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 June 30, 2017
|                                             |                                                                                            
|[  ]                                         | 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 of
                                                                             incorporation 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, smaller reporting
company, or an emerging growth company.



|[  ]
    Large accelerated filer | [  ]
    Accelerated filer       
|-------------------------------- | ---------------------------------
|[  ]
    Non-accelerated filer   | [X]
    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. [  ]



State
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,570,839,890
common shares as of August 15, 2017
































|TABLE
    OF CONTENTS             
|----------------------------------
|                                  
|                                  
|                                  
|PART
    I – FINANCIAL INFORMATION
|                                  
|Item 1:                           
|Item 2:                           
|Item 3:                           
|Item 4:                           
|                                  
|PART
    II – OTHER INFORMATION   
|                                  
|Item 1:                           
|Item 1A:                          
|Item 2:                           
|Item 3:                           
|Item 4:                           
|Item 5:                           
|Item 6:                           









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 June 30, 2017 (unaudited) and December 31, 2016;                      
|--- | ------------------------------------------------------------------------------------------------------------
|F-2 | Consolidated
    Statements of Operations for the three months ended June 30, 2017 and 2016 (unaudited);    
|F-3 | Consolidated
    Statements of Cash Flows for the three months ended June 30, 2017 and 2016 (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 June 30, 2017
are not necessarily indicative of the results that can be expected for the full year.





3











TEXTMUNICATION
HOLDINGS, INC.

CONSOLIDATED
BALANCE SHEETS

(UNAUDITED)



|                                                                                                                                                                                             |  | June
    30, 2017 |             |   | December
    31, 2016 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | --------------------- | -
|ASSETS                                                                                                                                                                                       |  |                   |             |   |                       |  
|Current
    assets                                                                                                                                                                           |  |                   |             |   |                       |  
|Cash
    and cash equivalents                                                                                                                                                                |  | $                 | 53,364      |   |                       | $
|Receivables                                                                                                                                                                                  |  |                   | 25,892      |   |                       |  
|Total
    current assets                                                                                                                                                                     |  |                   | 79,256      |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Fixed
    assets, net                                                                                                                                                                        |  |                   | -           |   |                       |  
|Software                                                                                                                                                                                     |  |                   | 12,349      |   |                       |  
|Investment
    in equity method investee                                                                                                                                                     |  |                   | 452,336     |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Total
    assets                                                                                                                                                                             |  |                   | 543,941     |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|LIABILITIES
    AND STOCKHOLDERS’ DEFICIT                                                                                                                                                    |  |                   |             |   |                       |  
|Current
    liabilities                                                                                                                                                                      |  |                   |             |   |                       |  
|Accounts
    payable and accrued liabilities                                                                                                                                                 |  | $                 | 132,072     |   |                       | $
|Due
    to related parties                                                                                                                                                                   |  |                   | 11,750      |   |                       |  
|Loans
    payable                                                                                                                                                                            |  |                   | 11,500      |   |                       |  
|Convertible
    notes payable, net of discount                                                                                                                                               |  |                   | 465,308     |   |                       |  
|Derivitive
    liability                                                                                                                                                                     |  |                   | 444,943     |   |                       |  
|Total
    current liabilities                                                                                                                                                                |  |                   | 1,065,573   |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Total
    liabilities                                                                                                                                                                        |  |                   | 1,065,573   |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Stockholders’
    deficit                                                                                                                                                                    |  |                   |             |   |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Preferred
    stock, 5,933,333 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           |   |                       |  
|Series
    C - Preferred stock, 2,000,000 shares authorized, $0.0001 par value, 2,000,000 issued and outstanding                                                                             |  |                   | 200         |   |                       |  
|Common
    stock; $0.0001 par value; 250,000,000 shares authorized; 1,227,993,542 and 199,404,940 shares issued and outstanding as of
    June 30, 2017 and December 31, 2016, respectively. |  |                   | 122,800     |   |                       |  
|Additional
    paid-in capital                                                                                                                                                               |  |                   | 13,561,103  |   |                       |  
|Accumulated
    deficit                                                                                                                                                                      |  |                   | (14,206,142 | ) |                       |  
|Total
    stockholders’ deficit                                                                                                                                                              |  |                   | (521,632    | ) |                       |  
|                                                                                                                                                                                             |  |                   |             |   |                       |  
|Total
    liabilities and stockholders’ deficit                                                                                                                                              |  | $                 | 543,941     |   |                       | $



F-1







TEXTMUNICATION
HOLDINGS, INC.

