Hemp Naturals (HPMM) 10-Q 25 Sep 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	May 31, 2018	Mar. 07, 2018
Document and Entity Information
Entity Registrant Name	Hemp Naturals, Inc.
Document Type	10-Q
Document Period End Date	May 31, 2018
Amendment Flag	false
Entity Central Index Key	1,664,038
Current Fiscal Year End Date	--11-30
Entity Common Stock, Shares Outstanding		324,125,983
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	2,018
Document Fiscal Period Focus	Q2

Balance Sheets

Balance Sheets - USD ($)	May 31, 2018	Nov. 30, 2017
CURRENT ASSETS:
Cash	$ 16,444	$ 11
Prepaid Expenses	12,352,789	3,720,725
Total Current Assets	12,369,233	3,720,736
TOTAL ASSETS	12,369,233	3,720,736
CURRENT LIABILITIES:
Derivative Liability	171,598	0
Convertible Note Payable, net of debt discount of $59,062	19,688	0
Accrued expenses	7,203	9,074
Total Current Liabilities	198,489	9,074
TOTAL LIABILITIES	198,489	9,074
STOCKHOLDERS' DEFICIT:
Preferred stock, $.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of May 31, 2018 and November 30, 2017	0	0
Common stock, $.0001 par value, 500,000,000 shares authorized, 324,125,983 and 266,125,983 shares issued and outstanding as of May 31, 2018 and November 30, 2017, respectively	32,413	26,613
Additional Paid in Capital	19,344,393	7,709,151
Accumulated Deficit	(7,206,062)	(4,024,102)
Total Stockholders’ Deficit	12,170,744	3,711,662
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT	$ 12,369,233	$ 3,720,736

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)	May 31, 2018	Nov. 30, 2017
Statement of Financial Position [Abstract]
Convertible note payable debt discount	$ 59,062	$ 0
Preferred stock shares par value	$ 0.0001	$ 0.0001
Preferred stock shares authorized	20,000,000	20,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock shares par value	$ 0.0001	$ 0.0001
Common stock shares authorized	500,000,000	500,000,000
Common stock shares issued	324,125,983	266,125,983
Common stock shares outstanding	324,125,983	266,125,983

Statements of Operations

Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2018	May 31, 2017
Operating Expenses
General & Administrative Expenses	$ 1,910,656	$ 19,697	$ 3,069,424	$ 84,961
Total Operating Expenses	1,910,656	19,697	3,069,424	84,961
Other Expenses:
Interest Expense	72,117	0	72,117	0
Loss on Change of Fair Value of Derivative Liability	40,419	0	40,419	0
Total Other Expenses	112,536	0	112,536	0
Loss Before Income Tax Provision	(2,023,192)	(19,697)	(3,181,960)	(84,961)
Income Tax Provision	0	0	0	0
Net Loss	$ (2,023,192)	$ (19,697)	$ (3,181,960)	$ (84,961)
Basic and Diluted Net loss Per Common Stock	$ (0.01)	$ 0	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding- basic and diluted	324,125,983	14,005,983	310,104,005	14,005,983

Statements of Cash Flows

Statements of Cash Flows - USD ($)	6 Months Ended
	May 31, 2018	May 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (3,181,960)	$ (84,961)
Adjustment to reconcile net loss to net cash used in operating activities:
Expenses contributed to capital	35,941	41,685
Stock based compensation	2,967,937	0
Loss on Change of Fair Value of Derivative Liability	40,419	0
Non-Cash Interest Expense	72,117	0
Changes in current assets and liabilities:
Inventory	0	999
Accrued expenses	(1,871)	(2,000)
Net cash used in operating activities	(67,417)	(44,277)
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from Convertible Note Payable	78,750	0
Contributed capital from shareholder	5,100	0
Net cash provided by financing activities	83,850	0
Net increase/(decrease) in cash and cash equivalents	16,433	(44,277)
Cash and cash equivalents at beginning of period	11	46,017
Cash and cash equivalents at end of period	16,444	1,740
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for: Interest	0	0
Cash paid for: Income taxes	0	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIING ACTIVITIES:
Common stock issued recorded as prepaid expense	$ 11,600,000	$ 0

