10-Q

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE NINE MONTH PERIOD ENDED: SEPTEMBER 30, 2017

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  ______________ to ______________

Commission File Number: 333-148987

NEXT GROUP HOLDINGS, INC

(Exact name of Registrant as specified in its charter)

Florida	20-3537265
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1111 BRICKEL AVE, SUITE 2200, MIAMI, FL 33131

(Address of principal executive offices)

800-611-3622

(Registrant’s telephone number)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of November 10, 2017, the issuer had 301,422,658 shares of its common stock issued and outstanding.

Part I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NEXT GROUP HOLDINGS, INC

Table of Contents

	Pages
Unaudited Condensed Consolidated Balance Sheets	2
Unaudited Condensed Consolidated Statements of Operations	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	5 - 18

1

NEXT GROUP HOLDINGS, INC

CONSOLIDATED BALANCE SHEETS

	September 30, 2017			December 31, 2016
	(unaudited)
ASSETS
Current Assets
Cash	$	57,432		$	256,302
Accounts receivable, net		9,078			9,661
Accounts receivable, related party		199,894			-
Finance deposit		-			25,000
Prepaid expenses and other current assets		8,408			48,091
Investments		550,000			-
Assets from discontinued operations		-			225,884
Total current assets		824,812			564,938
License fee, net of accumulated amortization		55,556			118,056
Related party receivable		36,000			36,000
Total assets	$	916,368		$	718,994
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Bank overdraft	$	-		$	7
Accounts payable and accrued liabilities		1,697,524			1,330,789
Dividends payable		30,000			30,000
Deferred revenue		706,378			715,642
Loan payable		75,000			75,000
Convertible notes payable, net of discounts and debt issue costs		981,960			1,076,302
Derivative liability		1,143,186			1,210,281
Related party payable		3,225,453			3,155,995
Notes payable, current		116,395			-
Interest payable, related party		-			13,321
Notes payable, related party		-			280,000
Liabilities from discontinued operations		-			2,436,720
Total current liabilities		7,975,896			10,324,057
Commitments and contingencies		-			-
Stockholders' Deficit
Preferred stock, $0.001 par value, authorized 60,000,000 shares; Series A preferred stock; $0.001 par value, designated 50,000,000; 0 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively.		-			-
Series B preferred stock, $0.001 par value, designated 10,000,000; 10,000,000 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		10,000			10,000
Common stock, authorized 360,000,000 shares, $0.001 par value, 289,961,684 and 249,225,683 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		289,962			249,226
Additional paid in capital		6,702,788			6,791,750
Accumulated deficit		(13,436,542	)		(13,499,303	)
Total Next Group Holdings, Inc. stockholders' deficit		(6,433,792	)		(6,448,327	)
Non-controlling interest in subsidiaries		(625,736	)		(3,156,736	)
Total liabilities and stockholders' deficit	$	916,368		$	718,994

The accompanying notes are an integral part of these unaudited consolidated financial statements

2

NEXT GROUP HOLDINGS, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue	$	470,014		$	502,472		$	1,467,238		$	587,482
Revenue, related party		155,174			12,758			232,605			12,818
Total revenue		625,188			515,230			1,699,843			600,300
Cost of revenue		503,231			441,907			1,288,663			591,261
Gross profit (loss)		121,957			73,323			411,180			9,039
Operating expenses
Officer compensation		327,831			166,684			691,774			1,611,419
Professional fees		69,869			1,370,885			1,202,756			2,843,656
General and administrative		124,483			330,840			354,063			548,347
Total operating expenses		522,183			1,868,409			2,248,593			5,003,422
Loss from operations		(400,226	)		(1,795,086	)		(1,837,413	)		(4,994,383	)
Other income (expense)
Other income		550,000			-			729,580			10,245
Other expense		-			-			-			(45,000	)
Loss on disposal of asset		-			-			-			(2,926	)
Interest expense		(150,419	)		(412,017	)		(748,138	)		(1,302,199	)
Penalties on convertible notes payable		-			-			-			(14,490	)
Excess derivative liability expense		-			-			(144,143	)		-
(Loss) gain on derivative liability		1,687,253			1,191,239			(161,746	)		1,583,425
Gain on disposal of business		-			-			2,213,103			-
Total other income (expense)		2,086,834			779,222			1,888,656			229,055
Net income (loss) before income taxes		1,686,608			(1,015,864	)		51,243			(4,765,328	)
Income taxes		-			-			-			-
Net income (loss) before controlling interest		1,686,608			(1,015,864	)		51,243			(4,765,328	)
Net loss attributable to non-controlling interest		1,888			65,374			11,518			70,757
Net income (loss) attributable to Next Group Holdings, Inc.	$	1,688,496		$	(950,490	)	$	62,761		$	(4,694,571	)
Income (loss) per share, basic	$	0.01		$	(0.00	)	$	0.00		$	(0.02	)
Income (loss) per share, diluted	$	0.00		$	(0.00	)	$	0.00		$	(0.02	)
Weighted average number of common shares outstanding, basic		284,502,410			234,060,228			271,845,362			230,017,361
Weighted average number of common shares outstanding, diluted		357,482,680			234,060,228			344,825,632			230,017,361

The accompanying notes are an integral part of these unaudited consolidated financial statements

3

NEXT GROUP HOLDINGS, INC

CONSOLIDATED OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2017			2016
Cash Flows from Operating Activities:
Net income (loss) after non-controlling interest	$	62,761		$	(4,694,571	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-controlling interest		(11,518	)		(70,757	)
Imputed interest		179,008			180,845
Shares issued for services		720,200			2,130,078
Shares issued for other expense		-			45,000
Debt discount amortization		351,765			636,302
Stock based compensation		378,274			1,130,818
Excess derivative liability expense		144,143			333,482
Available for sale securities received as other income		(550,000	)
Loss on disposal of equipment		-			2,926
Depreciation expense		-			25,012
Amortization of debt issue costs		13,455			24,511
Amortization of intangible assets		-			66,629
Debt issue costs expensed		-
Default penalties on convertible notes		-			14,490
License fee amortization		62,500			62,495
Write off of finance deposit		25,000			-
Gain on disposal of business		(2,213,103	)		-
(Gain) loss on derivative fair value adjustment		161,746			(1,583,425	)
Changes in Operating Assets and Liabilities:
Restricted cash		-			3,678
Inventory		-			2,214
Accounts receivable		583			31,392
Accounts receivable, related party		(199,894	)		-
Prepaid expenses		39,683			(26,192	)
Accounts payable		458,343			706,184
Related party interest payable		-			13,130
Customer deposits		-			(30,035	)
Deferred revenue		(7,662	)		28,058
Net Cash Used by Operating Activities		(384,716	)		(967,736	)
Cash Flows from Investing Activities:
Due from related parties		-			41,913
Cash acquired in acquisitions, net of cash paid		-			43,573
Net Cash Provided by Investing Activities		-			85,486
Cash Flows from Financing Activities:
Bank overdraft		(7	)		1,704
Proceeds from loans payable		116,395			50,000
Repayments of loans payable		-			(20,961	)
Proceeds from convertible notes		-			969,130
(Repayments of) proceeds from related party loans		69,458			(47,481	)
Cash acquired through reverse recapitalization		-			1,184
Cash contributed in acquisition from related party net of cash paid		-			45,225
Net Cash Provided by Financing Activities		185,846			998,801
Net Increase (Decrease) in Cash		(198,870	)		116,551
Cash at Beginning of Period		256,302			18,047
Cash at End of Period	$	57,432		$	134,598
Supplemental disclosure of cash flow information
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities
Common stock issued as related party loan and accrued interest repayment	$	294,923		$	-
Common stock issued for conversion of convertible note principal	$	344,773		$	449,940
Common stock issued for conversion of convertible accrued interest	$	19,341		$	35,956
Change in derivative liability written off to additional paid in capital due to conversion of convertible notes payable	$	557,773		$	703,992
Initial measurement of derivative liabilities recorded as debt discount	$	184,789			-
Common stock issued as loan repayment	$	-		$	13,260
Common stock issued for prepayment of services	$	-		$	50,000
Common stock dividends declared	$	-		$	30,000

The accompanying notes are an integral part of these unaudited consolidated financial statements

4

NEXT GROUP HOLDINGS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Next Group Holdings, Inc, (the “Company”) was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned), NxtGn, Inc. (65% owned) and Next Mobile 360, Inc. (100% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016.

On January 1, 2016, NGH completed an Agreement and Plan of Merger (the “Merger Agreement”) with Pleasant Kids, Inc. (“Pleasant Kids”) and its wholly owned subsidiary, NGH Acquisition Corp. (“Acquisition Sub”), pursuant to which NGH merged with Acquisition Sub and Acquisition Sub was then merged into PLKD effective January 1, 2016. Under the terms of the Merger Agreement, the NGH shareholders received shares of PLKD common stock such that the NGH shareholders received approximately 80% of the total common shares and 100% of the preferred shares of PLKD issued and outstanding following the merger. Due to the nominal assets and limited operations of PLKD prior to the merger, the transaction was accorded reverse recapitalization accounting treatment under the provision of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 805 whereby NGH became the accounting acquirer (legal acquiree) and PLKD was treated as the accounting acquiree (legal acquirer). The historical financial records of the Company are those of the accounting acquirer (NGH) adjusted to reflect the legal capital of the accounting acquire (PLKD). As the transaction was treated as a recapitalization, no intangibles, including goodwill, were recognized. Concurrent with the effective date of the reverse recapitalization transaction, the Company adopted the fiscal year end of the accounting acquirer of December 31.

Meimoun and Mammon, LLC (“M&M”) was formed under the laws of the State of Florida on May 21, 2001 as a real estate investment company. During the year ended December 31, 2010, M&M began winding down real estate operations and engaged in telecommunications services. M&M acquired telecom registrations, licenses and authorities to provide telecom services to the retail and wholesale markets including sales of prepaid long distance telecom services and Mobile Virtual Network Operator (MVNO) services. The services are sold under the brand name Next Mobile 360 and through the subsidiary of the same name.

Next Cala, Inc, (“Cala”) was formed under the laws of Florida on July 10, 2009 to the purpose of offering prepaid and reloadable debit cards to the retail market. Cala serves consumers in the underbanked and unbanked populations through Incomm, a leading provider of payment remittance services worldwide.

NxtGn, Inc. (“NxtGn”) was formed under the laws of Florida on August 24, 2011 to develop a unique High Definition telepresence product (AVYDA) which allows users to connect with celebrities, public figures, healthcare and education applications via a mobile phone, tablet or personal computer.

On May 27, 2016, the Cala entered into a Joint Venture Agreement (the “Agreement”) with Glocal Payments Solutions, Inc (“Glocal”) to form a joint venture in which Cala has a 60% controlling interest and Glocal has a 40% interest. The Joint Venture will seek to launch and activate up to 45,000 prepaid debit cards under the Cala brand by December 31, 2016 and 360,000 additional cards during the 2017 calendar year. Either party may terminate the agreement at December 31, 2016 if certain objectives are not met.

On July 22, 2016, the Company completed its acquisition of Transaction Processing Products, Inc. (“TPP”) which has a 64% interest in Accent InterMedia, LLC (“AIM”) and no other assets or liabilities. AIM operates as a leading gift card provider and in business activities very synergistic with those the Company is currently engaged in. The Company sold its interest in TPP during the three months ended March 31, 2017 to an unaffiliated third party.

On August 10, 2016, M&M, a wholly owned subsidiary of the Company, closed the acquisition of Tel3 from a related party. Tel3 provides prepaid international long distance telephone services.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting of interim financial information. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Accordingly, these statements do not include all the disclosures normally required by accounting principles generally accepted in the United States for annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2016 and notes thereto and other pertinent information contained in our annual report on form 10-K as filed with the Securities and Exchange Commission on July 3, 2017. The unaudited condensed consolidated statements of operations and cash flows for the three and nine months ended September 30, 2017 are not necessarily indicative of the consolidated results of operations or cash flows to be expected for any future period or for the year ending December 31, 2017.

5

The accompanying unaudited condensed consolidated financial statements have been prepared by management and in the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position and results of operations as of the dates and for the periods presented.

Basis of Presentation

This summary of accounting policies for the Company is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the unaudited consolidated financial statements.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for allowances for bad debts, stock based compensation collectability of loans receivable, potential impairment losses of the capitalized license fee and fair value calculations related to embedded derivative features of outstanding convertible notes payable.

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of September 30, 2017 or December 31, 2016. As of September 30, 2017 and December 31, 2016, the Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

Revenue recognition

The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Next Cala generated revenues from commissions earned from Incomm, a leading financial services provider during the three and nine months ended September 30, 2017 and 2016.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There was no impairment losses recorded to long-lived assets during the three or nine months ended September 30, 2017 or 2016.

6

Non-Controlling Interest

The Company reports the non-controlling interest in its majority owned subsidiaries in the consolidated balance sheets within the stockholders’ deficit section, separately from the Company’s stockholders’ deficit. Non-controlling interest represents the non-controlling interest holders’ proportionate share of the equity of the Company’s majority-owned subsidiaries. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.

Derivative and Fair Value of Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

Except as discussed in Note 7 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of September 30, 2017 or December 31, 2016.

7

Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

At September 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $984,624 plus accrued interest of $387,927 for total convertible debts as of September 30, 2017 of $1,327,551 representing 72,980,270 new dilutive common shares if converted at the applicable rates. The effects of these notes have been included in net income per diluted share for the three and nine months ended September 30, 2017.

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

As discussed in the report on form 8K filed on May 18, 2016, the Company declared a special dividend on its outstanding common stock of one share of Class D Redeemable Preferred Stock.  Pursuant to the dividend, the special stock dividend will be distributed to owners of the Company’s common stock as of the record date in a ratio of one share of Class D Redeemable Preferred Stock common stock for every 1 share of common stock owned as of the record date.  The Company originally had set the record date as June 10, 2016 but was later modified to July 22, 2016. The Class D Preferred Stock must be redeemed within six months within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia, Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). The Designation fixes the redemption price of each share of class D Preferred stock as the greater of par value or the amount obtained by dividing (a) 9.03 percent of the net proceeds to the Corporation of the Lawsuit after payment of fees and expenses incurred in connection with such law suit and the resolution of  any creditor claims against Next Communications and all taxes on net income accrued or paid with respect to such amount, by (b) the total number of shares of Class D Preferred stock issued and outstanding as of the Redemption Date, which amount shall be rounded to the nearest whole cent.

The Company has accrued common stock dividends payable of $30,000 as of September 30, 2017.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred.

Stock-Based Compensation

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of subtopic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”) and subtopic 718-20 for awards classified as equity to employees. 

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. An instrument determined to be a derivative liability is recorded at fair value with a debt discount being recorded up to the face value of the related convertible note payable with any excess value being recognized as a day one loss on initial measurements of derivative liabilities. The debt discount is amortized as interest expense over the life of the convertible notes. Changes in value of the derivative liabilities that result from conversions of the underlying instrument to common stock are written off to additional paid in capital.

8

Related Parties

The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts.

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $55,556 and $118,056 as of September 30, 2017 and December 31, 2016, respectively.

Investments

The Company accounts for equity investments under ASC 321. Equity investments with a readily determinable market price are measured at fair value as of the date of the financial statements with any unrealized gains or losses being recognized in current period income or loss.

During the three months ended September 30, 2017, the Company accepted 50,000 shares of common stock in a publicly traded company as a referral fee. The Company classified these securities as available for sale and recorded the initial market value of the shares received as other income during the nine months ended September 30, 2017 and in accordance with ASC 321-10-35 Investments any gains or losses recognized are recorded through other income or loss. On the date of receipt, the common stock was valued at $11 per share, equal to the close price of the security, for a total of $550,000 and recorded the value of the shares as other income. The Company marked the securities to market as of the reporting date which was $11 per share for a total balance of $550,000 as of September 30, 2017. There were no additional gains or losses recognized in other income or loss on investments available for sale during the three or nine months ended September 30, 2017 and 2016.

Recently Issued Accounting Standards 

In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), that outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to the beginning of 2018 for public companies, with an option that would permit companies to adopt the standard as early as the original effective date of 2017. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP. ASU 2014-09 may be adopted either retrospectively or on a modified retrospective basis whereby it would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for those contracts. The updated standard is effective for us in the first quarter of 2018 and we do not plan to early adopt. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial position or results of operations.

9

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations.” This Update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The amendments in the Update clarify the implementation guidance on principal versus agent considerations. The Update is effective, along with ASU 2014-09, for annual and interim periods beginning after December 15, 2017. The adoption of ASU 2016- 08 is not expected to have a material impact on our consolidated financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016- 09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company has implemented ASU 2016-09 effective January 1, 2017.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-1O”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduce the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company is currently evaluating ASU 2016-10 and its impact on its consolidated financial statements or disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses. The new standard is effective for the Company at the beginning of fiscal year 2019. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (Topic 230)”, which provides guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. The new standard is effective for the Company at the beginning of fiscal year 2018. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and do not expect adoption to have a material impact.

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”, which requires that all deferred tax liabilities and assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 will be effective for interim and annuals periods beginning after December 15, 2016 and may be applied prospectively or retrospectively. Early adoption of the standard is permitted. The new standard is effective for the Company at the beginning of fiscal year 2017. There was no impact on the Company’s unaudited condensed consolidated financial statements as the Company does not currently have a deferred tax asset or liability.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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NOTE 3 – GOING CONCERN

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a net income before non-controlling interest of $51,243 and a loss of $4,765,328 and net cash used in operating activities of $384,716 and $967,736, for the nine months ended September 30, 2017 and 2016, respectively. The Company has a working capital deficit of $7,151,084 and $9,759,119, and an accumulated deficit of $13,436,542 and $13,499,303 as of September 30, 2017 and December 31, 2016, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of this report. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has a minimum cash balance available for payment of ongoing operating expense, has experienced losses from operations since inception, and it does not have a source of revenue sufficient to cover its operating costs. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

Management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times.