CONSOLIDATED
STATEMENTS OF OPERATIONS

(UNAUDITED)



|                                                            |  | The
    Three Months Ended |               |   | The
    Six Months Ended |  
|----------------------------------------------------------- |  | -------------------------- | ------------- | - | ------------------------ | -
|                                                            |  | June
    30, 2017          |               |   | June
    30, 2016        |  
|                                                            |  |                            |               |   |                          |  
|Revenues                                                    |  | $                          | 307,788       |   |                          | $
|                                                            |  |                            |               |   |                          |  
|Cost of revenues                                            |  |                            | 84,047        |   |                          |  
|                                                            |  |                            |               |   |                          |  
|Gross profit                                                |  |                            | 223,741       |   |                          |  
|                                                            |  |                            |               |   |                          |  
|Operating expenses                                          |  |                            |               |   |                          |  
|Professional fees                                           |  |                            | -             |   |                          |  
|Officer Compensation                                        |  |                            | 227,016       |   |                          |  
|General
    and administrative expenses                     |  |                            | 83,081        |   |                          |  
|Total
    operating expenses                                |  |                            | 310,097       |   |                          |  
|                                                            |  |                            |               |   |                          |  
|Loss from operations                                        |  |                            | (86,356       | ) |                          |  
|                                                            |  |                            |               |   |                          |  
|Other expense                                               |  |                            |               |   |                          |  
|Interest expense                                            |  |                            | (7,064        | ) |                          |  
|Loss on change of
    derivitive liability                  |  |                            | 4,032,108     |   |                          |  
|Amortization of
    debt discount                           |  |                            | (26,703       | ) |                          |  
|Loss
    on settlement of notes payable                     |  |                            | 87,375        |   |                          |  
|Total
    other expense                                     |  |                            | 4,085,716     |   |                          |  
|                                                            |  |                            |               |   |                          |  
|Income (loss) from
    investment in equity method investee |  |                            | -             |   |                          |  
|                                                            |  |                            |               |   |                          |  
|Net income (loss)                                           |  | $                          | 3,999,360     |   |                          | $
|                                                            |  |                            |               |   |                          |  
|Basic weighted average common shares outstanding            |  |                            | 1,227,993,542 |   |                          |  
|Net loss per
    common share: basic and diluted            |  | $                          | 0.00          |   |                          | $



F-2







TEXTMUNICATION
HOLDINGS, INC.

CONSOLIDATED
STATEMENTS OF CASH FLOW

(UNAUDITED)



