Item 1. Description of Business
Organization
HealthTalk Live, Inc. (The Company), is a Nevada Corporation formed on April 1, 2011 by its founders, Johnie M. Yawn and Vicki L. Yawn. The principal executive office is located at 1955 Baring Blvd, Sparks, NV 89434. Telephone: 775-358-1412
Overview
Our business provides traditional, plus natural health and wellness information services through our real-time interactive website, HealthTalkLive.com, and through our Live Radio Show on Sirius/XM channel 131 distributed through Salem Radio Network and other affiliate radio stations. For the most part, the affiliate radio stations will be an additional source of revenue, web traffic and advertising. Users of our site have access to information on traditional and natural methods of health care and how to employ those methods, either alone or as a compliment modern medical treatment. HealthTalkLive.com is an Integrative health site.
On July 11, 2014 HealthTalk Live Inc., entered into a long term continuing contract with Salem Radio Network (SRN) to distribute the live call-in radio show, Health Talk Live, on Sirius/XM satellite radio channel 131 Saturdays 1-2 PM Eastern, starting August 2, 2014. The show is also being streamed live worldwide and available for simultaneous affiliate radio station rebroadcast by either direct satellite connection or broadcast quality Computer Modem (CM). Affiliate stations may also download the show by file transfer protocol (FTP) for replay during a different time slot. As a result of this agreement and our now having a radio outlet for our content, HealthTalk Live, Inc. anticipates revenue to increase and, although it is still too early to accurately predict. Even though HealthTalk Live, Inc. showed a profit for the last quarter of the company's FY there is no assurance we will be profitable in future quarters.
On our site, information is disseminated through the live chat forum, reference center, news E-newsletters, Health Tools, Medical Videos.
The type of information disseminated through the web site is highly customizable to the user's inputs. The information distributed comes from Health Guides and personal Health Calculators that are widely available in Health and Medical Journals. In some cases, the "forum" or open "blog" will answer individual questions. These questions are answered by various users of the site and are not validated or endorsed by the company. All statements are the opinion of Company and are not intended to diagnose, treat, cure or prevent any disease. The information disseminated on the radio show is live in real time although the stream is delayed 8 seconds. Affiliate stations may rebroadcast our show in any time slot they wish, any show replayed in any time slot other than live is considered a delayed broadcast.
The Company's advice for wellness includes integrative medicine. The National Institute of Health defines Integrative Medicine as the combination of conventional medicine with Complementary and Alternative Medicine for which there is evidence of safety and effectiveness. Integrative Medicine is designated to treat the person and not just the disease. This approach depends on a partnership between the patient and the doctor, where the goal is to treat the mind, body, and spirit all at the same time. The Company believes that through integration, more time and attention can be spent on a broader approach to healing, and is not based entirely on Western Medical thought. The National Center for Complementary and Alternative Medicine (NCCAM), part of the National Institute of Health (nih.gov) which changed its name to the National Center for Complementary and Integrative Health (NCCIH) effective January 1, 2015.
The business plan calls for revenues to be generated through individual monthly subscriptions, affiliate radio stations and advertising on the web-portal. As of the current date, the company has entered into agreements with outside vendors for additional services regarding advertising or revenue sharing. Individual monthly subscriptions will eventually be phased out as advertising and affiliate station revenue increases. HealthTalk Live is no longer actively pursuing Platinum Members; although Platinum members can and do continue to enroll.
As of the date of this annual report, we have generated minimal revenues. However, we have done all the necessary work to have our registration statement declared effective by the SEC on October 17, 2013 and have obtained and OTC Market trading symbol of HLTK.
Consumer Services
Our goal is to provide an objective and trusted source of information for online services to support consumers in their efforts to employ educated natural, traditional or integrative techniques into their healthcare and lifestyle choices. We believe that our services and resources will appeal to both patients and doctors who want reliable, up-to-date content and advice on integrative medical techniques.
At this time our services are primarily member-based. Silver member users can read and post in the Live Chat Forum, News, receive E-newsletters, read many of the publications in the Reference Center and have access to Health Tools and Videos. However, in order to post in the Live Chat Forum, read all publications in the Reference Center and access all of the Health Tools and Videos, paid memberships are required.
Community-based Discussion Groups
HealthTalkLive.com provides a discussion area called the Live Chat Forum. Currently, the Live Chat Forum allows HealthTalkLive.com members and medical professionals to communicate 24 hours a day and seven days a week, by posting questions, answers, comments and concerns about physical, mental and even spiritual wellbeing. The site provides users the opportunity for its members to ask questions and receive suggestions from naturopathic health specialists about their health concerns. Medical professionals currently providing answers and information include MDs, PhDs, NDs, dieticians and others in the field of natural health, all of whom donate their time as part of their personal or professional commitments to encouraging individuals to make healthier choices.
We have a social networking component to our website in that the website also allows each member to create a profile, share information about themselves with other members, to communicate between one another privately and receiving notices when a member flags topics of particular interest when additional posts are created under flagged topics.
Our Reference Center is a continuously growing library of articles compiled from various sources ranging from Health Talk Live staff to articles published elsewhere and used with author permission. All articles relate to health topics related to integrative medicine, modern medical techniques and traditional and holistic health care.
Articles in our Reference Center are made available according to membership status. Articles reserved for paid members include all articles created by HealthTalk staff and by medical professionals writing for our website. Articles written by Health Talk staff include references to support data but have not been peer reviewed.
The Reference Center also includes articles from the Food and Drug Administration (FDA), National Institutes of Health (NIH) or other government agencies, which are available free to all users. Articles written by medical professionals published elsewhere and included in our reference center with author permission are free to all.
The source and arrangements for which we receive our reference material in our library and whether we purchase or license these materials from other sources, or whether they are copyrighted or available via public domain is as follows: The two officers/founding members have over 12 years each of practical experience and knowledge in the integrative health products industry after having owned/operated a health food store and while guests, hosts, and guest-hosts, on various radio and television programs about integrative health, during that time. Johnie M. Yawn's Ph.D. is in Psychology; Vicki L.Yawn is currently working toward her ND after working in the health insurance industry for well over a decade.
All material in the NEWS section is public domain regardless of whether it is authored by us or obtained from the National Institute of Health or Natural Standards, all material from Natural Standards is licensed to us on an annual basis.
Some material in the Reference center is for platinum members however we do not stop its distribution.
For over 14 years, Johnie and Vicki have amassed a large library of health references and engaged in conversations, both personally and through radio and television venues, of and with various published professionals, including, but not limited to, the Drs. Balch, Earl Mindell, R.P.H., Ph.D., Eugene Steiner, R.P.H., Ph.D., Sherry Rogers, MD, Helen Pensanti, MD, John Young, MD, Lorna Walker, Ph.D. Nutritionist, Patrick Quillin, PhD., RD, CNS, Ann McCombs, MD, Leigh Erin Connealy, MD, etc., many of whom post regularly in the Live Chat Forum or create and offer articles for the Reference Center at HealthTalkLive.com. Most remain in private practice. Some are retired or semi-retired and devote some of their time helping people through our website by making suggestions for changes people can make to enhance their health. All the MD's referenced are members of the AMA.
With respect to our arrangements with doctors and other medical professionals that provide advice through our website and whether we compensate them, offer them services, or we verify their credentials and identities: Most of the medical professionals who post or provide articles through our website are friends and colleagues for well over a decade. They donate some of their time to help people get healthy. All the MD's are members of the AMA.
