10-Q

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

FOR THE SIX MONTH PERIOD ENDED: JUNE 30, 2018

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

For the transition period from  ______________ to ______________

Commission File Number: 333-148987

CUENTAS, INC.

(formerly NEXT GROUP HOLDINGS, INC)

(Exact name of Registrant as specified in its charter)

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

19 W. FLAGER ST, SUITE 507, MIAMI, FL 33130

(Address of principal executive offices)

800-611-3622

(Registrant’s telephone number)

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

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

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

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of November 21, 2018, the issuer had 1,305,088 shares of its common stock issued and outstanding.

Part I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CUENTAS, INC.

(formerly NEXT GROUP HOLDINGS, INC)

Table of Contents

	Pages
Unaudited Condensed Consolidated Balance Sheets	2
Unaudited Condensed Consolidated Statements of Operations	3
Unaudited Condensed Consolidated Statements of Cash Flows	4
Notes to Unaudited Condensed Consolidated Financial Statements	5 - 21

1

CUENTAS, INC.

(FORMERLY NEXT GROUP HOLDINGS, INC.)

UNADUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2018			December 31, 2017
ASSETS
Current Assets
Cash	$	12,770		$	92,714
Accounts receivable, net		4,382,269			7,623,197
Accounts receivable, related party		610,006			8,545
Prepaid expenses and other current assets		90,755			74,365
Related party receivable		36,000			36,000
Other receivable		641			100,000
Total current assets		5,132,441			7,934,821
Equipment, net of accumulated depreciation		15,734			5,608
Intangible assets, net of accumulated amortization		2,721,472			2,935,757
License fee, net of accumulated amortization		-			34,722
Investments		180,000			250,000
Goodwill		1,333,713			1,333,713
Total assets	$	9,383,360		$	12,494,621
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	4,524,873		$	7,030,050
Accounts payable, related party		1,341,427			499,668
Dividends payable		30,000			30,000
Deferred revenue		612,174			685,905
Loan payable		75,000			75,000
Convertible notes payable, net of discounts and debt issue costs		-			48,897
Derivative liability		119,269			574,130
Related party payables		3,072,482			3,032,567
Notes payable, current		72,015			71,048
Stock based liabilities		1,261,730			2,963,272
Total current liabilities		11,108,970			15,010,537
Related party payables, net of discounts		2,607,670			2,535,601
Other long term liabilities		-			120,000
Total liabilities		13,716,640			17,666,138
Commitments and contingencies		-			-
Stockholders’ Deficit
Common stock subscribed		-			400,000
Preferred stock, $0.001 par value, authorized 60,000,000 shares; Series A preferred stock; $0.001 par value, designated 50,000,000;  0 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively		-			-
Series B preferred stock, $0.001 par value, designated 10,000,000; 10,000,000 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively		10,000			10,000
Common stock, authorized 360,000,000 shares, $0.001 par value; 1,191,972 and 1,140,398 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively		1,192			1,140
Additional paid in capital		10,254,782			9,554,844
Accumulated deficit		(13,953,044	)		(14,207,568	)
Accumulated other comprehensive income		-			(300,000	)
Total Cuentas, Inc. stockholders’ deficit		(3,687,070	)		(4,541,584	)
Non-controlling interest in subsidiaries		(646,210	)		(629,933	)
Total stockholders’ deficit		(4,333,280	)		(5,171,517	)
Total liabilities and stockholders’ deficit	$	9,383,360		$	12,494,621

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

2

CUENTAS, INC.