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable

During the nine months ended September 30, 2017, the Company entered into two separate loans to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The first loan resulted in cash proceeds $125,000 to the Company for future payments totaling $168,750 from future receivables and requires daily repayments of $1,339. The second resulted in cash proceeds of $50,000 for future payments totaling $68,000 from future receivables and requires daily cash repayments of $540. There was $91,395 due for the agreements as of September 30, 2017 included in current notes payable.

On May 1, 2017, the Company received a loan from an unrelated party for $25,000. The loan is due on demand and as such is included in current notes payable. The note does not accrue interest and had a principal balance due of $25,000 as of September 30, 2017.

Convertible Notes Payable

The Company has entered into a series of convertible notes payable to fund operations. While with differing noteholders, the terms of the outstanding convertible notes are substantially similar and accrue interest at 8% annually with a default interest rate of 24% and allow for the conversion of outstanding principal and interest to common stock at a price equal to a 45% to 50% from the lowest trading price in the preceding 20 days. The convertible notes outstanding contain cross default features and the Company defaulted on all notes in November 2016.

In February 2017, the Company agreed with certain noteholders to extend a redemption freeze agreement whereby the convertible note holders agreed to not convert outstanding principal and accrued interest into common stock for a period of 60 days. Upon the expiration of these agreements, a 90 day extension was executed whereby the noteholders agreed to not convert additional amounts through the first week of July 2017. Under the terms of the extension, each noteholder was granted the right to convert a limited amount of outstanding principal to common stock at a rate equal to the stated rate in the convertible note payable but not less than $0.02 per share and extended the due dates of the notes to July 2017. These agreements were extended again through August 23, 2017.

On September 18, 2017, the Company agreed with Noteholder 3 to make monthly cash repayments of $9,234 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018.

On October 9, 2017, the Company agreed with Noteholder 4 to make monthly cash repayments of $11,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

On October 9, 2017, the Company agreed with Noteholder 1 to make monthly cash repayments of $44,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

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The following table summarizes all convertible notes payable activity for the nine months ended September 30, 2017:

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2016		Advances		Conversions to Common Stock			Principal Balance, September 30, 2017
Noteholder 1	11/25/2015	11/24/2016	$	82,500	$	82,500	$	-	$	(35,971	)	$	46,529
Noteholder 1	12/21/2015	12/21/2016		27,000		27,000		-		-			27,000
Noteholder 1	1/15/2016	1/15/2017		131,250		131,250		-		-			131,250
Noteholder 1	3/8/2016	3/8/2017		50,000		50,000		-		-			50,000
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	5/16/2016	5/16/2017		100,000		100,000		-		(60,000	)		40,000
Noteholder 1	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 1	8/2/2016	8/2/2017		50,000		50,000		-		-			50,000
Noteholder 2	11/20/2015	11/20/2016		37,000		37,000		-		-			37,000
Noteholder 3	3/8/2016	3/8/2017		50,000		14,000		-		-			14,000
Noteholder 3	5/16/2016	5/16/2017		100,000		100,000		-		(77,500	)		22,500
Noteholder 3	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 3	3/8/2016	3/8/2017		25,000		25,000		-		(25,000	)		-
Noteholder 4	1/19/2016	1/15/2017		131,250		131,250		-		(22,704	)		108,546
Noteholder 4	3/9/2016	3/8/2017		50,000		50,000		-		(16,098	)		33,902
Noteholder 5	11/9/2015	11/9/2016		100,000		61,397		-		(12,500	)		48,897
Noteholder 6	11/2/2016	11/2/2017		52,500		52,500		-		(25,000	)		27,500
Noteholder 7	1/2/2017	8/2/2017		70,000		-		70,000		(70,000	)		-
Totals			$	1,404,000	$	1,259,397	$	70,000	$	(344,773	)	$	984,624

The following is a summary of all convertible notes outstanding as of September 30, 2017:

Holder	Issue Date	Due Date	Principal		Discount			Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 1	11/25/2015	11/24/2016	$	46,529	$	-		$	-	$	46,529	$	22,912
Noteholder 1	12/21/2015	12/21/2016		27,000		-			-		27,000		10,776
Noteholder 1	1/15/2016	1/15/2017		131,250		-			-		131,250		51,666
Noteholder 1	3/8/2016	3/8/2017		50,000		-			-		50,000		17,786
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	5/16/2016	5/16/2017		40,000		-			-		40,000		30,873
Noteholder 1	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 1	8/2/2016	8/2/2017		50,000		-			-		50,000		10,630
Noteholder 2	11/20/2015	11/20/2016		37,000		-			-		37,000		10,607
Noteholder 3	3/8/2016	3/8/2017		14,000		-			-		14,000		8,713
Noteholder 3	5/16/2016	5/16/2017		22,500		-			-		22,500		28,559
Noteholder 3	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 3	3/8/2016	3/8/2017		-		-			-		-		-
Noteholder 4	1/19/2016	1/15/2017		108,546		-			-		108,546		43,687
Noteholder 4	3/9/2016	3/8/2017		33,902		-			-		33,902		11,839
Noteholder 5	11/9/2015	11/9/2016		48,897		-			-		48,897		26,852
Noteholder 6	11/2/2016	11/2/2017		27,500		(2,664	)		-		24,836		5,326
Noteholder 7	1/2/2017	8/2/2017		-		-			-		-		-
Totals			$	984,624	$	(2,664	)	$	-	$	981,960	$	387,927

Accrued Interest

There was $387,927 and $207,951 of accrued interest due on all convertible notes as of September 30, 2017 and December 31, 2016, respectively which is included in accounts payable and accrued liabilities on the balance sheet (see Note 8 – Accounts Payable and Accrued Liabilities).

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NOTE 5 – DERIVATIVE LIABILITIES

The Company analyzed the conversion features of the convertible notes payable as discussed in Note 4 for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative liability because the exercise price of these convertible notes are subject to a variable conversion rate.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the reverse capitalization date of the convertible notes payable and certain outstanding option grants was $1,236,007 which was recorded as a derivative liability on the balance sheet.

As of September 30, 2017, the Company had a $1,143,186 derivative liability balance on the balance sheet and recorded a loss from derivative liability fair value adjustment of $161,746 during the nine months ended September 30, 2017.  The derivative liability activity comes from convertible notes payable as discussed in Note 4. In addition to derivative liabilities associated with convertible notes payable, the Company recorded a derivative liability due to a ratchet strike price feature associated with the options issued in the sale of TPP. The options are exercisable at $0.18 per share unless the Company’s common stock is quoted at a price greater than $0.50 per share at which point the options are exercisable at $0.001 per share.

A summary of outstanding derivative liabilities as of September 30, 2017 is as follows:

Holder	Derivative Balance
Noteholder 1	$	39,944
Noteholder 1		23,179
Noteholder 1		112,676
Noteholder 1		42,924
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		34,339
Noteholder 1		42,924
Noteholder 1		42,924
Noteholder 2		31,764
Noteholder 3		12,019
Noteholder 3		19,316
Noteholder 3		42,924
Noteholder 4		93,185
Noteholder 4		29,104
Noteholder 5		93,636
Option Holder		223,500
Noteholder 6		46,353
Total	$	1,143,186

The value of the embedded derivative liabilities for the convertible notes payable and outstanding option awards was determined using the Black-Scholes option pricing model based on the following assumptions:

	September 30, 2017			December 31, 2016
Expected volatility		72% - 796	%		155% - 871	%
Expected term		.09 - 2.50 years			.19 – 2.54 years
Risk free rate		0.96% - 1.62	%		.51% - 1.47	%
Forfeiture rate		0	%		0	%
Expected dividend yield		0	%		0	%

A summary of the changes in derivative liabilities balance for the nine months ended September 30, 2017 is as follows:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2016	$	1,210,281
Initial measurement of derivative liabilities		328,932
Change in fair market value		161,746
Write off to additional paid in capital due to conversion		(557,773	)
Balance, September 30, 2017	$	1,143,186

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NOTE 6 – STOCK OPTIONS

The following table summarizes all stock option activity for the nine months ended September 30, 2017: 

	Shares			Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2016		17,500,000		$	0.18
Granted		7,500,000			0.18
Exercised		-			-
Forfeited		(7,500,000	)		(0.18	)
Expired		-			-
Outstanding, September 30, 2017		17,500,000		$	0.18

The following table discloses information regarding outstanding and exercisable options at September 30, 2017:

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	0.18		17,500,000	$	0.18		3.23		10,833,334	$	0.18
			17,500,000	$	0.18		3.23		10,833,334	$	0.18

On May 31, 2016, the Company issued 10,000,000 options to a board member pursuant to its agreement with the member. One third of the 10,000,000 options issued vested immediately upon execution of the related agreement, resulting in an immediate stock based expense of $558,323 being recognized. The remaining shares of the issuance vest based on performance milestones which the Company believes is 80% likely of occurring resulting in stock based expense of $558,328 during the year ended December 31, 2016, at which point there was a 50% probability of attainment, and $334,997 during the nine months ended September 30, 2017 at which point the probability of attainment was updated to 80%. The remaining fair value of the unvested shares of $223,331 will be recognized according to the estimated probability of the performance obligations being achieved.

On July 14, 2016, the Company issued 7,500,000 options as part of its acquisition of TPP. The options were exercisable for a period of three years and carried an exercise price of $0.18 per share. The options carried a ratchet pricing feature whereby they become exercisable at $0.001 per share if the Company’s common stock trades at a price greater than $0.50 per share. The options carried a value of $898,490 which was recorded as a derivative liability as discussed in Note 5 – Derivative Liabilities. On March 31, 2017, the Company, as part of its sale of TPP, cancelled these options and reissued 7,500,000 options that are exercisable for a period of three years and carry an exercise price of $0.18 per share. The options carry a ratchet pricing feature whereby they become exercisable at $0.05 per share if the Company’s common stock trades at a price greater than $0.50 per share.

The Company issued 1,000,000 stock options exercisable at $1.00 pursuant to its agreement with Glocal. This agreement was amended on August 9, 2016 in which the option owners forfeited these options. The fair value of the 1,000,000 stock options granted with an exercise price of $1.00 was amortized through the forfeiture resulting in stock based compensation expense of $14,166.

Total stock based compensation expense was $334,997 and $1,123,735 during the nine months ended September 30, 2017 and 2016 leaving an unrecognized expense of $223,331 as of September 30, 2017. In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows:

	September 30, 2017
Expected term of options granted		0 - 5 years
Expected volatility range		778 - 850	%
Range of risk-free interest rates		0.82 - 1.41	%
Expected dividend yield		0	%

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company follows the provisions of ASC 850—Related Party Transactions & Disclosures relating to the identification of related parties and disclosure of related party transactions.

Our financial statements include disclosures of material related party transactions, other than expense allowances, and other similar items in the ordinary course of business. The disclosures include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. 

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The Company has had extensive dealings with related parties including those in which our Chief Executive Officer holds a significant ownership interest as well as an executive position during the nine months ended September 30, 2017 and 2016. Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and our Chief Executive Officer holds an executive position.

With the exception of the Company’s purchase of a 9% interest in Next Cala, Inc. from a related party as described below, amounts scheduled below as “due to related parties” and “due from related parties” have not had their terms, including amounts, collection or repayment terms or similar provisions memorialized in formalized written agreements.

Related party balances at September 30, 2017 and December 31, 2016 consisted of the following:

Due from related parties

	September 30, 2017		December 31, 2016
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

Due to related parties

	September 30, 2017		December 31, 2016
(b) Due to Next Communications, Inc.	$	3,119,851	$	2,961,271
(c) Due to Asiya Communications SAPI de C.V.		5,998		95,120
(d) Michael DePrado		99,604		99,604
Total Due from related parties	$	3,225,453	$	3,155,995

(a)	Glocal Card Services is our partner in the Glocal Joint Venture and is considered a related party because of our business relationship with them
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer. (See Note 11 – Commitments and Contingencies)
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer and Chief Financial Officer

During the nine months ended September 30, 2017 and 2016, the Company recorded interest expense of $179,008 and $180,845 using an interest rate equal to that on the outstanding convertible notes payable as discussed in Note 6 – Convertible Notes Payable as imputed interest on the related party payable due to Next Communications. The interest was immediately forgiven by the related party and recorded to additional paid in capital.

Notes Payable, Related Party

During the year ended December 31, 2014, the Company entered into two notes with its President to purchase his interest in Next Cala, Inc. and separately his voting control in Next Cala. Inc. During the nine months ended September 30, 2017, the outstanding principal and accrued interest totaling $294,923 was converted to 8,900,000 shares of common stock.

Accounts Receivable, Related Party

The Company had outstanding accounts receivable of $199,894 from related parties as of September 30, 2017 of which $197,840 was due from Next Communications and $2,054 was due from Asiya Communications SAPI de C.V. The accounts receivable arose from the sale of wholesale telecommunications minutes to these entities.

Revenues (Related Party)

The Company generated revenues from related parties of $155,174 and $12,758 during the three months ended September 30, 2017 and 2016 and $232,605 and $12,818 during the nine months ended September 30, 2017 and 2016 as itemized below.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Next Communications, Inc.	$	155,174	$	-	$	226,840	$	-
Asiya Communications SAPI de C.V.		-		81		1,972		81
Next Cala 360		-		12,677		3,793		12,737
Total	$	155,174	$	12,758	$	232,605	$	12,818

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NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of September 30, 2017:

Trade payables	$	1,024,564
Accrued expenses		138,836
Accrued interest, notes payable		4,810
Accrued interest, convertible notes payable		387,927
Accrued salaries and wages		141,387
Total	$	1,697,524

During the year ended December 31, 2014, a former employee, Franjose Yglesias-Bertheau of Pleasant Kids (PLKD) filed lawsuit against PLKD claiming unpaid wages of $622,968 and was initially awarded that amount in a judgement. However, the judgement was later revised and the Company settled for $80,000 in March 2017 for which the Company paid $10,000 cash and entered into a convertible note payable for $70,000. The note was fully converted during the nine months ended September 30, 2017 leaving a payable balance of $0 outstanding as of September 30, 2017.

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

At the time of incorporation, the Company was authorized to issue 60,000,000 shares of preferred stock with a par value of $0.001 of which 50,000,000 was designated Series A and 10,000,000 as Series B. With the completion of the recapitalization as discussed in Note 2, the outstanding Series A preferred shares were cancelled leaving a balance outstanding of Preferred Series A of -0-.

The Company has 10,000,000 shares of Preferred Stock designated as Series B. The Series B Preferred Stock is not convertible into Common Stock at any time and is not entitled to dividends of any kind or liquidation, dissolution rights of any kind. The holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock.

The Company has 36,000,000 shares of Preferred Stock designated as Series D. The Class D Preferred Stock must be redeemed within six(6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia , Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). There were no Series D Preferred shares issued or outstanding as of September 30, 2017 or December 31, 2016.

Common Stock

Effective November 20, 2015 the Company amended its Articles of Incorporation to decrease the common shares authorized from 9,500,000,000 to 360,000,000 with a par value of $0.001. 

During the nine months ended September 30, 2017, the Company issued 18,059,865 shares of commons stock for the conversion of $344,744 of principal of convertible notes payable and 967,045 shares for the conversion of $19,341 of accrued interest. The conversion of principal and accrued interest on convertible notes payable to common stock were done so at the contractual terms of each respective agreement. Additionally, the Company issued 8,449,654 common shares valued at $280,000 as repayment of a non-convertible related party loan and 450,346 common shares valued at $14,932 as repayment of non-convertible related party accrued interest. The related party is an officer of the Company. The fair value of the shares issued as repayment of the related party payable was $338,200 using the close price of $0.038 per share on the date of the transaction resulting in an excess fair value of shares issued upon conversion of $43,277 which was recorded as compensation expense. The Company also issued 12,809,091 shares of common stock valued at $720,200 for services were valued using the close price of the Company’s common stock on the date of issuance as quoted on the OTCBB.

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Summary of common stock activity for the nine months ended September 30, 2017	Outstanding shares
Balance, December 31, 2016		249,225,683
Shares issued for services		12,809,091
Shares issued as repayment of related party loan and accrued interest (a)		8,900,000
Shares issued for conversion of convertible notes payable and accrued interest (b)		19,026,910
Balance, September 30, 2017		289,961,684

(a) Shares issued as repayment of outstanding loan principal of $280,000 plus accrued interest of $14,923. The lender did not have conversion rights to convert the principal to common stock. However, the lender agreed to accept shares in lieu of cash repayment.

(b) Shares issued in connection with outstanding convertible notes payable and convertible accrued interest on convertible notes payable in accordance with contractual terms of noteholders as discussed in Note 6 – Convertible Notes Payable.

As of September 30, 2017, the Company has 289,961,684 common shares outstanding, a total of 72,980,270 common share equivalents as discussed in Note 2 – Summary of Significant Accounting Policies and Basis of Presentation. With 360,000,000 shares authorized, there are insufficient common shares in treasury to meet all of the Company’s common share equivalents obligations. All of the common share equivalents, or 72,980,270, arise from outstanding convertible notes payable as discussed in Note 2 – Summary of Significant Accounting Policies and Basis of Presentation and Note 4 – Notes Payable and Convertible Notes Payable and as such have been recognized as a debt obligation in conjunction with the underlying derivative liabilities as discussed in Note 5 – Derivative Liabilities. 

NOTE 10 – CUSTOMER CONCENTRATION

Sales to Next Communications, a related party as discussed in Note 7 – Related Party Transactions, generated $155,174 and $226,840 of revenue during the three and nine months ended September 30, 2017 which represented 25% and 13% of total revenues during those periods.

The Company did not have any one customer account for more than 10% of its revenues during the three or nine months ended September 30, 2016. 

The Company generated all of its revenues from the sale of telecommunications minutes, both at wholesale and retail, during the three and nine months ended September 30, 2017.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

On April 7, 2016, the Company executed an agreement with a third party to provide market awareness services for the Company. The agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reached $750,000,000. The probability of this event is uncertain at present and the Company has not accrued a contingent loss as of September 30, 2017, or December 31, 2016 as a result.