They volunteer on numerous (past) radio and television programs as guests, and will continue to donate time to other radio and television programs, and continue to post suggestions from time to time in the Live Chat Forum, and submit articles for our visitors and members to read in the Reference Center.
There is no "arrangement" with any of the professionals who post in the Live Chat Forum, or who submit articles for publication in our Reference Center. We have personally looked up all of the contributors on the internet including their own web pages and professional affiliations. Most have extensive backgrounds such as Dr Helen Pensanti who hosted the TV series Doctor to Doctor for over 20 years.
Anyone who writes articles for submission to the site must do so through us; however, most of them are doctors and nutritionists whom we know and have been associated with professionally for years.
Health Tools and Surgical Videos
Our Health Tools and Surgical Videos provide our members with information that supports their health choice research. Features include height, weight and other calculators; what medications may interfere with or enhance herbs and other supplements; what herbs and supplements may interfere with or enhance other herbs and supplements; Our website provides full videos of procedures performed by surgeons in hospitals that can help outline what a potential surgery is likely to entail, should they decide to have any surgical procedure.
We have a licensing agreement with HealthTools that gives us access to their tools for our users. This agreement is renewed on a yearly basis and costs $950.00 per year.
We currently have an oral agreement with the president of ORlive. This relationship and agreement developed from the volume of traffic our site generates for ORlive. As part of this oral agreement ORlive built a customized, branded player for our company. All ORlive content exists on their servers with a backup of all content on our servers. Content on ORlive is licensed to ORlive by various hospitals.
Discounts on Products
We do not sell products. However, paid Platinum Members of HealthTalkLive.com are eligible for discounts from participating discount providers. The discount is applied when the member purchases suggested supplements directly from the participating providers. Each Participating Discount Provider receives a list of current Platinum Members in order to track Platinum Membership status. At the current time an oral financial agreement between HealthTalk Live, Inc and Advanced Nutrition exists for commissions based on total sales. We believe that each discount provider currently participates due to the volume of traffic they receive from advertisements they place on our website. We have made each provider aware that in the future they will need to pay for continued presence on our website. There is no guarantee that any of these discount providers will continue to provide discounts or even advertise on our site if they are made to pay fees to do so in the future.
Set forth below is a list of our current participating discount providers.
Customers
We believe our customers are people interested in pursuing or maintaining health naturally, through diet, exercise and other natural or traditional health regimens. Our goal is to provide information and services related to preventative and other health measures to individuals and professionals who choose a more natural and proactive health regimen. At the current time our user demographic consists primarily of adults 35 + years of age.
Technological Infrastructure
The Company's Internet-based services are currently delivered through HealthTalkLive.com and are designed to address the healthcare information needs of consumers with easy-to-use interfaces, search functions and navigation capabilities. Certain features of the current website were created only for HealthTalkLive.com by WebFX; however, there are also some programs and plug-ins purchased or downloaded to implement the initial existing website, including Magic Members, Word Press, Buddy Press, Natural Standard, ORLive, Genesis php and Mail Studio, which are all owned by most of these companies, who sell a license to HealthTalkLive.com to use their products, which are renewed yearly.
Unfortunately, with our growth, pre-manufactured programs are now failing to meet the needs of the company. In the next 12 months we anticipate hiring additional programmers and developers who will code and create proprietary programs and features that will be owned, operated and featured only at HealthTalkLive.com. We will use customized content management and publishing technology to develop, edit, publish, manage and organize the content for HealthTalkLive.com. To the extent possible we will include industry standard ad-serving technology such as cookies to store, manage and serve online advertisements in a contextually relevant manner.
We will soon allow users to create their own forums on a health topic of concern to them. Within these forums users will be able to discuss the health topics with each other's and with health professionals. We have invested, and intend to further invest in the future, in software and systems that allow us to meet the growing demands of our users and sponsors. We anticipate launching a new website within four to six months after hiring new developers and programmers. We anticipate costs for this stage of development to approach $750,000 to $1,000,000. This information is included as "Hiring Symposium" in the milestone chart above. If we do not raise sufficient funds from going public we will not be able to hire new programmers and developers and launch of the new site will be significantly delayed or impossible.
Marketing
Currently, marketing is done through radio, E-newsletters and other media; however, this will be expanded heavily within the year after going public. We anticipate spending $125,000, if and to the extent available as described above, on Search engine optimization (SEO). SEO will allow us to increase the visibility of our site in a search engine's "natural" search results. To increase our marketing we will focus on SEO in order to determine what information people interested in integrative medical techniques or natural health care search for, including the actual search terms or keywords typed into search engines by potential users of our site. Optimizing our website may involve editing our content, HTML and associated coding to increase the incidence of commonly searched terms and to remove barriers to the indexing activities of search engines.
Intellectual Property
We currently have no intellectual property.
Regulations
Healthcare Regulation. The healthcare industry is highly regulated and is subject to changing political, regulatory and other influences. Most of our revenue is derived either directly from the healthcare industry or from other sources that are subject to healthcare laws and related regulations and could be affected by changes in those laws and regulations. This section of our Annual Report contains a description of healthcare laws and regulations applicable to us, either directly or through their effect on our healthcare industry customers, as well as healthcare industry standards that serve a self-regulatory function, and certain related matters. Changes in those laws, regulations and standards may create unexpected liabilities for us, may cause us to incur additional costs and may restrict our operations.
Many healthcare laws are complex, and their application to specific products and services may not be clear. In particular, many existing healthcare laws and regulations, when enacted, did not anticipate the healthcare information services that we provide. However, these laws, regulations and industry standards may nonetheless be applied to our products and services. We cannot provide assurance that we will be able to accurately anticipate the application of these laws, regulations and industry standards to our operations. Our failure to accurately anticipate the application of these laws and regulations to our operations, or other failure to comply, could create liability for us, result in adverse publicity and negatively affect our business. Even in areas where we are not subject to healthcare regulation directly, we may become involved in governmental actions or investigations through our relationships with customers that are regulated, and participation in such actions or investigations, even if we are not a party and not the subject of an investigation, may cause us to incur significant expenses.
Other Applicable Regulation. This section of our Annual Report also contains a description of other laws and regulations, including general consumer protection laws and Internet-related laws that may affect our operations. Laws and regulations have been adopted, and may be adopted in the future, that address Internet-related issues, including online content, privacy, online marketing, unsolicited commercial email, taxation, pricing, and quality of products and services. Some of these laws and regulations, particularly those that relate specifically to the Internet, were adopted relatively recently, and their scope and application may still be subject to uncertainties. Interpretations of these laws, as well as any new or revised laws or regulations, could decrease demand for our services, increase our cost of doing business, or otherwise cause our business to suffer.
Regulation of Drug and Medical Device Advertising and Promotion
The FDA and the Federal Trade Commission, or FTC, regulate the form, content and dissemination of labeling, advertising and promotional materials prepared by, or for, pharmaceutical or medical device companies. The FTC regulates over-the-counter drug advertising and, in some cases, medical device advertising. Based on FDA requirements, regulated companies must limit advertising and promotional materials to discussions of FDA-approved uses and claims. In limited circumstances, regulated companies may disseminate certain non-promotional scientific information or disease-state information.
