UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
D.C. 20549



FORM
10-Q



|[X]                                               | Quarterly
    Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|------------------------------------------------- | -------------------------------------------------------------------------------------------
|                                                  |                                                                                            
|For
    the quarterly period ended March 31, 2016
|                                                  |                                                                                            
|[  ]                                              | Transition
    Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934       



For
the transition period from __________ to __________



Commission
File Number: 000-21202



Textmunication
Holdings, Inc.

(Exact
name of registrant as specified in its charter)



|Nevada                                                            |  | 58-1588291                          
|----------------------------------------------------------------- |  | ------------------------------------
|(State
    or other jurisdiction ofincorporation or organization) |  | (IRS
    EmployerIdentification No.)
|                                                                 
|1940
    Contra Costa Blvd. Pleasant Hill, CA 94523              
|(Address
    of principal executive offices)                     



925-777-2111

(Registrant’s
telephone number)





(Former
name, former address and former fiscal year, if changed since last report)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

[X]
Yes [  ] No



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X]
Yes [  ] No



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.



|[  ]
    Large accelerated filer | [  ]
    Accelerated filer       
|-------------------------------- | ---------------------------------
|[  ]
    Non-accelerated filer   | [X]
    Smaller reporting company



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ]
Yes [X] No



State
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 121,177,720
common shares as of May 24, 2016.






















TABLE
OF CONTENTS



|                                   |                                                                                           | Page
|---------------------------------- | ----------------------------------------------------------------------------------------- | ----
|PART
    I – FINANCIAL INFORMATION
|                                  
|Item
    1:                        | Financial
    Statements                                                                  | 3   
|Item
    2:                        | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations | 4   
|Item
    3:                        | Quantitative
    and Qualitative Disclosures About Market Risk                            | 7   
|Item
    4:                        | Controls
    and Procedures                                                               | 7   
|                                  
|PART
    II – OTHER INFORMATION   
|                                  
|Item
    1:                        | Legal
    Proceedings                                                                     | 8   
|Item
    1A:                       | Risk
    Factors                                                                          | 8   
|Item
    2:                        | Unregistered
    Sales of Equity Securities and Use of Proceeds                           | 8   
|Item
    3:                        | Defaults
    Upon Senior Securities                                                       | 9   
|Item
    4:                        | Mine
    Safety Disclosures                                                               | 9   
|Item
    5:                        | Other
    Information                                                                     | 9   
|Item
    6:                        | Exhibits                                                                                  | 9   



2







PART
I - FINANCIAL INFORMATION



Item
1. Financial Statements



Our
consolidated financial statements included in this Form 10-Q are as follows:



|F-1 | Consolidated
    Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015;                      
|--- | -------------------------------------------------------------------------------------------------------------
|    |                                                                                                              
|F-2 | Consolidated
    Statements of Operations for the three months ended March 31, 2016 and 2015 (unaudited);    
|    |                                                                                                              
|F-3 | Consolidated
    Statements of Cash Flows for the three months ended March 31, 2016 and 2015 (unaudited); and
|    |                                                                                                              
|F-4 | Notes
    to Consolidated Financial Statements.                                                              



These
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2016
are not necessarily indicative of the results that can be expected for the full year.





3







TEXTMUNICATION,
INC.

CONSOLIDATED
BALANCE SHEETS

(UNAUDITED)



