NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
NOTE
1 – BASIS OF PRESENTATION AND GOING CONCERN
The
Company
Textmunication
Holdings, Inc. (Company) was incorporated on May 13, 2010 under the laws of the State of California. Textmunication is an online
mobile marketing platform service that will connect merchants with their customers and allow them to drive loyalty and repeat
business in a non-intrusive, value added medium. For merchants we provide a mobile marketing platform where they can always send
the most up-to-date offers/discounts/alerts/events schedule, such as happy hours, trivia night, and other campaigns. The consumer
can also access specials and promotions that merchants choose to distribute through Textmunication by opting in to keywords designated
to the merchant’s keywords.
On
November 16, 2013, the Company entered into a Share Exchange Agreement (SEA) with Textmunication Holdings (Holdings). a Nevada
corporation, whereby the sole shareholder of the Company received 65,640,207 new shares of common stock of Holdings in exchange
for 100% of the Company’s issued and outstanding shares.
Basis
of Presentation
Our
financial statements are presented in conformity with accounting principles generally accepted in the United States of America,
as reported on our fiscal years ending on December 31, 2016 and 2015. We have summarized our most significant accounting policies.
Going
concern
These
consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to
a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal
course of business. As of December 31, 2016, the Company has an accumulated deficit of $7,361,146. The company’s
ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its
ability to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans,
there is no assurance that any such activity will generate funds that will be available for operations. These conditions raise
substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do
not include any adjustments that might arise from this uncertainty.
Reclassifications
Certain
reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.
These reclassifications had no effect on previously reported results of operations. The Company reclassified amounts from common
stock to additional paid-in capital.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash
The
Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.
The
Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial
institution. The balance at times may exceed federally insured limits. At December 31, 2016 and 2015 no cash balances exceeded
the federally insured limit.
Accounts
receivable and allowance for doubtful accounts
Accounts
receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support
customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts
receivable, historical collection information and existing economic conditions. As of December 31, 2016 and 2015 the allowance
for doubtful accounts was $0 and bad debt expense of $0 and $0, respectively.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Revenue
Recognition
We
recognize revenue in accordance with Accounting Standards Codification, or (“ASC”), 605, Revenue Recognition. We recognize
revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service
has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection
of our fees is reasonably assured.
Thus,
we recognize subscription revenue on a monthly basis, as services are provided. Customers are billed for the subscription on a
monthly, quarterly, semi-annual or annual basis, at the customer’s option.
Fair
Value of Financial Instruments
The
carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair
values due to the short maturities of these items.
As
required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted
prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly
or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity
to develop its own assumptions.
The
three levels of the fair value hierarchy are described below:
Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or
liabilities;
Level
2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially
the full term of the asset or liability;
Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable
(supported by little or no market activity).
The
fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their
value is considered fair value.
Financial
assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2016:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Financial Instruments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
870,921
|
|
|
$
|
870,921
|
|
Financial
assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2015:
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
Total
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Financial Instruments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
551,646
|
|
|
$
|
551,646
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
The
following table presents details of the Company’s level 3 derivative liabilities as of December 31, 2016 and 2015:
|
|
Amount
|
|
Balance December 31, 2015
|
|
$
|
551,646
|
|
Debt discount originated from derivative
liabilities
|
|
|
501,750
|
|
Initial loss recorded
|
|
|
1,563,080
|
|
Adjustment to derivative liability due
to debt conversion
|
|
|
(1,573,237
|
)
|
Change in fair
market value of derivative liabilities
|
|
|
(172,318
|
)
|
Balance December 31, 2016
|
|
$
|
870,921
|
|
Net
income (loss) per Common Share
Basic
net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average
number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss
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.
Property
and equipment
Property
and equipment are stated at cost, less accumulated depreciation provided on the straight-line method over the estimated useful
lives of the assets, which range from three to seven years. Expenditures for renewals or betterments are capitalized, and repairs
and maintenance are charged to expense as incurred the cost and accumulated depreciation of assets sold or otherwise disposed
of are removed from the accounts, and any gain or loss thereon is reflected in operations.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and
are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit
of the accumulated net loss has been fully offset by an equal valuation allowance.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Stock-Based
Compensation
The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation –
Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation
expense and credited to additional paid-in capital over the period during which services are rendered.
The
Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants
and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value
of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly
to compensation expense and additional paid-in capital over the period during which services are rendered.
Recent
Accounting Pronouncements
No
new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the
financial statements.
NOTE
3 – RELATED PARTY TRANSACTIONS
During
the year ended December 31, 2014, the Company received advances from a related party. The loans are due on demand and have no
interest. Amounts outstanding as of December 31, 2016 and December 31, 2015 was approximately $11,750 and $11,750, respectively.
