate voice services over the Company’s network and from related monthly recurring charges. Variable revenue is earned based on the number of minutes during a call and is recognized upon completion of a call. Revenue from each customer is calculated from information received through the Company’s network switches. The Company tracks the information received from the switch and analyzes the call detail records and applies the respective revenue rate for each call. Fixed revenue is earned from monthly recurring services provided to customers that are fixed and recurring in nature, and are connected for a specified period of time. Revenues are recognized as the services are provided and continue until the expiration of the contract or until cancellation of the service by the customer. Cash fees received prior to call completion are recorded on the Company’s consolidated balance sheets as unearned revenue. As of February 28, 2015 and August 31, 2014, the Company recorded unearned revenue of $104,565 and $104,565, respectively.
	Use of estimates
	The preparation of financial statements in accordance 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 disclosures 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. Significant estimates include the useful life of fixed assets and assumptions used in the fair value of stock-based compensation.
	Derivative Instrument Liability
	The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged.
	In accordance with this authoritative guidance, the Company recognized certain reset conversion features embedded in an issued a settlement agreement, convertible notes payable and registration rights agreement as derivative instruments at fair value.
	Accounting for changes in the fair value of the derivative instruments depend on whether the derivative qualifies as hedge relationships and the types of relationships designated are based on the exposures hedged. At February 28, 2015 and August 31, 2014, the Company did not have any derivative instruments that were designated as hedges.
	Net Income (loss) per Common Share
	The Company computes net income (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net income (loss) per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period
	Research and development
	In accordance with ASC 730, “Research and Development”, the Company expenses all research and development costs as incurred. The Company had incurred $7,000 and $35,000 for the three and six months ended February 28, 2015, respectively; and $-0- and $-0- for the three and six months ended February 28, 2015, respectively. The Company expects the research and development costs to increase in the future as it continues to invest in the infrastructure that is critical to achieve our business goals and objectives.
	Cash and Cash Equivalents
	For purposes of reporting cash flows, the Company considers all cash on hand, in banks, certificates of deposit and other highly liquid debt instruments with a maturity of three months or less at the date of purchase, to be cash and cash equivalents.
	Property and equipment
	Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is five years for computer assets and software. Expenditures for maintenance and repairs are expensed as incurred.
	Intangible Assets
	The Company amortized its identifiable intangible assets using the straight-line method over their estimated period of benefit.  The estimated useful lives of the customer relationships and domain rights are five years. The Company periodically evaluates the recoverability of intangible assets and takes into account events or circumstances that warrant revised estimates of useful lives or indicate that impairment exists.
	Prepaid Expenses
	As of February 28, 2015 and August 31, 2014, prepaid expenses were zero and $71,318, respectively.
	Stock-Based Compensation
	The Company accounts for our stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.
	This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
	Compensation expense for restricted stock or options granted to non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.
	Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company uses the Black-Scholes option-pricing model to value its stock option awards which incorporate the Company’s stock price as determined by an outside third-party, an average volatility of comparable companies, U.S. risk-free rate, dividend rate, and estimated life.
	Income taxes
	Income tax provisions or benefits for interim periods are computed based on the Company’s estimated annual effective tax rate. Based on the Company's historical losses and its expectation of continuation of losses for the foreseeable future, the Company has determined that it is more likely than not that deferred tax assets will not be realized and, accordingly, has provided a full valuation allowance. As the Company anticipates or anticipated that its net deferred tax assets at February 28, 2015 and 2014 would be fully offset by a valuation allowance, there are no federal or state income tax benefit for the periods ended February 28, 2015 and 20143 related to losses incurred during such periods.
	Fair Value of Financial Instruments
	Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2015 and August 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
	Recently Issued Accounting Pronouncements
	There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

2_PROPERTY_AND_EQUIPMENT

2. PROPERTY AND EQUIPMENT	6 Months Ended
	Feb. 28, 2015
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Property and equipment as of February 28, 2015 and August 31, 2014 is summarized as follows:
		February 28,			August 31,
		2015			2014
	Computer equipment	$	13,442		$	13,442
	Software		112,950			112,950
	Total		126,950			126,950
	Less:  accumulated depreciation		(53,279	)		(52,286	)
		$	73,671		$	74,106
	Depreciation for the three and six months ended February 28, 2015 was $993.  Depreciation of the three and six months ended February 28, 2014 was $27,922.