|                                                                                                                                                                                        |  | March 31, 2016 |            |   | December 31, 2015 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ----------------- | -
|ASSETS                                                                                                                                                                                  |  |                |            |   |                   |  
|Current assets                                                                                                                                                                          |  |                |            |   |                   |  
|Cash and cash equivalents                                                                                                                                                               |  | $              | 37,578     |   |                   | $
|Receivables                                                                                                                                                                             |  |                | 3,853      |   |                   |  
|Total current assets                                                                                                                                                                    |  |                | 41,431     |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Fixed Assets, net                                                                                                                                                                       |  |                | 850        |   |                   |  
|Investment in equity method investee                                                                                                                                                    |  |                | 455,469    |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Total assets                                                                                                                                                                            |  |                | 497,750    |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                   |  |                |            |   |                   |  
|Current liabilities                                                                                                                                                                     |  |                |            |   |                   |  
|Accounts payable and accrued liabilities                                                                                                                                                |  | $              | 267,210    |   |                   | $
|Due to related parties                                                                                                                                                                  |  |                | 11,750     |   |                   |  
|Loans payable                                                                                                                                                                           |  |                | 63,841     |   |                   |  
|Convertible notes payable, net of discount                                                                                                                                              |  |                | 409,879    |   |                   |  
|Derivitive liability                                                                                                                                                                    |  |                | 666,885    |   |                   |  
|Total current liabilities                                                                                                                                                               |  |                | 1,419,565  |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Total liabilities                                                                                                                                                                       |  |                | 1,419,565  |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Stockholders’ deficit                                                                                                                                                                   |  |                |            |   |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Preferred stock, 9,933,333 shares authorized, $0.0001 par value, 4,000,000
    issued and outstanding                                                                                   |  |                | 400        |   |                   |  
|Series B - Preferred stock, 66,667 shares authorized, $0.0001 par value,
    66,667 issued and outstanding                                                                              |  |                | 7          |   |                   |  
|Common stock; $0.0001 par value; 250,000,000 shares authorized; 117,682,660 and 109,542,788
    shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively. |  |                | 11,759     |   |                   |  
|Additional paid-in capital                                                                                                                                                              |  |                | 4,473,037  |   |                   |  
|Accumulated deficit                                                                                                                                                                     |  |                | (5,407,017 | ) |                   |  
|Total stockholders’ deficit                                                                                                                                                             |  |                | (921,815   | ) |                   |  
|                                                                                                                                                                                        |  |                |            |   |                   |  
|Total liabilities and stockholders’ deficit                                                                                                                                             |  | $              | 497,750    |   |                   | $



The
accompanying notes are an integral part of these financial statements



F-1







TEXTMUNICATION,
INC.

CONSOLIDATED
STATEMENT OF OPERATIONS

(UNAUDITED)



|                                                 |  | The Quarters Ended |            
|------------------------------------------------ |  | ------------------ | -----------
|                                                 |  | March 31, 2016     |            
|                                                 |  |                    |            
|Revenues                                         |  | $                  | 88,410     
|                                                 |  |                    |            
|Cost of revenues                                 |  |                    | 17,676     
|                                                 |  |                    |            
|Gross profit                                     |  |                    | 70,733     
|                                                 |  |                    |            
|Operating expenses                               |  |                    |            
|General and administrative expenses              |  |                    | 193,475    
|Total operating expenses                         |  |                    | 193,475    
|                                                 |  |                    |            
|Loss from operations                             |  |                    | (122,742   
|                                                 |  |                    |            
|Other expense                                    |  |                    |            
|Interest expense                                 |  |                    | (66,679    
|Loss on change of derivitive liability           |  |                    | (918,770   
|Amortization of debt discount                    |  |                    | (127,348   
|Total other expense                              |  |                    | (1,112,797 
|                                                 |  |                    |            
|Income from investment in equity method investee |  |                    | 5,616      
|                                                 |  |                    |            
|Net loss                                         |  | $                  | (1,229,923 
|                                                 |  |                    |            
|Basic weighted average common shares outstanding |  |                    | 113,289,367
|Net loss per common share: basic and diluted     |  | $                  | (0.01      



The
accompanying notes are an integral part of these financial statements



F-2







TEXTMUNICATION,
INC.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

(UNAUDITED)