(FORMERLY NEXT GROUP HOLDINGS, INC.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
										(Restated)
Revenue	$	11,967,987		$	500,426		$	29,718,263		$	997,224
Revenue, sales to related parties		8,941,435			73,638			11,189,379			77,431
Total revenue		20,909,422			574,064			40,907,642			1,074,655
Cost of revenue		12,293,982			450,175			28,479,619			785,432
Cost of revenue, purchases from related parties		8,361,849			-			11,434,687			-
Gross profit (loss)		253,591			123,889			993,336			289,223
Operating expenses
Officer compensation		193,525			147,777			328,717			363,943
Professional fees		214,340			641,603			514,698			1,132,887
General and administrative		419,997			132,688			855,003			229,580
Total operating expenses		827,862			922,068			1,698,418			1,726,410
Loss from operations		(574,271	)		(798,179	)		(705,082	)		(1,437,187	)
Other income (expense)
Other income		-			178,712			-			179,580
Other expense		(69,912	)		-			(94,862	)		-
Interest expense		(346,325	)		(238,477	)		(748,907	)		(597,719	)
Gain (loss) on derivative liability		14,729			(1,579,105	)		427,935			(1,993,142	)
Gain on extinguishment of debt		-			-			98,611			-
Gain (loss) on fair value of stock based liabilities		(3,069	)		-			1,559,413			-
Total other income (expense)		(404,577	)		(1,638,870	)		1,242,190			(2,411,281	)
Loss from discontinued operations		-			-			-			(327,800	)
Income (loss) before income taxes		(978,848	)		(2,437,049	)		537,108			(4,176,268	)
Income taxes		-			-			-			-
Net income (loss)		(978,848	)		(2,437,049	)		537,108			(4,176,268	)
Net (income) loss attributable to non-controlling interest		9,619			(144	)		17,416			9,630
Net income (loss) attributable to Cuentas, Inc.	$	(969,229	)	$	(2,437,193	)	$	554,524		$	(4,166,638	)
Net income (loss) per basic share	$	(0.81	)	$	(2.62	)	$	0.47		$	(4.71	)
Net income (loss) per diluted share	$	(0.81	)	$	(2.62	)	$	0.43		$	(4.71	)
Weighted average number of basic common shares outstanding		1,191,972			930,122			1,183,555			884,706
Weighted average number of diluted common shares outstanding		1,191,972			930,122			1,287,382			884,706

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

3

CUENTAS, INC.

(FORMERLY NEXT GROUP HOLDINGS, INC.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Six Months Ended June 30,
	2018			2017
				(Restated)
Cash Flows from Operating Activities:
Net income (loss)	$	537,108		$	(4,176,268	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Shares issued for services		-			720,200
Stock based compensation		44,333			154,943
Imputed interest		119,517			119,518
Gain on extinguishment of debt		(98,611	)		-
Loss on fair value of investments		70,000			-
Debt discount amortization		72,069			328,537
Gain on derivative fair value adjustment		(427,935	)		1,993,142
License fee amortization		34,722			41,667
Amortization of debt issue costs		-			13,004
Loss on disposal of business		-			327,800
Gain on fair value of stock based liabilities		(1,559,413	)		-
Allowance for doubtful accounts		-			25,000
Depreciation expense		1,373			-
Amortization of intangible assets		214,285			-
Changes in Operating Assets and Liabilities:
Accounts receivable		3,240,928			1,363
Accounts receivable, related party		(601,461	)		(49,720	)
Prepaid expenses		(16,390	)		44,758
Other receivable		99,359			-
Accounts payable		(2,595,239	)		317,301
Accounts payable, related party		841,759			-
Deferred revenue		(73,731	)		21,874
Net Cash Used by Operating Activities		(97,327	)		(116,881	)
Cash Flows from Investing  Activities:
Purchase of equipment		(11,499	)		-
Net Cash Used by Investing Activities		(11,499	)		-
Cash Flows from Financing Activities:
Bank overdraft		-			(7	)
Proceeds from loans payable		967			25,000
Repayments of convertible notes		(12,000	)		-
Proceeds from related party loans		40,199			-
Repayments of related party loans		(284	)		(100,542	)
Net Cash Provided by (Used in) Financing Activities		28,882			(75,549	)
Net Increase (Decrease) in Cash		(79,944	)		(192,430	)
Cash at Beginning of Period		92,714			256,302
Cash at End of Period	$	12,770		$	63,872
Supplemental disclosure of cash flow information
Cash paid for interest	$	586,145		$	-
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities
Common stock issued as related party loan and accrued interest repayment	$	-		$	294,923
Common stock issued for conversion of convertible note principal	$	26,640		$	167,069
Common stock issued for conversion of convertible accrued interest	$	-		$	11,580
Common stock issued for settlement of stock based liabilities	$	154,973		$	-
Common stock issued for settlement of common stock subscribed	$	400,000		$	-

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

4

CUENTAS, INC.