3_SETTLEMENT_PAYABLE

3. SETTLEMENT PAYABLE	6 Months Ended
	Feb. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
SETTLEMENT PAYABLE	On October 18, 2013, the Company entered into a settlement agreement with IBC Funds (“IBC”) in settlement of an aggregate of $418,000 of past-due obligations of the Company comprised of notes payable in aggregate of $380,928 and related accrued interest, which IBC had purchased from certain vendors of the Company pursuant to the terms of separate claim purchase agreements between IBC and each of such vendors, plus fees and costs.
	Pursuant to the terms of the settlement agreement, the Company issued 1,107,680 shares during 2013 of the Company’s common stock as a settlement fee and agreed to issue, in one or more tranches as necessary, that number of shares equal to $70,000 upon conversion to Common Stock at a conversion rate equal to 65% of the lowest closing bid price of the Common Stock during the ten trading days prior to the date the conversion is requested by IBC. The Company has identified the embedded derivatives related to the settlement agreement. These embedded derivatives included certain conversion features and reset provisions.
	On May 27, 2014, the Company issued 4,939,760 shares of its common stock as collateral in connection with the continuing litigation with IBC Funds.  The common stock was recorded at par value in the Company’s financial statements. On June, July and August 2014 the company issued 21,000,000 shares of its common stock as collateral in connection with the continuing litigation with IBC Funds. On October 2014, the company issued 15,210,000 shares equal to $208,542.34 upon conversion to common stock as collateral in connection with the litigation with IBC Funds and finalized the IBC settlement.
	The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of settlement agreement and to fair value as of each subsequent reporting date which at February 28, 2015 was $840,435. At the inception of the settlement agreement, the Company determined the aggregate fair value of $631,220 of the embedded derivatives.
	The fair value of the embedded derivatives at inception was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 229.31%, (3) weighted average risk-free interest rate of 0.12% %, (4) expected life of 1.00 year, and (5) estimated fair value of the Company’s common stock from $0.1316 per share. The initial fair value of the embedded debt derivative of $631,220 was allocated as a debt discount up to the settlement agreement ($418,000) with the remainder ($213,220) charged to current period operations as interest expense. For the six months ended February 28, 2015, the Company amortized $418,000, due to the demand nature of the agreement, to current period operations as interest expense. As of February 28, 2015 the gross balance of the settlement agreement was $348,000.