|                                                                                |  | The Quarter Ended |           
|------------------------------------------------------------------------------- |  | ----------------- | ----------
|                                                                                |  | March 31, 2016    |           
|Cash Flows from Operating Activities                                            |  |                   |           
|Net loss                                                                        |  | $                 | (1,229,923
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                   |           
|Amortization of debt discount                                                   |  |                   | 127,348   
|Loss on derivative liability                                                    |  |                   | 918,770   
|Depreciation                                                                    |  |                   | 181       
|Income from equity method investee                                              |  |                   | (5,616    
|Changes in assets and liabilities                                               |  |                   |           
|Receivables                                                                     |  |                   | (791      
|Accounts payable and accrued expenses                                           |  |                   | 86,673    
|Net cash from operating activities                                              |  |                   | (103,357  
|                                                                                |  |                   |           
|Distributions from equity method investee                                       |  |                   | 10,149    
|Net cash used in investing activities                                           |  |                   | 10,149    
|                                                                                |  |                   |           
|Cash Flows from Financing Activities                                            |  |                   |           
|Proceeds from loans payable                                                     |  |                   | -         
|Payments on loans payable                                                       |  |                   | (34,594   
|Proceeds from convertible notes payable                                         |  |                   | 100,000   
|Payments on convertible notes payable                                           |  |                   | 4,250     
|Net cash from financing activities                                              |  |                   | 69,656    
|                                                                                |  |                   |           
|Net increase in cash                                                            |  |                   | (23,552   
|                                                                                |  |                   |           
|Cash, beginning of period                                                       |  |                   | 61,130    
|                                                                                |  |                   |           
|Cash, end of period                                                             |  | $                 | 37,578    
|                                                                                |  |                   |           
|Supplemental disclosure of cash flow information                                |  |                   |           
|Cash paid for interest                                                          |  | $                 | 20,907    
|Cash paid for tax                                                               |  | $                 | -         
|                                                                                |  |                   |           
|Non-Cash investing and financing transactions                                   |  |                   |           
|Preferred shares issued for equity method investee                              |  | $                 | 460,002   
|Conversion of convertible notes payable                                         |  | $                 | 45,494    
|Settlement of derivative liability                                              |  | $                 | 56,583    



The
accompanying notes are an integral part of these financial statements



F-3









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



NOTE
1 – BASIS OF PRESENTATION AND GOING CONCERN



Basis
of Presentation



The
accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read
in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial
Statements filed with the SEC on Form 10-K/A. In the opinion of management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of operations for the interim period presented have been
reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected
for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited
financial statements for the most recent fiscal period, as reported in the Form 10-K/A, have been omitted.



Going
concern



These
consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to
a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal
course of business. As of March 31, 2016, the Company has an accumulated deficit of $5,407,017. The company’s ability to
continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability
to achieve and maintain profitable operations. While the Company is expanding its best efforts to achieve the above plans, there
is no assurance that any such activity will generate funds that will be available for operations. These conditions raise substantial
doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include
any adjustments that might arise from this uncertainty.



NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Cash



The
Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.



The
Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial
institution. The balance at times may exceed federally insured limits. At March 31, 2016 no cash balances exceeded the federally
insured limit.



Accounts
receivable and allowance for doubtful accounts



Accounts
receivable are stated at the amount management expects to collect. The Company generally does not require collateral to support
customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts
receivable, historical collection information and existing economic conditions. As of March 31, 2016 and 2015 the allowance for
doubtful accounts was $0 and bad debt expense of $0 and $0, respectively.



Revenue
Recognition



We
recognize revenue in accordance with Accounting Standards Codification, or (“ASC”), 605, Revenue Recognition. We recognize
revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service
has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection
of our fees is reasonably assured.



Thus,
we recognize subscription revenue on a monthly basis, as services are provided. Customers are billed for the subscription on a
monthly basis.



F-4







TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



Fair
Value of Financial Instruments



The
carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair
values due to the short maturities of these items.



As
required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair
value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted
prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly
or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity
to develop its own assumptions.



The
three levels of the fair value hierarchy are described below:



Level
1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or
liabilities;



Level
2: Quoted prices in markets that are not active, or inputs that is observable, either directly or indirectly, for substantially
the full term of the asset or liability;



Level
3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable
(supported by little or no market activity).



The
fair value of the accounts receivable, accounts payable, notes payable are considered short term in nature and therefore their
value is considered fair value.