1. Organization and Description

1. Organization and Description of Business	6 Months Ended
	May 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	Hemp Naturals, Inc. (the Company) was incorporated under the laws of the State of Delaware on November 13, 2015. The Company intends to offer consumer goods that are made of industrial hemp and/or the non-psychoactive ingredients of the cannabis plant. The Company has elected November 30th as its year end.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies	6 Months Ended
	May 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Basis of Presentation This summary of significant accounting policies is presented to assist in understanding the Company's unaudited interim financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the unaudited interim financial statements. While the information presented in the accompanying interim financial statements for the six months ended May 31, 2018 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The accompanying unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements (and notes thereto) for the fiscal year ended November 30, 2017 included elsewhere in the Company’s Form 10K filed with the SEC on August 8, 2018. Operating results for the six months ended May 31, 2018 are not necessarily indicative of the results that can be expected for the year ending November 30, 2018. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K for the most recent fiscal year, as filed with the Securities and Exchange Commission on August 8, 2018, have been omitted. Use of Estimates The preparation of unaudited interim 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. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820, Fair Value Measurements and Disclosures ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses Related Parties The Company follows ASC 850, Related Party Disclosures,

3. Going Concern

3. Going Concern	6 Months Ended
	May 31, 2018
Going Concern
Going Concern	The Company’s unaudited interim financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these unaudited interim financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios. The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital until such time as revenue is sufficient to cover expenses. There is no assurance that management's plan will be successful. The unaudited interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

4. Commitments and Contingencie

4. Commitments and Contingencies	6 Months Ended
	May 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	The Company follows ASC 450-20, Los Contingencies, Office Space The Company contracted the use of 3,000 square feet of space owned by our Secretary, Maryna Bleier, who has been and will be contributing the space, valued at $5,000 per month, to the Company as additional paid-in capital July 1, 2016 until July 1, 2028. Beginning July 1, 2028, the Company is obligated to pay $5,000 monthly for the use of their office space per the terms of the rental contract.

5. Prepaid Expenses

5. Prepaid Expenses	6 Months Ended
	May 31, 2018
Prepaid Expense, Current [Abstract]
Prepaid Expenses	During the six months ended May 31, 2018, the Company issued 58,000,000 shares of common stock as compensation for consulting services. The fair value of the shares issued as compensation was $0.20 per share.

6. Convertible Note Payable

6. Convertible Note Payable	6 Months Ended
	May 31, 2018
Debt Disclosure [Abstract]
Convertible Note Payable	On February 28, 2018, the Company entered into a share purchase agreement with third party Adar Bays LLC (“Adar”) in which the Company sold a promissory note to Adar at 8% annual interest and convertible to discounted shares at 55% discount. The one year promissory note was purchased March 6, 2018. As of May 31, 2018, the convertible note payable, derivative liability and accumulated interest totaled $192,861. Fair Value Measurements The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, payables to related parties, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes 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 — quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with the following assumption inputs: March 6, 2018 May 31, 2018 Annual dividend yield - - Expected life (years) 1 .75 Risk-free interest rate 2.00 % 2.16 % Expected volatility 219.0 % 243.0 % Fair Value Measurements at May 31, 2018 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Liabilities Embedded derivative liabilities 171,598 Total $ 171,598 Derivative Liabilities The embedded conversion features of the above convertible notes payable and warrants contain discounted conversion prices and should be recognized as derivative instruments. Such embedded conversion features should be bifurcated and accounted for at fair value. As of the year ended November 30, 2017 and the period ended May 31, 2018, the Company had a derivative liability balance of $0 and $171,598, respectively. The Company uses the Black-Scholes option-pricing model to calculate derivate liability. Fair Value of Embedded Derivative Liabilities: November 30, 2017 $ - Addition 131,179 Converted - Change in Fair Market Value - Changes in fair value of derivative liabilities 40,419 As of May 31, 2018 $ 171,598