4_CONVERTIBLE_NOTE_PAYABLE

4. CONVERTIBLE NOTE PAYABLE	6 Months Ended
	Feb. 28, 2015
Notes to Financial Statements
CONVERTIBLE NOTE PAYABLE	Yew Note
	On May 17, 2013, the Company issued a $130,928 unsecured convertible promissory note that matured August 31, 2014. The promissory note bears interest at a rate of 4.9% and can be convertible into 130,928 shares of the Company’s common stock, at a conversion rate of $1.00 per share. Interest will also be converted into common stock at the conversion rate of $1.00 per share. The note was assigned to IBC Funds LLC on October 2013 but as part of the note cancelation settlement with IBC on September 2014 the liability was reestablished on the Company’s balance sheet. The note currently is in default and the Company is in the process of negotiating an extension.
	Radican Notes
	On September 16, 2013, the Company issued two unsecured notes payable, in the aggregate amount of $150,000, a bearing interest at 12% per annum with both principal and interest due at March 31, 2014.  The Company may repay the notes at any time prior to maturity at amount equal to 130% of the outstanding principal redeemed plus accrued interest.
	The holders have a right, at maturity or in an event of default (as defined), to convert any outstanding and unpaid principal portion of the notes and accrued interest at a conversion price of 50% of the average of five lowest bid prices of the Company’s common stock during the previous fifteen trading days from the conversion date.
	On March 31, 2014, at maturity, the Company has identified the embedded derivatives related to the above described notes. These embedded derivatives included certain conversion features and reset provisions.
	On November 30, 2014 the Company issued 10,000,000 shares of common stock with a value of $50,000 in settlement of $50,000 of the convertible note payable.
	KBM Worldwide
	On September 16, 2014, the Company issued an unsecured 8% convertible note in the amount of $53,000, a bearing interest at 8% per annum with both principal and interest due on June 18, 2014.  The Company has an option, subject to the approval and acceptance of the holder, to pay the note in cash at a redemption premium of 150% of the principal amount. The Company received $50,000 and $3,000 was charged to debt costs.
	The note is convertible into the Company’s common stock, at any time, at a conversion price of the lower of: i) 50% discount to the average three lowest bids on the twenty trading days before the date the note was executed, or ii) 50% of the average of the three lowest bid prices during the twenty trading days preceding the delivery of any conversion notice.
	The Company has identified the embedded derivatives related to the note described above. These embedded derivatives included certain conversion features and reset provisions.
	The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of note and to fair value as of each subsequent reporting date, which at February 28, 2015 was $36,741.
	The fair value of the embedded derivatives at inception was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 170%, (3) weighted average risk-free interest rate of 0.002%, (4) expected life of 0.30 year, and (5) estimated fair value of the Company’s common stock from $0.0001 per share. The initial fair value of the embedded debt derivative of $97,634 was allocated as a debt discount up to the settlement agreement of $53,000, As of February 28, 2015 the gross balance of the note was $53,000.
	Beaufort Capital
	On October 2, 2014, the Company issued an unsecured 12% convertible note in the amount of $12,500, a bearing interest at 12% per annum with both principal and interest due on January 25, 2015.  The Company has an option, subject to the approval and acceptance of the holder, to pay the note in cash at a redemption premium of 150% of the principal amount. The Company received $10,000 and $2,500 was charged to debt costs.
	The note is convertible into the Company’s common stock, at any time, at a conversion price of the lower of: i) 58% discount to the average three lowest bids on the twenty trading days before the date the note was executed, or ii) 50% of the average of the three lowest bid prices during the twenty trading days preceding the delivery of any conversion notice.
	The Company has identified the embedded derivatives related to the above described note. These embedded derivatives included certain conversion features and reset provisions.
	The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of note and to fair value as of each subsequent reporting date which at February 28, 2015 was $12,292.
	The fair value of the embedded derivatives at inception was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 82%, (3) weighted average risk-free interest rate of 0.013%, (4) expected life of 0.12 year, and (5) estimated fair value of the Company’s common stock from $0.0001 per share. The initial fair value of the embedded debt derivative of $97,634 was allocated as a debt discount up to the settlement agreement of $12,500, As of February 28, 2015 the gross balance of the note was $12,500.

5_DERIVATIVE_LIABILITIES

5. DERIVATIVE LIABILITIES	6 Months Ended
	Feb. 28, 2015
Notes to Financial Statements
DERIVATIVE LIABILITIES	As described in Notes 4 and 6 above, the Company has identified embedded derivatives in a settlement and note payables. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date which at February 28, 2015 was aggregate of $840,435
	During the six months ended February 28, 2015, the Company recorded an aggregate of $364,006 loss on change in fair value of derivative liabilities.

6_STOCK_BASED_PAYABLE

6. STOCK BASED PAYABLE	6 Months Ended
	Feb. 28, 2015
Notes to Financial Statements
STOCK BASED PAYABLE	In connection with the acquisition of Rocket VoIP, the Company is obligated to issue a remaining 95,000 shares of the Company’s common stock.  As such, the Company has recorded a stock based payable of $14,725 reflecting the fair value of the 95,000 shares of common stock at the date of the acquisition.
	The Company issued $5,500 in fair value of its common stock to three individuals for service.

7_STOCKHOLDERS_EQUITY

7. STOCKHOLDERS EQUITY	6 Months Ended
	Feb. 28, 2015
Equity [Abstract]
STOCKHOLDERS EQUITY	On January 14, 2015 the Company filed an amendment to their Articles increasing the authorized shares to 1,875,000,000 shares.
	On December 9, 2014 the Company issued 10,050,000 shares of common stock for convertible debt with a value of $12,000
	On December 16, 2014 the Company issued 32,980,082 shares of common stock for convertible debt with a value of $23,296
	On December 22, 2014 the Company issued 5,500,000 shares of common stock to three individuals for service with a value of $5,500.
	On January 9, 2015 the Company issued 3,338,560 shares of common stock for convertible debt with a value of $1,669.
	On January 13, 2015 the Company issued 26,070,127 shares of common stock for convertible debt with a value of $1,669.
	On February 3, 2015 the Company issued 28,651,070 shares of common stock for convertible debt with a value of $9,124.
	On February 20, 2015 the Company issued 31,487,526 shares of common stock for convertible debt with a value of $4,273.