Financial
assets and liabilities measured at fair value on a recurring basis are summarized below for the period ended March 31, 2016:



|                                 |  | Level 1 |   |  | Level 2 |   |   | Level 3 |  |   | Total   | 
|-------------------------------- |  | ------- | - |  | ------- | - | - | ------- |  | - | ------- | 
|Liabilities                      |  |         |   |  |         |   |   |         |  |   |         | 
|Derivative Financial Instruments |  | $       | — |  |         | $ | — |         |  | $ | 666,885 | 



Financial
assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended December 31, 2015:



|                                 |  | Level 1 |   |  | Level 2 |   |   | Level 3 |  |   | Total   | 
|-------------------------------- |  | ------- | - |  | ------- | - | - | ------- |  | - | ------- | 
|Liabilities                      |  |         |   |  |         |   |   |         |  |   |         | 
|Derivative Financial Instruments |  | $       | — |  |         | $ | — |         |  | $ | 551,646 | 



The
following table presents details of the Company’s level 3 derivative liabilities as of March 31, 2016 and December 31, 2015:



|                                                          |  | Amount |         
|--------------------------------------------------------- |  | ------ | --------
|Balance December 31, 2015                                 |  | $      | 551,646 
|Debt discount originated from derivative liabilities      |  |        | 100,000 
|Initial loss recorded                                     |  |        | 550,708 
|Adjustment to derivative liability due to debt conversion |  |        | (903,531
|Change in fair market value of derivative liabilities     |  |        | 368,062 
|Balance March 31, 2016                                    |  | $      | 666,885 



F-5







TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



Net
income (loss) per Common Share



Basic
net income (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average
number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss
per share except that the denominator is increased to include the number of additional common shares that would have been outstanding
if the potential common shares had been issued and if the additional common shares were dilutive.



Use
of Estimates



The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.



Stock-Based
Compensation



The
Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation –
Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized
in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation
expense and credited to additional paid-in capital over the period during which services are rendered.



The
Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than
Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants
and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value
of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly
to compensation expense and additional paid-in capital over the period during which services are rendered.



Investments
in Securities



Investments
in securities are accounted for using the equity method if the investment provides the Company the ability to exercise significant
influence, but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership
interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s
Board of Directors, are considered in determining whether the equity method is appropriate.



Recent
Accounting Pronouncements



No
new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the
financial statements.



NOTE
4 – RELATED PARTY TRANSACTIONS



As
of March 31, 2016, the Company had advances due to a related party. The loans are due on demand and have no interest. Amounts
outstanding as of March 31, 2016 and December 31, 2015 were approximately $11,750 and $11,750, respectively.



F-6







TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



NOTE
5 – LOANS PAYABLE



As
of March 31, 2016 and December 31, 2015, the Company had short term loans payable of $63,841 and $98,435, respectively. During
the quarter ended March 31, 2016 and 2015, the Company received proceeds of $0 and $28,825 and made payments of $34,594 and $17,890
respectively, from certain short term loans payable with interest rates ranging from 23%-28%.



NOTE
6 - CONVERTIBLE NOTE PAYABLE



Convertible
notes payable consist of the following as of March 31, 2016 and December 31, 2015:



|Total convertible notes payable   |  |   | 560,127  |   |  |   | 501,369  |  
|--------------------------------- |  | - | -------- | - |  | - | -------- | -
|Less discounts                    |  |   | (150,248 | ) |  |   | (177,596 | )
|Convertible notes net of discount |  | $ | 409,879  |   |  | $ | 323,773  |  



On
February 17, 2016, we entered into a convertible promissory note pursuant to which we borrowed $100,000. Interest under the convertible
promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on November 17, 2016. The note
is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion
price of 50% of the lowest day market price of our common stock during the previous 20 days to the date of the notice of conversion
or the date the note was executed. The Company recorded a debt discount in the amount of $100,000 in connection with the initial
valuation of the derivative liability of the Note to be amortized utilizing the effective interest method of accretion over the
term of the Note. Further, the Company recognized a derivative liability of $650,708 and an initial loss of $550,708 based on
the Black Scholes Merton pricing model.