Information on our Websites that promotes the use of pharmaceutical products or medical devices is subject to FDA and FTC requirements and enforcement actions, and information regarding other products and services is subject to FTC requirements. If either agency finds that information on our Websites violates regulations or guidance, it may take regulatory or judicial action against us or the advertiser or sponsor of that information. State attorneys general may also take similar action based on their state's consumer protection statutes. Areas of our Websites that could be the primary focus of regulators include pages and programs that discuss use of a regulated product or that the regulators believe may lack editorial independence from the influence of sponsoring pharmaceutical or device companies. Television broadcast advertisements that we may provide may also be subject to FTC and FDA regulation, depending on the content. The agencies place the principal burden of compliance with advertising and promotional regulations on advertisers and sponsors to make truthful, substantiated claims.
The Federal Food, Drug, and Cosmetic Act, or FDC Act, and its implementing regulations require that prescription drugs be approved by the FDA prior to marketing. It is a violation to market, advertise or otherwise commercialize such products prior to approval. The FDA allows for preapproval exchange of scientific information, provided it is non-promotional in nature and does not draw conclusions regarding the ultimate safety or effectiveness of the unapproved drug. The FDA also refrains from regulating certain disease state materials so long as those materials do not make a representation or suggestion about a drug or device. Upon approval or clearance, the FDA's regulatory authority extends to the labeling and advertising of prescription drugs and medical devices. Such products may be promoted and advertised only for uses reviewed and approved by the FDA. Labeling and advertising can be neither false nor misleading and must present all material information, including risk information, in a clear, conspicuous and neutral manner. There are also requirements for certain information (the "prescribing information" or "package insert" for promotional labeling and the "brief summary" for advertising) to be part of labeling and advertising. Labeling and advertising that violate these legal standards are subject to enforcement.
The FDA also regulates the safety, effectiveness, and labeling of over-the-counter (OTC) drugs either through specific product approvals or through regulations that define approved claims for specific categories of products. The FTC regulates the advertising of OTC drugs under the section of the Federal Trade Commission Act that prohibits unfair or deceptive trade practices. The FDA and FTC regulatory framework requires that OTC drugs be formulated and labeled in accordance with FDA approvals or regulations and promoted in a manner that is truthful, adequately substantiated, and consistent with the labeled uses. OTC drugs that do not meet these requirements are subject to FDA or FTC enforcement action depending on the nature of the violation. In addition, state attorneys general may bring enforcement actions for alleged unfair or deceptive advertising.
There are several administrative, civil and criminal sanctions available to the FDA for violations of the FDC Act or FDA regulations as they relate to labeling and advertising. Administrative sanctions include a written request that violative advertising or promotion cease and/or that corrective action be taken, such as requiring a company to provide to healthcare providers and/or consumers information to correct misinformation previously conveyed. More serious civil sanctions include seizures, injunctions, fines and consent decrees. Any of these enforcement measures could prevent a company from introducing or maintaining its product in the marketplace. Criminal penalties for severe violations can result in a prison term and/or substantial fines. State attorneys general have similar investigative tools and sanctions available to them.
In the last 15 years, the FDA has gradually relaxed its formerly restrictive policies on DTC advertising of prescription drugs, allowing companies to advertise prescription drugs to consumers in any medium, provided that they satisfy FDA requirements. In 2010, the FDA issued a proposed rule recommending standards for determining whether the major statement in DTC advertisements of prescription drugs relating to side effects and contraindications is presented in a clear, conspicuous, and neutral manner. These new regulations, if finalized, could make it more difficult for us to obtain advertising and sponsorship revenue.
In 2009, the FDA solicited input on the issue of promoting FDA-regulated products using the Internet and social media. The Food and Drug Administration Safety and Innovation Act (FDASIA) directs the FDA to issue guidance, no later than July 9, 2014, regarding the use of the Internet to promote FDA-regulated medical products. There is a possibility that the FDA may issue a policy restricting or materially changing promotion using the Internet, social media and other sponsored health content on the Internet. We cannot predict what effect any such changes would have on our business. Although the FDA issued a 2011 guidance addressing the use of social media by consumers, it was limited to guidance regarding drug and device firms' responses to public unsolicited requests for information made on Websites.
Other Restrictions Regarding Confidentiality, Privacy and Security of Health Information
In addition to HIPAA, numerous other state and federal laws govern the collection, dissemination, use, access to, confidentiality and security of patient health and prescriber information. In addition, Congress and some states are considering new laws and regulations that further protect the privacy and security of medical records or medical information. In some cases, more protective state privacy and security laws are not preempted by the HIPAA Privacy and Security Standards and may be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our customers and strategic partners.
These laws at a state or federal level, or new interpretations of these laws, could create liability for us, could impose additional operational requirements on our business and could affect the manner in which we use and transmit patient information and could increase our cost of doing business. Claims of violations of privacy rights or contractual breaches, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Consumer Protection Regulation
General. Advertising and promotional activities presented to visitors on our Websites are subject to federal and state consumer protection laws that regulate unfair and deceptive practices. We are also subject to various other federal and state consumer protection laws, including the specific ones described later in this section.
The FTC and many state attorneys general are applying federal and state consumer protection laws to require that the online collection, use and dissemination of data, and the presentation of Website content, comply with certain standards for notice, choice, security and access. Courts may also adopt these developing standards. In many cases, the specific limitations imposed by these standards are subject to interpretation by courts and other governmental authorities. We believe that we are in compliance with the consumer protection standards that apply to our Websites, but a determination by a state or federal agency or court that any of our practices do not meet these standards could result in liability and adversely affect our business. New interpretations of these standards could also require us to incur additional costs and restrict our business operations. In addition, claims that we are violating any such standards could, even if we are not found liable, be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
In February 2009, the FTC published Self Regulatory Principles for Online Behavioral Advertising to address consumer privacy issues that may arise from so-called "behavioral advertising" (i.e., the tracking of online activities) and to encourage industry self-regulation. These principles serve as guidelines to industry. In addition, there is a possibility, supported by certain public statements, that the FTC may revise or eliminate the principles in favor of a more restrictive approach for companies that utilize behavioral advertising. There is also a possibility of legislation, regulations and increased enforcement activities, relating to behavioral advertising. To the extent that our existing practices are inconsistent with any revised principles, new rules, new legislation and/or future enforcement activities, our business may become subject to restrictions that could reduce our revenues or increase our cost of doing business.
In October 2009, the FTC adopted revised Guides Concerning the Use of Endorsements and Testimonials in Advertising. These Guides, which were last updated in 1980, became effective December 1, 2009. In addition to revising certain provisions regarding disclosures relating to endorsements and testimonials, the FTC clarified the Guides' applicability to online and social media forums. The revised Guides may be an indication that the FTC may apply increased scrutiny to the use of endorsements and testimonials online and through traditional media. To the extent we rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Guides.
In December 2010, following a series of workshops, the FTC issued a preliminary staff report containing a proposed framework for businesses and policymakers for online consumer privacy issues and, in March 2012, the FTC issued a final report setting forth its current views on best practices, to protect the privacy of consumers, to be implemented by companies that collect and use consumer data. Also in March 2012, the White House released a Privacy White Paper that outlined the Obama Administration's proposal for a new American privacy framework based on a Consumer Bill of Privacy Rights and which called for the development of industry-specific voluntary, enforceable privacy codes of conduct through a collaborative multi-stakeholder process. Both the FTC and the White House called for Congress to develop baseline privacy legislation and the FTC also called on industry to accelerate the pace of self-regulation.
Both the FTC's staff report and the White House's Privacy White Paper reflect a continuing governmental interest in, and assessment of, online privacy issues. How these issues are ultimately resolved, whether through self-regulatory programs, legislation and regulation or some combination and the specifics of any such regimes, may significantly impact our operations.