8_RELATED_PARTY_TRANSACTIONS

8. RELATED PARTY TRANSACTIONS	6 Months Ended
	Feb. 28, 2015
Disclosure Text Block [Abstract]
Related Party Transactions	Officer's salaries for the  David  Levy  and  Richard  Dea,  were not paid and accordingly  the Company has accrued their  salaries due under their  employment starting February 1, 2013. The two officers accrued amounts are $177,500 and $102,500 in aggregate as of February 28, 2015 and August 31, 2014, respectively.

9_FAIR_VALUE_MEASUREMENT

9. FAIR VALUE MEASUREMENT	6 Months Ended
	Feb. 28, 2015
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENT	The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
	ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:
	Level 1 – Quoted prices in active markets for identical assets or liabilities.
	Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.
	Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
	All items required to be recorded or measured on a recurring basis are based upon level 3 inputs.
	To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.
	Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements.
	The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.
	As of February 28, 2015 or August 31, 2014, the Company did not have any items that would be classified as level 1 or 2 disclosures.
	The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed in notes 4 and 5. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Notes 4 and 6 are that of volatility and market price of the underlying common stock of the Company.
	As of February 28, 2015 and August 31, 2014, the Company did not have any derivative instruments that were designated as hedges.
	The derivative liability as of February 28, 2015, in the amount of $840,435 has a level 3 classification.
	The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of February 28, 2015:
		Derivative
		Liability
	Balance, August 31, 2014	$	476,429
	Loss on change in fair value of derivatives		346,006
	Balance, February 28, 2015	$	840,435

10_COMMITMENTS_AND_CONTINGENCI

10. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Feb. 28, 2015
Commitments and Contingencies Disclosure [Abstract]
COMMITMENT AND CONTINGENCIES	In December 2014 iTalk, Inc. formed a subsidiary Limestone Energy Holdings, Inc., a Florida corporation (“Limestone”) to explore a diversification strategy into the oil and gas industry. This new subsidiary was formed whereby the founders of Limestone are the CEO of iTalk, Inc. who owns 7% of Limestone, iTalk, Inc. owns 86%, Wager H.S., LLC owns 5% and Bridle Path Investments I, LLC owns 2%. The minority shareholders in Limestone have a right to convert into a like percentage of common shares of iTalk, Inc. only upon oil and gas company acquisition by either Limestone directly or by iTalk, Inc.
	On January 6, 2015, Limestone entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Hilliard Bender Energy, LLC, a Florida limited liability company, (“Hilliard”). Pursuant to the Purchase Agreement, Limestone will purchase all of the outstanding membership interests of Hillard as of the Closing (as defined in the Purchase Agreement) in consideration for 51 shares of common stock of Limestone (“Limestone Consideration”). Subsequent to the Closing, the Limestone consideration will be convertible into 625,000,000 shares of the Company’s restricted common stock.
	iTalk, Inc. has convertible debt outstanding and other liabilities outstanding, which will either be settled from the first financings raised by Limestone and/or iTalk, Inc. or repaid by iTalk, Inc. through share issuances to such creditors. It is estimated at the date of this Agreement the total required to satisfy all these financial obligations are estimated to be less than $1.0 million. Certain of the existing debt obligations have terms and conditions that could restrict the Company’s ability to complete this transaction, future transactions, or future financings, unless their obligations are satisfied. The obligation of Limestone to consummate the transaction is subject to a condition that the Company will have increased the number of its authorized shares of common stock from 500 million to 1.5 billion (the “Authorized Increase”). The Authorized increase will required the Company to amend and restate its Schedule 14C originally filed with the Securities and Exchange Commission on November 14, 2014 to include detailed information regarding Hilliard and its business as required by Items 11, 13 and 14 Schedule 14A promulgated under Section 14(a) of the Securities Exchange Act of 1934, as amended. The consummation of the transaction is also subject to the satisfaction of other customary conditions, including obtaining requisite consents and approvals and performance in all material respects by the parties of their covenants and agreements under the Purchase Agreement.