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On October 14, 2014, one of our operating subsidiaries, NxtGn, Inc. and Next Communications, Inc., an entity controlled by our CEO, (collectively the “Plaintiffs”) filed suit in the United States District Court for the Southern district of New York against Viber Media, Inc.  Plaintiffs filed an Amended Complaint asserting four claims: misappropriation of a business idea, misappropriation of trade secrets, breach of contract, and unjust enrichment.  Viber moved the Court to dismiss the Amended Complaint.  On March 30, 2016, U.S. District Judge Richard Sullivan issued an opinion and order on Viber’s motion to Dismiss.  Specifically, Judge Sullivan ordered that Viber’s motion to dismiss is granted on Plaintiffs’ misappropriation of a business idea claim, but denied as to their misappropriation of trade secrets, breach of contract, and unjust enrichment claims. The Company has appealed the court’s decision to dismiss. The Company has not accrued any gains or losses associated with this case as it would be a contingent gain and recorded when received.

On September 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries be dismissed as defendants and has not accrued a contingent loss as of September 30, 2017 as a result.

On July 6, 2017, the Company received notice that an existing legal claim against Accent InterMedia (“AIM”) had been amended to include claims against the Company. The claims brought against the Company include failure to comply with certain judgments for collection of funds by the plaintiff while having a controlling interest in AIM via its ownership of Transaction Processing Products (“TPP”). The Company believes the amended case is without merit and that, per its agreement to sell its interest in TPP, any claims brought against AIM or TPP would be the responsibilities of the current interest holders. Due to the original suit being filed against AIM and amended to include the Company after it disposed of its interest in TPP, which had a controlling interest in AIM, we believe it likely the Company and its subsidiaries be dismissed as defendants. As a result, no contingent loss as been accrued as of September 30, 2017.

In November 2017, the Company received a demand from legal counsel of Ridge Resources regarding the physical issuance of 8,900,000. The common shares are accounted for as issued during the nine months ended September 30, 2017 when the obligation to issue the shares arose however have yet to be physically issued. The Company intends to issue these shares when certain common share reserves associated with its convertible notes payable are released. The Company has not accrued a contingent loss associated with this demand as it expects to remedy the physical issuance before the end of 2017.

NOTE 12 – SUBSEQUENT EVENTS

Common Stock Issuances

On various dates through November 10, 2017, the Company issued a total of 7,913,851 shares of common stock for the conversion of $146,250 of outstanding principal and 1,047,123 shares of common stock for the conversion of $20,942 of outstanding interest on convertible notes payable. All conversions were performed at the contractual terms within each respective convertible note. The Company also issued 2,500,000 shares of common stock for cash proceeds of $64,000.  

Redemption Agreements on Convertible Notes Payable

As discussed in Note 4 – Convertible Notes Payable, the Company entered into the following agreements with convertible noteholders:

On October 9, 2017, the Company agreed with Noteholder 4 to make monthly cash repayments of $11,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

On October 9, 2017, the Company agreed with Noteholder 1 to make monthly cash repayments of $44,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

Acquisition of Limecom, Inc.

As discussed in an 8K filed with the Securities Exchange Commission on October 26, 2017, on October 24, 2017, the Company received 100% of all outstanding shares of Limecom, Inc., as per the acquisition agreement which was effective as of October 20, 2017. The Company, through its wholly-owned subsidiary, Next Group Acquisition Inc., purchased all of the issued and outstanding shares of LimeCom Inc. (“LimeCom”), a Florida corporation, from Heritage Ventures Limited (“Heritage”). LimeCom is engaged in the global telecommunications business. The Stock Purchase Agreement with Heritage provided for the payment of 51,804,809 shares of Next Group Holdings, Inc. restricted common stock and the sum of $2,000,000 for the shares of LimeCom. The cash component of the purchase price is payable within eight months from the closing date. 10,360,800 shares of NXGH stock will be held in escrow for a period of eight months in the event that any unknown or undisclosed claims are made against LimeCom. The Company is required to deliver the shares of stock to the Purchaser and the Escrow Agent within ten days of the closing date. As of November 20, 2017, the Company had not yet delivered the 51,804,809 shares of common stock to Heritage and escrow agent as required by the stock purchase agreement. The seller has agreed to extend the date for delivery of the shares to December 1, 2017.

The acquisition further provides that LimeCom must achieve $125,000,000 in revenues in fiscal year 2017 and $2,500,000 in EBITA. In the event that Limecom does not achieve these amounts, the Company will pay according to the formula written in the acquisition agreement. The Company and Heritage have a mutual right of rescission if the $2,000,000 is not paid or any unknown or undisclosed material claims are made against Limecom. as set forth in the agreement.

As a part of the agreement, Orlando Taddeo, President and CEO of LimeCom, will be appointed as a director of the Company.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company’s results of operations and financial condition. This discussion should be read together with the Company’s financial statements and the notes to the financial statements, which are included in this report.

Forward-Looking Statements

This Report contains forward-looking statements that relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Report. Forward-looking statements are often identified by words like “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar words or expressions that, by their nature, refer to future events.

In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential,” or “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements in an effort to conform these statements to actual results.

Business History

Next Group Holdings, Inc, (the “Company”) was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned). NxtGn, Inc. (65% owned) and Next Mobile 360, Inc. (100% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016.

Meimoun and Mammon, LLC (“M&M”) was formed under the laws of the State of Florida on May 21, 2001 as a real estate investment company. During the year ended December 31, 2010, M&M began winding down real estate operations and engaged in telecommunications services. M&M acquired telecom registrations, licenses and authorities to provide telecom services to the retail and wholesale markets including sales of prepaid long distance telecom services and Mobile Virtual Network Operator (MVNO) services. The services are sold under the brand name Next Mobile 360 and through the subsidiary of the same name.

Next Cala, Inc, (“Cala”) was formed under the laws of Florida on July 10, 2009 to the purpose of offering prepaid and reloadable debit cards to the retail market. Cala serves consumers in the underbanked and unbanked populations through Incomm, a leading provider of payment remittance services worldwide.

On May 27, 2016, the Cala entered into a Joint Venture Agreement (the “Agreement”) with Glocal Payments Solutions, Inc (“Glocal”) to form a joint venture in which Cala would have a 60% interest and Glocal would have a 40% interest. The Joint Venture will seek to launch and activate up to 45,000 prepaid debit cards under the Cala brand by December 31, 2016 and 360,000 additional cards during the 2017 calendar year. Either party may terminate the agreement at December 31, 2016 if certain objectives are not met.

NxtGn, Inc. (“NxtGn”) was formed under the laws of Florida on August 24, 2011 to develop a unique High Definition telepresence product (AVYDA) which allows users to connect with celebrities, public figures, healthcare and education applications via a mobile phone, tablet or personal computer.

On July 22, 2016, the Company completed its acquisition of Transaction Processing Products, Inc. (“TPP”) which has a 64% interest in Accent InterMedia, LLC (“AIM”) and no other assets or liabilities. AIM operates as a leading gift card provider but was discontinued on March 31, 2017.

On August 10, 2016, M&M, a wholly owned subsidiary of the Company, closed the acquisition of Tel3 from a related party. Tel3 provides prepaid international long distance telephone services.

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Overview

On January 12, 2016, and effective as of January 1, 2016, the Company issued 177,539,180 shares of its restricted common stock and 10,000,000 shares of its Series B preferred stock for 100% of the issued and outstanding shares of Next Group Holdings, Inc. (NEXT). Based on the completion of the agreement NEXT became a wholly-owned subsidiary of the Company.

On December 31, 2015, we signed our merger with Next Group Holdings, Inc. a Florida Corporation but the transaction was not completed until January 12, 2016, when the document was filed with the State of Florida. The accounting effective date of the transaction in January 1, 2016. The Company filed for a change of name is Next Group Holdings, Inc. and its symbol is NXGH.

As a result of this merger, we adopted Next Group’s corporate structure and began a transition into its business model. Through our subsidiaries, we engage in use of certain licensed technology to provide innovative telecommunications, mobility, and remittance solutions to unserved, unbanked, and emerging markets.

Our subsidiaries are Next Mobile 360 LLC (100%), a limited liability company formed under the laws of Florida (“Next Mobile”), Meimoun & Mammon, LLC (100%), a limited liability company formed under the laws of Florida (“M&M”), NxtGn, Inc. (65%), a corporation formed under the laws of Florida (“NxtGn”), and Next CALA, Inc. (94%), a corporation formed under the laws of Florida.

Item 2. Business Description

Item 2.01. Business Description

Next Group Holdings through its operating subsidiaries, engages in the business of using proprietary technology and certain licensed technology to provide innovative telecommunications and telecommunications mobility and remittance solutions in emerging markets.

Principal Products

Through its subsidiaries, the Company offers telecommunication services, prepaid and reloadable general purpose debit cards, commercial gift cards and high definition telepresence products.

Operations

The Company is engaged in the business of using proprietary technology and certain licensed technology to provide innovative telecommunications and telecommunications mobility and remittance solutions in emerging markets.

Transitioning of Operations

Prior to the reverse recapitalization, we operated primarily as a manufacturing, marketing and distribution company focused on juice based beverages. These operations were phased out following the reverse recapitalization.

Results of operations for the three months ended September 30, 2017 and 2016

Revenue

Total revenue for the three months ended September 30, 2017, were $625,188, compared to revenue of $515,230 for the three month period ended September 30, 2016. During the three months ended September 30, 2017, revenues from non-related parties totaled $470,014 and revenues from related parties totaled $155,174 compared to $502,472 from non-related parties and $12,758 from related parties during the three months ended September 30, 2016. The increase in revenue was due to increased sales of wholesale minutes to Next Communications, a related party, which totaled $155,174 and $0 during the three months ended September 30, 2017 and 2016, respectively.

Cost of Goods Sold

The Company incurred total cost of goods sold of $503,231 for the three months ended September 30, 2017, compared to $441,907 for the three months ended September 30, 2016 resulting in gross margins of $121,957 and $73,323. The increase in cost of goods sold was the result of increased minutes purchased to be resold as discussed previously.

Operating Expenses

Operating expenses for the three months ended September 30, 2017 were $522,183 compared to $1,868,409 for the three months ended September 30, 2016. Operating expenses were decreased in the three months ended September 30, 2017 due mainly to a decrease in stock based compensation included in officer compensation and professional fees.

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Loss from Operations

Loss from operations was $400,226 during the three months ended September 30, 2017, compared to $1,795,086 for the three months ended September 30, 2016. The decrease in losses from operations is the result of decreased stock based compensation combined with improved gross margins as discussed previously.

Other Income (Expense)

Total other income (expense) during the three months ended September 30, 2017 was a net income of $2,086,834 compared to $779,222 the same period in 2016. The increase in other income was the result of increased gains on the fair value measurements of derivative liabilities which totaled $1,687,253 during the current period compared to $1,191,239 during the same period in 2016 and $550,000 of available for sale securities received as a referral fee and recorded as other income.

Net Income (Loss)

The Company recognized net income before non-controlling interest for the three months ended September 30, 2017 of $1,686,608 compared to a loss of $1,015,864 for the three months ended September 30, 2016. The change in net income (loss) for the three months ended September 30, 2017 is due mainly to the decrease in stock based compensation in the current period, available for sale securities received as other income and increased gains recognized on the fair value measurement of derivative liabilities.

Results of operations for the nine months ended September 30, 2017 and 2016

Revenue

Total revenue for the nine months ended September 30, 2017, were $1,699,843, compared to revenue of $600,300 for the nine month period ended September 30, 2016. During the nine months ended September 30, 2017, revenues from non-related parties totaled $1,467,238 and revenues from related parties totaled $232,605 compared to $587,482 from non-related parties and $12,818 from related parties during the nine months ended September 30, 2016. The increase in revenue was due to the acquisition of Tel3 which was completed during July 2016. Due to the timing of the acquisition, results of Tel3 are included for a full nine months in the current period and three months in 2016.

Cost of Goods Sold

The Company incurred total cost of goods sold of $1,288,663 for the nine months ended September 30, 2017, compared to $591,261 for the nine months ended September 30, 2016 resulting in gross margins of $411,180 and $9,039. The increase in cost of goods sold was the result of our acquisition of Tel3 closing in July 2016 and the incremental costs associated with offering telecom minutes for consumers. Due to the timing of the acquisition, results of Tel3 are included for a full nine months in the current period and three months in 2016.

Operating Expenses

Operating expenses for the nine months ended September 30, 2017 were $2,248,593 compared to $5,003,422 for the nine months ended September 30, 2016. Operating expenses were decreased in the nine months ended September 30, 2017 due mainly to a decrease in stock based compensation included in officer compensation and professional fees.

Loss from Operations

Loss from operations was $1,837,413 during the nine months ended September 30, 2017, compared to $4,994,383 for the nine months ended September 30, 2016. The decrease in losses from operations is the result of decreased stock based compensation combined with improved gross margins as discussed previously.

Other Income (Expense)

Total other income (expense) during the nine months ended September 30, 2017 was a net gain of $1,888,656 compared to a gain of $229,055 for the same period in 2016. The increase in other income was the result of a gain realized on the disposal of a business of $2,213,103 which occurred during the nine months ended September 30, 2017, partially offset by increased losses on the fair value measurements of derivative liabilities which totaled $161,746 during the current period compared to a gain of $1,583,425 during the same period in 2016 and available for sale securities received as a referral fee and recorded as other income totaling $550,000. We expect the gain realized from this disposal to be a one time event.

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Net Income (Loss)

Net income before non-controlling interest for the nine months ended September 30, 2017 was $51,243 compared to a loss of $4,765,328 for the nine months ended September 30, 2016. The decrease in net loss for the nine months ended September 30, 2017 is due mainly to the decrease in stock based compensation, a referral fee of $550,000 recognized in 2017 that did not exist in 2016 and gain recognized on the disposal of a business in the current period partially offset by increased losses on the fair value measurement of derivative liabilities.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2017, the Company had cash of $57,432, net current assets of $824,812 and current liabilities of $7,975,896 creating a working capital deficit of $7,151,084. Net cash used in operating activities was $384,716 and $967,736 for the nine months ended September 30, 2017 and 2016, respectively. Current assets consisted of $57,432 of cash; $159,252 of accounts receivable; $49,720 of related party accounts receivable; $8,408 of prepaid expenses and $550,000 of investments.

As of December 31, 2016, the Company had $256,302 of cash, total current assets of $564,938 and total current liabilities of $10,324,057 creating a working capital deficit of $9,759,119. Current assets as of December 31, 2016 consisted of $256,302 of cash, accounts receivable net of allowance of $9,661, finance deposits of $25,000, prepaid expenses of $48,091 and current assets from discontinued operations of $225,884. 

Going Concern 

The Company’s unaudited condensed consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt about the company’s ability to continue as a going concern. 

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business. 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the Business paragraph and eventually attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.   

During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development associated with the launch of the company’s Cuentas branded NextCala general purpose reloadable card. The Company may experience a cash shortfall and be required to raise additional capital. 

Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse affect upon it and its shareholders.   

Operating Activities

The Company used $384,716 of cash in operations during the nine months ended September 30, 2017 and $967,736 during the nine months ended September 30, 2016. The Company’s primary uses of cash have been for professional support, marketing expenses and working capital. Net cash used in operating activities during the nine months ended September 30, 2017 consisted of net income of $62,761, non-cash losses and gains totaling $738,530 and changes in working capital of $291,053. All cash received has been expended in the furtherance of growing future operations. 

Investing Activities

The Company generated cash from investing activities of $0 and $85,486 during the nine months ended September 30, 2017 and 2016. The $85,486 generated from investing activities during the nine months ended September 30, 2016 was the collection of a related party receivable of $41,913 and cash acquired in acquisitions net of cash paid totaling $43,573.

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Financing Activities

The Company generated cash from financing activities of $185,846 during the nine months ended September 30, 2017 compared to $998,801 during the same period in 2016. Net cash provided by financing activities in 2017 consisted of repayments of a bank overdraft of $7, proceeds from loans payable of $116,395 and proceeds from related party loans of $69,458. Net cash provided by financing activities in 2016 consisted of proceeds from bank overdrafts of $1,704, proceeds from loans payable of $50,000, repayments of loans payable totaling $20,961, proceeds from convertible notes of $969,130, repayments of related party loans payable of $47,481, $1,184 of cash assumed through the reverse capitalization and $45,225 of cash contributed in an acquisition from a related party.

The Company may not have sufficient resources to fully develop any new products or expand our market area unless it is able to raise additional financing. The Company can make no assurances these required funds will be available on favorable terms, if at all. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Additionally, these conditions may increase costs to raise capital and/or result in further dilution. The failure to raise capital when needed, will adversely affect our business, financial condition and results of operations, and could force the Company to reduce or cease operations.

The Company believes that it will be able to meet the costs of growth and public reporting with funds generated from operations and additional amounts generated through debt and equity financing, Although management believes that the required financing to fund product development and increasing inventory levels can be secured at terms satisfactory to the Company, there is no guarantee these funds will be made available, and if funds are available, that the terms will be satisfactory to the Company.

Impact of Inflation

The Company does not expect inflation to be a significant factor in operation of the business.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon The Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Some of the critical accounting estimates are detailed below.

Critical Accounting Estimates and New Accounting Pronouncements

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

● it requires assumptions to be made that were uncertain at the time the estimate was made, and

● changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

The Company base estimates and judgments on experience, current knowledge, and beliefs of what could occur in the future, observation of trends in the industry, information provided by customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following accounting policies and estimates as those that are believed to be the most critical to the financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, and derivative financial instruments.

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Share-Based Compensation Expense

We calculate share-based compensation expense for option awards and warrant issuances (“Share-based Awards”) based on the estimated grant/issue-date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”), and recognize the expense on a straight-line basis over the vesting period, net of estimated forfeitures. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period of the Share-based Award in determining the fair value of Share-based Awards. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, and as discussed in greater detail below, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, disclosure controls and procedures are not effective: 

● to give reasonable assurance that the information required to be disclosed in reports that are file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and

● to ensure that information required to be disclosed in the reports that are file or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our CEO and our Treasurer, to allow timely decisions regarding required disclosure.

Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective due to the following material weakness identified:

Lack of appropriate segregation of duties,

Lack of control procedures that include multiple levels of supervision and review, and

There is an overreliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material, nonstandard transactions.

There have been no changes to our internal controls during the period covered by this report.