Amortization
of debt discount during the three-month period ended March 31, 2016 and 2015 was $15,693 and $0, respectively, and the unamortized
discount at March 31, 2016 and December 31, 2015 was $84,307 and $0, respectively. Interest expense recorded on the convertible
notes for the three-month period ended March 31, 2016 and 2015 was $1,447 and $0, respectively.



The
Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15
“Derivatives and Hedging; Embedded Derivatives” (“Topic No. 815-15”). Topic No. 815-15 requires the Company
to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible
debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for’ any unrealized
change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes
pricing model.



The
Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible
note and at March 31, 2016:



|Fair value assumptions – derivative notes: |  | March 31, 2016 |           
|------------------------------------------ |  | -------------- | ----------
|Risk free interest rate                    |  |                | 0.59      
|Expected term (years)                      |  |                | 0.01-1.611
|Expected volatility                        |  |                | 310.68    
|Expected dividends                         |  |                | 0         



F-7







TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



NOTE
7 – INVESTMENT IN ASPIRE CONSULTING GROUP, LLC



On
January 5, 2016, the Company entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a Virginia limited liability
company and certain members of Aspire. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire 49% of all
of the issued and outstanding membership units of Aspire in exchange for the issuance of 66,667 shares of the Company’s
newly created Series B Convertible Preferred Stock to the Members valued at $460,002.



The
Company has concluded that it has the ability to exercise significant influence, but not control, over Aspire through its acquired
49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.



The
following table presents details of the Company’s investment is Aspire as of March 31, 2016 and December 31, 2015:



|                                                                 |  | Amount |        
|---------------------------------------------------------------- |  | ------ | -------
|Balance December 31, 2015                                        |  | $      | -      
|Fair value of shares issued for ownership 49% interest in Aspire |  |        | 460,002
|Income from equity method investee                               |  |        | 5,616  
|Distributions received from Aspire                               |  |        | (10,149
|Balance March 31, 2016                                           |  | $      | 455,469



NOTE
8 – COMMITMENTS AND CONTINGENCIES



Office
Lease



On
January 6, 2015 the Company signed an amendment to its lease originally signed on May 9, 2008. The amended lease commenced January
1, 2015 and expires on thirty days’ notice. Rent expense was approximately $5,268 and $6,800 for the three months ended
March 31, 2016 and 2015, respectively.



Current
month to month lease is for $2,000 a month.



Executive
Employment Agreement



The
Company has an employment agreement with the CEO/Chairman to perform duties and responsibilities as may be assigned by the Board
of Directors. The base salary is in the amount of $100,000 per annum plus an annual discretionary bonus plus benefits commencing
on December 17, 2013 and ending May 1, 2017 with an automatic renewal on each anniversary date (May 1) thereafter.



Litigations,
Claims and Assessments



The
Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.



There
is currently a dispute over a $36,363 note secured by 59,400,000 shares of the Company’s common stock held by the Company’s
CEO. In the view of management, there are significant issues of fact regarding the proper issuance and assumption of this note
by the Company. Additionally, there are issues over the validity of the prior debt. Regardless, the Company is in discussions
to settle this note, and while no guarantee can be given as to the successful resolution of this matter, the Company believes
it will be resolved without litigation.



F-8







TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE MONTHS ENDED MARCH 31, 2016



However,
litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business.
The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the
aggregate, a material adverse effect on its business, financial condition or operating results.



NOTE
10 – STOCKHOLDERS’ EQUITY



The
Company is authorized to issue an aggregate of 250,000,000 shares of common stock with a par value of $0.0001. The Company is
also authorized to issue 10,000,000 shares of “blank check” preferred stock with a par value of $0.0001, which includes
4,000,000 shares of Series A Preferred Stock (“Series A”), already outstanding, and 66,667 shares of Series B Convertible
Preferred Stock (“Series B”), already outstanding.



Under
the Certificate of Designation, holders of Series A will participate on an equal basis per-share with holders of our common stock
in any distribution upon winding up, dissolution, or liquidation. Holders of Series A are entitled to vote together with the holders
of our common stock on all matters submitted to shareholders at a rate of three hundred (300) votes for each share held.