Data Protection Regulation. With the recent increase in publicity regarding data breaches resulting in improper dissemination of consumer information, many states have passed laws regulating the actions that a business must take if it experiences a data breach, such as prompt disclosure to affected customers. Generally, these laws are limited to electronic data and make some exemptions for smaller breaches. Congress has also been considering similar federal legislation relating to data breaches. The FTC has also prosecuted some data breach cases as unfair and/or deceptive acts or practices under the FTC Act. In addition to data breach notification laws, some states have enacted statutes and rules requiring businesses to reasonably protect certain types of personal information they hold or to otherwise comply with certain specified data security requirements for personal information. These laws may apply directly to our business or indirectly by contract when we provide services to other companies. We intend to continue to comprehensively protect all consumer data and to comply with all applicable laws regarding the protection of this data.
CAN-SPAM Act. On January 1, 2004, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, became effective. The CAN-SPAM Act regulates commercial emails, provides a right on the part of the recipient to request the sender to stop sending messages, and establishes penalties for the sending of email messages that are intended to deceive the recipient as to source or content. Under the CAN-SPAM Act, senders of commercial emails (and other persons who initiate those emails) are required to make sure that those emails do not contain false or misleading transmission information. Commercial emails are required to include a valid return email address and other subject heading information so that the sender and the Internet location from which the message has been sent are accurately identified. Recipients must be furnished with an electronic method of informing the sender of the recipient's decision to not receive further commercial emails. In addition, the email must include a postal address of the sender and notice that the email is an advertisement. We are following the CAN-SPAM requirements in the e-newsletters that WE distribute to members and some of our other email communications, and believe that our email practices comply with the requirements of the CAN-SPAM Act, even though we believe that FTC regulations issued in May 2008 confirmed our existing understanding that these email newsletter communications are not generally commercial emails. Many states have also enacted anti-spam laws. The CAN-SPAM Act preempts many of these statutes. To the extent that these laws are not preempted, we believe that our email practices are designed to comply with these laws.
COPPA. The Children's Online Privacy Protection Act, or COPPA, applies to operators of commercial websites and online services directed to U.S. children under the age of 13 that collect personal information from children, and to operators of general audience sites with actual knowledge that they are collecting information from U.S. children under the age of 13. Our sites are not directed at children and our privacy policy, states that no one under the applicable age is entitled to use the site. Our privacy policy specifically states that HealthTalk Live is a general audience site that is not targeted to children and does not knowingly collect personal information from children under 18 years of age. We believe this efforts to comply with COPPA are sufficient given the fact that our user demographic consists primarily of adults 35-50 years of age.
FACTA. In an effort to reduce the risk of identity theft from the improper disposal of consumer information, Congress passed the Fair and Accurate Credit Transactions Act (or FACTA), which requires businesses to take reasonable measures to prevent unauthorized access to such information. FACTA's disposal standards are flexible and allow businesses discretion in determining what measures are reasonable based upon the sensitivity of the information, the costs and benefits of different disposal methods and relevant changes in technology. We believe that we are in compliance with FACTA.
Regulation of Wellness Incentive Programs
Certain provisions of HIPAA (commonly referred to as the HIPAA nondiscrimination provisions) generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, co-payment, or other cost-sharing requirements based on a "health factor." Such differentials are, however, acceptable under the HIPAA nondiscrimination provisions if the differentials are applied through "wellness programs." The Department of Labor, in coordination with the Departments of the Treasury and HHS, has issued regulations that define "wellness programs" for purposes of the HIPAA nondiscrimination provisions, establishing specific requirements for wellness programs that reward participants who satisfy a standard related to a health factor. These requirements include (1) limiting the amount of the wellness program's rewards, (2) the wellness program being designed to promote good health and prevent disease, (3) giving those eligible to participate in the wellness program the opportunity to qualify for the reward at least once a year, (4) providing a reward that is available to all similarly situated individuals, and (5) requiring disclosure of reasonable alternative standards that must be available under the wellness program.
Although HIPAA and its regulations state that certain excepted benefits, including supplemental benefits, are not subject to the wellness program rules, it does not define the term "similar supplemental coverage." On December 7, 2007, the Department of Labor, in coordination with the Departments of the Treasury and HHS, released Field Assistance Bulletin No. 2007-04 (FAB 2007-04) in response to the development of questionable health and wellness programs that were marketed as "similar supplemental coverage." FAB 2007-04 clarifies the rules for supplemental programs and provides that supplemental benefits under a wellness program cannot discriminate on the basis of a health factor. With these new requirements in place, wellness programs that require individuals to meet certain health factors can no longer be considered supplemental and thus have to comply with HIPAA wellness program regulations described in the immediately preceding paragraph. According to FAB 2007-04, programs that do not meet these requirements may be subject to enforcement actions. HHS provided parallel guidance in Program Memorandum 08-01 (May 2008).
The Americans with Disabilities Act (ADA) prohibits discrimination on the basis of an employee's disability or perceived disability. Among other things, it limits employers from inquiring about the disabilities of employees unless the questions are job-related and consistent with business necessity. The ADA also limits the circumstances in which an employer may require physical examinations or answers to medical inquiries. However, the ADA allows employers to conduct voluntary medical examinations and activities, including voluntary medical histories, as part of a voluntary wellness program. A wellness program is "voluntary" if the employer neither requires participation nor penalizes employees who do not participate. Records acquired as part of a wellness program must be kept confidential and may not be used for a discriminatory purpose. Many states and localities provide similar protections to employees.
The Genetic Information Nondiscrimination Act restricts the collection or use of genetic information for underwriting purposes, and treats the offering of incentives or disincentives for completing an HRA or participating in a wellness program as underwriting. See "-- Genetic Information Nondiscrimination Act (GINA)," above.
We provide certain services related to wellness programs in connection with our site. We believe that we are in compliance with the laws and regulations applicable to these services, to the extent they apply to us.
Medical Professional Regulation
The practice of most healthcare professions requires licensing under applicable state law. In addition, the laws in some states prohibit business entities from practicing medicine, which is referred to as the prohibition against the corporate practice of medicine. We do not believe that we engage in the practice of medicine, and we have attempted to structure our Website, strategic relationships and other operations to avoid violating these state licensing and professional practice laws. We do not believe that we provide professional medical advice, diagnosis or treatment. We employ and contract with physicians who provide only health information to consumers, and we have no intention to provide medical care or advice. A state, however, may determine that some portion of our business violates these laws and may seek to have us discontinue those portions or subject us to penalties or licensure requirements. Any determination that we are a healthcare provider and acted improperly as a healthcare provider may result in liability to us. Specifically, we post the following disclaimer on our site: All statements are the opinion of staff at HealthTalkLive.com and are not intended to diagnose, treat, cure or prevent any disease. All ideas provided are given based upon information provided, including all health experiences, therapies, surgeries, medications taken, etc., in the past, present or foreseeable future. Johnie, Vicki, other healthtalklive.com staff, and anyone directly associated with the website, HealthTalkLive.com, are not responsible for negative or harmful side effects you may experience as a result of ideas shared. No other company, person or entity is associated with HealthTalkLive.com, Johnie, Vicki or any staff member; nor is there any association, obligation or interest between HealthTalkLive.com and sponsors, discount participants or advertisers, implied or otherwise, as having any association or agreement with views and opinions provided on HealthTalkLive.com. Prescription drugs have the potential for harmful side-effects, which may also be influenced by using nutritional supplements; please consult with your Medical Doctor and Pharmacist before using supplements of any kind. Only your Medical Doctor and Pharmacist are acquainted with your health issues and are able to diagnose your specific healthcare requirements. No one at HealthTalkLive.com is trained to diagnose and you should never self-diagnose in lieu of proper medical care and advice. Please avail yourself of all diagnostic testing available to you. Statements made may not have been evaluated by the Food and Drug Administration. If you are exhibiting symptoms or have a health concern, we encourage you to contact your physician immediately.