11_SUBSEQUENT_EVENTS

11. SUBSEQUENT EVENTS	6 Months Ended
	Feb. 28, 2015
Disclosure Text Block [Abstract]
SUBSEQUENT EVENTS	On March 1, 2015 the Company issued 27,583,333 shares of its common stock for debt with a value of $3,310.
	On March 16, 2015 the Company issued 16,512,719 shares of its common stock for debt with a value of $1,800.
	On March 23, 2015 the Company issued 34,604,791 shares of its common stock for debt with a value of $3,641.
	On March 24, 2015 the Company issued 9,958,333 shares of its common stock for debt with a value of $1,195.
	On March 30, 2015 the Company issued 37,500,000 shares of its common stock for debt with a value of $4,500.

1_SUMMARY_OF_SIGNIFICANT_ACCOU1

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Feb. 28, 2015
Accounting Policies [Abstract]
Business and Basis of Presentation	ITALK, INC. (the “Company”) was formed on July 10, 2006 under the laws of the State of Nevada as Sopac Cellular Solutions, Inc. On December 18, 2012, the Company changed its name iTALK, INC. effected by way of a merger with its wholly-owned subsidiary iTalk, Inc which was created solely to facilitate the name change. The Company was formed to sell wireless technology and cell phone service to medium and large corporations, involving a large array of cellular service plans, cell phones, software and accessories.
	In December 2014 iTalk, Inc. formed a subsidiary Limestone Energy Holdings, Inc., a Florida corporation (“Limestone”) to explore a diversification strategy into the oil and gas industry. This new subsidiary was formed whereby the founders of Limestone are the CEO of iTalk, Inc. who owns 7% of Limestone, iTalk, Inc. owns 86%, Wager H.S., LLC owns 5% and Bridle Path Investments I, LLC owns 2%. The minority shareholders in Limestone have a right to convert into a like percentage of common shares of iTalk, Inc. only upon an oil and gas company acquisition by either Limestone directly or by iTalk, Inc.
	The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, iTalk, Inc. and RocketVoL, Inc. All significant inter-company transactions and balances have been eliminated in consolidation.
Development Stage Company	The Company has elected to adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements.  The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
Interim Financial Statements	The following (a) condensed consolidated balance sheet as of August 31, 2014, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended February 28, 2015 are not necessarily indicative of results that may be expected for the year ended August 31, 2014. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended August 31, 2013 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on December 16, 2014.
Going Concern	The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has reported net losses of $640,795and $1,978,517for the six month periods ended February 28, 2015 and 2014, respectively, accumulated deficit of $2,822,315and total current liabilities in excess of current assets of $2,731,009 as of February 28, 2015.
	The Company has minimal revenues from operations and will be dependent on raising funds to satisfy its ongoing capital requirements for the next 12 months. The Company will require additional financing in order to execute its operating plan and continue as a going concern. The Company cannot predict whether this additional financing will be in the form of equity or debt, or by in another form. The Company may not be able to obtain the necessary additional capital on a timely basis, or on acceptable terms, or at all. In any of these pressures, any of these circumstances would have a material adverse effect on its business, prospects, financial condition and results of operations.
	The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
Revenue Recognition	The Company follows the guidance in Staff Accounting Bulletin (SAB) No. 104, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 104 states that revenue is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured.
	Revenues are primarily derived from fees charged to terminate voice services over the Company’s network and from related monthly recurring charges. Variable revenue is earned based on the number of minutes during a call and is recognized upon completion of a call. Revenue from each customer is calculated from information received through the Company’s network switches. The Company tracks the information received from the switch and analyzes the call detail records and applies the respective revenue rate for each call. Fixed revenue is earned from monthly recurring services provided to customers that are fixed and recurring in nature, and are connected for a specified period of time. Revenues are recognized as the services are provided and continue until the expiration of the contract or until cancellation of the service by the customer. Cash fees received prior to call completion are recorded on the Company’s consolidated balance sheets as unearned revenue. As of February 28, 2015 and August 31, 2014, the Company recorded unearned revenue of $104,565 and $104,565, respectively.
Use of estimates	The preparation of financial statements in accordance 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 disclosures 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. Significant estimates include the useful life of fixed assets and assumptions used in the fair value of stock-based compensation.
Derivative Instrument Liability	The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged.
	In accordance with this authoritative guidance, the Company recognized certain reset conversion features embedded in an issued a settlement agreement, convertible notes payable and registration rights agreement as derivative instruments at fair value.
	Accounting for changes in the fair value of the derivative instruments depend on whether the derivative qualifies as hedge relationships and the types of relationships designated are based on the exposures hedged. At February 28, 2015 and August 31, 2014, the Company did not have any derivative instruments that were designated as hedges.
Net Income (loss) per Common Share	The Company computes net income (loss) per share under Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of shares of common stock. Diluted net income (loss) per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period
Research and development	In accordance with ASC 730, “Research and Development”, the Company expenses all research and development costs as incurred. The Company had incurred $7,000 and $35,000 for the three months ended February 28, 2015, respectively; and $-0- and $-0- for the three months ended November 30, 2013, respectively. The Company expects the research and development costs to increase in the future as it continues to invest in the infrastructure that is critical to achieve our business goals and objectives.
Cash and Cash Equivalents	For purposes of reporting cash flows, the Company considers all cash on hand, in banks, certificates of deposit and other highly liquid debt instruments with a maturity of three months or less at the date of purchase, to be cash and cash equivalents.
Property and equipment	Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset's estimated useful life, which is five years for computer assets and software. Expenditures for maintenance and repairs are expensed as incurred.
Intangible Assets	The Company amortized its identifiable intangible assets using the straight-line method over their estimated period of benefit.  The estimated useful lives of the customer relationships and domain rights are five years. The Company periodically evaluates the recoverability of intangible assets and takes into account events or circumstances that warrant revised estimates of useful lives or indicate that impairment exists.
Prepaid Expenses	As of February 28, 2015 and August 31, 2014, prepaid expenses were zero and $71,318, respectively.
Stock-Based Compensation	The Company accounts for our stock based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.
	This guidance establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
	Compensation expense for restricted stock or options granted to non-employees is determined in accordance with the standard as the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.
	Determining the appropriate fair value of the stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based payment and stock price volatility. The Company uses the Black-Scholes option-pricing model to value its stock option awards which incorporate the Company’s stock price as determined by an outside third-party, an average volatility of comparable companies, U.S. risk-free rate, dividend rate, and estimated life.
Income taxes	Income tax provisions or benefits for interim periods are computed based on the Company’s estimated annual effective tax rate. Based on the Company's historical losses and its expectation of continuation of losses for the foreseeable future, the Company has determined that it is more likely than not that deferred tax assets will not be realized and, accordingly, has provided a full valuation allowance. As the Company anticipates or anticipated that its net deferred tax assets at February 28, 2015 and 2014 would be fully offset by a valuation allowance, there are no federal or state income tax benefit for the periods ended February 28, 2015 and 20143 related to losses incurred during such periods.
Fair Value of Financial Instruments	Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2015 and August 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Recently Issued Accounting Pronouncements	There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