Note
4 – LOANS PAYABLE
As
of December 31, 2016 and 2015, the Company has short term loans payable of $3,712 and $98,435, respectively. During the years
ended December 31, 2016 and 2015, the Company received proceeds of $31,200 and $143,737 and made payments of $125,923 and $51,202
and $54,477 respectively from certain short term loans payable with interest rates ranging from 20%-94%. Interest recorded on
the notes for the years ended December 31, 2016 and 2015 was $25,515 and $22,695, respectively.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
NOTE
5 - CONVERTIBLE NOTE PAYABLE
Description
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
In
connection with the SEA, the Company assumed three convertible promissory notes for an
aggregate of $13,670, net of debt discount. The notes mature on September 14, 2014 and
accrue interest at a rate of 12% per annum. The note principal is convertible at a price
of $.00382 per share. At issuance the fair market value of the Company’s common
stock was $.013 per share. The conversion feature of the note is considered beneficial
to the investor due to the conversion price for the convertible note being lower than
the fair market value of the common stock on the date the note was issued. The beneficial
conversion feature was recorded at the debt’s inception as a discount of the debt
of $76,429 and is being amortized over the lives of the convertible debt. Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $0 and $0, respectively
and the unamortized discount at December 31, 2016 and 2015 was $0 and $0, respectively.
Interest expense recorded on the convertible notes for the twelve months ended December
31, 2016 and 2015 was $3,060 and $5.060, respectively.
One
of the holders of the convertible promissory notes with a principal value of $25,476,
entered into note purchase and assignment agreements whereby half of the principal of
the note was assigned to two separate note holders. The original note was substituted
and replaced by two amended and restated 12% convertible promissory notes with restated
principal amounts of $12,738 each. All other terms of the original note remain in effect.
One
of the holders of the convertible promissory notes with a principal value of $25,476,
entered into note purchase and assignment agreements whereby half of the principal of
the note was assigned to two separate note holders. The original note was substituted
and replaced by two amended and restated 12% convertible promissory notes with restated
principal amounts of $12,738 each. All other terms of the original note remain in effect.
|
|
$
|
10,255
|
|
|
$
|
33,729
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
In
connection with the SEA, the Company assumed a convertible note for an aggregate of $36,363,
net of debt discount. The note matures on November 7, 2014 and interest accrues at a
rate of 20% per annum. The note principal is convertible into common stock at the rate
of $.001 per share or 50 million shares of the Company’s common stock but such
conversion can only take effect upon default of the note. The note is secured by 59,400,000
shares of the Company’s common stock. In conjunction with the note the Company
issued 750,000 shares of restricted common stock and 1,000,000 common stock purchase
warrants exercisable for twelve months at $.10 per warrant for one share of Company common
stock.
The relative fair value of the common stock and warrants at the debt’s inception of $6,884 and $9,121, respectively were recorded as a discount to the debt and are being amortized to debt discount over the life of the debt. The fair value of the warrants was calculated using the Black-Scholes option pricing model with the following assumptions: expected life of 1.0 years; volatility of 606.16%; no dividend yield; and a risk free interest rate of 0.11%. Amortization of debt discount during the year ended December 31, 2016 and 2015 was $0 and $325, respectively and the unamortized discount at December 31, 2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible note for the year ended December 31, 2016 and 2015 was $3,879 and $1,203, respectively.
|
|
|
-
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
On November 17, 2013, the Company
issued a $10,000 convertible promissory note. The note matures on May 17, 2015 and accrues interest at a rate of 12% per annum.
The note principal and interest are convertible at a price of $.10 per share. In conjunction with the note, the Company issued
100,000 common stock purchase warrants exercisable for twelve months at a price of $.125 per share. The relative fair value
of the warrants at inception of $1,297 was recorded as a discount to the debt and is being amortized to debt discount over
the life of the debt. The fair value of the warrants was calculated using the Black-Scholes option pricing model with the
following assumptions: expected life of 1.0 years; volatility of 608.68%; no dividend yield; and a risk free interest rate
of 0.13%.
|
|
|
-
|
|
|
|
10,000
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Amortization of debt
discount during the year ended December 31, 2016 and 2015 was $0 and $325, respectively and the unamortized discount at December
31, 2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible note for the year ended December
31, 2016 and 2015 was $3,879 and $1,203, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
February 13, 2014, the Company issued two $5,000 convertible promissory notes. The notes mature
on May 31, 2015 and accrue interest at a rate of 12% per annum. The note principal and interest
are convertible at a price of $.10 per share. In conjunction with the notes, the Company issued
100,000 common stock purchase warrants exercisable for twelve months at a price of $.125 per
share. The relative fair value of the warrants at inception of $3,324 was recorded as a discount
to the debt and is being amortized to debt discount over the life of the debt. The fair value
of the warrants was calculated using the Black-Scholes option pricing model with the following
assumptions: expected life of 1.0 years; volatility of 600.29%; no dividend yield; and a risk
free interest rate of 0.12%.
Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $0 and $1,064, respectively
and the unamortized discount at December 31, 2016 and 2016 was $0 and $0, respectively. Interest
expense recorded on the convertible note for the year ended December 31, 2016 and 2015 was
$1,207 and $1,203, respectively.
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
On April 17, 2014, the Company issued
a $10,000 convertible promissory note. The note matures on October 17, 2015 and accrues interest at a rate of 12% per annum.
The note principal and interest are convertible at a price of $.10 per share. In conjunction with the notes, the Company issued
100,000 common stock purchase warrants exercisable for twelve months at a price of $.125 per share. The relative fair value
of the warrants at inception of $8,000 was recorded as a discount to the debt and is being amortized to debt discount over
the life of the debt. The fair value of the warrants was calculated using the Black-Scholes option pricing model with the
following assumptions: expected life of 1.0 years; volatility of 444.14%; no dividend yield; and a risk free interest rate
of 0.11%.
|
|
|
5,000
|
|
|
|
10,000
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Amortization of debt
discount during the year ended December 31, 2016 and 2015 was $0 and $5,292, respectively and the unamortized discount at
December 31, 2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended
December 31, 2016 and 2015 was $603 and $852, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
May 29, 2014, the Company issued a $10,000 convertible promissory note. The note matures on
December 10, 2015 and accrues interest at a rate of 12% per annum. The note principal and
interest are convertible at a price of $.10 per share. In conjunction with the notes, the
Company issued 100,000 common stock purchase warrants exercisable for twelve months at a price
of $.125 per share. The relative fair value of the warrants at inception of $8,400 was recorded
as a discount to the debt and is being amortized to debt discount over the life of the debt.
The fair value of the warrants was calculated using the Black-Scholes option pricing model
with the following assumptions: expected life of 1.0 years; volatility of 290.82%; no dividend
yield; and a risk free interest rate of 0.10%.
Amortization
of debt discount during the year ended December 31, 2015 and 2014 was $6,143 and $3,857, respectively
and the unamortized discount at December 31, 2015 2014 was $0 and $6,143, respectively. Interest
expense recorded on the convertible notes for the year ended December 31, 2015 and 2014 was
$1,203 and $713, respectively.
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
On July 7, 2014, the Company issued
a $10,000 convertible promissory note. The note matures on July 7, 2015 and accrues interest at a rate of 12% per annum. The
note principal and interest are convertible at a price of $.10 per share. In conjunction with the notes, the Company issued
100,000 common stock purchase warrants exercisable for twelve months at a price of $.125 per share. The relative fair value
of the warrants at inception of $8,400 was recorded as a discount to the debt and is being amortized to debt discount over
the life of the debt. The fair value of the warrants was calculated using the Black-Scholes option pricing model with the
following assumptions: expected life of 1.0 years; volatility of 290.82%; no dividend yield; and a risk free interest rate
of 0.12%.
|
|
|
10,000
|
|
|
|
10,000
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Amortization of debt
discount during the year ended December 31, 2016 and 2015 was $0 and $5,151, respectively and the unamortized discount at
December 31, 2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended
December 31, 2016 and 2015 was $1,207 and $1,203, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On April 21, 2015, we entered into
a convertible promissory note pursuant to which we borrowed $26,500, including a debt discount of $1,650. Interest under the
convertible promissory note is 8% per annum, and the principal and all accrued but unpaid interest is due on April 20, 2016.
The note is convertible at any time following the issuance date at noteholders option into shares of our common stock at a
variable conversion price of 60% of the lowest average three day market price of our common stock during the 15 trading days
up until date the notice of conversion. The Company recorded a debt discount in the amount of $26,500 in connection with the
initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion
over the term of the Note. Further, the Company recognized a derivative liability of $31,976 and an intital loss of $5,326
based on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $0 and $5,151, respectively and the unamortized discount at December 31, 2016
and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December 31, 2016
and 2015 was $289 and $1,203, respectively.
|
|
|
-
|
|
|
|
21,443
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On April 29, 2015, the
Company issued a convertible promissory note in which the Company will be taking tranche payments, the total of these payments
cannot exceed $400,000. There is an original discount component of 10% per tranche. Therefore, the funds available to the
Company will be $360,000 and the liability (net of interest) will be $400,000 when all disbursements have been received by
the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 24 months after receipt.