Healthcare Reform
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (which we refer to as the Reform Legislation), was signed into law in March 2010. The Reform Legislation makes extensive changes to the system of healthcare insurance and benefits in the U.S. In general, the Reform Legislation seeks to reduce healthcare costs and decrease the number of uninsured legal U.S. residents by, among other things, requiring individuals to carry, and certain employers to offer, health insurance or be subject to penalties. The Reform Legislation also imposes new regulations on health insurers, including guaranteed coverage requirements, prohibitions on certain annual and all lifetime limits on amounts paid on behalf of or to plan members, increased restrictions on rescinding coverage, establishment of minimum medical loss ratio requirements, a requirement to cover certain preventive services on a first dollar basis, the establishment of state insurance exchanges and essential benefit packages, and greater limitations on how health insurers price certain of their products. The Reform Legislation also contains provisions that will affect the revenues and profits of pharmaceutical and medical device companies, including new taxes on certain sales of their products.
Many of the provisions of the Reform Legislation that expand insurance coverage will not become effective until 2014, and many provisions require regulations and interpretive guidance to be issued before they will be fully implemented. Some provisions do not apply to health plans that were in place when the Reform Legislation was enacted and have not been substantially changed since. In addition, it is difficult to foresee how individuals and businesses will respond to the choices available to them under the Reform Legislation. Furthermore, the Reform Legislation will result in future state legislative and regulatory changes, which we are unable to predict at this time, in order for states to comply with certain provisions of the Reform Legislation and to participate in grants and other incentive opportunities. In addition, Congress is considering various proposals to repeal some or all of the Reform Legislation.
While we do not currently anticipate any significant adverse effects on us as a direct result of application of the Reform Legislation to our business or on our company in its capacity as an employer, we are unable to predict what the indirect impacts of the Reform Legislation will be on our business through its effects on other healthcare industry participants, including pharmaceutical and medical device companies that are advertisers and sponsors of our public portals and employers and health plans that are clients of our private portals. Healthcare industry participants may respond to the Reform Legislation or to uncertainties created by the Reform Legislation by reducing their expenditures or postponing expenditure decisions, including expenditures for our services, which could have a material adverse effect on our business.
However, we believe that certain aspects of the Reform Legislation and future implementing regulations that seek to reduce healthcare costs may create opportunities for us with respect to our capabilities in providing health and wellness information and education. For example, the Reform Legislation encourages use of wellness programs through grants to small employers to establish such programs, permission for employers to offer larger rewards than under prior law, in the form of waivers of cost-sharing, premium discounts, or additional benefits, to employees for participating in these programs and meeting certain standards, and the inclusion of wellness services and chronic disease management among the essential health benefits that certain plans are required to provide. In addition, we believe that, as the Reform Legislation is implemented and consumers begin shopping for health insurance in the new markets that it creates, we will be well positioned to provide information and decision-support tools to assist consumers in choosing an appropriate health plan for their needs. However, we cannot yet determine the scope of any such opportunities or what competition we may face in our efforts to pursue such opportunities.
Competition
Competition in the healthcare information and services industry is intense. We will face direct competition with other online services and websites, including blogs providing information about traditional and naturopathic health care and products, other small websites providing such information, as well as from subsidiaries or other affiliates of larger health information and services websites, many of which have substantially greater resources than we do. We will initially be a small competitor in the market.
Our principal larger competitors will be websites such as WebMD, Yahoo.com and About.com and other websites that provide general-purpose consumer online services, as well as other high-traffic websites that include healthcare-related and non-healthcare-related content and services. Our competitors also include more specialized providers of online services, tools and applications for healthcare consumers, such as iVillage.com, DrKoop.com, drugs.com, eMedicine.com and Realage.com. We also face competition from governmental and non-profit sites, such as NIH.com and medline.com. We intend to compete with these larger competitors by offering more comprehensive services and information. We believe that users of our website will find all of the information they seek by visiting our website rather than needing to visit multiple sites to find similarly comprehensive information.
Some of our competitors have greater financial, technical, marketing and other resources than we do and some are better known than we are. We cannot provide assurance that we will be able to compete successfully against these organizations. As a result these competitors may:
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Succeed in providing information and services that are equal to or superior to our information and services or that achieve greater market acceptance than our information and service;
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Devote greater resources to developing, marketing or selling their products;
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Respond more quickly to new or emerging information or service technologies, which could render our information and services obsolete or less preferable;
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Withstand competition in the industry more effectively than we can.
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Establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our customers or prospective customers; and
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Take advantage of other opportunities more readily than we can.
Since there are no substantial barriers to entry into the markets in which we participate, we expect that additional competitors will continue to enter these markets.
Employees
Our only full time employees are Johnie Yawn and Vicki Yawn. They are the founders of our company and perform all clerical, administrative, managerial and sales functions at the present time. We also utilize 5-10 part time workers as independent contractors who work on our website as programmers and developers as needed.
Additional Information
We are a public company and file annual, quarterly and special reports and other information with the SEC. We are not required to, and do not intend to, deliver an annual report to security holders. You may read and copy any document we file at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our filings are also available, at no charge, to the public at http://www.sec.gov.
Item 2.
Item 2. Description of Property
Our business office address is 1955 Baring Boulevard, Sparks, NV 89434.
We do not currently rent any property. We do not intend to renovate, improve, or develop properties. We are not subject to competitive conditions for property and currently have no property to insure. We have no policy with respect to investments in real estate or interests in real estate and no policy with respect to investments in real estate mortgages. Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities.
Item 3.
Item 3. Legal Proceedings
We are not a party to any material legal proceedings nor are we aware of any circumstance that may reasonably lead any third party to initiate material legal proceedings against us.
Item 4.
Item 4. Mine Safety Disclosures
None
PART II
Item 5.
Item 5. Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Trading History
Our common stock is quoted on the Over-The-Counter Bulletin Board under the symbol "HLTK."
Bid Information*
__________
* The quotation do not reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
As of March 31, 2015 there were approximately 60 stockholders of record of our common stock.
Dividends
We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
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we would not be able to pay our debts as they become due in the usual course of business; or
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our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our articles of incorporation.
Recent Sales of Unregistered Securities
For the quarter ended March 31, 2015 the Company issued no new stock.
Securities Authorized for Issuance under Equity Compensation Plans
None.
Item 6.
Item 6. Selected Consolidated Financial Data.
Not required.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.
Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.
Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filing with the Securities and Exchange Commission.
Although the forward-looking statements in this Registration Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
Overview
Our business provides traditional plus natural health and wellness information services through our real-time interactive website, HealthTalkLive.com, and through our Live Radio Show on Sirius/XM channel 131 distributed through Salem Radio Network and other affiliate radio stations. For the most part, the affiliate radio stations will be an additional source of revenue, web traffic and advertising. Users of our site have access to information on traditional and natural methods of health care and how to employ those methods, either alone or as a compliment modern medical treatment. HealthTalkLive.com is an integrative health site.