7. Shareholder Equity

7. Shareholder Equity	6 Months Ended
	May 31, 2018
Equity [Abstract]
Shareholder Equity	Preferred Stock The authorized preferred stock of the Company consists of 20,000,000 shares with a par value of $0.0001. The Company has no shares of preferred stock issued and outstanding as of May 31, 2018 and November 30, 2017. Common Stock The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.0001. There were 324,125,983 and 266,125,983 shares of common stock issued and outstanding as of May 31, 2018 and November 30, 2017, respectively. On January 14, 2018 29,000,000 common shares were issued to an entity controlled by our CEO as compensation for a two year agreement to provide consulting to the Company. On January 10, 2018 29,000,000 common shares were issued to a shareholder as compensation for a two year agreement to provide consulting to the Company. Pertinent Rights and Privileges Holders of shares of Common Stock are entitled to one vote for each share held to be used at all stockholders’ meetings and for all purposes including the election of directors. Common Stock does not have cumulative voting rights. Nor does it have preemptive or preferential rights to acquire or subscribe for any unissued shares of any class of stock. Holders of shares of Preferred Stock are entitled to voting rights where every one share of Preferred Stock has voting rights equal to one hundred shares of Common Stock. Additional Paid In Capital During the six months ended May 31, 2018, our CEO paid a combined $4,541 in operating expenses which is recorded as additional paid in capital. Our secretary provided rental space to the company totaling $30,000, which is recorded as additional paid in capital. A shareholder paid operating expenses of $1,500 and another shareholder advanced $5,000 to the Company. These contributions from the two shareholders are posted as additional paid in capital as there is no expectation of repayment.

8. Related-Party Transactions

8. Related-Party Transactions	6 Months Ended
	May 31, 2018
Related Party Transactions [Abstract]
Related-Party Transactions	Contributed Capital During the six months ended May 31, 2018, our CEO paid a combined $4,541 in operating expenses which is recorded as additional paid in capital. Our secretary provided rental space to the company totaling $30,000, which is recorded as additional paid in capital. A shareholder paid operating expenses of $1,500 and another shareholder advanced $5,000 to the Company. These contributions from the two shareholders are posted as additional paid in capital as there is no expectation of repayment. Equity On January 14, 2018 29,000,000 common shares were issued to Blue Car Enterprise, an entity controlled by our CEO, as compensation for a two year agreement to provide consulting to the Company. On January 10, 2018 29,000,000 common shares were issued to the Elad National Properties, a shareholder, as compensation for a two year agreement to provide consulting to the Company. Office Space At this time our office space is provided to us rent free by our Secretary Maryna Bleier which is accounted for as contribution of $5,000 monthly. Our office space is located at 16950 North Bay Road, Suite 1803 Sunny Isles Beach, Florida 33160. After July 1, 2028, the Company is obligated to pay $5,000 monthly.

9. Subsequent Events

9. Subsequent Events	6 Months Ended
	May 31, 2018
Subsequent Events [Abstract]
Subsequent Events	After May 31, 2018, our CEO paid expenses on behalf of the Company totaling $1,300. On July 6, 2018, the Board of Directors resolved to increase the total number of authorized shares. The total number of shares of capital stock which the Corporation shall have authority to issue is: one billion two hundred twenty million (1,220,000,000). These shares shall be divided into two classes with one billion two hundred million (1,200,000,000) shares designated as common stock at $.0001 par value and twenty million (20,000,000) shares designated as preferred stock at $.0001 par value.

2. Summary of Significant Acc15

2. Summary of Significant Accounting Policies (Policies)	6 Months Ended
	May 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	This summary of significant accounting policies is presented to assist in understanding the Company's unaudited interim financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the unaudited interim financial statements. While the information presented in the accompanying interim financial statements for the six months ended May 31, 2018 is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with the accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. The accompanying unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements (and notes thereto) for the fiscal year ended November 30, 2017 included elsewhere in the Company’s Form 10K filed with the SEC on August 8, 2018. Operating results for the six months ended May 31, 2018 are not necessarily indicative of the results that can be expected for the year ending November 30, 2018. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K for the most recent fiscal year, as filed with the Securities and Exchange Commission on August 8, 2018, have been omitted.
Use of Estimates	The preparation of unaudited interim 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. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Fair Value of Financial Instruments	The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820, Fair Value Measurements and Disclosures ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses
Related Parties	The Company follows ASC 850, Related Party Disclosures,