24

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 14, 2014, one of our operating subsidiaries, NxtGn, Inc. and Next Communications, Inc., an entity controlled by our CEO, (collectively the “Plaintiffs”) filed suit in the United States District Court for the Southern district of New York against Viber Media, Inc.  Plaintiffs filed an Amended Complaint asserting four claims: misappropriation of a business idea, misappropriation of trade secrets, breach of contract, and unjust enrichment.  Viber moved the Court to dismiss the Amended Complaint.  On March 30, 2016, U.S. District Judge Richard Sullivan issued an opinion and order on Viber’s motion to Dismiss.  Specifically, Judge Sullivan ordered that Viber’s motion to dismiss is granted on Plaintiffs’ misappropriation of a business idea claim, but denied as to their misappropriation of trade secrets, breach of contract, and unjust enrichment claims.

On September 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries be dismissed as defendants. 

On July 6, 2017, the Company received notice an existing legal claim against Accent InterMedia (“AIM”) had been amended to include claims against the Company. The claims brought against the Company include failure to comply with certain judgments for collection of funds by the plaintiff while having a controlling interest in AIM via its ownership of Transaction Processing Products (“TPP”). The Company believes the amended case is without merit and that, per its agreement to sell its interest in TPP, any claims brought against AIM or TPP would be the responsibilities of the current interest holders. Due to the original suit being filed against AIM and amended to include the Company after it disposed of its interest in TPP, which had a controlling interest in AIM, we believe it likely the Company and its subsidiaries be dismissed as defendants.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, 2017, the Company issued 18,059,865 shares of commons stock for the conversion of $344,744 of principal of convertible notes payable and 967,045 shares for the conversion of $19,341 of accrued interest. Additionally, the Company issued 8,449,654 common shares valued at $280,000 as repayment of a non-convertible related party loan and 450,346 common shares valued at $14,932 as repayment of non-convertible related party accrued interest. The Company also issued 12,809,091 shares of common stock valued at $720,200 for services were valued using the close price of the Company’s common stock on the date of issuance as quoted on the OTCBB.

ITEM 3. DEFAULTS UPON SENIOR DEBT

None.

ITEM 4. Removed and Reserved

None.

ITEM 5. OTHER INFORMATION

The Company’s SEC Attorney, Simon Kogen, sole practitioner of New York, has been incapacitated and incommunicado with the Company due to a hospitalization, and as such the Company had to seek new SEC Council. The Company has retained the following two firms, respectively;

Ellenoff Grossman & Schole LLP 

Barry I. Grossman

Address: 150 E 42nd St Fl 11, New York, NY 10017

Phone: (212) 370-1300

Baratta, Baratta & Aidala LLP 

Joseph P Barrata Sr.

Address: 546 5th Ave, 6th Floor, New York, NY 10036

Phone: (212) 750-9700

25

ITEM 6. EXHIBITS

Exhibit No.	Description	Location
2	Articles of Merger- NYBD Holding, Inc/Pleasant Kids, Inc.	(1)
3.1	Articles of Incorporation- League Now Holdings, Corporation, dated September 21, 2005	(1)
3.2	Articles of incorporation – Pleasant Kids, Inc., dated July 19, 2013	(1)
3.3	Amendment to articles of incorporation, dated May 9, 2013	(1)
3.4	Amendment to articles of incorporation, dated September 14, 2014	(2)
3.5	Amendment to articles of incorporation, dated October 7, 2014	(2)
3.6	Amendment to articles of incorporation, dated February 4, 2014	(2)
3.7	Amendment to articles of incorporation, dated May 8, 2014	(2)
3.8	Amendment to articles of incorporation, dated May 19, 2014	(2)
3.9	Amendment to articles of incorporation, dated February 25, 2015	(3)
3.10	Amendment to articles of incorporation, dated March 19, 2015	(3)
3.11	Joint Venture Agreement between NextCala, Inc. and Glocal Payment Solutions, Inc. dated May 27, 2016	(4)
3.12	Addendum to joint venture agreement between NextCala, Inc. and Glocal Payment Solutions, Inc. dated August 9, 2016	(4)
3.13	Debt Purchase and Assignment Agreement and Stock Purchase Agreement of Transaction Processing Products, Inc. dated July 10, 2016	(5)
3.14	Agreement Regarding Purchase and Sale of All Assets and Certain Liabilities of Tel3 dated August 11, 2016	(5)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

(1)	Incorporated by reference from Pleasant Kid’s Annual Report on Form 10-K for the Fiscal Year Ended September 30, 2013 filed on January 14, 2014.
(2)	Incorporated by reference from Pleasant Kid’s Annual Report on Form 10-K for the Fiscal Year Ended September 30, 2014 filed on January 14, 2015.
(3)	Incorporated by reference from Pleasant Kid’s Quarterly Report on Form 10-Q for the Fiscal Quarter Ended March 31, 2015 filed on May 20, 2015.
(4)	Incorporated by reference from Next Group Holdings’ Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2016 filed on August 19, 2016.
(5)	Incorporated by reference from Next Group Holdings’ Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2016 filed on November 21, 2016.

26

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Next Group Holdings, Inc.
	(Registrant)
Date: November 20, 2017	By:	/s/ Arik Maimon
		Chief Executive Officer
	By:	/s/ Michael DePrado
		Chief Financial Officer

27

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Arik Maimon, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of Next Group Holdings, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Arik Maimon
	Arik Maimon
	Chief Executive Officer November 20, 2017

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Michael DePrado, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of Next Group Holdings, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: 

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Michael DePrado
	Michael DePrado Chief Financial Officer
	November 20, 2017

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Next Group Holdings, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), Arik Maimon, President and Chief Operating Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Arik Maimon
	Arik Maimon
	Chief Executive Officer November 20, 2017

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Next Group Holdings, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), I, Michael DePrado, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Michael DePrado
	Michael DePrado Chief Financial Officer
	November 20, 2017

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 10, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	NEXT GROUP HOLDINGS, INC.
Entity Central Index Key	0001424657
Trading Symbol	PLKD
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		301,422,658

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash	$ 57,432	$ 256,302
Accounts receivable, net	9,078	9,661
Accounts receivable, related party	199,894
Finance deposit		25,000
Prepaid expenses and other current assets	8,408	48,091
Investments	550,000
Assets from discontinued operations		225,884
Total current assets	824,812	564,938
License fee, net of accumulated amortization	55,556	118,056
Related party receivable	36,000	36,000
Total assets	916,368	718,994
Current liabilities
Bank overdraft		7
Accounts payable and accrued liabilities	1,697,524	1,330,789
Dividends payable	30,000	30,000
Deferred revenue	706,378	715,642
Loan payable	75,000	75,000
Convertible notes payable, net of discounts and debt issue costs	981,960	1,076,302
Derivative liability	1,143,186	1,210,281
Related party payable	3,225,453	3,155,995
Notes payable, current	116,395
Interest payable, related party		13,321
Notes payable, related party		280,000
Liabilities from discontinued operations		2,436,720
Total current liabilities	7,975,896	10,324,057
Commitments and contingencies
Stockholders' Deficit
Common stock, authorized 360,000,000 shares, $0.001 par value, 289,961,684 and 249,225,683 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	289,962	249,226
Additional paid in capital	6,702,788	6,791,750
Accumulated deficit	(13,436,542)	(13,499,303)
Total Next Group Holdings, Inc. stockholders' deficit	(6,433,792)	(6,448,327)
Non-controlling interest in subsidiaries	(625,736)	(3,156,736)
Total liabilities and stockholders' deficit	916,368	718,994
Series A preferred stock
Stockholders' Deficit
Preferred stock, value
Series B preferred stock
Stockholders' Deficit
Preferred stock, value	$ 10,000	$ 10,000

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	60,000,000	60,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	360,000,000	360,000,000
Common stock, shares issued	289,961,684	249,225,683
Common stock, shares outstanding	289,961,684	249,225,683
Series A preferred stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B preferred stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	10,000,000	10,000,000
Preferred stock, shares issued	10,000,000	10,000,000
Preferred stock, shares outstanding	10,000,000	10,000,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenue	$ 470,014	$ 502,472	$ 1,467,238	$ 587,482
Revenue, related party	155,174	12,758	232,605	12,818
Total revenue	625,188	515,230	1,699,843	600,300
Cost of revenue	503,231	441,907	1,288,663	591,261
Gross profit (loss)	121,957	73,323	411,180	9,039
Operating expenses
Officer compensation	327,831	166,684	691,774	1,611,419
Professional fees	69,869	1,370,885	1,202,756	2,843,656
General and administrative	124,483	330,840	354,063	548,347
Total operating expenses	522,183	1,868,409	2,248,593	5,003,422
Loss from operations	(400,226)	(1,795,086)	(1,837,413)	(4,994,383)
Other income (expense)
Other income	550,000		729,580	10,245
Other expense				(45,000)
Loss on disposal of asset				(2,926)
Interest expense	(150,419)	(412,017)	(748,138)	(1,302,199)
Penalties on convertible notes payable				(14,490)
Excess derivative liability expense			(144,143)
(Loss) gain on derivative liability	1,687,253	1,191,239	(161,746)	1,583,425
Gain on disposal of business			2,213,103
Total other income (expense)	2,086,834	779,222	1,888,656	229,055
Net income (loss) before income taxes	1,686,608	(1,015,864)	51,243	(4,765,328)
Income taxes
Net income (loss) before controlling interest	1,686,608	(1,015,864)	51,243	(4,765,328)
Net loss attributable to non-controlling interest	1,888	65,374	11,518	70,757
Net income (loss) attributable to Next Group Holdings, Inc.	$ 1,688,496	$ (950,490)	$ 62,761	$ (4,694,571)
Income (loss) per share, basic		$ 0.00	$ 0.00	$ (0.02)
Income (loss) per share, diluted	$ 0.00	$ 0.00	$ 0.00	$ (0.02)
Weighted average number of common shares outstanding, basic	284,502,410	234,060,228	271,845,362	230,017,361
Weighted average number of common shares outstanding, diluted	357,482,680	234,060,228	344,825,632	230,017,361

XML

Consolidated of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flows from Operating Activities:
Net income (loss) after non-controlling interest	$ 62,761	$ (4,694,571)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-controlling interest	(11,518)	(70,757)
Imputed interest	179,008	180,845
Shares issued for services	720,200	2,130,078
Shares issued for other expense		45,000
Debt discount amortization	351,765	636,302
Stock based compensation	378,274	1,130,818
Excess derivative liability expense	144,143	333,482
Available for sale securities received as other income	(550,000)
Loss on disposal of equipment		2,926
Depreciation expense		25,012
Amortization of debt issue costs	13,455	24,511
Amortization of intangible assets		66,629
Debt issue costs expensed
Default penalties on convertible notes		14,490
License fee amortization	62,500	62,495
Write off of finance deposit	25,000
Gain on disposal of business	(2,213,103)
(Gain) loss on derivative fair value adjustment	161,746	(1,583,425)
Changes in Operating Assets and Liabilities:
Restricted cash		3,678
Inventory		2,214
Accounts receivable	583	31,392
Accounts receivable, related party	(199,894)
Prepaid expenses	39,683	(26,192)
Accounts payable	458,343	706,184
Related party interest payable		13,130
Customer deposits		(30,035)
Deferred revenue	(7,662)	28,058
Net Cash Used by Operating Activities	(384,716)	(967,736)
Cash Flows from Investing Activities:
Due from related parties		41,913
Cash acquired in acquisitions, net of cash paid		43,573
Net Cash Provided by Investing Activities		85,486
Cash Flows from Financing Activities:
Bank overdraft	(7)	1,704
Proceeds from loans payable	116,395	50,000
Repayments of loans payable		(20,961)
Proceeds from convertible notes		969,130
(Repayments of) proceeds from related party loans	69,458	(47,481)
Cash acquired through reverse recapitalization		1,184
Cash contributed in acquisition from related party net of cash paid		45,225
Net Cash Provided by Financing Activities	185,846	998,801
Net Increase (Decrease) in Cash	(198,870)	116,551
Cash at Beginning of Period	256,302	18,047
Cash at End of Period	57,432	134,598
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Supplemental disclosure of non-cash financing activities
Common stock issued as related party loan and accrued interest repayment	294,923
Common stock issued for conversion of convertible note principal	344,773	449,940
Common stock issued for conversion of convertible accrued interest	19,341	35,956
Change in derivative liability written off to additional paid in capital due to conversion of convertible notes payable	557,773	703,992
Initial measurement of derivative liabilities recorded as debt discount	184,789
Common stock issued as loan repayment		13,260
Common stock issued for prepayment of services		50,000
Write off of finance deposit		$ 30,000

XML

Organization and Description of Business

9 Months Ended

Sep. 30, 2017

Organization and Description of Business [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Next Group Holdings, Inc, (the “Company”) was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned), NxtGn, Inc. (65% owned) and Next Mobile 360, Inc. (100% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016.

On January 1, 2016, NGH completed an Agreement and Plan of Merger (the “Merger Agreement”) with Pleasant Kids, Inc. (“Pleasant Kids”) and its wholly owned subsidiary, NGH Acquisition Corp. (“Acquisition Sub”), pursuant to which NGH merged with Acquisition Sub and Acquisition Sub was then merged into PLKD effective January 1, 2016. Under the terms of the Merger Agreement, the NGH shareholders received shares of PLKD common stock such that the NGH shareholders received approximately 80% of the total common shares and 100% of the preferred shares of PLKD issued and outstanding following the merger. Due to the nominal assets and limited operations of PLKD prior to the merger, the transaction was accorded reverse recapitalization accounting treatment under the provision of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 805 whereby NGH became the accounting acquirer (legal acquiree) and PLKD was treated as the accounting acquiree (legal acquirer). The historical financial records of the Company are those of the accounting acquirer (NGH) adjusted to reflect the legal capital of the accounting acquire (PLKD). As the transaction was treated as a recapitalization, no intangibles, including goodwill, were recognized. Concurrent with the effective date of the reverse recapitalization transaction, the Company adopted the fiscal year end of the accounting acquirer of December 31.

Meimoun and Mammon, LLC (“M&M”) was formed under the laws of the State of Florida on May 21, 2001 as a real estate investment company. During the year ended December 31, 2010, M&M began winding down real estate operations and engaged in telecommunications services. M&M acquired telecom registrations, licenses and authorities to provide telecom services to the retail and wholesale markets including sales of prepaid long distance telecom services and Mobile Virtual Network Operator (MVNO) services. The services are sold under the brand name Next Mobile 360 and through the subsidiary of the same name.

Next Cala, Inc, (“Cala”) was formed under the laws of Florida on July 10, 2009 to the purpose of offering prepaid and reloadable debit cards to the retail market. Cala serves consumers in the underbanked and unbanked populations through Incomm, a leading provider of payment remittance services worldwide.

NxtGn, Inc. (“NxtGn”) was formed under the laws of Florida on August 24, 2011 to develop a unique High Definition telepresence product (AVYDA) which allows users to connect with celebrities, public figures, healthcare and education applications via a mobile phone, tablet or personal computer.

On May 27, 2016, the Cala entered into a Joint Venture Agreement (the “Agreement”) with Glocal Payments Solutions, Inc (“Glocal”) to form a joint venture in which Cala has a 60% controlling interest and Glocal has a 40% interest. The Joint Venture will seek to launch and activate up to 45,000 prepaid debit cards under the Cala brand by December 31, 2016 and 360,000 additional cards during the 2017 calendar year. Either party may terminate the agreement at December 31, 2016 if certain objectives are not met.

On July 22, 2016, the Company completed its acquisition of Transaction Processing Products, Inc. (“TPP”) which has a 64% interest in Accent InterMedia, LLC (“AIM”) and no other assets or liabilities. AIM operates as a leading gift card provider and in business activities very synergistic with those the Company is currently engaged in. The Company sold its interest in TPP during the three months ended March 31, 2017 to an unaffiliated third party.

On August 10, 2016, M&M, a wholly owned subsidiary of the Company, closed the acquisition of Tel3 from a related party. Tel3 provides prepaid international long distance telephone services.

XML

Summary of Significant Accounting Policies and Basis of Presentation

9 Months Ended

Sep. 30, 2017

Summary of Significant Accounting Policies and Basis of Presentation [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting of interim financial information. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Accordingly, these statements do not include all the disclosures normally required by accounting principles generally accepted in the United States for annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2016 and notes thereto and other pertinent information contained in our annual report on form 10-K as filed with the Securities and Exchange Commission on July 3, 2017. The unaudited condensed consolidated statements of operations and cash flows for the three and nine months ended September 30, 2017 are not necessarily indicative of the consolidated results of operations or cash flows to be expected for any future period or for the year ending December 31, 2017.

The accompanying unaudited condensed consolidated financial statements have been prepared by management and in the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position and results of operations as of the dates and for the periods presented.

Basis of Presentation

This summary of accounting policies for the Company is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the unaudited consolidated financial statements.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for allowances for bad debts, stock based compensation collectability of loans receivable, potential impairment losses of the capitalized license fee and fair value calculations related to embedded derivative features of outstanding convertible notes payable.

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of September 30, 2017 or December 31, 2016. As of September 30, 2017 and December 31, 2016, the Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

Revenue recognition

The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Next Cala generated revenues from commissions earned from Incomm, a leading financial services provider during the three and nine months ended September 30, 2017 and 2016.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There was no impairment losses recorded to long-lived assets during the three or nine months ended September 30, 2017 or 2016.

Non-Controlling Interest

The Company reports the non-controlling interest in its majority owned subsidiaries in the consolidated balance sheets within the stockholders’ deficit section, separately from the Company’s stockholders’ deficit. Non-controlling interest represents the non-controlling interest holders’ proportionate share of the equity of the Company’s majority-owned subsidiaries. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.

Derivative and Fair Value of Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

Except as discussed in Note 7 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of September 30, 2017 or December 31, 2016.

Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

At September 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $984,624 plus accrued interest of $387,927 for total convertible debts as of September 30, 2017 of $1,327,551 representing 72,980,270 new dilutive common shares if converted at the applicable rates. The effects of these notes have been included in net income per diluted share for the three and nine months ended September 30, 2017.