|                                                                                    |  | Six
    Months Ended |           
|----------------------------------------------------------------------------------- |  | -------------------- | ----------
|                                                                                    |  | June
    30, 2017    |           
|Cash Flows from Operating Activities                                                |  |                      |           
|Net
    loss                                                                        |  |                      | (6,766,995
|Adjustments to reconcile net loss to
    net cash provided by operating activities: |  |                      |           
|Amortization of
    debt discount                                                   |  |                      | 96,926    
|Loss on derivative
    liability                                                    |  |                      | 627,952   
|Non cash interest
    expense                                                       |  |                      | 50,000    
|Depreciation                                                                        |  |                      | 304       
|Share based compensation                                                            |  |                      | 6,115,100 
|Gain on the settlement
    of debt                                                  |  |                      | (87,375   
|Income from equity
    method investee                                              |  |                      | 1,726     
|Changes in assets and liabilities                                                   |  |                      |           
|Receivables                                                                         |  |                      | (22,135   
|Accounts
    payable and accrued expenses                                           |  |                      | (64,659   
|Net cash used in
    operating activities                                           |  |                      | (49,156   
|                                                                                    |  |                      |           
|Distributions
    from equity method investee                                       |  |                      | (12,349   
|Net cash provided
    by investing activities                                       |  |                      | (12,349   
|                                                                                    |  |                      |           
|Cash Flows from Financing Activities                                                |  |                      |           
|Proceeds on loans
    payable                                                       |  |                      | 11,500    
|Payments on loans
    payable                                                       |  |                      | (3,712    
|Proceeds from convertible
    notes payable                                         |  |                      | 129,489   
|Payments
    on convertible notes payable                                           |  |                      | (22,408   
|Net cash provided
    by financing activities                                       |  |                      | 114,869   
|                                                                                    |  |                      |           
|Net increase in cash                                                                |  |                      | 53,364    
|                                                                                    |  |                      |           
|Cash, beginning of period                                                           |  |                      | -         
|                                                                                    |  |                      |           
|Cash, end of period                                                                 |  | $                    | 53,364    
|                                                                                    |  |                      |           
|Supplemental disclosure of cash flow
    information                                |  |                      |           
|Cash
    paid for interest                                                          |  | $                    | -         
|Cash
    paid for tax                                                               |  | $                    | -         
|                                                                                    |  |                      |           
|Non-Cash investing and financing transactions                                       |  |                      |           
|Preferred
    shares issued for equity method investee                              |  | $                    | -         
|Conversion
    of convertible notes payable                                         |  | $                    | -         
|Settlement
    of derivative liability                                              |  | $                    | -         





F-3















TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017







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. 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, 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 June 30, 2017, the Company has an accumulated deficit of $14,206,142. 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 June 30, 2017, 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 June 30, 2017 and 2016 the allowance for
doubtful accounts was $0 and $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, quarterly, semi-annual or annual basis, at the customer’s option.



F-4









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017





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 six months ended June 30, 2017:



|                                     |  | Level
    1 |   |  | Level
    2 |   |   | Level
    3 |  |   | Total   | 
|------------------------------------ |  | ----------- | - |  | ----------- | - | - | ----------- |  | - | ------- | 
|Liabilities                          |  |             |   |  |             |   |   |             |  |   |         | 
|Derivative Financial
    Instruments |  | $           | — |  |             | $ | — |             |  | $ | 444,943 | 



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



|                                     |  | Level
    1 |   |  | Level
    2 |   |   | Level
    3 |  |   | Total   | 
|------------------------------------ |  | ----------- | - |  | ----------- | - | - | ----------- |  | - | ------- | 
|Liabilities                          |  |             |   |  |             |   |   |             |  |   |         | 
|Derivative Financial
    Instruments |  | $           | — |  |             | $ | — |             |  | $ | 870,921 | 



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.



F-5









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017





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 June 30, 2017, the Company had advances due to a related party. The loans are due on demand and have no interest. Amounts outstanding
as of June 30, 2017 and December 31, 2016 were approximately $11,750 and $11,750, respectively



NOTE
5 – LOANS PAYABLE



As
of June 30, 2017 and December 31, 2016, the Company has short term loans payable of $11,500 and $3,712, respectively. During the
six months ended June 30, 2017 and 2016, the Company received proceeds of $11,500 and $0 and made payments of $3,712 and $34,594,
respectively, from certain short-term loans payable with interest rates ranging from 23%-28%.