On July 11, 2014 HealthTalk Live Inc., entered into a long term continuing contract with Salem Radio Network (SRN) to distribute the live call-in radio show, Health Talk Live, on Sirius/XM satellite radio channel 131 Saturdays 1-2 PM Eastern, starting August 2, 2014. The show is also being streamed live worldwide and available for simultaneous affiliate radio station rebroadcast by either direct satellite connection or broadcast quality Computer Modem (CM). Affiliate stations may also download the show by file transfer protocol (FTP) for replay during a different time slot. As a result of this agreement and our now having a radio outlet for our content, HealthTalk Live, Inc. anticipates revenue to increase and, although it is still too early to accurately predict, we hope to be profitable in the long run, although there is no assurance if or when we will ever be profitable.
On our site, information is disseminated through the live chat forum, reference center, news E-newsletters, Health Tools, Medical Videos.
The type of information disseminated through the web site is highly customizable to the user's inputs. The information distributed comes from Health Guides and personal Health Calculators that are widely available in Health and Medical Journals. In some cases, the "forum" or open "blog" will answer individual questions. These questions are answered by various users of the site and are not validated or endorsed by the company. All statements are the opinion of Company and are not intended to diagnose, treat, cure or prevent any disease. The information disseminated on the radio show is live in real time although the stream is delayed 8 seconds. Affiliate stations may rebroadcast our show in any time slot they wish, any show replayed in any time slot other than live is considered a delayed broadcast.
The Company's advice for wellness includes integrative medicine. The National Institute of Health defines Integrative Medicine as the combination of conventional medicine with Complementary and Alternative Medicine for which there is evidence of safety and effectiveness. Integrative Medicine is designated to treat the person and not just the disease. This approach depends on a partnership between the patient and the doctor, where the goal is to treat the mind, body, and spirit all at the same time. The Company believes that through integration, more time and attention can be spent on a broader approach to healing, and is not based entirely on Western Medical thought. The National Center for Complementary and Alternative Medicine (NCCAM), part of the National Institute of Health (nih.gov) which changed its name to the National Center for Research on Complementary and Integrative Health (NCRCI).
The business plan calls for revenues to be generated through individual monthly subscriptions, affiliate radio stations and advertising on the web-portal. As of the current date, the company has entered into agreements with outside vendors for additional services regarding advertising or revenue sharing. Individual monthly subscriptions will eventually be phased out as advertising and affiliate station revenue increases. HealthTalk Live is no longer actively pursuing Platinum Members; although Platinum members can and do continue to enroll.
As of the date of this annual report, we have generated minimal revenues. However, we have done all the necessary work to have our registration statement declared effective by the SEC on October 17, 2013 and have obtained and OTC Market trading symbol of HLTK.
Results of Operations
For the fiscal year ended March 31, 2015 vs. March 31, 2014
Revenue
For the fiscal year ended March 31, 2014, the company had net total revenues of $4,893 which came from the sale of subscription agreements to its website.
For the fiscal year ended March 31, 2015, the company had net total revenues of $23,287 an increase of 376% which came from the increase in advertising revenue to its website. The increase was due to an increase in traffic on the website purchasing products from our advertisers.
Expense
Our expenses consist of selling, general and administrative expenses as follows:
For the fiscal year ended March 31, 2014 there were a total of $111,593 in operating expenses, which includes Legal and professional fees of $89,198, Bank fees $1,504, office and other expenses of $11,530, advertising and promotion $4,560, website hosting and maintenance of $301 and depreciation and amortization of $4,500.
For the fiscal year ended March 31, 2015, there were a total of $94,270 in operating expenses, which includes Legal and professional fees of $19,556, Website hosting and maintenance of $252, Office and other expenses $5,255, Bank fees $1,519, depreciation and amortization $43,303 and advertising and promotion $24,385. Increases in operating expenses were mainly due to the increases in advertising and promotion, and depreciation and amortization.
We expect selling, general, and administrative expenses to increase in future periods as we initiate a number of marketing and promotional activities as well as maintaining our public listing.
Income & Operation Taxes
We are subject to income taxes in the U.S.
We paid no income taxes in the USA for the fiscal year ended March 31, 2015 due to the net operation loss in the USA.
Net Loss
We incurred net losses of $106,700 for the fiscal year ended March 31, 2014 and net losses of $70,983 for the fiscal year ended March 31, 2015. The decrease in net loss was mainly due to increases in revenue for advertising and promotion.
Commitments and Contingencies
Our web presence is being hosted by a 3rd Party Hosting Company. We are a month-to-month contract with this company. The information on our website is not sourced from any particular vendor, but contains abstractions from commonly available medical journals and information based media outlets. We offer various levels of paid subscriptions:
Subscription Options
Monthly Silver Membership - Free - Ongoing
One (1) month of Silver Membership, including access to our forums and E-newsletters.
Monthly Platinum Membership - 6.95 USD per 1 month - for 1 time
One (1) month of Platinum Membership, including access to our forums and reference center.
Monthly Platinum Membership - 6.95 USD per 1 month - Ongoing
Monthly Platinum Membership - Autobill. If you would like to be billed automatically, without having to renew every month, please select this option.
Semi-Annual Platinum Membership - 34.75 USD per 6 months - for 1 time
Six (6) months of Platinum Membership, including access to our forums and reference center.
Annual Platinum Membership - 69.50 USD per 1 year - for 1 time
One (1) year of Platinum Membership, including access to our forums and reference center.
While we encourage members to visit participating vendors that offer discounts to our members, we have not received any compensation or a percentage of sales at this time.
Foreign Currency Translation
The Company has determined the United States dollars to be its functional currency for HealthTalk Live Inc. We do have subscribers and visitors from overseas, however all transactions are in United States Dollars. There were no foreign currency translation effects on our financial presentation.
Liquidity and Capital Resources
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*Current Ratio = Current Assets / Current Liabilities
** Total Debt / Equity = Total Liabilities / Total Shareholders Equity.
The Company had cash and cash equivalents of $13,836 and working capital of ($7,484) for the period ended March 31, 2015. For the fiscal year ended March 31, 2014 the Company had cash and cash equivalents of $1,112 and working capital of ($9,047). As of the fiscal year ended March 31, 2015 the Company had $116,920 in Total Liabilities and Debt and for the fiscal year ended March 31, 2014, the company had $65,000 in Liabilities and Debt.
Our business plan includes the following milestones:
Milestones
The primary obstacle to implementing this plan would be if we are unable to raise the capital necessary to fund such a large expansion. We believe that becoming a public company will facilitate our ability to raise some or all of this additional capital. If we are unable to raise the entire $2,450,000 to $2,900,000 we estimate is necessary for the expansion described above we will use the actual funds raised to hire at least two designers and six programmers. In the event that we do not raise the entire amount we will also drop all television advertising and focus our efforts on Live Radio plus search engine optimization.