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

As discussed in the report on form 8K filed on May 18, 2016, the Company declared a special dividend on its outstanding common stock of one share of Class D Redeemable Preferred Stock.  Pursuant to the dividend, the special stock dividend will be distributed to owners of the Company’s common stock as of the record date in a ratio of one share of Class D Redeemable Preferred Stock common stock for every 1 share of common stock owned as of the record date.  The Company originally had set the record date as June 10, 2016 but was later modified to July 22, 2016. The Class D Preferred Stock must be redeemed within six months within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia, Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). The Designation fixes the redemption price of each share of class D Preferred stock as the greater of par value or the amount obtained by dividing (a) 9.03 percent of the net proceeds to the Corporation of the Lawsuit after payment of fees and expenses incurred in connection with such law suit and the resolution of  any creditor claims against Next Communications and all taxes on net income accrued or paid with respect to such amount, by (b) the total number of shares of Class D Preferred stock issued and outstanding as of the Redemption Date, which amount shall be rounded to the nearest whole cent.

The Company has accrued common stock dividends payable of $30,000 as of September 30, 2017.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred.

Stock-Based Compensation

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of subtopic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”) and subtopic 718-20 for awards classified as equity to employees. 

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. An instrument determined to be a derivative liability is recorded at fair value with a debt discount being recorded up to the face value of the related convertible note payable with any excess value being recognized as a day one loss on initial measurements of derivative liabilities. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair market values of derivative liabilities over the life of the convertible notes. Changes in value of the derivative liabilities that result from conversions of the underlying instrument to common stock are written off to additional paid in capital.

Related Parties

The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts.

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $55,556 and $118,056 as of September 30, 2017 and December 31, 2016, respectively.

Investments

The Company accounts for equity investments under ASC 321. Equity investments with a readily determinable market price are measured at fair value as of the date of the financial statements with any unrealized gains or losses being recognized in current period income or loss.

During the three months ended September 30, 2017, the Company accepted 50,000 shares of common stock in a publicly traded company as a referral fee. The Company classified these securities as available for sale and recorded the initial market value of the shares received as other income during the nine months ended September 30, 2017 and in accordance with ASC 321-10-35 Investments any gains or losses recognized are recorded through other income or loss. On the date of receipt, the common stock was valued at $11 per share, equal to the close price of the security, for a total of $550,000 and recorded the value of the shares as other income. The Company marked the securities to market as of the reporting date which was $11 per share for a total balance of $550,000 as of September 30, 2017. There were no additional gains or losses recognized in other income or loss on investments available for sale during the three or nine months ended September 30, 2017 and 2016.

Recently Issued Accounting Standards 

In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), that outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to the beginning of 2018 for public companies, with an option that would permit companies to adopt the standard as early as the original effective date of 2017. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP. ASU 2014-09 may be adopted either retrospectively or on a modified retrospective basis whereby it would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for those contracts. The updated standard is effective for us in the first quarter of 2018 and we do not plan to early adopt. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations.” This Update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The amendments in the Update clarify the implementation guidance on principal versus agent considerations. The Update is effective, along with ASU 2014-09, for annual and interim periods beginning after December 15, 2017. The adoption of ASU 2016- 08 is not expected to have a material impact on our consolidated financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016- 09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company has implemented ASU 2016-09 effective January 1, 2017.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-1O”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduce the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company is currently evaluating ASU 2016-10 and its impact on its consolidated financial statements or disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses. The new standard is effective for the Company at the beginning of fiscal year 2019. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (Topic 230)”, which provides guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. The new standard is effective for the Company at the beginning of fiscal year 2018. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and do not expect adoption to have a material impact.

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”, which requires that all deferred tax liabilities and assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 will be effective for interim and annuals periods beginning after December 15, 2016 and may be applied prospectively or retrospectively. Early adoption of the standard is permitted. The new standard is effective for the Company at the beginning of fiscal year 2017. There was no impact on the Company’s unaudited condensed consolidated financial statements as the Company does not currently have a deferred tax asset or liability.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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Going Concern

9 Months Ended

Sep. 30, 2017

Going Concern [Abstract]

GOING CONCERN

NOTE 3 – GOING CONCERN

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had a net income before non-controlling interest of $51,243 and a loss of $4,765,328 and net cash used in operating activities of $384,716 and $967,736, for the nine months ended September 30, 2017 and 2016, respectively. The Company has a working capital deficit of $7,151,084 and $9,759,119, and an accumulated deficit of $13,436,542 and $13,499,303 as of September 30, 2017 and December 31, 2016, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of this report. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has a minimum cash balance available for payment of ongoing operating expense, has experienced losses from operations since inception, and it does not have a source of revenue sufficient to cover its operating costs. Its continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.

Management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times.

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Notes Payable and Convertible Notes Payable

9 Months Ended

Sep. 30, 2017

Notes Payable and Convertible Notes Payable [Abstract]

NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable

During the nine months ended September 30, 2017, the Company entered into two separate loans to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The first loan resulted in cash proceeds $125,000 to the Company for future payments totaling $168,750 from future receivables and requires daily repayments of $1,339. The second resulted in cash proceeds of $50,000 for future payments totaling $68,000 from future receivables and requires daily cash repayments of $540. There was $91,395 due for the agreements as of September 30, 2017 included in current notes payable.

On May 1, 2017, the Company received a loan from an unrelated party for $25,000. The loan is due on demand and as such is included in current notes payable. The note does not accrue interest and had a principal balance due of $25,000 as of September 30, 2017.

Convertible Notes Payable

The Company has entered into a series of convertible notes payable to fund operations. While with differing noteholders, the terms of the outstanding convertible notes are substantially similar and accrue interest at 8% annually with a default interest rate of 24% and allow for the conversion of outstanding principal and interest to common stock at a price equal to a 45% to 50% from the lowest trading price in the preceding 20 days. The convertible notes outstanding contain cross default features and the Company defaulted on all notes in November 2016.

In February 2017, the Company agreed with certain noteholders to extend a redemption freeze agreement whereby the convertible note holders agreed to not convert outstanding principal and accrued interest into common stock for a period of 60 days. Upon the expiration of these agreements, a 90 day extension was executed whereby the noteholders agreed to not convert additional amounts through the first week of July 2017. Under the terms of the extension, each noteholder was granted the right to convert a limited amount of outstanding principal to common stock at a rate equal to the stated rate in the convertible note payable but not less than $0.02 per share and extended the due dates of the notes to July 2017. These agreements were extended again through August 23, 2017.

On September 18, 2017, the Company agreed with Noteholder 3 to make monthly cash repayments of $9,234 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018.

On October 9, 2017, the Company agreed with Noteholder 4 to make monthly cash repayments of $11,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

On October 9, 2017, the Company agreed with Noteholder 1 to make monthly cash repayments of $44,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

The following table summarizes all convertible notes payable activity for the nine months ended September 30, 2017:

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2016		Advances		Conversions to Common Stock			Principal Balance, September 30, 2017
Noteholder 1	11/25/2015	11/24/2016	$	82,500	$	82,500	$	-	$	(35,971	)	$	46,529
Noteholder 1	12/21/2015	12/21/2016		27,000		27,000		-		-			27,000
Noteholder 1	1/15/2016	1/15/2017		131,250		131,250		-		-			131,250
Noteholder 1	3/8/2016	3/8/2017		50,000		50,000		-		-			50,000
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	5/16/2016	5/16/2017		100,000		100,000		-		(60,000	)		40,000
Noteholder 1	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 1	8/2/2016	8/2/2017		50,000		50,000		-		-			50,000
Noteholder 2	11/20/2015	11/20/2016		37,000		37,000		-		-			37,000
Noteholder 3	3/8/2016	3/8/2017		50,000		14,000		-		-			14,000
Noteholder 3	5/16/2016	5/16/2017		100,000		100,000		-		(77,500	)		22,500
Noteholder 3	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 3	3/8/2016	3/8/2017		25,000		25,000		-		(25,000	)		-
Noteholder 4	1/19/2016	1/15/2017		131,250		131,250		-		(22,704	)		108,546
Noteholder 4	3/9/2016	3/8/2017		50,000		50,000		-		(16,098	)		33,902
Noteholder 5	11/9/2015	11/9/2016		100,000		61,397		-		(12,500	)		48,897
Noteholder 6	11/2/2016	11/2/2017		52,500		52,500		-		(25,000	)		27,500
Noteholder 7	1/2/2017	8/2/2017		70,000		-		70,000		(70,000	)		-
Totals			$	1,404,000	$	1,259,397	$	70,000	$	(344,773	)	$	984,624

The following is a summary of all convertible notes outstanding as of September 30, 2017:

Holder	Issue Date	Due Date	Principal		Discount			Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 1	11/25/2015	11/24/2016	$	46,529	$	-		$	-	$	46,529	$	22,912
Noteholder 1	12/21/2015	12/21/2016		27,000		-			-		27,000		10,776
Noteholder 1	1/15/2016	1/15/2017		131,250		-			-		131,250		51,666
Noteholder 1	3/8/2016	3/8/2017		50,000		-			-		50,000		17,786
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	5/16/2016	5/16/2017		40,000		-			-		40,000		30,873
Noteholder 1	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 1	8/2/2016	8/2/2017		50,000		-			-		50,000		10,630
Noteholder 2	11/20/2015	11/20/2016		37,000		-			-		37,000		10,607
Noteholder 3	3/8/2016	3/8/2017		14,000		-			-		14,000		8,713
Noteholder 3	5/16/2016	5/16/2017		22,500		-			-		22,500		28,559
Noteholder 3	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 3	3/8/2016	3/8/2017		-		-			-		-		-
Noteholder 4	1/19/2016	1/15/2017		108,546		-			-		108,546		43,687
Noteholder 4	3/9/2016	3/8/2017		33,902		-			-		33,902		11,839
Noteholder 5	11/9/2015	11/9/2016		48,897		-			-		48,897		26,852
Noteholder 6	11/2/2016	11/2/2017		27,500		(2,664	)		-		24,836		5,326
Noteholder 7	1/2/2017	8/2/2017		-		-			-		-		-
Totals			$	984,624	$	(2,664	)	$	-	$	981,960	$	387,927

Accrued Interest

There was $387,927 and $207,951 of accrued interest due on all convertible notes as of September 30, 2017 and December 31, 2016, respectively which is included in accounts payable and accrued liabilities on the balance sheet (see Note 8 – Accounts Payable and Accrued Liabilities).

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Derivative Liabilities

9 Months Ended

Sep. 30, 2017

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

NOTE 5 – DERIVATIVE LIABILITIES

The Company analyzed the conversion features of the convertible notes payable as discussed in Note 4 for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative liability because the exercise price of these convertible notes are subject to a variable conversion rate.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the reverse capitalization date of the convertible notes payable and certain outstanding option grants was $1,236,007 which was recorded as a derivative liability on the balance sheet.

As of September 30, 2017, the Company had a $1,143,186 derivative liability balance on the balance sheet and recorded a loss from derivative liability fair value adjustment of $161,746 during the nine months ended September 30, 2017.  The derivative liability activity comes from convertible notes payable as discussed in Note 4. In addition to derivative liabilities associated with convertible notes payable, the Company recorded a derivative liability due to a ratchet strike price feature associated with the options issued in the sale of TPP. The options are exercisable at $0.18 per share unless the Company’s common stock is quoted at a price greater than $0.50 per share at which point the options are exercisable at $0.001 per share.

A summary of outstanding derivative liabilities as of September 30, 2017 is as follows:

Holder	Derivative Balance
Noteholder 1	$	39,944
Noteholder 1		23,179
Noteholder 1		112,676
Noteholder 1		42,924
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		34,339
Noteholder 1		42,924
Noteholder 1		42,924
Noteholder 2		31,764
Noteholder 3		12,019
Noteholder 3		19,316
Noteholder 3		42,924
Noteholder 4		93,185
Noteholder 4		29,104
Noteholder 5		93,636
Option Holder		223,500
Noteholder 6		46,353
Total	$	1,143,186

The value of the embedded derivative liabilities for the convertible notes payable and outstanding option awards was determined using the Black-Scholes option pricing model based on the following assumptions:

	September 30,  2017			December 31, 2016
Expected volatility		72% - 796	%		155% - 871	%
Expected term		.09 - 2.50 years			.19 – 2.54 years
Risk free rate		0.96% - 1.62	%		.51% - 1.47	%
Forfeiture rate		0	%		0	%
Expected dividend yield		0	%		0	%

A summary of the changes in derivative liabilities balance for the nine months ended September 30, 2017 is as follows:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2016	$	1,210,281
Initial measurement of derivative liabilities		328,932
Change in fair market value		161,746
Write off to additional paid in capital due to conversion		(557,773	)
Balance, September 30, 2017	$	1,143,186

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Stock Options

9 Months Ended

Sep. 30, 2017

Stock Options [Abstract]

STOCK OPTIONS

NOTE 6 – STOCK OPTIONS

The following table summarizes all stock option activity for the nine months ended September 30, 2017: 

	Shares			Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2016		17,500,000		$	0.18
Granted		7,500,000			0.18
Exercised		-			-
Forfeited		(7,500,000	)		(0.18	)
Expired		-			-
Outstanding, September 30, 2017		17,500,000		$	0.18

The following table discloses information regarding outstanding and exercisable options at September 30, 2017:

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	0.18		17,500,000	$	0.18		3.23		10,833,334	$	0.18
			17,500,000	$	0.18		3.23		10,833,334	$	0.18

On May 31, 2016, the Company issued 10,000,000 options to a board member pursuant to its agreement with the member. One third of the 10,000,000 options issued vested immediately upon execution of the related agreement, resulting in an immediate stock based expense of $558,323 being recognized. The remaining shares of the issuance vest based on performance milestones which the Company believes is 80% likely of occurring resulting in stock based expense of $558,328 during the year ended December 31, 2016, at which point there was a 50% probability of attainment, and $334,997 during the nine months ended September 30, 2017 at which point the probability of attainment was updated to 80%. The remaining fair value of the unvested shares of $223,331 will be recognized according to the estimated probability of the performance obligations being achieved.

On July 14, 2016, the Company issued 7,500,000 options as part of its acquisition of TPP. The options were exercisable for a period of three years and carried an exercise price of $0.18 per share. The options carried a ratchet pricing feature whereby they become exercisable at $0.001 per share if the Company’s common stock trades at a price greater than $0.50 per share. The options carried a value of $898,490 which was recorded as a derivative liability as discussed in Note 5 – Derivative Liabilities. On March 31, 2017, the Company, as part of its sale of TPP, cancelled these options and reissued 7,500,000 options that are exercisable for a period of three years and carry an exercise price of $0.18 per share. The options carry a ratchet pricing feature whereby they become exercisable at $0.05 per share if the Company’s common stock trades at a price greater than $0.50 per share.

The Company issued 1,000,000 stock options exercisable at $1.00 pursuant to its agreement with Glocal. This agreement was amended on August 9, 2016 in which the option owners forfeited these options. The fair value of the 1,000,000 stock options granted with an exercise price of $1.00 was amortized through the forfeiture resulting in stock based compensation expense of $14,166.

Total stock based compensation expense was $334,997 and $1,123,735 during the nine months ended September 30, 2017 and 2016 leaving an unrecognized expense of $223,331 as of September 30, 2017. In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows:

	September 30,  2017
Expected term of options granted		0 - 5 years
Expected volatility range		778 - 850	%
Range of risk-free interest rates		0.82 - 1.41	%
Expected dividend yield		0	%

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Related Party Transactions

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company follows the provisions of ASC 850—Related Party Transactions & Disclosures relating to the identification of related parties and disclosure of related party transactions.

Our financial statements include disclosures of material related party transactions, other than expense allowances, and other similar items in the ordinary course of business. The disclosures include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. 

The Company has had extensive dealings with related parties including those in which our Chief Executive Officer holds a significant ownership interest as well as an executive position during the nine months ended September 30, 2017 and 2016. Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and our Chief Executive Officer holds an executive position.

With the exception of the Company’s purchase of a 9% interest in Next Cala, Inc. from a related party as described below, amounts scheduled below as “due to related parties” and “due from related parties” have not had their terms, including amounts, collection or repayment terms or similar provisions memorialized in formalized written agreements.

Related party balances at September 30, 2017 and December 31, 2016 consisted of the following:

Due from related parties

	September 30, 2017		December 31, 2016
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

Due to related parties

	September 30, 2017		December 31, 2016
(b) Due to Next Communications, Inc.	$	3,119,851	$	2,961,271
(c) Due to Asiya Communications SAPI de C.V.		5,998		95,120
(d) Michael DePrado		99,604		99,604
Total Due from related parties	$	3,225,453	$	3,155,995

(a)	Glocal Card Services is our partner in the Glocal Joint Venture and is considered a related party because of our business relationship with them
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer. (See Note 11 – Commitments and Contingencies)
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer and Chief Financial Officer

During the nine months ended September 30, 2017 and 2016, the Company recorded interest expense of $179,008 and $180,845 using an interest rate equal to that on the outstanding convertible notes payable as discussed in Note 6 – Convertible Notes Payable as imputed interest on the related party payable due to Next Communications. The interest was immediately forgiven by the related party and recorded to additional paid in capital.

Notes Payable, Related Party

During the year ended December 31, 2014, the Company entered into two notes with its President to purchase his interest in Next Cala, Inc. and separately his voting control in Next Cala. Inc. During the nine months ended September 30, 2017, the outstanding principal and accrued interest totaling $294,923 was converted to 8,900,000 shares of common stock.

Accounts Receivable, Related Party

The Company had outstanding accounts receivable of $199,894 from related parties as of September 30, 2017 of which $197,840 was due from Next Communications and $2,054 was due from Asiya Communications SAPI de C.V. The accounts receivable arose from the sale of wholesale telecommunications minutes to these entities.