F-6











TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017



NOTE
6 - CONVERTIBLE NOTE PAYABLE



Convertible
notes payable consist of the following as of June 30, 2017 and December 31, 2016:



|                                      |  | 2017 |         |   | 2016 |  
|------------------------------------- |  | ---- | ------- | - | ---- | -
|Total convertible notes
    payable   |  |      | 469,977 |   |      |  
|Less discounts                        |  |      | (4,669  | ) |      |  
|Convertible notes
    net of discount |  | $    | 465,308 |   |      | $



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
following table presents details of the Company’s derivative liabilities associated with its convertible notes as of June
30, 2017 and December 31, 2016:



|                                                              |  | Amount |           
|------------------------------------------------------------- |  | ------ | ----------
|Balance December 31, 2016                                     |  | $      | 870,921   
|Debt discount originated from derivative
    liabilities      |  |        | 14,489    
|Initial loss recorded                                         |  |        | 11,658    
|Adjustment to derivative liability due
    to debt conversion |  |        | (1,053,930
|Change in fair
    market value of derivative liabilities     |  |        | 601,805   
|Balance March 31, 2017                                        |  | $      | 444,943   



During
the three months ended June 30, 2017, the Company issued 547,756,269 shares of common stock with a fair value of $270,928 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 $1,053,930. The conversion of the derivative liabilities has been recorded through
additional paid-in capital.



The
Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible
note and at June 30, 2017:



|Fair
    value assumptions – derivative notes: |  | June
    30, 2017 |           
|---------------------------------------------- |  | ----------------- | ----------
|Risk free interest rate                        |  |                   | 0.40-0.80 
|Expected term (years)                          |  |                   | 0.01-0.159
|Expected volatility                            |  |                   | 289-337   
|Expected dividends                             |  |                   | 0         



F-7









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017



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 an Aspire through its acquired
49% equity interest and therefore has accounted for the acquisition of the interest under the equity method.



The
following table presents details of the Company’s investment is Aspire as of June 30, 2017 and December 31, 2016:



|                                                                     |  | Amount |        
|-------------------------------------------------------------------- |  | ------ | -------
|Balance December 31,
    2016                                        |  | $      | 454,062
|Fair value of shares issued for ownership
    49% interest in Aspire |  |        | -      
|Income (loss) from equity method
    investee                        |  |        | (1,726 
|Distributions
    received from Aspire                               |  |        | -      
|Balance June
    30, 2017                                            |  | $      | 452,336



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 $10,535 for the six months ended June
30, 2016 and 2015, respectively.



Executive
Employment Agreement



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



Litigations,
Claims and Assessments



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



Included
in this litigation is a dispute over a $36,363 note secured by 59,400,000 shares of the Company’s common stock. 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.



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.



F-8









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017





On
July 7, 2016, the Company entered into an agreement to settle the note and accrued interest for 2,000,000 shares of common stock
valued at $146,000. (See Note 6).



NOTE
9 – STOCKHOLDERS’ EQUITY



The
Company is authorized to issue an aggregate of 4,000,000,000 shares of common stock with a par value of $0.0001. The Company is
also authorized to issue 10,000,000 shares of “blank check” preferred stock with a par value of $0.0001, which includes
4,000,000 shares of preferred stock.



On
May 9, 2017, pursuant to Article III of the Company’s Articles of Incorporation, the Board of Directors voted to designate
a class of preferred stock entitled Series C Convertible Preferred Stock, consisting of up 2,000,000 shares, par value $0.0001.
Under the Certificate of Designation, holders of Series C Convertible Preferred Stock will participate on an equal basis per-share
with holders of common stock, Series A Preferred Stock and Series B Preferred Stock in any distribution upon winding up, dissolution,
or liquidation. Holders of Series C Convertible Preferred Stock are entitled to vote together with the holders of our common stock
on all matters submitted to shareholders at a rate of 875 votes for each share held. Holders of Series C Convertible Preferred
Stock are entitled to convert each share held for 875 shares of common stock.



As
of June 30, 2017, and December 31, 2015, 1,227,993,542 and 199,404,940 shares of common stock, 0 and 0 shares of Series A preferred
stock and 66,667 and 0 Series B preferred stock and 66,667 and 2,000,000 and 0 Series C preferred stock, were issued and outstanding,
respectively.



During
the six months ended June 30, 2017, the Company issued 547,756,269 shares of common stock with a fair value of $270,928 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 $1,053,930. The conversion of the derivative liabilities has been recorded through
additional paid-in capital.