Each tranche bears interest at 0% for the first 90 days and 12% per annum thereafter. The loan is secured by shares of the
Company’s common stock. Each portion of the loan becomes convertible immediatly after date of the note. The loan and
any accrued interest can then be converted into shares of the Company’s common stock at a rate of 60% multiplied by
the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest
complete trading day prior to the conversion date. During the year ended December 31, 2015, the Company has received two tranche
disbursements of $25,000 and $30,000 on April 29, 2015 and November 10, 2015, respectivley. The tranches included an original
issue discount of $2,779 and $3,000. Additionally, the Company recorded a debt discount related to the two tranches in the
amount of $60,779 in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing
the effective interest method of accretion over the term of the Note. Further, the Company recognized derivative liability
of $112,163 and an intital loss of $64,716 based on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $46,707 and $8,319, respectively and the unamortized discount at December 31,
2016 and 2015 was $0 and $46,737, respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $1,737 and $1,737, respectively.
|
|
|
-
|
|
|
|
47,447
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On
April 28, 2015, we entered into a convertible promissory note pursuant to which we borrowed
$40,000, including a debt discount of $3,500. Interest under the convertible promissory
note is 12% per annum, and the principal and all accrued but unpaid interest is due on
April 28, 2016. The note is convertible at any time following the issuance date at noteholders
option into shares of our common stock at a variable conversion price of the lower of
the closing sale price of common stock on the trading day immediately preceding the conversion
date and 50% of the lowest market price of our common stock during the 20 trading days
up until date the notice of conversion. The Company recorded a debt discount in the amount
of $40,000 in connection with the initial valuation of the derivative liability of the
Note to be amortized utilizing the effective interest method of accretion over the term
of the Note. Further, the Company recognized a derivative liability of $62,240 and an
intital loss of $22,240 based on the Black Scholes Merton pricing model.
Amortization
of debt discount during the year ended December 31, 2015 and 2014 was $25,391 and $0, respectively
and the unamortized discount at December 31, 2015 2014 was $12,140 and $0, respectively. Interest
expense recorded on the convertible notes for the year ended December 31, 2015 and 2014 was
$3,261 and $0, respectively.
|
|
|
-
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
On April 23, 2015, we entered into
a convertible promissory note pursuant to which we borrowed $25,000. Interest under the convertible promissory note is 8%
per annum, and the principal and all accrued but unpaid interest is due on April 23, 2016. The note is convertible at any
time following the issuance date at noteholders option into shares of our common stock at a variable conversion price of 50%
of the lowest market price of our common stock during the 15 trading days prior the date of the notice of conversion. The
Company recorded a debt discount in the amount of $25,000 in connection with the initial valuation of the derivative liability
of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company
recognized a derivative liability of $38,340 and an intital loss of $13,340 based on the Black Scholes Merton pricing model.
On September 9, 2015, the note holder converted $5,000 of the note payable into 1,000,000 shares of common stock. The converted
portion of the note also had an associated derivative liability with a fair value on the date of conversion of $8,608.
|
|
|
|
|
|
|
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
Amortization of debt
discount during the year ended December 31, 2016 and 2015 was $7.973 and $17,027, respectively and the unamortized discount
at December 31, 2016 and 2015 was $0 and $7,973, respectively. Interest expense recorded on the convertible notes for the
year ended December 31, 2016 and 2015 was $2,713 and $1,109, respectively.
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
On
May 12, 2015, we entered into a convertible promissory note pursuant to which we borrowed
$57,500, including a debt discount of $7,500. Interest under the convertible promissory note
is 8% per annum, and the principal and all accrued but unpaid interest is due on April 23,
2016. The note is convertible at any time following the issuance date at noteholders option
into shares of our common stock at a variable conversion price of 60% of the lowest day market
price of our common stock during the 15 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $50,000 in connection with the initial
valuation of the derivative liability of the Note to be amortized utilizing the effective
interest method of accretion over the term of the Note. Further, the Company recognized a
derivative liability of $68,020 and an intital loss of $18,020 based on the Black Scholes
Merton pricing model.
Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $19,273 and $38,254,
respectively and the unamortized discount at December 31, 2016 and 2015 was $0 and $19,273,
respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $5,470 and $2,949, respectively.
|
|
|
-
|
|
|
|
57,500
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On
July 10, 2015, we entered into a convertible promissory note pursuant to which we borrowed
$25,000, including a debt discount of $3,500. Interest under the convertible promissory note
is 12% per annum, and the principal and all accrued but unpaid interest is due on January
30, 2016. The note is convertible at any time following the issuance date at noteholders option
into shares of our common stock at a variable conversion price of 60% of the lowest day market
price of our common stock during the 10 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $25,000 in connection with the initial
valuation of the derivative liability of the Note to be amortized utilizing the effective
interest method of accretion over the term of the Note. Further, the Company recognized a
derivative liability of $31,241 and an intital loss of $6,241 based on the Black Scholes Merton
pricing model.
Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $4,191 and $24,309,
respectively and the unamortized discount at December 31, 2016 and 2015 was $0 and $0, respectively.
Interest expense recorded on the convertible notes for the year ended December 31, 2016 and
2015 was $2,975 and $1,438, respectively.
|
|
|
-
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
On
August 21, 2015, we entered into a convertible promissory note pursuant to which we borrowed
$55,750, including a debt discount of $5,750. Interest under the convertible promissory note
is 10% per annum, and the principal and all accrued but unpaid interest is due on May 21,
2016. The note is convertible at any time following the issuance date at noteholders option
into shares of our common stock at a variable conversion price of 55% of the lowest day market
price of our common stock during the 25 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $55,750 in connection with the initial
valuation of the derivative liability of the Note to be amortized utilizing the effective
interest method of accretion over the term of the Note. Further, the Company recognized a
derivative liability of $85,313 and an intital loss of $29,563 based on the Black Scholes
Merton pricing model.
Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $31,872 and $29,628,
respectively and the unamortized discount at December 31, 2016 and 2015 was $0 and $0, respectively.
Interest expense recorded on the convertible notes for the year ended December 31, 2016 and
2015 was $9,916 and $3,208, respectively.
|
|
|
-
|
|
|
|
55,750
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On
September 9, 2015, we entered into a convertible promissory note pursuant to which we
borrowed $50,000. Interest under the convertible promissory note is 8% per annum, and
the principal and all accrued but unpaid interest is due on June 7, 2016. The note is
convertible at any time following the issuance date at noteholders option into shares
of our common stock at a variable conversion price of 50% of the lowest day market price
of our common stock during the 10 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $50,000 in connection with the
initial valuation of the derivative liability of the Note to be amortized utilizing the
effective interest method of accretion over the term of the Note. Further, the Company
recognized a derivative liability of $86,459 and an intital loss of $36,459 based on
the Black Scholes Merton pricing model.
Amortization
of debt discount during the year ended December 31, 2016 and 2015 was $29,228 and $20,772,
respectively and the unamortized discount at December 31, 2016 and 2015 was $0 and $0, respectively.
Interest expense recorded on the convertible notes for the year ended December 31, 2016 and
2015 was $5,260 and $1,249, respectively.
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
On September 22, 2015, we entered
into a convertible promissory note pursuant to which we borrowed $15,000. Interest under the convertible promissory note is
10% per annum, and the principal and all accrued but unpaid interest is due on March 22, 2016. The note is convertible at
any time following the issuance date at noteholders option into shares of our common stock at a variable conversion price
of 50% of the lowest day market price of our common stock during the 25 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $15,000 in connection with the initial valuation of the derivative liability
of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company
recognized a derivative liability of $24,253 and an intital loss of $9,253 based on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $6,758 and $8,242, respectively and the unamortized discount at December 31,
2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $1,919 and $415, respectively.
|
|
|
15,000
|
|
|
|
15,000
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On September 23, 2015,
we entered into a convertible promissory note pursuant to which we borrowed $25,000. Interest under the convertible promissory
note is 10% per annum, and the principal and all accrued but unpaid interest is due on March 23, 2016. The note is convertible
at any time following the issuance date at noteholders option into shares of our common stock at a variable conversion price
of 50% of the lowest day market price of our common stock during the 25 trading days prior the date of the notice of conversion.
The Company recorded a debt discount in the amount of $25,000 in connection with the initial valuation of the derivative liability
of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further, the Company
recognized a derivative liability of $40,438 and an intital loss of $15,438 based on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $11,401 and $13,599, respectively and the unamortized discount at December 31,
2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $3,192 and $685, respectively.
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
On November 5, 2015, we entered into
a convertible promissory note pursuant to which we borrowed $30,500, including a debt discount of $5,500. Interest under the
convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on August 5, 2016.