Revenues (Related Party)

The Company generated revenues from related parties of $155,174 and $12,758 during the three months ended September 30, 2017 and 2016 and $232,605 and $12,818 during the nine months ended September 30, 2017 and 2016 as itemized below.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Next Communications, Inc.	$	155,174	$	-	$	226,840	$	-
Asiya Communications SAPI de C.V.		-		81		1,972		81
Next Cala 360		-		12,677		3,793		12,737
Total	$	155,174	$	12,758	$	232,605	$	12,818

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Accounts Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2017

Accounts Payable and Accrued Liabilities [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of September 30, 2017:

Trade payables	$	1,024,564
Accrued expenses		138,836
Accrued interest, notes payable		4,810
Accrued interest, convertible notes payable		387,927
Accrued salaries and wages		141,387
Total	$	1,697,524

During the year ended December 31, 2014, a former employee, Franjose Yglesias-Bertheau of Pleasant Kids (PLKD) filed lawsuit against PLKD claiming unpaid wages of $622,968 and was initially awarded that amount in a judgement. However, the judgement was later revised and the Company settled for $80,000 in March 2017 for which the Company paid $10,000 cash and entered into a convertible note payable for $70,000. The note was fully converted during the nine months ended September 30, 2017 leaving a payable balance of $0 outstanding as of September 30, 2017.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2017

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

At the time of incorporation, the Company was authorized to issue 60,000,000 shares of preferred stock with a par value of $0.001 of which 50,000,000 was designated Series A and 10,000,000 as Series B. With the completion of the recapitalization as discussed in Note 2, the outstanding Series A preferred shares were cancelled leaving a balance outstanding of Preferred Series A of -0-.

The Company has 10,000,000 shares of Preferred Stock designated as Series B. The Series B Preferred Stock is not convertible into Common Stock at any time and is not entitled to dividends of any kind or liquidation, dissolution rights of any kind. The holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock.

The Company has 36,000,000 shares of Preferred Stock designated as Series D. The Class D Preferred Stock must be redeemed within six(6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia , Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). There were no Series D Preferred shares issued or outstanding as of September 30, 2017 or December 31, 2016.

Common Stock

Effective November 20, 2015 the Company amended its Articles of Incorporation to decrease the common shares authorized from 9,500,000,000 to 360,000,000 with a par value of $0.001. 

During the nine months ended September 30, 2017, the Company issued 18,059,865 shares of commons stock for the conversion of $344,744 of principal of convertible notes payable and 967,045 shares for the conversion of $19,341 of accrued interest. The conversion of principal and accrued interest on convertible notes payable to common stock were done so at the contractual terms of each respective agreement. Additionally, the Company issued 8,449,654 common shares valued at $280,000 as repayment of a non-convertible related party loan and 450,346 common shares valued at $14,932 as repayment of non-convertible related party accrued interest. The related party is an officer of the Company. The fair value of the shares issued as repayment of the related party payable was $338,200 using the close price of $0.038 per share on the date of the transaction resulting in an excess fair value of shares issued upon conversion of $43,277 which was recorded as compensation expense. The Company also issued 12,809,091 shares of common stock valued at $720,200 for services were valued using the close price of the Company’s common stock on the date of issuance as quoted on the OTCBB.

Summary of common stock activity for the nine months ended September 30, 2017	Outstanding shares
Balance, December 31, 2016		249,225,683
Shares issued for services		12,809,091
Shares issued as repayment of related party loan and accrued interest (a)		8,900,000
Shares issued for conversion of convertible notes payable and accrued interest (b)		19,026,910
Balance, September 30, 2017		289,961,684

(a) Shares issued as repayment of outstanding loan principal of $280,000 plus accrued interest of $14,923. The lender did not have conversion rights to convert the principal to common stock. However, the lender agreed to accept shares in lieu of cash repayment.

(b) Shares issued in connection with outstanding convertible notes payable and convertible accrued interest on convertible notes payable in accordance with contractual terms of noteholders as discussed in Note 6 – Convertible Notes Payable.

As of September 30, 2017, the Company has 289,961,684 common shares outstanding, a total of 72,980,270 common share equivalents as discussed in Note 2 – Summary of Significant Accounting Policies and Basis of Presentation. With 360,000,000 shares authorized, there are insufficient common shares in treasury to meet all of the Company’s common share equivalents obligations. All of the common share equivalents, or 72,980,270, arise from outstanding convertible notes payable as discussed in Note 2 – Summary of Significant Accounting Policies and Basis of Presentation and Note 4 – Notes Payable and Convertible Notes Payable and as such have been recognized as a debt obligation in conjunction with the underlying derivative liabilities as discussed in Note 5 – Derivative Liabilities. 

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Customer Concentration

9 Months Ended

Sep. 30, 2017

Customer Concentration [Abstract]

CUSTOMER CONCENTRATION

NOTE 10 – CUSTOMER CONCENTRATION

Sales to Next Communications, a related party as discussed in Note 7 – Related Party Transactions, generated $155,174 and $226,840 of revenue during the three and nine months ended September 30, 2017 which represented 25% and 13% of total revenues during those periods.

The Company did not have any one customer account for more than 10% of its revenues during the three or nine months ended September 30, 2016. 

The Company generated all of its revenues from the sale of telecommunications minutes, both at wholesale and retail, during the three and nine months ended September 30, 2017.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 11 – COMMITMENTS AND CONTINGENCIES

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

On April 7, 2016, the Company executed an agreement with a third party to provide market awareness services for the Company. The agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reached $750,000,000. The probability of this event is uncertain at present and the Company has not accrued a contingent loss as of September 30, 2017, or December 31, 2016 as a result.

On October 14, 2014, one of our operating subsidiaries, NxtGn, Inc. and Next Communications, Inc., an entity controlled by our CEO, (collectively the “Plaintiffs”) filed suit in the United States District Court for the Southern district of New York against Viber Media, Inc.  Plaintiffs filed an Amended Complaint asserting four claims: misappropriation of a business idea, misappropriation of trade secrets, breach of contract, and unjust enrichment.  Viber moved the Court to dismiss the Amended Complaint.  On March 30, 2016, U.S. District Judge Richard Sullivan issued an opinion and order on Viber’s motion to Dismiss.  Specifically, Judge Sullivan ordered that Viber’s motion to dismiss is granted on Plaintiffs’ misappropriation of a business idea claim, but denied as to their misappropriation of trade secrets, breach of contract, and unjust enrichment claims. The Company has appealed the court’s decision to dismiss. The Company has not accrued any gains or losses associated with this case as it would be a contingent gain and recorded when received.

On September 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries be dismissed as defendants and has not accrued a contingent loss as of September 30, 2017 as a result.

On July 6, 2017, the Company received notice that an existing legal claim against Accent InterMedia (“AIM”) had been amended to include claims against the Company. The claims brought against the Company include failure to comply with certain judgments for collection of funds by the plaintiff while having a controlling interest in AIM via its ownership of Transaction Processing Products (“TPP”). The Company believes the amended case is without merit and that, per its agreement to sell its interest in TPP, any claims brought against AIM or TPP would be the responsibilities of the current interest holders. Due to the original suit being filed against AIM and amended to include the Company after it disposed of its interest in TPP, which had a controlling interest in AIM, we believe it likely the Company and its subsidiaries be dismissed as defendants. As a result, no contingent loss as been accrued as of September 30, 2017.

In November 2017, the Company received a demand from legal counsel of Ridge Resources regarding the physical issuance of 8,900,000. The common shares are accounted for as issued during the nine months ended September 30, 2017 when the obligation to issue the shares arose however have yet to be physically issued. The Company intends to issue these shares when certain common share reserves associated with its convertible notes payable are released. The Company has not accrued a contingent loss associated with this demand as it expects to remedy the physical issuance before the end of 2017.

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

Common Stock Issuances

On various dates through November 10, 2017, the Company issued a total of 7,913,851 shares of common stock for the conversion of $146,250 of outstanding principal and 1,047,123 shares of common stock for the conversion of $20,942 of outstanding interest on convertible notes payable. All conversions were performed at the contractual terms within each respective convertible note. The Company also issued 2,500,000 shares of common stock for cash proceeds of $64,000.  

Redemption Agreements on Convertible Notes Payable

As discussed in Note 4 – Convertible Notes Payable, the Company entered into the following agreements with convertible noteholders:

On October 9, 2017, the Company agreed with Noteholder 4 to make monthly cash repayments of $11,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

On October 9, 2017, the Company agreed with Noteholder 1 to make monthly cash repayments of $44,000 over a period of eight months. If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

Acquisition of Limecom, Inc.

As discussed in an 8K filed with the Securities Exchange Commission on October 26, 2017, on October 24, 2017, the Company received 100% of all outstanding shares of Limecom, Inc., as per the acquisition agreement which was effective as of October 20, 2017. The Company, through its wholly-owned subsidiary, Next Group Acquisition Inc., purchased all of the issued and outstanding shares of LimeCom Inc. (“LimeCom”), a Florida corporation, from Heritage Ventures Limited (“Heritage”). LimeCom is engaged in the global telecommunications business. The Stock Purchase Agreement with Heritage provided for the payment of 51,804,809 shares of Next Group Holdings, Inc. restricted common stock and the sum of $2,000,000 for the shares of LimeCom. The cash component of the purchase price is payable within eight months from the closing date. 10,360,800 shares of NXGH stock will be held in escrow for a period of eight months in the event that any unknown or undisclosed claims are made against LimeCom. The Company is required to deliver the shares of stock to the Purchaser and the Escrow Agent within ten days of the closing date. As of November 20, 2017, the Company had not yet delivered the 51,804,809 shares of common stock to Heritage and escrow agent as required by the stock purchase agreement. The seller has agreed to extend the date for delivery of the shares to December 1, 2017.

The acquisition further provides that LimeCom must achieve $125,000,000 in revenues in fiscal year 2017 and $2,500,000 in EBITA. In the event that Limecom does not achieve these amounts, the Company will pay according to the formula written in the acquisition agreement. The Company and Heritage have a mutual right of rescission if the $2,000,000 is not paid or any unknown or undisclosed material claims are made against Limecom. as set forth in the agreement.

As a part of the agreement, Orlando Taddeo, President and CEO of LimeCom, will be appointed as a director of the Company.

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Summary of Significant Accounting Policies and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2017

Summary of Significant Accounting Policies and Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

This summary of accounting policies for the Company is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the unaudited consolidated financial statements.

Use of Estimates

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for allowances for bad debts, stock based compensation collectability of loans receivable, potential impairment losses of the capitalized license fee and fair value calculations related to embedded derivative features of outstanding convertible notes payable.

Cash

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of September 30, 2017 or December 31, 2016. As of September 30, 2017 and December 31, 2016, the Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

Revenue recognition

Revenue recognition

The Company follows paragraph 605-10-S99 of the FASB Accounting Standards Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division. While the Company collects payment for such minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer. Next Cala generated revenues from commissions earned from Incomm, a leading financial services provider during the three and nine months ended September 30, 2017 and 2016.

Property and equipment

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the related assets, which range from three to five years. Maintenance and repair costs are expensed as they are incurred while renewals and improvements which extend the useful life of an asset are capitalized. At the time of retirement or disposal of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated results of operations.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There was no impairment losses recorded to long-lived assets during the three or nine months ended September 30, 2017 or 2016.

Non-controlling Interest

Non-Controlling Interest

The Company reports the non-controlling interest in its majority owned subsidiaries in the consolidated balance sheets within the stockholders’ deficit section, separately from the Company’s stockholders’ deficit. Non-controlling interest represents the non-controlling interest holders’ proportionate share of the equity of the Company’s majority-owned subsidiaries. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance.

Derivative and Fair Value of Financial Instruments

Derivative and Fair Value of Financial Instruments

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

Except as discussed in Note 7 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of September 30, 2017 or December 31, 2016.

Income Taxes

Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

Basic Income (Loss) Per Share

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

At September 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $984,624 plus accrued interest of $387,927 for total convertible debts as of September 30, 2017 of $1,327,551 representing 72,980,270 new dilutive common shares if converted at the applicable rates. The effects of these notes have been included in net income per diluted share for the three and nine months ended September 30, 2017.

Dividends

Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

As discussed in the report on form 8K filed on May 18, 2016, the Company declared a special dividend on its outstanding common stock of one share of Class D Redeemable Preferred Stock.  Pursuant to the dividend, the special stock dividend will be distributed to owners of the Company’s common stock as of the record date in a ratio of one share of Class D Redeemable Preferred Stock common stock for every 1 share of common stock owned as of the record date.  The Company originally had set the record date as June 10, 2016 but was later modified to July 22, 2016. The Class D Preferred Stock must be redeemed within six months within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia, Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). The Designation fixes the redemption price of each share of class D Preferred stock as the greater of par value or the amount obtained by dividing (a) 9.03 percent of the net proceeds to the Corporation of the Lawsuit after payment of fees and expenses incurred in connection with such law suit and the resolution of  any creditor claims against Next Communications and all taxes on net income accrued or paid with respect to such amount, by (b) the total number of shares of Class D Preferred stock issued and outstanding as of the Redemption Date, which amount shall be rounded to the nearest whole cent.

The Company has accrued common stock dividends payable of $30,000 as of September 30, 2017.

Advertising Costs

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of subtopic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”) and subtopic 718-20 for awards classified as equity to employees.

Derivative Liabilities

Derivative Liabilities

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. An instrument determined to be a derivative liability is recorded at fair value with a debt discount being recorded up to the face value of the related convertible note payable with any excess value being recognized as a day one loss on initial measurements of derivative liabilities. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair market values of derivative liabilities over the life of the convertible notes. Changes in value of the derivative liabilities that result from conversions of the underlying instrument to common stock are written off to additional paid in capital.

Related Parties

Related Parties

The registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Accounts Receivable

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts.

License Fee

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $55,556 and $118,056 as of September 30, 2017 and December 31, 2016, respectively.

Investments

Investments

The Company accounts for equity investments under ASC 321. Equity investments with a readily determinable market price are measured at fair value as of the date of the financial statements with any unrealized gains or losses being recognized in current period income or loss.

During the three months ended September 30, 2017, the Company accepted 50,000 shares of common stock in a publicly traded company as a referral fee. The Company classified these securities as available for sale and recorded the initial market value of the shares received as other income during the nine months ended September 30, 2017 and in accordance with ASC 321-10-35 Investments any gains or losses recognized are recorded through other income or loss. On the date of receipt, the common stock was valued at $11 per share, equal to the close price of the security, for a total of $550,000 and recorded the value of the shares as other income. The Company marked the securities to market as of the reporting date which was $11 per share for a total balance of $550,000 as of September 30, 2017. There were no additional gains or losses recognized in other income or loss on investments available for sale during the three or nine months ended September 30, 2017 and 2016.

Recently Issued Accounting Standards

Recently Issued Accounting Standards 

In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), that outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to the beginning of 2018 for public companies, with an option that would permit companies to adopt the standard as early as the original effective date of 2017. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP. ASU 2014-09 may be adopted either retrospectively or on a modified retrospective basis whereby it would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for those contracts. The updated standard is effective for us in the first quarter of 2018 and we do not plan to early adopt. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. 

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations.” This Update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The amendments in the Update clarify the implementation guidance on principal versus agent considerations. The Update is effective, along with ASU 2014-09, for annual and interim periods beginning after December 15, 2017. The adoption of ASU 2016- 08 is not expected to have a material impact on our consolidated financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016- 09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company has implemented ASU 2016-09 effective January 1, 2017.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-1O”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduce the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company is currently evaluating ASU 2016-10 and its impact on its consolidated financial statements or disclosures.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses. The new standard is effective for the Company at the beginning of fiscal year 2019. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (Topic 230)”, which provides guidance for eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective retrospectively for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption is permitted. The new standard is effective for the Company at the beginning of fiscal year 2018. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and do not expect adoption to have a material impact.