On
February 16, 2017, the Company issued a total of 2,000,000,000 shares of our common stock to our officer and director, Wais Asefi,
as compensation for services rendered. During the six months ended June 30, 2017, the officer exchanged the common shares for
2,000,000 shares of newly designated Series C Preferred stock.



During
the six months ended June 30, 2017, the Company issued 77,500,000 shares of common stock for services valued at $115,100.



NOTE
10 – SUBSEQUENT EVENTS



Effective
July 3, 2017, the Company and Auctus Fund, LLC (“Auctus”) entered into a Settlement Agreement and Mutual General Release
(the “Settlement Agreement”). Pursuant to the Settlement Agreement, the parties agreed as follows:



| | ● | The
    Company agreed to issue 550,000,000 shares of our common stock to Auctus in settlement of a Securities Purchase Agreement
    with Auctus dated July 22, 2016;                                                         
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                
| | ● | The
    shares are subject to a Leak-Out Agreement, which provides that Auctus may publicly sell daily the greater of 4,910,714 shares
    or 20% of the average daily trading volume over the prior 10-day trading period; and
| |   |                                                                                                                                                                                                                                
| | ● | Upon
    receipt of the Shares and an irrevocable letter of instruction to our transfer agent, which was executed on July 3, 2017,
    the parties agreed to release each other from all claims.                               



F-9









TEXTMUNICATION
HOLDINGS, INC.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2017





Effective
August 4, 2017, our company and Carebourn Capital, L.P. (“Carebourn”) entered into a Debt Settlement Agreement. Pursuant
to the Settlement Agreement, the parties agreed as follows:



| | ● | We
    agreed to issue 70,000,000 shares of our common stock to Carebourn in settlement of the balance remaining on a convertible
    promissory note dated November 5, 2015, which was amended on July 12, 2016;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | $30,500
    of the note was sold to a third party, and we owed $15,250 to Carebourn, which amount is settled by the issuance of shares;
    and                                                                  
| | ● | Upon
    receipt of the shares, the parties agreed to release each other from all claims.                                                                                                                        



F-10









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” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. 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. We intend such
forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions.
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.
We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information,
future events or otherwise. Further information concerning our business, including additional factors that could materially affect
our financial results, is included herein and in our other filings with the SEC.



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.



In
the past 4 years, we have grown to over 300 clients and more than 800 different locations 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 and Six Months Ended June 30, 2017 and 2016



Revenues



For
the three months ended June 30, 2017, we earned revenues in the amount of $307,788, as compared with revenues of $103,449 for
the three months ended June 30, 2016. For the six months ended June 30, 2017, we earned revenues in the amount of $536,548, as
compared with revenues of $191,859 for the three months ended June 30, 2016.



The
increase in revenues for the three and six months ended June 30, 2017 over the prior year period is due to more customer accounts
achieved from a change in our pricing model to become more competitive. We expect to achieve greater revenues for the rest of
2017.



4









Cost
of Revenues



Cost
of revenues was $84,047 for the three months ended June 30, 2017, as compared with $32,843 for the same period ended June 30,
2016. Cost of revenues was $157,466 for the six months ended June 30, 2017, as compared with $50,519 for the same period ended
June 30, 2016.



Gross
Profit



Our
gross profit was $223,741 for the three months ended June 30, 2017 or approximately 73% of revenues, as compared with $70,606
for the same period ended June 30, 2016, or approximately 68% of revenues. Our gross profit was $379,082 for the six months ended
June 30, 2017 or approximately 71% of revenues, as compared with $141,340 for the same period ended June 30, 2016, or approximately
74% of revenues.



We
had spent more on web hosting costs and that is the main reason for the decrease in margin in the six months ended June 30, 2017
compared with the same period ended 2016. However, we experienced an increased margin in the three months ended June 30, 2017
over the same period ended 2016 and we expect that our increased revenues will result in a similar or greater margin in future
quarters.



Operating
Expenses



Our
operating expenses were $310,097 for the three months ended June 30, 2017, as compared with $184,301 for the three months ended
June 30, 2016. Our operating expenses were $6,473,348 for the six months ended June 30, 2017, as compared with $377,777 for the
six months ended June 30, 2016.