The note is convertible at any date following 90 days after the issuance date at noteholders option into shares of our common
stock at a variable conversion price of 50% of the lowest day market price of our common stock onthe date of the notice of
conversion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $4,376 and $1,124, respectively and the unamortized discount at December 31,
2016 and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $4,242 and $572, respectively.
|
|
|
30,500
|
|
|
|
30,500
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On February 17, 2016,
we entered into a convertible promissory note pursuant to which we borrowed $100,000. Interest under the convertible promissory
note is 12% per annum, and the principal and all accrued but unpaid interest is due on November 17, 2016. The note is convertible
at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion price of
50% of the lowest day market price of our common stock during the previous 20 days to the date of the notice of conversion
or the date the note was executed. The Company recorded a debt discount in the amount of $100,000 in connection with the initial
valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over
the term of the Note. Further, the Company recognized a derivative liability of $650,708 and an initial loss of $550,708 based
on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $100,000 and $0, respectively and the unamortized discount at December 31, 2016
and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December 31, 2016
and 2015 was $7,440 and $0, respectively.
|
|
|
70,945
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On April 1, 2016, we entered into
a convertible promissory note pursuant to which we borrowed $100,000. Interest under the convertible promissory note is 12%
per annum, and the principal and all accrued but unpaid interest is due on December 22, 2016 The note is convertible at any
date after the issuance date at noteholders option into shares of our common stock at a variable conversion price of 50% of
the average three (3) two (2) lowest day market price of our common stock during the previous 20 days immediately preceding
the conversion date. The Company recorded a debt discount in the amount of $100,000 in connection with the initial valuation
of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the term
of the Note. Further, the Company recognized a derivative liability of $221,148 and an initial loss of $121,148 based on the
Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $110,000 and $0, respectively and the unamortized discount at December 31, 2016
and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December 31, 2016
and 2015 was $1,863 and $0, respectively.
|
|
|
20,608
|
|
|
|
-
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On June 24, 2016, we
entered into a convertible promissory note pursuant to which we borrowed $64,000 including a debt discount of $3,200. Interest
under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on December
22, 2016. The note is convertible at any date after the issuance date at noteholders option into shares of our common stock
at a variable conversion price of 50% of the average three (3) two (2) lowest day market price of our common stock during
the previous 20 days immediately preceding the conversion date. The Company recorded a debt discount in the amount of $64,000
in connection with the initial valuation of the derivative liability of the Note to be amortized utilizing the effective interest
method of accretion over the term of the Note. Further, the Company recognized a derivative liability of $112,104 and an initial
loss of $48,104 based on the Black Scholes Merton pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $67,200 and $0, respectively and the unamortized discount at December 31, 2016
and 2015 was $0 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December 31, 2016
and 2015 was $4,019 and $0, respectively.
|
|
|
64,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On July 18, 2016, we entered a convertible
promissory note pursuant to which we borrowed $237,750 including a debt discount of $20,000. Interest under the convertible
promissory note is 10% per annum, and the principal and all accrued but unpaid interest is due on April 18, 2017. The note
is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion
price of 55% of the lowest day market price of our common stock during the previous 25 days immediately preceding the conversion
date. The Company recorded a debt discount in the amount of $237,750 in connection with the initial valuation of the derivative
liability of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. Further,
the Company recognized a derivative liability of $1,080,870 and an initial loss of $843,120 based on the Black Scholes Merton
pricing model.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount during
the year ended December 31, 2016 and 2015 was $156,155 and $0, respectively and the unamortized discount at December 31, 2016
and 2015 was $101,595 and $0, respectively. Interest expense recorded on the convertible notes for the year ended December
31, 2016 and 2015 was $10,878 and $0, respectively.
|
|
|
237,750
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Less discounts
|
|
|
(101,594
|
)
|
|
|
(177,596
|
)
|
Convertible
notes net of discount
|
|
$
|
477,464
|
|
|
$
|
323,773
|
|
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
The
Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15
“Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company
to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible
debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized
change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes
pricing model.
The
Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible
note and at December 31, 2016 and 2015:
Fair
value assumptions – derivative notes:
|
|
December
31, 2015
|
|
Risk free interest rate
|
|
|
0.16-1.06
|
%
|
Expected term (years)
|
|
|
0.721-2.00
|
|
Expected volatility
|
|
|
322.88
|
%
|
Expected dividends
|
|
|
0
|
%
|
Fair
value assumptions – derivative notes:
|
|
December
31, 2016
|
|
Risk free interest rate
|
|
|
0.44
|
%
|
Expected term (years)
|
|
|
0.0-0.27
|
|
Expected volatility
|
|
|
273.97
|
%
|
Expected dividends
|
|
|
0
|
%
|
Settlement
agreements
On
July 7, 2016, the Company entered into an agreement to settle a certain note and accrued interest in the amount of $36,363 issued
on November 10, 2015 for 2,000,000 shares of common stock valued at $146,000. Upon the settlement of the notes the Company recorded
a $109,778 loss related to the difference between the note balances and the fair value of the share.