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”, which requires that all deferred tax liabilities and assets be classified as noncurrent amounts on the balance sheet. ASU 2015-17 will be effective for interim and annuals periods beginning after December 15, 2016 and may be applied prospectively or retrospectively. Early adoption of the standard is permitted. The new standard is effective for the Company at the beginning of fiscal year 2017. There was no impact on the Company’s unaudited condensed consolidated financial statements as the Company does not currently have a deferred tax asset or liability.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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Notes Payable and Convertible Notes Payable (Tables)

9 Months Ended

Sep. 30, 2017

Notes Payable and Convertible Notes Payable [Abstract]

Summary of convertible notes payable activity

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2016		Advances		Conversions to Common Stock			Principal Balance, September 30, 2017
Noteholder 1	11/25/2015	11/24/2016	$	82,500	$	82,500	$	-	$	(35,971	)	$	46,529
Noteholder 1	12/21/2015	12/21/2016		27,000		27,000		-		-			27,000
Noteholder 1	1/15/2016	1/15/2017		131,250		131,250		-		-			131,250
Noteholder 1	3/8/2016	3/8/2017		50,000		50,000		-		-			50,000
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	4/11/2016	4/11/2017		82,500		82,500		-		-			82,500
Noteholder 1	5/16/2016	5/16/2017		100,000		100,000		-		(60,000	)		40,000
Noteholder 1	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 1	8/2/2016	8/2/2017		50,000		50,000		-		-			50,000
Noteholder 2	11/20/2015	11/20/2016		37,000		37,000		-		-			37,000
Noteholder 3	3/8/2016	3/8/2017		50,000		14,000		-		-			14,000
Noteholder 3	5/16/2016	5/16/2017		100,000		100,000		-		(77,500	)		22,500
Noteholder 3	7/22/2016	7/22/2017		50,000		50,000		-		-			50,000
Noteholder 3	3/8/2016	3/8/2017		25,000		25,000		-		(25,000	)		-
Noteholder 4	1/19/2016	1/15/2017		131,250		131,250		-		(22,704	)		108,546
Noteholder 4	3/9/2016	3/8/2017		50,000		50,000		-		(16,098	)		33,902
Noteholder 5	11/9/2015	11/9/2016		100,000		61,397		-		(12,500	)		48,897
Noteholder 6	11/2/2016	11/2/2017		52,500		52,500		-		(25,000	)		27,500
Noteholder 7	1/2/2017	8/2/2017		70,000		-		70,000		(70,000	)		-
Totals			$	1,404,000	$	1,259,397	$	70,000	$	(344,773	)	$	984,624

Summary of convertible notes outstanding

Holder	Issue Date	Due Date	Principal		Discount			Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 1	11/25/2015	11/24/2016	$	46,529	$	-		$	-	$	46,529	$	22,912
Noteholder 1	12/21/2015	12/21/2016		27,000		-			-		27,000		10,776
Noteholder 1	1/15/2016	1/15/2017		131,250		-			-		131,250		51,666
Noteholder 1	3/8/2016	3/8/2017		50,000		-			-		50,000		17,786
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	4/11/2016	4/11/2017		82,500		-			-		82,500		28,733
Noteholder 1	5/16/2016	5/16/2017		40,000		-			-		40,000		30,873
Noteholder 1	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 1	8/2/2016	8/2/2017		50,000		-			-		50,000		10,630
Noteholder 2	11/20/2015	11/20/2016		37,000		-			-		37,000		10,607
Noteholder 3	3/8/2016	3/8/2017		14,000		-			-		14,000		8,713
Noteholder 3	5/16/2016	5/16/2017		22,500		-			-		22,500		28,559
Noteholder 3	7/22/2016	7/22/2017		50,000		-			-		50,000		10,751
Noteholder 3	3/8/2016	3/8/2017		-		-			-		-		-
Noteholder 4	1/19/2016	1/15/2017		108,546		-			-		108,546		43,687
Noteholder 4	3/9/2016	3/8/2017		33,902		-			-		33,902		11,839
Noteholder 5	11/9/2015	11/9/2016		48,897		-			-		48,897		26,852
Noteholder 6	11/2/2016	11/2/2017		27,500		(2,664	)		-		24,836		5,326
Noteholder 7	1/2/2017	8/2/2017		-		-			-		-		-
Totals			$	984,624	$	(2,664	)	$	-	$	981,960	$	387,927

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Derivative Liabilities (Tables)

9 Months Ended

Sep. 30, 2017

Derivative Liabilities [Abstract]

Summary of outstanding derivative liabilities

Holder	Derivative Balance
Noteholder 1	$	39,944
Noteholder 1		23,179
Noteholder 1		112,676
Noteholder 1		42,924
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		70,825
Noteholder 1		34,339
Noteholder 1		42,924
Noteholder 1		42,924
Noteholder 2		31,764
Noteholder 3		12,019
Noteholder 3		19,316
Noteholder 3		42,924
Noteholder 4		93,185
Noteholder 4		29,104
Noteholder 5		93,636
Option Holder		223,500
Noteholder 6		46,353
Total	$	1,143,186

Schedule of embedded derivative liabilities

	September 30,  2017			December 31, 2016
Expected volatility		72% - 796	%		155% - 871	%
Expected term		.09 - 2.50 years			.19 – 2.54 years
Risk free rate		0.96% - 1.62	%		.51% - 1.47	%
Forfeiture rate		0	%		0	%
Expected dividend yield		0	%		0	%

Schedule of changes in derivative liabilities

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2016	$	1,210,281
Initial measurement of derivative liabilities		328,932
Change in fair market value		161,746
Write off to additional paid in capital due to conversion		(557,773	)
Balance, September 30, 2017	$	1,143,186

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Stock Options (Tables)

9 Months Ended

Sep. 30, 2017

Stock Options [Abstract]

Schedule of stock option activity

	Shares			Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2016		17,500,000		$	0.18
Granted		7,500,000			0.18
Exercised		-			-
Forfeited		(7,500,000	)		(0.18	)
Expired		-			-
Outstanding, September 30, 2017		17,500,000		$	0.18

Schedule of information regarding outstanding and exercisable options

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	0.18		17,500,000	$	0.18		3.23		10,833,334	$	0.18
			17,500,000	$	0.18		3.23		10,833,334	$	0.18

Schedule of compensation cost of the stock options

	September 30,  2017
Expected term of options granted		0 - 5 years
Expected volatility range		778 - 850	%
Range of risk-free interest rates		0.82 - 1.41	%
Expected dividend yield		0	%

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Summary of due from and due to related parties

	September 30, 2017		December 31, 2016
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

Due to related parties

	September 30, 2017		December 31, 2016
(b) Due to Next Communications, Inc.	$	3,119,851	$	2,961,271
(c) Due to Asiya Communications SAPI de C.V.		5,998		95,120
(d) Michael DePrado		99,604		99,604
Total Due from related parties	$	3,225,453	$	3,155,995

(a)	Glocal Card Services is our partner in the Glocal Joint Venture and is considered a related party because of our business relationship with them
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer. (See Note 11 – Commitments and Contingencies)
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer and Chief Financial Officer

Schedule of revenues from related parties

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Next Communications, Inc.	$	155,174	$	-	$	226,840	$	-
Asiya Communications SAPI de C.V.		-		81		1,972		81
Next Cala 360		-		12,677		3,793		12,737
Total	$	155,174	$	12,758	$	232,605	$	12,818

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Accounts Payable and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2017

Accounts Payable and Accrued Liabilities [Abstract]

Schedule of accounts payable and accrued liabilities

Trade payables	$	1,024,564
Accrued expenses		138,836
Accrued interest, notes payable		4,810
Accrued interest, convertible notes payable		387,927
Accrued salaries and wages		141,387
Total	$	1,697,524

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Stockholders' Equity [Abstract]

Summary of common stock activity

Summary of common stock activity for the nine months ended September 30, 2017	Outstanding shares
Balance, December 31, 2016		249,225,683
Shares issued for services		12,809,091
Shares issued as repayment of related party loan and accrued interest (a)		8,900,000
Shares issued for conversion of convertible notes payable and accrued interest (b)		19,026,910
Balance, September 30, 2017		289,961,684

(a) Shares issued as repayment of outstanding loan principal of $280,000 plus accrued interest of $14,923. The lender did not have conversion rights to convert the principal to common stock. However, the lender agreed to accept shares in lieu of cash repayment.

(b) Shares issued in connection with outstanding convertible notes payable and convertible accrued interest on convertible notes payable in accordance with contractual terms of noteholders as discussed in Note 6 – Convertible Notes Payable.

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Organization and Description of Business (Details) - USD ($)	1 Months Ended		9 Months Ended
	Dec. 31, 2016	May 31, 2016	Sep. 30, 2017	Jul. 22, 2016	May 27, 2016	Jan. 01, 2016
Accent InterMedia, LLC [Member]
Organization and Description of Business (Textual)
Percentage of shares received by NGH shareholders				64.00%
Common shares [Member] | Merger Agreement [Member]
Organization and Description of Business (Textual)
Percentage of shares received by NGH shareholders						80.00%
Preferred shares [Member] | Merger Agreement [Member]
Organization and Description of Business (Textual)
Percentage of shares received by NGH shareholders						100.00%
Meimoun and Mammon, LLC [Member]
Organization and Description of Business (Textual)
Next Group Holdings, Inc. ownership percentage in subsidiaries			100.00%
Next Cala, Inc. [Member]
Organization and Description of Business (Textual)
Next Group Holdings, Inc. ownership percentage in subsidiaries		60.00%	94.00%
Next Cala, Inc. [Member] | Joint Venture Agreement [Member]
Organization and Description of Business (Textual)
Interest in joint venture agreement					60.00%
Prepaid debit cards	$ 45,000
Additional cards			$ 360,000
NxtGn, Inc. [Member]
Organization and Description of Business (Textual)
Next Group Holdings, Inc. ownership percentage in subsidiaries			65.00%
Next Mobile 360, Inc. [Member]
Organization and Description of Business (Textual)
Next Group Holdings, Inc. ownership percentage in subsidiaries			100.00%
Glocal Payments Solutions, Inc [Member] | Joint Venture Agreement [Member]
Organization and Description of Business (Textual)
Interest in joint venture agreement					40.00%

XML

Summary of Significant Accounting Policies and Basis of Presentation (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 shares	Sep. 30, 2017 USD ($) Customers $ / shares shares	Sep. 30, 2016 shares	Dec. 31, 2016 USD ($)
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Number of outstanding convertible notes payable | Customers			18
Accrued interest	$ 387,927		$ 387,927
Convertible notes outstanding	70,000		70,000
Convertible debts amount	$ 984,624		$ 984,624		$ 1,259,397
Number of new dilutive common shares | shares	357,482,680	234,060,228	344,825,632	230,017,361
Subscription receivable
License fee remitted			250,000
License fee	55,556		$ 55,556		118,056
Dividends, description			The dividend, the special stock dividend will be distributed to owners of the Company's common stock as of the record date in a ratio of one share of Class D Redeemable Preferred Stock common stock for every 1 share of common stock owned as of the record date. The Company originally had set the record date as June 10, 2016 but was later modified to July 22, 2016. The Class D Preferred Stock must be redeemed within six months within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation's affiliates lawsuit against ViberMedia, Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the "Lawsuit"). The Designation fixes the redemption price of each share of class D Preferred stock as the greater of par value or the amount obtained by dividing (a) 9.03 percent of the net proceeds to the Corporation of the Lawsuit after payment of fees and expenses incurred in connection with such law suit and the resolution of any creditor claims against Next Communications and all taxes on net income accrued or paid with respect to such amount, by (b) the total number of shares of Class D Preferred stock issued and outstanding as of the Redemption Date, which amount shall be rounded to the nearest whole cent.
Accrued common stock dividends payable			$ 30,000
FDIC insured limit	$ 250,000		$ 250,000		$ 250,000
Investments [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Common stock held referral fee | shares	50,000		50,000
Security closeing price	$ 550,000		$ 550,000
Equity securities balance	$ 550,000		$ 550,000
Common stock, trade price | $ / shares	$ 11		$ 11
Property and equipment [Member] | Minimum [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Estimated useful lives			3 years
Property and equipment [Member] | Maximum [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Estimated useful lives			5 years
Convertible Debt Securities [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Convertible notes outstanding	$ 984,624		$ 984,624
Convertible debts amount	$ 1,327,551		$ 1,327,551
Number of new dilutive common shares | shares			72,980,270

XML

Going Concern (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Going Concern (Textual)
Net income before non-controlling interest	$ 1,686,608	$ (1,015,864)	$ 51,243	$ (4,765,328)
Net cash used in operating activities			(384,716)	$ (967,736)
Working capital deficit	7,151,084		7,151,084		$ 9,759,119
Accumulated deficit	$ (13,436,542)		$ (13,436,542)		$ (13,499,303)

XML

Notes Payable and Convertible Notes Payable (Details)	9 Months Ended
	Sep. 30, 2017 USD ($)
Short-term Debt [Line Items]
Original Principal	$ 1,404,000
Balance	1,259,397
Advances	70,000
Conversions to Common Stock	(344,773)
Balance	$ 984,624
Note issued on 11/25/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Nov. 25, 2015
Due Date	Nov. 24, 2016
Original Principal	$ 82,500
Balance	82,500
Advances
Conversions to Common Stock	(35,971)
Balance	$ 46,529
Note issued on 12/21/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Dec. 21, 2015
Due Date	Dec. 21, 2016
Original Principal	$ 27,000
Balance	27,000
Advances
Conversions to Common Stock
Balance	$ 27,000
Note issued on 1/15/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Jan. 15, 2016
Due Date	Jan. 15, 2017
Original Principal	$ 131,250
Balance	131,250
Advances
Conversions to Common Stock
Balance	$ 131,250
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Original Principal	$ 50,000
Balance	50,000
Advances
Conversions to Common Stock
Balance	$ 50,000
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Original Principal	$ 82,500
Balance	82,500
Advances
Conversions to Common Stock
Balance	$ 82,500
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Original Principal	$ 82,500
Balance	82,500
Advances
Conversions to Common Stock
Balance	$ 82,500
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Original Principal	$ 82,500
Balance	82,500
Advances
Conversions to Common Stock
Balance	$ 82,500
Note issued on 5/16/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	May 16, 2016
Due Date	May 16, 2017
Original Principal	$ 100,000
Balance	100,000
Advances
Conversions to Common Stock	(60,000)
Balance	$ 40,000
Note issued on 7/22/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Jul. 22, 2016
Due Date	Jul. 22, 2017
Original Principal	$ 50,000
Balance	50,000
Advances
Conversions to Common Stock
Balance	$ 50,000
Note issued on 8/2/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Aug. 02, 2016
Due Date	Aug. 02, 2017
Original Principal	$ 50,000
Balance	50,000
Advances
Conversions to Common Stock
Balance	$ 50,000
Note issued on 11/20/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 2
Issue Date	Nov. 20, 2015
Due Date	Nov. 20, 2016
Original Principal	$ 37,000
Balance	37,000
Advances
Conversions to Common Stock
Balance	$ 37,000
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Original Principal	$ 50,000
Balance	14,000
Advances
Conversions to Common Stock
Balance	$ 14,000
Note issued on 5/16/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	May 16, 2016
Due Date	May 16, 2017
Original Principal	$ 100,000
Balance	100,000
Advances
Conversions to Common Stock	(77,500)
Balance	$ 22,500
Note issued on 7/22/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Jul. 22, 2016
Due Date	Jul. 22, 2017
Original Principal	$ 50,000
Balance	50,000
Advances
Conversions to Common Stock
Balance	$ 50,000
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Original Principal	$ 25,000
Balance	25,000
Advances
Conversions to Common Stock	(25,000)
Balance
Note issued on 1/19/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 4
Issue Date	Jan. 19, 2016
Due Date	Jan. 15, 2017
Original Principal	$ 131,250
Balance	131,250
Advances
Conversions to Common Stock	(22,704)
Balance	$ 108,546
Note issued on 3/9/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 4
Issue Date	Mar. 09, 2016
Due Date	Mar. 08, 2017
Original Principal	$ 50,000
Balance	50,000
Advances
Conversions to Common Stock	(16,098)
Balance	$ 33,902
Note issued on 11/9/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 5
Issue Date	Nov. 09, 2015
Due Date	Nov. 09, 2016
Original Principal	$ 100,000
Balance	61,397
Advances
Conversions to Common Stock	(12,500)
Balance	$ 48,897
Note issued on 11/2/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 6
Issue Date	Nov. 02, 2016
Due Date	Nov. 02, 2017
Original Principal	$ 52,500
Balance	52,500
Advances
Conversions to Common Stock	(25,000)
Balance	$ 27,500
Note issued on 1/2/2017 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 7
Issue Date	Jan. 02, 2017
Due Date	Aug. 02, 2017
Original Principal	$ 70,000
Balance
Advances	70,000
Conversions to Common Stock	(70,000)
Balance

XML

Notes Payable and Convertible Notes Payable (Details 1) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Short-term Debt [Line Items]
Principal	$ 984,624	$ 1,259,397
Carrying Value	981,960	1,076,302
Accrued Interest	$ 4,810
Note issued on 11/25/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Nov. 25, 2015
Due Date	Nov. 24, 2016
Principal	$ 46,529	82,500
Discount
Unamortized Debt Issue Costs
Carrying Value	46,529	82,500
Accrued Interest	$ 22,912
Note issued on 12/21/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Dec. 21, 2015
Due Date	Dec. 21, 2016
Principal	$ 27,000	27,000
Discount
Unamortized Debt Issue Costs
Carrying Value	27,000	27,000
Accrued Interest	$ 10,776
Note issued on 1/15/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Jan. 15, 2016
Due Date	Jan. 15, 2017
Principal	$ 131,250	131,250
Discount
Unamortized Debt Issue Costs
Carrying Value	131,250	131,250
Accrued Interest	$ 51,666
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Principal	$ 50,000	50,000
Discount
Unamortized Debt Issue Costs
Carrying Value	50,000	50,000
Accrued Interest	$ 17,786
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Principal	$ 82,500	82,500
Discount
Unamortized Debt Issue Costs
Carrying Value	82,500	82,500
Accrued Interest	$ 28,733
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Principal	$ 82,500	82,500
Discount
Unamortized Debt Issue Costs
Carrying Value	82,500	82,500
Accrued Interest	$ 28,733
Note issued on 4/11/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Apr. 11, 2016
Due Date	Apr. 11, 2017
Principal	$ 82,500	82,500
Discount
Unamortized Debt Issue Costs
Carrying Value	82,500	82,500
Accrued Interest	$ 28,733
Note issued on 5/16/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	May 16, 2016
Due Date	May 16, 2017
Principal	$ 40,000	100,000
Discount
Unamortized Debt Issue Costs
Carrying Value	40,000	100,000
Accrued Interest	$ 30,873
Note issued on 7/22/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Jul. 22, 2016
Due Date	Jul. 22, 2017
Principal	$ 50,000	50,000
Discount
Unamortized Debt Issue Costs
Carrying Value	50,000	50,000
Accrued Interest	$ 10,751
Note issued on 8/2/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 1
Issue Date	Aug. 02, 2016
Due Date	Aug. 02, 2017
Principal	$ 50,000	50,000
Discount
Unamortized Debt Issue Costs
Carrying Value	50,000	50,000
Accrued Interest	$ 10,630
Note issued on 11/20/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 2
Issue Date	Nov. 20, 2015
Due Date	Nov. 20, 2016
Principal	$ 37,000	37,000
Discount
Unamortized Debt Issue Costs
Carrying Value	37,000	37,000
Accrued Interest	$ 10,607
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Principal	$ 14,000	14,000
Discount
Unamortized Debt Issue Costs
Carrying Value	14,000	14,000
Accrued Interest	$ 8,713
Note issued on 5/16/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	May 16, 2016
Due Date	May 16, 2017
Principal	$ 22,500	100,000
Discount
Unamortized Debt Issue Costs
Carrying Value	22,500	100,000
Accrued Interest	$ 28,559
Note issued on 7/22/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Jul. 22, 2016
Due Date	Jul. 22, 2017
Principal	$ 50,000	50,000
Discount
Unamortized Debt Issue Costs
Carrying Value	50,000	50,000
Accrued Interest	$ 10,751
Note issued on 3/8/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 3
Issue Date	Mar. 08, 2016
Due Date	Mar. 08, 2017
Principal		25,000
Discount
Unamortized Debt Issue Costs
Carrying Value		25,000
Accrued Interest
Note issued on 1/19/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 4
Issue Date	Jan. 19, 2016
Due Date	Jan. 15, 2017
Principal	$ 108,546	131,250
Discount
Unamortized Debt Issue Costs
Carrying Value	108,546	131,250
Accrued Interest	$ 43,687
Note issued on 3/9/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 4
Issue Date	Mar. 09, 2016
Due Date	Mar. 08, 2017
Principal	$ 33,902	50,000
Discount
Unamortized Debt Issue Costs
Carrying Value	33,902	50,000
Accrued Interest	$ 11,839
Note issued on 11/9/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 5
Issue Date	Nov. 09, 2015
Due Date	Nov. 09, 2016
Principal	$ 48,897	61,397
Discount
Unamortized Debt Issue Costs
Carrying Value	48,897	61,397
Accrued Interest	$ 26,852
Note issued on 11/2/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 6
Issue Date	Nov. 02, 2016
Due Date	Nov. 02, 2017
Principal	$ 27,500	52,500
Discount	(2,664)
Unamortized Debt Issue Costs
Carrying Value	24,836	52,500
Accrued Interest	$ 5,326
Note issued on 1/2/2017 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 7
Issue Date	Jan. 02, 2017
Due Date	Aug. 02, 2017
Principal
Discount
Unamortized Debt Issue Costs
Carrying Value
Accrued Interest
Totals [Member]
Short-term Debt [Line Items]
Principal	984,624
Discount	(2,664)
Unamortized Debt Issue Costs
Carrying Value	981,960
Accrued Interest	$ 387,927

XML

Notes Payable and Convertible Notes Payable (Details Textual) - USD ($)

1 Months Ended

9 Months Ended

Oct. 09, 2017

Sep. 18, 2017

May 01, 2017

Feb. 28, 2017

Sep. 30, 2017

Sep. 30, 2016

Dec. 31, 2016

Notes Payable and Convertible Notes Payable (Textual)

Accrued interest

$ 4,810

Repayments of future loans receivables

$ 20,961

Unrelated party loan

$ 25,000

Principal balance due

25,000

Subsequent Event [Member]

Notes Payable and Convertible Notes Payable (Textual)

Due to cash repayments

$ 44,000

Noteholder 1 [Member]

Notes Payable and Convertible Notes Payable (Textual)

Accrued interest

22,912

Noteholder 1 [Member] | Subsequent Event [Member]

Notes Payable and Convertible Notes Payable (Textual)

Debt conversion terms

If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

Cash repayment term

8 months

Due to cash repayments

$ 44,000

Noteholder 3 [Member]

Notes Payable and Convertible Notes Payable (Textual)

Accrued interest

51,666

Noteholder 4 [Member]

Notes Payable and Convertible Notes Payable (Textual)

Accrued interest

$ 17,786

Noteholder 4 [Member] | Subsequent Event [Member]

Notes Payable and Convertible Notes Payable (Textual)

Debt conversion terms

If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.