On
January 5, 2016, pursuant to Article III of our Articles of Incorporation, the Company’s Board of Directors voted to designate
Series B, consisting of up 66,667 shares, par value $0.0001. Under the Certificate of Designation, holders of Series B participate
on an equal basis per-share with holders of the Company’s common stock and Series A in any distribution upon winding up,
dissolution, or liquidation. Holders of Series B are not entitled to voting rights.



As
of March 31, 2016 and December 31, 2015, 117,682,660 and 109,542,788 shares of common stock, 4,000,000 and 4,000,000 shares of
Series A and 66,667 and 0 Series B, were issued and outstanding, respectively.



During
the quarter ended March 31, 2016, the Company issued 66,667 shares of Series B with a fair value of $460,002 for a 49% interest
in an Aspire Consulting, Inc.



During
the quarter ended March 31, 2016, the Company issued 8,139,872 shares of common stock with a fair value of $45,494 for the partial
conversion of convertible notes payable. The converted portion of the notes also had associated derivative liabilities with fair
values on the date of conversion of $903,531. The conversion of the derivative liabilities has been recorded through additional
paid-in capital.



NOTE
11 – SUBSEQUENT EVENTS



Subsequent
to quarter end, the company issued a total of 2.3 million shares in partial settlement of convertible notes payable.



F-9







Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations



Forward-Looking
Statements



Certain
statements, other than purely historical information, including estimates, projections, statements relating to our business plans,
objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking
statements.” These forward-looking statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are
subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our
ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have
a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes
in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted
accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue
reliance should not be placed on such statements.



Company
Overview



We
are a developing player in the mobile marketing and loyalty industry, providing cutting-edge mobile marketing solutions, rewards
and loyalty to our clients. With a powerful yet intuitive suite of services, clients are able to reach more customers faster and
reward them for repeat business. We help clients reach their marketing and revenue goals by educating clients with the most effective
tools in mobile marketing, rewards, paperless redemption and loyalty.



For
the past 4 years, we have grown to over 200 clients in the United States, Canada and Mexico. We have achieved this with an expanded
focus on a variety of industries, including restaurants, retailers, entertainment venues and other partnership opportunities.
We have decided to focus our energy on the gym, health and fitness club market.



More
recently, we have also entered into the IT consulting business through our acquisition of a minority interest in Aspire Consulting,
LLC. We plan to assist our controlling partner in the development of this consulting business in addition to improving the market
position of our mobile marketing business.



Our
principal executive office is located at 1940 Contra Costa Blvd. Pleasant Hill, CA 94523 and our telephone number is (925-777-2111).



Results
of Operation for Three Months Ended March 31, 2016 and 2014



Revenues



For
the three months ended March 31, 2016, we earned revenues in the amount of $88,410, as compared with revenues of $82,278 for the
three months ended March 31, 2015.



The
decrease is revenues for the three months ended March 31, 2016 is due to a change in our pricing model to become more competitive.
We expect to achieve greater revenues in 2016.



Cost
of Revenues



Cost
of revenues was $17,676 for the three months ended March 31, 2016, as compared with $8,890 for the same period ended March 31,
2015.



Our
cost of revenues increased for the three months ended March 31, 2016 compared with the same period ended March 31, 2015 and was
mainly attributable to $12,786 spent in web hosting costs. We expect to continue paying similar web hosting costs and perhaps
more as traffic to our website increases.



4







Operating
Expenses



Our
operating expenses were $193,475 for the three months ended March 31, 2016, as compared with $97,859 for the three months ended
March 31, 2015.



Our
operating expenses for the three months ended March 31, 2016 mainly consisted of contract labor expense of $38,000, management
compensation of $40,599, professional fees of $24,110, and legal fees of $24,721. Our operating expenses for the three months
ended March 31, 2015 mainly consisted of consulting fees of $22,145, contract labor of $20,620, legal fees of $10,570, rent expenses
of $6,800, meals and entertainment of $6,309 and accounting fees of $5,875



The
major reason for the increase in operating expenses in 2016 over 2015 was a result of increased management compensation, professional
fees and contract labor.