On
July 14, 2016, the Company entered into an agreement, which was amended on February 27, 2017, to settle a certain note and accrued
interest in the amount of $50,000 issued on September 8, 2015 for $128,000. Upon the settlement of the notes the Company recorded
a $78,000 loss related to the difference between the original note balances and the settlement amount.
On
August 22, 2016, the Company entered into an agreement to settle certain convertible notes payable issued on September, 10, 2013,
September 27, 2013, November 7, 2013, and November 17, 2013 with balances of $90,762 and secured by 59,400,000 shares of the Company’s
common stock, including interest for $32,000 Upon the settlement of the notes the Company recorded a $57,762 gain related to the
difference between the note balances and the settlement price.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
On
September 8, 2016, the Company entered into an agreement to partially settle a certain note in the amount of $5,000 issued on
April 17, 2014 for 10,000,000 shares of common stock valued at $195,000. Upon the settlement of the notes the Company recorded
a $190,000 loss related to the difference between the note balances and the fair value of the share.
NOTE
6 – INVESTMENT IN ASPIRE CONSULTING GROUP, LLC
On
January 5, 2016, the Company entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a Virginia limited liability
company and certain members of Aspire. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire 49% of all
of the issued and outstanding membership units of Aspire in exchange for the issuance of 66,667 shares of the Company’s
newly created Series B Convertible Preferred Stock to the Members valued at $460,002.
The
Company has concluded that it has the ability to exercise significant influence, but not control, over an Aspire through its acquired
49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.
The
following table presents details of the Company’s investment is Aspire as of December 31, 2016 and 2015:
|
|
Amount
|
|
Balance December 31, 2015
|
|
$
|
-
|
|
Fair value of shares issued
for ownership 49% interest in Aspire
|
|
|
460,002
|
|
Income from equity method investee
|
|
|
18,395
|
|
Distributions
received from Aspire
|
|
|
(24,335
|
)
|
Balance December 31, 2016
|
|
$
|
454,062
|
|
NOTE
7 – COMMITMENTS AND CONTINGENCIES
Office
Lease
On
January 6, 2015 the Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January
1, 2015 and expires on thirty days’ notice. Current month to month lease is for $2,000 a month. Rent expense was approximately
$23,972 and $21,483 for the years ended December 31, 2016 and 2015, respectively.
Executive
Employment Agreement
The
Company has an employment agreement with the CEO/Chairman to perform duties and responsibilities as may be assigned by the Board
of Directors. The base salary is in the amount of $100,000 per annum plus an annual discretionary bonus plus benefits commencing
on December 17, 2013 and ending May 1, 2017 with an automatic renewal on each anniversary date (May 1) thereafter.
Litigations,
Claims and Assessments
The
Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.
Included
in this litigation is a dispute over a $36,363 note In the view of management, there are significant issues of fact regarding
the proper issuance and assumption of this note by the Company. Additionally, there are issues over the validity of the prior
debt. Regardless, the Company is in discussions to settle this note, and while no guarantee can be given as to the successful
resolution of this matter, the Company believes it will be resolved without litigation.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
However,
litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business.
The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the
aggregate, a material adverse effect on its business, financial condition or operating results.
On
July 7, 2016, the Company entered into an agreement to settle the note and accrued interest for 2,000,000 shares of common stock
valued at $146,000. (See Note 5).
NOTE
8 – INCOME TAXES
For
the year ended December 31, 2016, the cumulative net operating loss carry-forward from continuing operations is approximately
$4,652,866 and will expire beginning in the year 2030.
The
cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as
of December 31, 2016 and 2015:
|
|
2016
|
|
|
2015
|
|
Deferred tax asset attributable to:
|
|
|
|
|
|
|
|
|
Net
operating loss carryover
|
|
$
|
1,623,745
|
|
|
$
|
1,461,983
|
|
Valuation
allowance
|
|
|
(1,623,745
|
)
|
|
|
(1,461,983
|
)
|
Net
deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
Note
9 – STOCKHOLDERS’ EQUITY
The
Company is authorized to issue an aggregate of 4,000,000,000 shares of common stock with a par value of $0.0001. The Company is
also authorized to issue 10,000,000 shares of “blank check” preferred stock with a par value of $0.0001, which includes
4,000,000 shares of Series A preferred stock (“Series A”).