(Formerly NEXT GROUP HOLDINGS, INC)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Cuentas, Inc. (the “Company”) invests in financial technology and currently derives its revenues from the sales of prepaid and wholesale calling minutes. Additionally, the Company has an agreement with Incomm, a leading processor of general purpose reloadable (“GPR”) debit cards, to market and distribute a line of GPR cards targeted towards the Latin American market. The Company intends to launch the cards upon successful completion of appropriate financing and has yet to generate revenues from this activity. In September 2018, the Company changed its name to Cuentas, Inc. to better represent its intended business activities.

Cuentas, Inc. was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned), NxtGn, Inc. (65% owned), Next Mobile 360, Inc. (100% owned) and SDI Next Distribution, LLC (51% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016. During the year ended December 31, 2016, the Company acquired a business segment, Tel3, from an existing corporation. Tel3 was merged into Meimoun and Mammon, LLC effective January 1, 2017. On October 23, 2017, the Company acquired 100% of the outstanding interests in Limecom, Inc.

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

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

NxtGn, Inc. (“NxtGn”) was formed under the laws of Florida on August 24, 2011 to develop a High Definition telepresence product (AVYDA) which allows users to connect with celebrities, public figures, healthcare and education applications via a mobile phone, tablet or personal computer.  NxtGn has entered into a joint venture with telephony platform industry leader Telarix, Inc. to develop and market the AVYDA Powered by Telarix™ HD telepresence platform. The AVYDA Powered by Telarix™ product is marketed throughout the world by the Telarix sales force.

On May 27, 2016, Next Cala entered into a Joint Venture Agreement (the “Agreement”) with Glocal Payments Solutions, Inc (“Glocal”) to form a joint venture, NextGlocal, in which Cala has a 60% controlling interest and Glocal has a 40% interest. The Joint Venture sought to launch and activate up to 45,000 prepaid debit cards under the Cala brand by December 31, 2016 and 360,000 additional cards during the 2017 calendar year. Neither milestone was achieved. Either party may terminate the agreement at December 31, 2016 if certain objectives are not met. The joint venture has not had activity since the year ended December 31, 2016 but has not been formally dissolved.

On July 22, 2016, the Company completed its acquisition of Transaction Processing Products, Inc. (“TPP”) which has a 64% interest in Accent InterMedia, LLC (“AIM”) and no other assets or liabilities. The Company disposed of TPP during the year ended December 31, 2017.

On August 10, 2016, M&M, a wholly owned subsidiary of the Company, closed the acquisition of Tel3 from a related party. Tel3 provides prepaid calling cards to consumers directly and operates in a complimentary space as M&M. Tel3 was originally acquired by the Company’s CEO in a private transaction and sold to the Company for $10 cash.

On October 23, 2017, the Company closed the acquisition of Limecom, Inc. (“Limecom”). Limecom is a global telecommunication company, providing services to telecommunication providers from all over the world. Limecom operates a network built on internet protocol (“IP”) switching equipment.

5

The Company has a Market Partner Agreement with InsightPOS, LLC since September 17, 2016. InsightPOS is a “State of the Art”, “Super Functional Point Of Sale” system that has a combination of tools that we believe makes the retail experience quicker and better both for the shopper and for store management. The Company previously installed about 10 units including training by InsightPOS. These units were withdrawn due to required programming development and improved network interconnections.

On December 6, 2017, the Company completed its formation of SDI NEXT Distribution LLC in which it holds a 51% interest, previously announced August 24, 2017 as a Letter of Intent with Fisk Holdings, LLC. As Managing Member of the newly formed LLC, the Company will contribute a total of $500,000, to be paid per an agreed-upon schedule over a twelve-month period beginning December 2017. Fisk Holdings, LLC will contribute 30,000 active Point of Sale locations for distribution of retail telecommunications and prepaid financial products and services to include, but not be limited to: prepaid general purpose reloadable cards, prepaid gift cards, prepaid money transfer, prepaid utility payments, and other prepaid products. There has been no activity in or cash contributions to this entity since formation.

The Company, through its affiliate, Next Communications, Inc., has the right to sell STI Mobile, Next Cala and any Next products to 8,800 locations that were serviced by a prepaid distribution network. The Company will offer the InsightPOS system to clients of this distribution network as well via direct sales through its own sales force and affiliates. When a system is installed, NGH receives 50% of the gross profits received by InsightPOS after retailer commissions are paid.