Our
operating expenses for the six months ended June 30, 2017 mainly consisted of a share issuance to our officer and director of
2 billion shares valued at $6,000,000. We expect that our operating expenses for the rest of 2017 will decrease, provided that
we do not have to issue stock for services, which was the main reason for our increased expenses for the half year. Given our
lack of operating capital, we have been forced to issue shares for services rendered to the company. We hope that increase revenues
will lessen that trend for 2017 and beyond.



Other
Income/Expenses



We
had other income of $4,085,716 for the three months ended June 30, 2017 compared with other expenses of $198,388 for the same
period ended June 30, 2016. We had other expenses of $671,004 for the six months ended June 30, 2017 compared with other expenses
of $377,777 for the same period ended June 30, 2016.



Other
income for the three months ended June 30, 2017 consisted mainly of $4,032,108 change in the fair value of derivative liabilities
based on Black Scholes.



Net
Income/Loss



We
had net income of $3,999,360 for the three months ended June 30, 2017, as compared with a net loss of $305,420 for the three months
ended June 30, 2016. We had a net loss of $6,766,996 for the six months ended June 30, 2017, as compared with net loss of $1,535,343
for the three months ended June 30, 2016.



Liquidity
and Capital Resources



As
of June 30, 2017, we had total current assets of $79,256, consisting of cash and receivables. Our total current liabilities as
of June 30, 2017 were $1,065,573. We had a working capital deficit of $98,317 as of June 30, 2017.



Cash
Flows from Operating Activities



Operating
activities used $12,349 in cash for the six months ended June 30, 2017, compared with cash provided of $23,335 for the six months
ended June 30, 2016. Our negative operating cash flow for the six months ended June 30, 2017 was largely the result of our net
loss for the period of $6,766,995, offset by share based compensation of $6,115,100 and loss on derivative liabilities of $627,952.



5







Cash
Flows from Financing Activities



Cash
flows provided by financing activities during the six months ended June 30, 2017 amounted to $114,869, compared with cash flows
provided by financing activities of $215,164 for the six months ended June 30, 2016. Our positive cash flows for the six months
ended June 30, 2017 consisted of proceeds from convertible notes and loans payable, offset by payments on such.



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 June 30, 2017, we have an accumulated deficit of $14,206,142. 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 June 30, 2017, 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.
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.



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.



Item
3. Quantitative and Qualitative Disclosures About Market Risk



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



6









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 June 30, 2017, 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 June 30, 2017, 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 June 30, 2017, 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 June 30, 2017.
    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.                                                                                                                                                                                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 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.



7







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 June 30, 2017, 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



Below
is a list of our legal proceedings and the settlements we recently entered into.



JSJ
Investments, Inc. vs. Textmunication Holdings, Inc.

95th
District Court of Dallas County, Texas

Filed
on 2/7/2017

Case
DC-17-01404



Auctus
Fund vs. Textmunication Holdings, Inc.

United
States District Court – District of Massachusetts

Filed
on 3/24/2017

Case
1:17-cv-10504



Textmunication
Holdings, Inc. vs. Carebourn Capital. L.P.

United
States District Court – District of Nevada

Filed
on 4/5/2017

Case
2:17-cv-00968-JAD-VCF



Textmunication
Holdings, Inc. vs. Lester Einhaus

Eighth
Judicial District Court of Clark County, Nevada

Filed
on 4/10/2017

A-17-753743-C



On
May 24, 2017, our company and JSJ Investments Inc. (“JSJ”) entered into a Final Settlement Agreement. Pursuant to
the Settlement Agreement, the parties agreed as follows:



| | ● | We
    agreed to execute an amendment to the 12% convertible promissory note in favor of JSJ, which will allow JSJ to convert the
    note’s outstanding balance and accrued interest of $53,280.57 into a fixed 262,500,000 shares of our common stock under
    conversion notices;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Upon
    receipt of the 262,500,000 shares, the parties will release each other from all claims; and                                                                                                                                                                                 
| | ● | As
    security for the issuance, we agreed to execute a judgment in favor of JSJ, but it will not be entered if we comply with the
    terms of settlement.                                                                                                                         