Under
the Certificate of Designation, holders of Series A Preferred Stock will participate on an equal basis per-share with holders
of our common stock in any distribution upon winding up, dissolution, or liquidation. Holders of Series A Preferred Stock are
entitled to vote together with the holders of our common stock on all matters submitted to shareholders at a rate of three hundred
(300) votes for each share held.
On
January 5, 2016, pursuant to Article III of our Articles of Incorporation, the Company’s Board of Directors voted to designate
a class of preferred stock entitled Series B Convertible Preferred Stock, consisting of up 66,667 shares, par value $0.0001. Under
the Certificate of Designation, holders of Series B Convertible Preferred Stock participate on an equal basis per-share with holders
of the Company’s common stock and Series A Preferred Stock in any distribution upon winding up, dissolution, or liquidation.
Holders of Series B Convertible Preferred Stock are not entitled to voting rights.
As
of December 31, 2016 and 2015, 199,402,788 and 109,542,788 shares of common stock, 4,000,000 and 0 shares of Series A preferred
stock and 66,667 and 0 Series B preferred stock, were issued and outstanding, respectively.
During
the year ended December 31, 2016, the Company issued 66,667 shares of Series B preferred stock with a fair value of $460,002 for
a 49% interest in an Aspire Consulting, Inc.
TEXTMUNICATION
HOLDINGS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEAR ENDED DECEMBER 31, 2016
(AUDITED)
During
the year ended December 31, 2016, the Company issued 141,260,000 shares of common stock with a fair value of $635,299 for the
conversion of convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair
values on the date of conversion of $1,573,238. The conversion of the derivative liabilities has been recorded through additional
paid-in capital.
During
the year ended December 31, 2016, the Company issued 8,000,000 shares of common stock valued at $478,700 for services.
During
the year ended December 31, 2016, the Company’s CEO returned and the Company retired 59,400,000 shares of common stock.
NOTE
10 – SUBSEQUENT EVENTS
On
February 16, 2017, the Company issued a total of 2,000,000,000 shares of our common stock to our officer and director, Wais Asefi,
as compensation for services rendered.
On
February 23, 2017, the Company issued 3,000,000 shares of common stock for services.
September
9, 2015, the Company entered into a convertible promissory note pursuant to which we borrowed $50,000. Interest under the convertible
promissory note was 8% per annum, and the principal and all accrued but unpaid interest was due on June 7, 2016. The note was
convertible at any time following the issuance date at noteholders option into shares of our common stock at a variable conversion
price of 50% of the lowest day market price of our common stock during the 10 trading days prior the date of the notice of conversion.
On
February 27, 2017, our company and Spero Holdings, LLC (“Spero”) entered into a Agreement, Mutual General Release,
and Covenant Not to Sue (the “Agreement”). Pursuant to the Agreement, the parties agreed as follows:
|
●
|
We
agreed to pay Spero $121,745.75 in the following manner: $55,000 paid on March 15, 2017 by a third party and $45,000 paid
on April 1, 2017 by a third party. The remaining $21,754.75 was paid by company pursuant to Spero’s writ of attachment
(the “Writ”). A third party made the initial payment of $55,000 to Spero by acquiring a portion of the 8% Convertible
Debenture (the “Note”) we issued on September 8, 2015 to Spero.
|
|
|
|
|
●
|
As
security for the payments, we had agreed to sign an irrevocable letter of instruction to allow 125,000,000 shares of our common
stock which was released from Spero back to the company on April 13, 2017 based on the agreement.
|
|
|
|
|
●
|
The
Company and the new note holder have agreed to revise the variable conversion price in favor of a fixed $0.000125 per share
conversion price.
|
On
March 6, 2017, we hired the law firm Ellsworth Young LLP to vigorously protect us against abusive lending practices. We have several
cases pending concerning convertible promissory notes outstanding, including the following. These actions are all in the initial
stages, and we will provide additional disclosures in future filings as these cases develop.
JSJ
Investments, Inc. vs. Textmunication Holdings, Inc.
95th
District Court of Dallas County, Texas
Filed
on 2/7/2017
Case
DC-17-01404
Auctus
Fund vs. Textmunication Holdings, Inc.
United
States District Court – District of Massachusetts
Filed
on 3/24/2017
Case
1:17-cv-10504
Textmunication
Holdings, Inc. vs. Carebourn Capital. L.P.
United
States District Court – District of Nevada
Filed
on 4/5/2017
Case
2:17-cv-00968-JAD-VCF
Textmunication
Holdings, Inc. vs. Lester Einhaus
Eighth
Judicial District Court of Clark County, Nevada
Filed
on 4/10/2017
A-17-753743-C
Subsequent
to year-end the Company issued 209,548,457 shares of common stock for the settlement of certain notes payable.