Cash repayment term

8 months

Due to cash repayments

$ 11,000

Convertible Notes Payable [Member]

Notes Payable and Convertible Notes Payable (Textual)

Annual interest rate

8.00%

Debt conversion terms

The Company agreed with certain noteholders to extend a redemption freeze agreement whereby the convertible note holders agreed to not convert outstanding principal and accrued interest into common stock for a period of 60 days.

The terms of the outstanding convertible notes are substantially similar and accrue interest at 8% annually with a default interest rate of 24% and allow for the conversion of outstanding principal and interest to common stock at a price equal to a 45% to 50% from the lowest trading price in the preceding 20 days.

Conversion price per share

$ 0.02

Accrued interest

$ 387,927

$ 207,951

Convertible Notes Payable [Member] | Noteholder 3 [Member]

Notes Payable and Convertible Notes Payable (Textual)

Debt conversion terms

If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018.

Cash repayment term

8 months

Due to cash repayments

$ 9,234

First Loan [Member]

Notes Payable and Convertible Notes Payable (Textual)

Cash proceeds from loan

125,000

Secured loan

168,750

Repayments of future loans receivables

1,339

Second Loan [Member]

Notes Payable and Convertible Notes Payable (Textual)

Cash proceeds from loan

50,000

Secured loan

68,000

Repayments of future loans receivables

540

Notes Payable [Member]

Notes Payable and Convertible Notes Payable (Textual)

Due to cash repayments

$ 91,395

XML

Derivative Liabilities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Derivative [Line Items]
Outstanding Derivative Liabilities	$ 1,143,186	$ 1,210,281
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	39,944
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	23,179
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	112,676
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	42,924
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	70,825
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	70,825
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	70,825
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	34,339
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	42,924
Noteholder 1 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	42,924
Noteholder 2 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	31,764
Noteholder 3 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	12,019
Noteholder 3 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	19,316
Noteholder 3 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	42,924
Noteholder 4 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	93,185
Noteholder 4 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	29,104
Noteholder 5 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	93,636
Option Holder [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	223,500
Noteholder 6 [Member]
Derivative [Line Items]
Outstanding Derivative Liabilities	$ 46,353

XML

Derivative Liabilities (Details 1)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Derivative [Line Items]
Forfeiture rate	0.00%	0.00%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Derivative [Line Items]
Expected volatility	72.00%	155.00%
Expected term	1 month 2 days	2 months 8 days
Risk free rate	0.96%	0.51%
Maximum [Member]
Derivative [Line Items]
Expected volatility	796.00%	871.00%
Expected term	2 years 6 months	2 years 6 months 14 days
Risk free rate	1.62%	1.47%

XML

Derivative Liabilities (Details 2)	9 Months Ended
	Sep. 30, 2017 USD ($)
Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2016	$ 1,210,281
Initial measurement of derivative liabilities	328,932
Change in fair market value	161,746
Write off to additional paid in capital due to conversion	(557,773)
Balance, September 30, 2017	$ 1,143,186

XML

Derivative Liabilities (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Derivative Liabilities (Textual)
Fair value of derivative reverse capitalization on convertible notes payable	$ 1,236,007		$ 1,236,007
Derivative liability	1,143,186		1,143,186		$ 1,210,281
Gain from derivative liability fair value adjustment	$ 1,687,253	$ 1,191,239	$ (161,746)	$ 1,583,425
Derivative liability exercisable, description			The options are exercisable at $0.18 per share unless the Company's common stock is quoted at a price greater than $0.50 per share at which point the options are exercisable at $0.001 per share.

XML

Stock Options (Details) - Stock Option [Member]	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, December 31, 2016 | shares	17,500,000
Granted | shares	7,500,000
Exercised | shares
Forfeited | shares	(7,500,000)
Expired | shares
Outstanding, September 30, 2017 | shares	17,500,000
Weighted - Average Exercise Price Per Share, Outstanding, December 31, 2016 | $ / shares	$ 0.18
Weighted - Average Exercise Price Per Share, Granted | $ / shares	0.18
Weighted - Average Exercise Price Per Share, Exercised | $ / shares
Weighted - Average Exercise Price Per Share, Forfeited | $ / shares	(0.18)
Weighted - Average Exercise Price Per Share, Expired | $ / shares
Weighted - Average Exercise Price Per Share, Outstanding, September 30, 2017 | $ / shares	$ 0.18

XML

Stock Options (Details 1) - Stock Option [Member] - $ / shares	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices
Outstanding, Number of Option Shares	17,500,000	17,500,000
Outstanding, Weighted Average Exercise Price	$ 0.18	$ 0.18
Outstanding, Weighted Average Remaining Life (Years)	3 years 2 months 23 days
Exercisable, Number of Option Shares	10,833,334
Exercisable, Weighted Average Exercise Price	$ 0.18
0.18 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices	$ 0.18
Outstanding, Number of Option Shares	17,500,000
Outstanding, Weighted Average Exercise Price	$ 0.18
Outstanding, Weighted Average Remaining Life (Years)	3 years 2 months 23 days
Exercisable, Number of Option Shares	10,833,334
Exercisable, Weighted Average Exercise Price	$ 0.18

XML

Stock Options (Details 2)	9 Months Ended
	Sep. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility range, minimum	778.00%
Expected volatility range, maximum	850.00%
Range of risk-free interest rates, minimum	0.82%
Range of risk-free interest rates, maximum	1.41%
Expected dividend yield	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of options granted	5 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term of options granted	0 years

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Stock Options (Details Textual) - USD ($)

1 Months Ended

9 Months Ended

Jul. 14, 2016

Mar. 31, 2017

May 31, 2016

Sep. 30, 2017

Sep. 30, 2016

Dec. 31, 2016

Stock Options (Textual)

Stock based compensation

$ 378,274

$ 1,130,818

Unrecognized expense

$ 223,331

Stock Option [Member]

Stock Options (Textual)

Stock based compensation

$ 558,323

Options issued

17,500,000

17,500,000

Stock based compensation arrangement, Description

The Company believes is 80% likely of occurring resulting in stock based expense of $558,328 during the year ended December 31, 2016, at which point there was a 50% probability of attainment, and $334,997 during the nine months ended September 30, 2017 at which point the probability of attainment was updated to 80%.

Fair value of stock options granted

7,500,000

Fair value of unvested shares

$ 223,331

Options exercise price per share

$ 0.18

Common stock, trade price

$ 0.5

Stock Option [Member] | Glocal [Member]

Stock Options (Textual)

Stock based compensation

$ 14,166

Options issued

1,000,000

Fair value of stock options granted

1,000,000

Exercise price of options

$ 1.00

Options exercise price per share

$ 1.00

Stock Option [Member] | TPP [Member]

Stock Options (Textual)

Options issued

7,500,000

7,500,000

Term of options

3 years

3 years

Exercise price of options

$ 0.18

$ 0.18

Options value

$ 898,490

Options exercise price per share

$ 0.001

0.05

Common stock, trade price

$ 0.50

$ 0.50

Stock Option [Member] | Board Member [Member]

Stock Options (Textual)

Options issued

10,000,000

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Related Party Transactions (Details) - USD ($)		Sep. 30, 2017	Dec. 31, 2016
Due from related parties
Total Due from related parties		$ 36,000	$ 36,000
Due to related parties
Total Due to related parties		3,225,453	3,155,995
Glocal Card Services [Member]
Due from related parties
Total Due from related parties	[1]	36,000	36,000
Due to Next Communications, Inc. [Member]
Due to related parties
Total Due to related parties	[2]	3,119,851	2,961,271
Due to Asiya Communications SAPI de C.V. [Member]
Due to related parties
Total Due to related parties	[3]	5,998	95,120
Michael DePrado [Member]
Due to related parties
Total Due to related parties	[4]	$ 99,604	$ 99,604

[1] Glocal Card Services is our partner in the Glocal Joint Venture and is considered a related party because of our business relationship with them

[2] Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer. (See Note 11 Commitments and Contingencies)

[3] Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.

[4] Michael DePrado is our Chief Operating Officer and Chief Financial Officer

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Related Party Transactions (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Related Party Transaction [Line Items]
Total Revenues (Related Party)	$ 155,174	$ 12,758	$ 232,605	$ 12,818
Next Communications, Inc. [Member]
Related Party Transaction [Line Items]
Total Revenues (Related Party)	155,174		226,840
Asiya Communications SAPI de C.V. [Member]
Related Party Transaction [Line Items]
Total Revenues (Related Party)		81	1,972	81
Next Cala 360 [Member]
Related Party Transaction [Line Items]
Total Revenues (Related Party)		$ 12,677	$ 3,793	$ 12,737

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Related Party Transactions (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Related Party Transactions (Textual)
Interest rate of related party			9.00%
Interest expense			$ 179,008	$ 180,845
Revenue, related party	$ 155,174	$ 12,758	$ 232,605	$ 12,818
Converted to shares of common stock			8,900,000
Outstanding principal and accrued interest			$ 294,923
Accounts receivable, related party	199,894		199,894
Asiya Communications SAPI de C.V. [Member]
Related Party Transactions (Textual)
Accounts receivable, related party	2,054		2,054
Next Communications [Member]
Related Party Transactions (Textual)
Accounts receivable, related party	$ 197,840		$ 197,840

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Accounts Payable and Accrued Liabilities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Accounts Payable and Accrued Liabilities [Abstract]
Trade payables	$ 1,024,564
Accrued expenses	138,836
Accrued interest, notes payable	4,810
Accrued interest, convertible notes payable	387,927
Accrued salaries and wages	141,387
Total	$ 1,697,524	$ 1,330,789

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Accounts Payable and Accrued Liabilities (Details Textual) - USD ($)	Sep. 30, 2017	Mar. 31, 2017	Dec. 31, 2014
Accounts Payable and Accrued Liabilities(Textual)
Unpaid wages			$ 622,968
Settlement amount		$ 80,000
Accounts payable, cash	$ 10,000
Convertible note payable	70,000
Payable balance outstanding	$ 0

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Stockholders' Equity (Details)	9 Months Ended
	Sep. 30, 2017 shares
Summary of common stock activity for the six months ended June 30, 2017
Balance, December 31, 2016	249,225,683
Shares issued for services	12,809,091
Shares issued as repayment of related party loan and accrued interest	8,900,000	[1]
Shares issued for conversion of convertible notes payable and accrued interest	19,026,910	[2]
Balance, September 30, 2017	289,961,684

[1] Shares issued as repayment of outstanding loan principal of $280,000 plus accrued interest of $14,923. The lender did not have conversion rights to convert the principal to common stock. However, the lender agreed to accept shares in lieu of cash repayment.

[2] Shares issued in connection with outstanding convertible notes payable and convertible accrued interest on convertible notes payable in accordance with contractual terms of noteholders as discussed in Note 6 - Convertible Notes Payable.

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Stockholders' Equity (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016	Nov. 20, 2015
Stockholders' Equity (Textual)
Preferred stock, shares authorized	60,000,000		60,000,000		60,000,000
Preferred stock, par value	$ 0.001		$ 0.001		$ 0.001
Common stock, shares authorized	360,000,000		360,000,000		360,000,000	9,500,000,000
Common stock, shares outstanding	289,961,684		289,961,684		249,225,683
Common share equivalents	72,980,270		72,980,270
Common share equivalents from outstanding convertible notes payable	357,482,680	234,060,228	344,825,632	230,017,361
Common stock, par value	$ 0.001		$ 0.001		$ 0.001
Shares issued for services			12,809,091
Repayment of non-convertible loan			$ 14,932
Fair value of shares issued upon conversion			43,277
Repayment of the related party payable			$ 338,200
Price per share			$ 0.038
Principal amount			$ 280,000
Convertible Debt Securities [Member]
Stockholders' Equity (Textual)
Common share equivalents from outstanding convertible notes payable			72,980,270
Series A Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, par value	$ 0.001		$ 0.001		$ 0.001
Preferred stock, shares designated	50,000,000		50,000,000		50,000,000
Preferred stock, shares outstanding	0		0		0
Series B Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, par value	$ 0.001		$ 0.001		$ 0.001
Preferred stock, shares designated	10,000,000		10,000,000		10,000,000
Preferred stock, voting rights description			The holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock.
Preferred stock, shares outstanding	10,000,000		10,000,000		10,000,000
Common Stock [Member]
Stockholders' Equity (Textual)
Stock issued for conversion of debt, shares			18,059,865
Issuance of common stock in conversion of convertible notes payable			$ 344,744
Shares issued for services			12,809,091
Shares issued for services, value			$ 720,200
Issuance of common shares value			8,449,654
Issuance of common stock in lieu of accrued interest			$ 19,341
Issuance of common stock, shares in lieu of accrued interest			967,045
Common shares rescinded, shares			450,346
Repayment of outstanding loan			$ 280,000
Accrued interest			$ 14,932
Series D Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, shares designated	36,000,000		36,000,000

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Customer Concentration (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Customer Concentration (Textual)
Revenue	$ 625,188	$ 515,230	$ 1,699,843	$ 600,300
Revenues derived percentage	10.00%		10.00%
Next Communications [Member]
Customer Concentration (Textual)
Revenue	$ 155,174		$ 226,840
Revenues derived percentage	25.00%		13.00%

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Commitments and Contingencies (Details) - shares	Apr. 07, 2016	Sep. 30, 2017
Commitments and Contingencies (Textual)
Commitments description	The agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reached $750,000,000.
Common shares issued		8,900,000

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Subsequent Events (Details) - USD ($)	1 Months Ended				9 Months Ended
	Nov. 20, 2017	Nov. 10, 2017	Oct. 26, 2017	Oct. 09, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Subsequent Events (Textual)
Common stock issued for conversion of convertible note principal					$ 344,773	$ 449,940
Common stock, shares issued					289,961,684		249,225,683
Subsequent Events [Member]
Subsequent Events (Textual)
Redemption agreements on convertible notes payable, description				If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.
Common stock issued for conversion of convertible note principal		$ 7,913,851
Stock issued for conversion of debt, shares		146,250
Due to cash repayments				$ 44,000
Common stock for cash proceeds		$ 64,000
Common stock, shares issued		2,500,000
Escrow shares	51,804,809
Subsequent Events [Member] | Convertible Notes Payable [Member]
Subsequent Events (Textual)
Common stock issued for conversion of convertible note principal		$ 20,942
Stock issued for conversion of debt, shares		1,047,123
Subsequent Events [Member] | Acquisition of Limecom Inc [Member]
Subsequent Events (Textual)
Percentage of outstanding ownership			100.00%
Restricted common stock shares			51,804,809
Restricted common stock, value			$ 2,000,000
Escrow shares			10,360,800
Description of business transaction			The acquisition further provides that LimeCom must achieve $125,000,000 in revenues in fiscal year 2017 and $2,500,000 in EBITA. In the event that Limecom does not achieve these amounts, the Company will pay according to the formula written in the acquisition agreement. The Company and Heritage have a mutual right of rescission if the $2,000,000 is not paid or any unknown or undisclosed material claims are made against Limecom. as set forth in the agreement.
Undisclosed material claims value			$ 2,000,000
Redemption Agreements on Convertible Notes Payable [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Redemption agreements on convertible notes payable, description				If the Company repays 70% of the total outstanding principal no later than December 31, 2017, the remaining 30% principal balance will be converted to common stock at a rate equal to $0.05 per share after June 18, 2018. If the Company fails to repay 70% of the outstanding principal by December 31, 2017, the noteholder may convert the unpaid balance to common stock at $0.02 per share after June 18, 2018. Additionally, the Company agreed to use 30% of any gross proceeds raised in any financing to retire outstanding principal due.
Due to cash repayments				$ 11,000