As of March 31, 2015, HealthTalk Live, Inc has $13,836 in cash on-hand. If we maintain operations at current levels, we anticipate we will incur approximately $48,000 in additional expenses in the next 12 months. We anticipate additional costs associated with our staying public in the next 12 months of approximately $20,000. Accordingly, we estimate a burn rate of $5,700 per month during the next 12 months. These numbers are based on the maintenance of the website and professional expenses. We anticipate funding these anticipated expenses with revenues. If we do not generate enough revenue through memberships and advertising to cover our estimated expenses for the next 12 months, our President Johnie Yawn and our Secretary Vicki Yawn have agreed to loan the Company money to continue operations. The Company as of March 31, 2015 owes $95,600 to Johnie and Vicki Yawn from previous loans for operations. These loans were made on an oral basis without interest, due upon demand. Management is under no obligation to loan the Company additional funds for operations. If Johnie and Vicki Yawn exercise their rights under the loan agreement and demand immediate repayment of all sums due, it is currently unlikely that the Company has the resources to make such repayments and may not have such resources in the future if such demand were made, which in the worst case could cause the Company to have to cease operations as the Company would have no funds available to continue operations.
Our auditor has indicated in its report that our losses and need to rely on loans from management raises substantial doubt about our ability to continue as a going concern.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not required.
Item 8.
Item 8. Financial Statements
BALANCE SHEETS
See accompanying notes to the financial statements.
HEALTHTALK LIVE, INC.
STATEMENTS OF OPERATIONS
See accompanying notes to the financial statements.
STATEMENTS OF STOCKHOLDERS' EQUITY
See accompanying notes to the financial statements.
STATEMENTS OF CASH FLOWS
See accompanying notes to the financial statements.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist the reader in understanding and evaluating the financial statements. 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.
Formation and Business Activity
HealthTalk Live, Inc. (the Company) was formed on April 1st, 2011 in the state of Nevada and operations commenced immediately.
The Company has adopted March 31st as its fiscal year end.
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 person's unique requirements.
The Company includes integrative medicine in their overall approach, which is designed to treat the person and not just the disease. This approach depends on a partnership between the patient and the doctor, where the goal is to treat the mind, body and spirit all at the same time. What makes integrative medicine appealing is that many people have an overall dissatisfaction with the current health care system that often has doctors feeling rushed and overwhelmed and leaves patients feeling is if they are nothing more than diseases and/or statistics. Integrative medicine seems to promise more time, attention and a broader approach to healing, one that in not entirely based on the western biomedical model. Therefore, this approach combines conventional western medicine and alternative or complementary treatments.
The Company operates in one segment 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.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Formation and Business Activity (Continued)
The Company is still in the process of building out its website and is also changing to an advertising based revenue model. It is not known how this new website will be accepted and used by the public, which will be the impetus behind higher advertising rates charged.
The Company is in the process of raising additional equity capital to support the completion of its website. The Company's activities are subject to significant risks and uncertainties, including failing to secure additional funding to maintain and build the website and fund operations.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a 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 Company's website has been capitalized and amortized over a period of three years. Expenditures for minor enhancements and maintenance are expensed as incurred.
Long-lived Assets
The Company's 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 management's estimates on asset useful lives and future cash flows.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Long-lived Assets (continued)
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, 2015 and 2014, the Company had not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company's 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.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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, 2015 and 2014 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.
Fair Value Measurements
FASB ASC Topic 825 "Financial Instruments," requires disclosure about fair value of financial instruments.
The FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
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Level 1 -- observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
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Level 2 -- other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
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Level 3 -- significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments).
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair Value Measurements (Continued)
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.
Implementation of FAS No. 2014-10
The Company has implanted FAS No. 2014-10 which changed the way in which developmental stage companies disclosure results of operations. The Company is no longer required to report on and disclose operational results from inception to date and all references to "developmental stage" have been removed from these financial statements.
As the Company has not yet commenced principal operations whose planned principal operation is an integrative and interactive web portal designed for online consumers throughout the world. During the last year, the Company raised additional equity capital to support the completion of its development activities. The Company's activites are subject to significant risks and uncertainties, including failure to secure additional funding to operationalize the Company's current technology before another company sets up a similar web portal.
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 Company's future financial statements.
2. GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the years ended March 31, 2015 and 2014 the Company had an accumulated deficit of approximately $308,000 and $237,000 respectively, had net losses of approximately $71,000 and $107,000 respectively, and net cash used in operating activities of approximately $17,000 and $52,000 respectively, with little revenue earned since inception, and a lack of operational history. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
2. GOING CONCERN (Continued)
While the Company is attempting to commence operations and generate revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of additional public and/or private offerings of its stock. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
3. PROPERTY AND EQUIPMENT
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
4. RELATED PARTY TRANSACTIONS
Loan from officers-stockholders
During the year ended March 31, 2015, John and Vicki Yawn loaned the Company a total of $33,100 and were repaid $2,500, resulting in a net balance due them of $95,600.
During the year ended March 31, 2014, John and Vicki Yawn loaned the Company a total of $10,000, resulting in a net balance due them of $65,000.
The loans were for the purpose of the Company's operations and is unsecured without interest. It is expected that when the Company can generate sufficient cash flows from operations, the loans will be requested to be paid.
5. STOCKHOLDERS' EQUITY
The Company was formed on April 1st, 2011 in the state of Nevada and operations commenced immediately. The Company is authorized to issue 100,000,000 shares of common stock with a par value of $.001. The Company is also authorized to issue 10,000,000 shares of preferred stock with a par value of $.001. No shares of preferred stock have been issued to date.
On June 26, 2013 the Company issued 100,000 shares of common stock to Richard Oravec in exchange for professional services valued at $10,000. This value was based on the latest sales of the Company's common stock, which was $.10 per share.
On June 26, 2013 the Company issued 79,292 shares of common stock to Michael T. Williams in exchange for professional services valued at $7,929. This value was based on the latest sales of the Company's common stock, which was $.10 per share.
On June 26, 2013 the Company issued 79,293 shares of common stock to Todd Feinstein in exchange for professional services valued at $7,929. This value was based on the latest sales of the Company's common stock, which was $.10 per share.
On January 13, 2014 the Company issued 240,000 shares of common stock to its stock agent, Globex Transfer LLC, the Company's stock agent in exchange for professional services valued at $24,000. This value was based on the latest sales of the Company's common stock, which was $.10 per share.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
6. INCOME TAXES
The provision (benefit) for income taxes for the years ended March 31, 2015 and 2014, assumes a 34% effective tax rate for federal income taxes. The Company has no state income tax liability:
The Company had deferred income tax assets as of March 31, 2015 and 2014 are as follows:
The Company provided a valuation allowance equal to the deferred income tax assets for the fiscal years ended March 31 2015 and 2014, respectively, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
At March 31, 2015, the Company had approximately $237,000 in Federal tax loss carryforwards that can be utilized in future periods to reduce taxable income, and begin to expire in 2027. Pursuant to Internal Revenue Code Section 382, the future utilization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.
The Company incurs no state income taxes. The Company did not identify any material uncertain tax positions on tax returns that will be filed. The fiscal years ended March 31, 2015, 2014 and 2013 are open for potential examination.
HEALTHTALK LIVE, INC.
NOTES TO FINANCIAL STATEMENTS
7. CONTINGENCIES
Legal
The Company is not involved in any legal matters arising in the normal course of business. While incapable of estimation, in the opinion of the management, the individual regulatory and legal matters in which it might involve in the future are not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows.
8. EARNINGS PER SHARE
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.
Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
The Company had no potential additional dilutive securities outstanding for the years ended March 31, 2015 and 2014.
The following table sets forth the computation of basic and diluted net income per share:
9. SUBSEQUENT EVENTS
Management has evaluated subsequent events through July 13, 2015 the date for which the financial statements were ready for issue. No events subsequent to March 31, 2015 were identified that would have a material impact on these financial statements.
Item 9.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures.
None.