8







Effective
July 3, 2017, our company and Auctus Fund, LLC (“Auctus”) entered into a Settlement Agreement and Mutual General Release.
Pursuant to the Settlement Agreement, the parties agreed as follows:



| | ● | We
    agreed to issue 550,000,000 shares of our common stock to Auctus in settlement of a Securities Purchase Agreement with Auctus
    dated July 22, 2016;                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | The
    shares are subject to a Leak-Out Agreement, which provides that Auctus may publicly sell daily the greater of 4,910,714 shares
    or 20% of the average daily trading volume over the prior 10-day trading period; and
| | ● | Upon
    receipt of the shares and an irrevocable letter of instruction to our transfer agent, which was executed on July 3, 2017,
    the parties agreed to release each other from all claims.                               



Effective
August 4, 2017, our company and Carebourn Capital, L.P. (“Carebourn”) entered into a Debt Settlement Agreement. Pursuant
to the Settlement Agreement, the parties agreed as follows:



| | ● | We
    agreed to issue 70,000,000 shares of our common stock to Carebourn in settlement of the balance remaining on a convertible
    promissory note dated November 5, 2015, which was amended on July 12, 2016;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | $30,500
    of the note was sold to a third party, and we owed $15,250 to Carebourn, which amount is settled by the issuance of shares;
    and                                                                  
| | ● | Upon
    receipt of the shares, the parties agreed to release each other from all claims.                                                                                                                        



Item
1A: Risk Factors



For
our mobile marketing business, see risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2014
filed on April 15, 2015.



For
our interest in Aspire Consulting Group, LLC, see risk factors included in our Current Report on Form 8-K filed on January 1,
2016.



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



The
information set forth below relates to our issuances of securities without registration under the Securities Act of 1933.



During
the six months ended June 30, 2017, we issued 77,500,000 shares of common stock for services valued at $115,100.



During
the six months ended June 30, 2017, we issued 547,756,269 shares of common stock with a fair value of $270,928 for the partial
conversion of convertible notes payable.



On
February 16, 2017, we issued a total of 2,000,000,000 shares of our common stock to our officer and director, Wais Asefi, as compensation
for services rendered. During the six months ended June 30, 2017, the officer exchanged the common shares for 2,000,000 shares
of our newly designated Series C Preferred stock.



On
May 24, 2017, we agreed to execute an amendment to the 12% convertible promissory note in favor of JSJ, which will allow JSJ to
convert the note’s outstanding balance and accrued interest of $53,280.57 into a fixed 262,500,000 shares of our common
stock under conversion notices.



On
July 3, 2017, we agreed to issue 550,000,000 shares of our common stock to Auctus in settlement of a Securities Purchase Agreement
with Auctus dated July 22, 2016;



On
August 4, 2017, we agreed to issue 70,000,000 shares of our common stock to Carebourn in settlement of the balance remaining on
a convertible promissory note dated November 5, 2015, which was amended on July 12, 2016.



9







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



10







Item
6. Exhibits



|Exhibit
    Number |  | Description
    of Exhibit                                                                                                                                                           
|------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |  |                                                                                                                                                                                      
|3.1                |  | Certificate
    of Designation, dated May 15, 2017                                                                                                                                   
|10.1               |  | Debt
    Settlement Agreement, dated August 4, 2017                                                                                                                                  
|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
|101**              |  | The
    following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 formatted in
    Extensible Business Reporting Language (XBRL).     
|                   |  | **Provided
        herewith                                                                                                                                                          



11







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:  | August
    15, 2017                                  | 
|       |                                                      | 
|By:    | /s/
    Wais Asefi                                   | 
|       | Wais
    Asefi                                       | 
|Title: | President,
    Chief Executive Officer, and Director | 



12