| 1. BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Formation
and Business Activity HealthTalk
Live, Inc. (the Company) was formed on April 1, 2011 in the State of Nevada and operations commenced immediately. HealthTalk
Live, Inc. was created to spread the importance of natural health and wellness throughout North America and the world. Since inception,
the website HealthTalkLive.com has received visitors from North America, Canada, South America, Europe, Asia and Australia. With
its soon-to-be-launched real-time interactive website, HealthTalkLive.com anticipates becoming one of the primary information
websites available in the world. In partnership with naturopathic practitioners, dieticians and medical doctors, HealthTalkLive.com
strives to provide healthy options for all, whether taking prescription drugs or preferring a total, natural health approach to
well-being. Information is disseminated through the live chat forum, reference center, news, E-newsletters and email. This provides
for a common sense approach to health and wellness, diet, exercise, cleanses and complete regimens, all created individually based
upon each persons unique requirements. During
the year ended March 31, 2017, the Company acquired Humbly Hemp, Inc. and now operates in two segments in accordance with accounting
guidance Financial Accounting Standards Board (FASB) ASC Topic 280, Segment Reporting. Our Chief Executive Officer
has been identified as the chief operating decision maker as defined by FASB ASC Topic 280. Acquisition
of Humbly Hemp, Inc. Effective
September 9, 2016, our former majority shareholders Johnie M. Yawn and Vicki L. Yawn transferred 22,800,000 of their shares of
common stock to Daniel Crawford for a purchase price of $125,000 and pursuant to a Stock Purchase Agreement between the parties.
The purchase price was paid by Mr. Crawford in the form of Secured Promissory Note (the Note) in favor of Dr. and
Mrs. Yawn. The Note is due in full on or before December 9, 2016 and bears no interest except in case of default. The Note is
secured, by a pledge of the shares purchased, under the terms of a Securities Pledge Agreement (the Pledge) between
the parties. As a result of this transaction, a change in control of the company has occurred, and Mr. Crawford is the owner of
approximately 70% of our issued and outstanding common stock. In connection with the change in control, Mr. Crawford was appointed
as our new sole officer and director. In the event of Mr. Crawfords future uncured default under the Note, Dr. and Mrs.
Yawn would be entitled to foreclose on the shares purchased pursuant to the terms of the Pledge. There are no other arrangements
known to the company, the operation of which may, at a subsequent date, result in a change in control of the registrant. On
October 1, 2016, we entered into an Agreement and Plan of Merger (the Merger Agreement) with Humbly Hemp, Inc.,
a private Nevada corporation (Humbly Hemp), and our subsidiary formed for the purposes of the transaction, Humble
Merger Sub, Inc. (the Merger Sub). Pursuant to the Merger Agreement, Humbly Hemp merged with and into the Merger
Sub, which resulted in Humbly Hemp becoming our wholly-owned subsidiary (the Acquisition). Humbly Hemp is a start-up
company planning to offer a line of energy and snack bars featuring all-natural hemp and other healthy ingredients. Going forward,
we intend to continue developing the business of Humbly Hemp, as well as our existing line of business. The sole officer, director,
and controlling shareholder of Humbly Hemp was our own CEO and controlling shareholder, Daniel Crawford. In
addition, pursuant to the terms and conditions of the Merger Agreement:
- The holders of all
of the common stock of Humbly Hemp issued and outstanding immediately prior to the closing of the Acquisition exchanged their
shares on a pro-rata basis for a total of 12,048,000 shares newly-issued shares of our common stock.
- Daniel Crawford,
the holder of 10,000,000 shares of Series A Preferred Stock in Humbly Hemp, exchanged all of his shares of preferred stock
in Humbly Hemp for 5,000,000 shares of our newly-designated Series A Preferred Stock. Our new Series A Preferred Stock is
convertible to common stock at a rate of five (5) shares for every share held and votes together with our common stock at
a rate of sixteen (16) votes for every share held. Our new Series A Preferred Stock ranks equally, on an as-converted basis,
to our common stock with respect to rights upon winding up, dissolution, or liquidation. Our Series A Preferred Stock does
not have any special dividend rights.
- The Company assumed
certain outstanding Convertible Promissory Notes issued by Humbly Hemp, and agreed that such notes shall be convertible to
our common stock at the same prices, and on the same terms and conditions, as set forth therein. Upon
the closing of the share exchange with the Company and Humbly Hemp, Humbly Hemp will become a wholly owned subsidiary of the Company.
The acquisition will be treated as a business combination. However, since Humbly Hemp was owned and controlled by Daniel Crawford,
an officer and director of the Company, the assets will not be adjusted to fair value and will carry over as book value. The
Company may be subject to segment reporting in accordance with ASC 280-10 in future filings. Cash
and Cash Equivalents The
Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Property
and Equipment Property
and equipment are stated at cost. Depreciation is provided by the straight-line method over the useful lives of the related assets,
from three to five years. The
cost of building the Companys website has been capitalized and amortized over a period of three years. Expenditures for
minor enhancements and maintenance are expensed as incurred. Inventory Inventories
are stated at the lower of cost (average cost) or market (net realizable value). Inventory consists of raw materials, work in
process inventory and finished goods inventory of $26,144, $0 and $0, respectively. Use
of Estimates The
preparation of financial statements in conformity with generally accepted accounting principles 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. Long-lived
Assets The
Companys long-lived assets and other assets (consisting of property and equipment) are reviewed for impairment in accordance
with the guidance of the FASB Topic ASC 360, Property, Plant, and Equipment, and FASB ASC Topic 205 Presentation
of Financial Statements . The Company tests for impairment losses on long-lived assets used in operations whenever events
or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset
to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected
to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve managements estimates
on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management
which could have a material effect on our reporting results and financial positions. Fair value is determined through various
valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered
necessary. Through March 31, 2017 and 2016, the Company had not experienced impairment losses on its long-lived assets. However,
there can be no assurances that demand for the Companys products or services will continue, which could result in an impairment
of long-lived assets in the future. Revenue
Recognition The
Company expects to recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (SEC)
Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition. Under
SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists,
(ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably
assured. Income
Taxes The
Company is subject to income taxes in the U.S. Significant judgment is required in evaluating our uncertain tax positions and
determining our provision for income taxes. In accordance with FASB ASC Topic 740, Income Taxes, the Company provides
for the recognition of deferred tax assets if realization of such assets is more likely than not. The Company accounts for income
tax under the provisions of FASB ASC Topic 740, Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of the events that have been included in the financial statements or
tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements
bases of assets and liabilities. Valuation allowances are established against net deferred tax assets when it is more likely than
not that some portion or all of the deferred tax asset will not be realized. Fair
Value of Financial Instruments The
Company applies the provisions of accounting guidance, FASB Topic ASC 825 that requires all entities to disclose the fair value
of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable
to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged
in a current transaction between willing parties. As of March 31, 2017 and March 31, 2016 the fair value of cash and accounts
payable, approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which
fluctuate with market rates. Convertible
Instruments The
Company evaluates and account for conversion options embedded in convertible instruments in accordance with ASC 815 Derivatives
and Hedging Activities Applicable
GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative
financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks
of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is
not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate
instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The
Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated
from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic
value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common
stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under
these arrangements are amortized over the term of the related debt to their stated date of redemption. Recent
Accounting Pronouncements The
Company has evaluated new accounting pronouncements that have been issued and are not yet effective for the Company and determined
that there are no such pronouncements expected to have an impact on the Companys future financial statements. |