2_PROPERTY_AND_EQUIPMENT_Table

2. PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Feb. 28, 2015
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT		February 28,			August 31,
		2015			2014
	Computer equipment	$	13,442		$	13,442
	Software		112,950			112,950
	Total		126,950			126,950
	Less:  accumulated depreciation		(53,279	)		(52,286	)
		$	73,671		$	74,106

9_FAIR_VALUE_MEASUREMENT_Table

9. FAIR VALUE MEASUREMENT (Tables)	6 Months Ended
	Feb. 28, 2015
Fair Value Measurement Tables
Summary of changes in fair value of the Company's Level 3 financial liabilities		Derivative
		Liability
	Balance, August 31, 2014	$	476,429
	Loss on change in fair value of derivatives		346,006
	Balance, February 28, 2015	$	840,435

2_PROPERTY_AND_EQUIPMENT_Detai

2. PROPERTY AND EQUIPMENT (Details) (USD $)	Feb. 28, 2015	Aug. 31, 2014
Property, Plant and Equipment [Abstract]
Computer equipment	$13,442	$13,442
Software	112,950	112,950
Total	126,950	126,950
Less: accumulated depreciation	-53,279	-52,286
Net	$73,671	$74,106

2_PROPERTY_AND_EQUIPMENT_Detai1

2. PROPERTY AND EQUIPMENT (Details Narrative) (USD $)	6 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
Property And Equipment Details Narrative
Depreciation	$993	$27,922

9_FAIR_VALUE_MEASUREMENT_Detai

9. FAIR VALUE MEASUREMENT (Details) (USD $)	Feb. 28, 2015
Fair Value Measurement Details
Beginning, Balance	$476,429
Loss on change in fair value of derivatives	346,006
Ending, Balance	$840,435