6. Convertible Note Payable (Ta

6. Convertible Note Payable (Tables)	6 Months Ended
	May 31, 2018
Debt Disclosure [Abstract]
Schedule of assumptions used	March 6, 2018 May 31, 2018 Annual dividend yield - - Expected life (years) 1 .75 Risk-free interest rate 2.00 % 2.16 % Expected volatility 219.0 % 243.0 %
Fair value heirarchy	Fair Value Measurements at May 31, 2018 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Liabilities Embedded derivative liabilities 171,598 Total $ 171,598
Fair value of derivative liabilities	Fair Value of Embedded Derivative Liabilities: November 30, 2017 $ - Addition 131,179 Converted - Change in Fair Market Value - Changes in fair value of derivative liabilities 40,419 As of May 31, 2018 $ 171,598

1. Organization and Descripti17

1. Organization and Description of Business (Details Narrative)	6 Months Ended
	May 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
State of Incorporation	Delaware
Date of Incorporation	Nov. 13, 2015

5. Prepaid Expenses (Details)

5. Prepaid Expenses (Details)	6 Months Ended
	May 31, 2018shares
Prepaid Expense, Current [Abstract]
Shares issued for consulting services	58,000,000

6. Convertible Note Payable (De

6. Convertible Note Payable (Details)	3 Months Ended	6 Months Ended
	Mar. 06, 2018	May 31, 2018
Debt Disclosure [Abstract]
Annual dividend yield	0.00%	0.00%
Expected life (years)	1 year	9 months
Risk-free interest rate	2.00%	2.16%
Expected volatility	219.00%	243.00%

6. Convertible Note Payable (20

6. Convertible Note Payable (Details 1) - USD ($)	May 31, 2018	Nov. 30, 2017
Embedded derivative liabilities	$ 171,598	$ 0
Total	171,598	$ 0
Level 1
Embedded derivative liabilities	0
Total	0
Level 2
Embedded derivative liabilities	0
Total	0
Level 3
Embedded derivative liabilities	171,598
Total	$ 171,598

6. Convertible Note Payable (21

6. Convertible Note Payable (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2018	May 31, 2017
Debt Disclosure [Abstract]
Beginning balance			$ 0
Addition			131,179
Converted			0
Change in Fair Market Value			0
Changes in fair value of derivative liabilities	$ 40,419	$ 0	40,419	$ 0
Ending balance	$ 171,598		$ 171,598

6. Convertible Note Payable (22

6. Convertible Note Payable (Details Narrative) - USD ($)	May 31, 2018	Nov. 30, 2017
Debt Disclosure [Abstract]
Derivative Liability	$ 171,598	$ 0

7. Shareholder Equity (Details

7. Shareholder Equity (Details Narrative) - USD ($)	May 31, 2018	Nov. 30, 2017
Preferred stock shares par value	$ 0.0001	$ 0.0001
Preferred stock shares authorized	20,000,000	20,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock shares par value	$ 0.0001	$ 0.0001
Common stock shares authorized	500,000,000	500,000,000
Common stock shares issued	324,125,983	266,125,983
Common stock shares outstanding	324,125,983	266,125,983
Chief Executive Officer [Member]
Payments by related parties	$ 4,541
Secretary [Member]
Payments by related parties	30,000
Shareholder [Member]
Payments by related parties	1,500
Shareholder [Member]
Payments by related parties	$ 5,000

8. Related-Party Transactions (

8. Related-Party Transactions (Details Narrative)	May 31, 2018USD ($)
Chief Executive Officer [Member]
Payments by Related Parties	$ 4,541
Secretary [Member]
Payments by Related Parties	30,000
Shareholder [Member]
Payments by Related Parties	1,500
Shareholder [Member]
Payments by Related Parties	$ 5,000