Other
Expenses



We
had other expenses of $1,112,797 for the three months ended March 31, 2016, as compared with $16,001 for the same period ended
March 31, 2015. Other expenses for the three months ended March 31, 2016 consisted of $918,770 due to the loss on change of derivative
liabilities, $127,348 in amortization of debt discount and $66,679 in interest expenses. Other expenses for the three months ended
March 31, 2015 consisted of $9,542 in amortization of debt discount and $6,459 in interest expenses.



The
major reason for the increase in other expenses in 2016 over 2015 was the loss on change in derivative liabilities associated
with convertible promissory notes.



Income
from Investment in equity method investee



On
January 5, 2016 we entered into a Share Exchange Agreement with Aspire Consulting Group, LLC, a Virginia limited liability company
and certain members of Aspire. We agreed to acquire 49% of all the issued and outstanding membership units of Aspire in exchange
for 66,667 shares of our newly created Series B Convertible Preferred Stock to the members valued at $460,002.



We
have concluded that we have the ability to exercise significant influence, but not control over Aspire and have therefore accounted
for the acquisition of the interest under the equity method.



During
the three month period, we received $10,149 in distributions from Aspire. Aspire has a policy to distribute cash to shareholders
after deducting direct cost of sales. The other expenses of Aspire are paid for from the Aspire portion of the distribution. The
excess of the distribution over our portion of net income was used to decrease the cost of our investment in Aspire.



Aspire
had billings in the first quarter of approximately $250,000. We anticipate these billings and payments to increase over the remainder
of the year.



Net
Loss



We
had a net loss of $1,229,923 for the three months ended March 31, 2016, as compared with net loss of $40,472 for the three months
ended March 31, 2015.



Liquidity
and Capital Resources



As
of March 31, 2016, we had total current assets of $41,431. Our total current liabilities as of March 31, 2016 were $1,419,565.
We had a working capital deficit of $1,378,134 as of March 31, 2016.



Cash
Flows from Operating Activities



Operating
activities used $103,357 in cash the three months ended March 31, 2016, compared with $47,059 for the three months ended March
31, 2015. Our net loss of $1,229,923 was the main component of our negative operating cash flow, offset mainly by the loss on
derivative liabilities of $918,770 and amortization of debt discount of $127,348.



5







Cash
Flows from Investing Activities



Investing
activities provided $10,149 in cash the three months ended March 31, 2016, compared with $0 for the three months ended March 31,
2015. Our positive investing cash flow was entirely attributable to cash we received in distributions from Aspire.



Cash
Flows from Financing Activities



Cash
flows provided by financing activities during the three months ended March 31, 2016 amounted to $69,656, compared with $54,935
for the three months ended March 31, 2015. Our cash flows for the three months ended March 31, 2016 consisted mostly of proceeds
from the sale of convertible promissory notes, offset by payments on loans payable.



On
February 17, 2016, we entered into a convertible promissory note pursuant to which we borrowed $100,000. Interest under the convertible
promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on November 17, 2016. The note
is convertible at any date after the issuance date at noteholders option into shares of our common stock at a variable conversion
price of 50% of the lowest day market price of our common stock during the previous 20 days to the date of the notice of conversion
or the date the note was executed.



Our
optimum level of growth for success will be achieved if we are able to raise $250,000 in the next twelve months. However, funds
are difficult to raise in today’s economic environment. If we are unable to raise $250,000 our ability to implement our
business plan and achieve our goals will be significantly diminished.



We
have experienced a history of losses. With our revenues increasing, however, we are less reliant on outside capital as we have
been in the past. We will need at a minimum $120,000 in capital to operate in the next 12 months.



We
are dependent on investment capital to continue our survival. We have raised money through convertible debt, almost always on
unfavorable terms. There is no guarantee that these small convertible loans will be available to us in the future or on terms
acceptable to us.



We
do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There
can be no assurance that such additional financing will be available to us on acceptable terms, or at all.