Item 9A.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-k was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company's controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2015 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at March 31, 2015, our disclosure controls and procedures are effective.
Management's Report on Internal Control Over Financial Reporting
Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2015 based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we will be implementing further internal controls as we become operative so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on its evaluation as of March 31, 2015, our management concluded that our internal controls over financial reporting were not effective as of March 31, 2015. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.
The material weakness relates to the following:
1. Accounting and Finance Personnel Weaknesses -- Our current accounting staff is relatively small and we do not have the required infrastructure of meeting the higher demands of being a U.S. public company. This material weakness also relates to a lack of personnel with expertise in preparing financial statements in accordance with U.S. GAAP, in addition to the small size of the staff.
This weakness also is due to our CEO and CFO being the same person.
2. Lack of Internal Audit Function -- We lack sufficient resources to perform the internal audit function. This weakness also is due to our CEO and CFO being the same person.
In order to mitigate these material weaknesses to the fullest extent possible, all work of the CFO is reviewed by a Director of the Company. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it will be immediately implemented. The Company continues to study the implementation of additional internal controls over accounting and financial reporting.
Changes in Internal Control over Financial Reporting
No change in the Company's internal control over financial reporting occurred during the quarter ended March 31, 2014, that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act.
Directors and Officers
The board of directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation or removal. Our directors and executive officers are as follows:
Johnie M. Yawn joined HealthTalk Live, Inc at the onset in April 2011. He is the President of Health Talk Live. Prior to joining HealthTalk Live, Inc. he was the President of VitaGanza Health Foods, LLC from November 2000 to April 2011. Mr. Yawn was credentialed by the Indiana Counselors Association on Alcohol and Drug Abuse (ICADA) as a Drug and Alcohol Counselor in Indiana from 1980 -- 1991. He was also a Certified Alcohol Drug Abuse Prevention (ADAP) Officer in the United States Army from 1972-1976. In 1978 Mr. Yawn received a BS in Psychology from Marian College, Indianapolis, IN. In 1982 he received a MA in Psychology from Ball State University, Muncie, Indiana. In 1985 he received a Ph.D. in Psychology from Great Lakes University. He does not currently have any other business associations. As a member of the board, Mr. Yawn contributes his knowledge of the company and a deep understanding of all aspects of our business, products and markets, as well substantial experience developing corporate strategy, assessing emerging industry trends, and business operations.
Vicki L. Yawn joined HealthTalk Live, Inc. at the onset in April 2011. She is the Vice President and Secretary of Health Talk Live and is also the Co-Host for the HealthTalk Live Talk Show radio program. Prior to joining HealthTalk Live, Inc. she was the Vice President of VitaGanza Health Foods, LLC from November 2000 to April 2011. She previously acted as co-host for the VitaGanza Health Talk Show radio program. Ms. Yawn is currently a candidate for a license as a Doctor of Naturopathic Medicine. She anticipates receiving the license in 2013. Prior to pursuing a license to practice as a Doctor of Naturopathic Medicine, Ms. Yawn received a Hanna Kroeger Practitioner Certification in 2004 in a program for vibropathic (homeopathic) and herbal combinations. In 2002 she completed 26 courses in nutrition science at Nature's Plus University. Health Talk Live Inc. is her only business activity. As a member of the board, Mrs. Yawn also contributes her knowledge of the company and a deep understanding of all aspects of our business, products and markets, as well substantial experience developing corporate strategy, assessing emerging industry trends, and business operations.
George W. Carter joined us at the onset in April 2011 as Director. Prior to joining us, he was the President of George W. Carter and Associates Investments and Insurance from 1966 to 1993. Subsequent to retirement to date he has been a mentor for SCORE (Service Corps Of Retired Executives), giving free, confidential advice to startup businesses. In 1965, he received a BS in Finance Indiana University, Bloomington Indiana. As a member of the board, Mr. Carter contributes the benefits of his years of executive leadership and management experience and SCORE consulting dealing with businesses like ours.
Corporate Governance
Our board of directors has determined that we have one board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules, Mr. Carter.
We do not have any standing audit, nominating and compensation committees of the board of directors, or committees performing similar functions. We do not currently have a Code of Ethics applicable to our principal executive, financial or accounting officer. All Board actions have been taken by Written Action rather than formal meetings.
Family Relationships
Johnie Yawn, President and Vicki Yawn, Secretary are married.
Legal Proceedings
No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten years in any of the following:
·
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time,
·
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses),
·
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities,
·
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
·
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.
·
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.
·
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
Section 16(a) Beneficial Ownership Reporting Compliance
We are not subject to the filing requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended.
Item 11.
Item 11. Executive Compensation.
Since inception on April 1, 2011, we have not paid any compensation to our two executive officers and we have no agreements or understandings, written or oral, to pay them compensation.
At this time, there has been no executive compensation. The monies obtained for Platinum and Silver Memberships are used to pay toward running the website; however, nearly all costs of this endeavor are shared by the two founding members. At this time, there is no money for compensation.
As to whether we may begin compensating our officers after your initial public offering or there will be in the future circumstances in which they will start to receive salaries or other compensation: Two years ago, the Board discussed compensation for the founders/management but there have never been sufficient revenues beyond those needed to support continued operations available to enact such compensation. At no time would the founders/management receive compensation to the detriment of the development corporation or its function or to the detriment of the stock-holders meaning there would have to be sufficient positive cash flow to fund all the operations of the Company that management has described in "Milestones" and there would be excess cash flow to pay management salary. Management would then determine when they would be paid salaries and how much for particular periods. There are no written agreements in effect with respect to the foregoing but management has indicated orally they will follow this policy.
Board of Directors
Director Compensation
This table is for our fiscal year ended March 31, 2015.
No director was paid in any form of compensation for acting as a Director as of March 31, 2015.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following tables set forth the ownership, as of the date of this prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown. The business address of the shareholders is Corporate Administrative Services, Inc. 1955 Baring Boulevard, Sparks, NV 89434.
This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Except as set forth above, applicable percentages are based upon 32,217,585 shares of common stock outstanding as of March 31, 2015.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Director Independence
Our board of directors has determined that we have one board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
Item 14.
Item 14. Principal Accountant Fees and Services.
Stein & Company LLP were our independent auditors for the fiscal years ended March 31, 2015 and 2014.
The following table shows the fees paid or accrued by us for the audit and other services provided by our auditor for fiscal 2014 and 2015.
As defined by the SEC, (i) "audit fees" are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) "audit-related fees" are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "audit fees;" (iii) "tax fees" are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) "all other fees" are fees for products and services provided by our principal accountant, other than the services reported under "audit fees," "audit-related fees," and "tax fees."
Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditors in order to ensure that they do not impair the auditors' independence. The SEC's rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee's responsibility for administration of the engagement of the independent auditors. Until such time as we have an Audit Committee in place, the Board of Directors will pre-approve the audit and non-audit services performed by the independent auditors.
Consistent with the SEC's rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent auditors to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting.
Item 15.
Item 15. Exhibits
____________
* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
SIGNATURE
NAME
TITLE
DATE
/s/ Johnie M. Yawn
Johnie M. Yawn
President/Director/Principal Executive Officer
July 13, 2015
Principal Financial Officer/Principal Accounting Officer
/s/ Vicki L. Yawn
Vicki L. Yawn
Secretary/Director
July 13, 2015
/s/ George Carter
George Carter
Director
July 13, 2015
EXHIBIT INDEX
__________
* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.