Going
Concern



As
of March 31, 2016, we have an accumulated deficit of $5,407,017. Our ability to continue as a going concern is contingent upon
the successful completion of additional financing arrangements and our ability to achieve and maintain profitable operations.
While we are expanding our best efforts to achieve the above plans, there is no assurance that any such activity will generate
funds that will be available for operations. These conditions raise substantial doubt about our ability to continue as a going
concern. These financial statements do not include any adjustments that might arise from this uncertainty.



Off
Balance Sheet Arrangements



As
of March 31, 2016, there were no off balance sheet arrangements.



Critical
Accounting Policies



In
December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management
Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
We do not believe that any accounting policies currently fit this definition.



6







Recently
Issued Accounting Pronouncements



Our
critical accounting policies are disclosed in Note 2 of our audited financial statements included in the Form 10-K filed with
the Securities and Exchange Commission.



Item
3. Quantitative and Qualitative Disclosures About Market Risk



A
smaller reporting company is not required to provide the information required by this Item.



Item
4. Controls and Procedures



Disclosure
Controls and Procedures



We
conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2016, to ensure that information required to be disclosed
by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required
to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management,
including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that as of March 31, 2016, our disclosure controls and procedures were not effective at the reasonable
assurance level due to the material weaknesses identified and described below.



Our
principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud.
Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and
our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control
system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of
the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company
have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual
a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.



Remediation
Plan to Address the Material Weaknesses in Internal Control over Financial Reporting



A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or
detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude
that, as of March 31, 2016, our disclosure controls and procedures, and our internal control over financial reporting, were not
effective at the reasonable assurance level:



| | 1. | We
    do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls
    over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2016.
    Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our
    assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented
    a material weakness.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7







| | 2. | We
    do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size
    and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However,
    to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be
    performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment
    of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material
    weakness.                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3. | Effective
    controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct
    and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed
    and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices.
    Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee
    financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect
    across the organization, management has determined that these circumstances constitute a material weakness.



To
address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial
statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows
for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all
material respects, our financial condition, results of operations and cash flows for the periods presented.



To
remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party
firm to assist us in remedying this material weakness once resources become available.



We
intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order
to segregate duties in a manner that establishes effective internal controls once resources become available.



Changes
in Internal Control over Financial Reporting



No
change in our system of internal control over financial reporting occurred during the period covered by this report, the period
ended March 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.



PART
II – OTHER INFORMATION



Item
1. Legal Proceedings



We
are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers,
directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse
to us.



Item
1A: Risk Factors



See
risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed on April 15, 2016, as well
as our Current Report on Form 8-K filed on January 6, 2016.



Item
2. Unregistered Sales of Equity Securities and Use of Proceeds



During
the quarter ended March 31, 2016, the Company issued 66,667 shares of Series B preferred stock with a fair value of $460,002 for
a 49% interest in an Aspire Consulting, Inc.



8







During
the quarter ended March 31, 2016, the Company issued 8,139,872 shares of common stock with a fair value of $45,494 for the partial
conversion of convertible notes payable.



Subsequent
to quarter end, we issued a total of 2,300,000 shares in partial settlement of convertible notes payable.



These
securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented
their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given
adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising.
We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted
stock.



Item
3. Defaults upon Senior Securities



None



Item
4. Mine Safety Disclosures



N/A



Item
5. Other Information



None



Item
6. Exhibits



|Exhibit
    Number |  | Description
                                         of Exhibit                                                                                                                      
|------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |  |                                                                                                                                                                                      
|31.1               |  | Certification
    of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                            
|31.2               |  | Certification
    of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002                            
|32.1               |  | Certification
    of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002



9







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



|Textmunication
    Holdings, Inc. |                                                     
|--------------------------------- | ----------------------------------------------------
|                                  |                                                     
|Date:                             | June
    16, 2016                                   
|                                  |                                                     
|By:                               | /s/
    Wais Asefi                                  
|                                  | Wais
    Asefi                                      
|Title:                            | President,
    Chief Executive Officer, and Director



10