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

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting of interim financial information. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Accordingly, these statements do not include all the disclosures normally required by accounting principles generally accepted in the United States for annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2017 and notes thereto and other pertinent information contained in our annual report on form 10-K as filed with the Securities and Exchange Commission. The unaudited condensed consolidated statements of operations and cash flows for the periods ended June 30, 2018 are not necessarily indicative of the consolidated results of operations or cash flows to be expected for any future period or for the year ending December 31, 2018.

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

Basis of Presentation

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

Principles of Consolidation

The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated.

Use of Estimates

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

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of June 30, 2018 or December 31, 2017. The Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

6

Revenue recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. Adoption of ASC 606 did not have a significant impact on the Company’s financial statements. The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division and the sale of wholesale telecom minutes through its Limecom subsidiary. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use.

Consumer Prepaid Minutes Revenues

The Company recognizes revenues from the sale of prepaid telecommunications minutes directly to consumers at the retail level. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use. Generally, consumers will prepay a fixed dollar amount then consume the prepayment upon making telephone calls on the Company’s telecommunications network. Revenues from direct to consumer retail sales were $385,802 and $493,458 and $797,025 and $994,049 during the three and six months ended June 30, 2018 and 2017, respectively.

Wholesale Telecommunications Revenues

The Company recognizes revenues from the brokering of sales of minutes from one telecommunications carrier to another. The Company receives an order for a defined number of minutes to a defined geographic region at which point it sources those minutes and purchases them with an immediate resale to the customer. Revenues from wholesale telecommunications minutes were $20,499,288 and $0 and $40,086,285 and $0 during the three and six months ended June 30, 2018 and 2017, respectively.

Significant Judgments

The Company’s contracts with consumers and telecommunications wholesalers can include promises to transfer multiple products and services. Determining whether multiple products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company’s retail products are sold with a limited right of return and the Company may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize.

Deferred Revenue

Deferred revenue is comprised mainly of unearned revenue related to prepayments from retail consumers for telecommunications minutes. The following table represents the changes in deferred revenue for the six months ended June 30, 2018:

	Deferred Revenue
Balance at December 31, 2017	$	685,905
Deferred revenue		723,294
Recognition of deferred revenue		(797,025	)
Balance at June 30, 2018	$	612,174

Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $612,174 as of June 30, 2018, of which the Company expects to recognize 100% of the revenue over the next 12 months.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has elected to immediately expense contract acquisition costs that would be amortized in one year or less. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. There were no capitalized contract acquisition costs as of June 30, 2018.

Property and equipment

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

7

Goodwill and Intangible Assets

Goodwill represents the excess cost over the fair value of the assets of an acquired business. Goodwill and intangible assets acquired in a business combination accounted for as a purchase and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. The Company evaluates the possible impairment of goodwill annually as part of its reporting process for the fourth quarter of each fiscal year. The Company determines the fair value of each subsidiary the goodwill relates to and compares the fair value to the carrying amount of the subsidiary. To the extent the carrying amount of the subsidiary exceeds the fair value of it, an impairment loss is recorded.

Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows:

Year ended December 31,
2018	$	214,286
2019		428,571
2020		428,571
2021		428,571
2022		428,571
Thereafter		792,902
Total	$	2,721,472

Amortization expense was $107,143 and $214,285 and $0 and $0 for the three and six months ended June 30, 2018 and 2017, respectively. Amortization expense for each period is included in cost of revenue.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There were no impairment losses recorded to long-lived assets during the three or six months ended June 30, 2018 or 2017.

Non-Controlling Interest

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

Derivative and Fair Value of Financial Instruments

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

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

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

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

8

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

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

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

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

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

Except as discussed in Note 5 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of June 30, 2018 or December 31, 2017.

Income Taxes

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

Basic Income (Loss) Per Share

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

At June 30, 2018, the Company had one outstanding convertible note payable with conversion rights that are exercisable. The amount of outstanding principal on this convertible note is $0 plus accrued interest of $5,326 for total convertible debt as of June 30, 2018 of $5,326 representing 1,472 new post-reverse split dilutive common shares if converted at the applicable rates. Additionally, the Company has committed to issue a total of 107,889 post-reverse split shares of common stock for the settlement of a related party note payable and services which are not yet issued or outstanding. The effects of this note and total common shares committed to be issued have been included in net income per diluted share for the six months ended June 30, 2018. The effects of these notes have been excluded from net loss per diluted share for the three months ended June 30, 2018 as the impacts would be antidilutive due to the Company recording a net loss for the period.

At June 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $1,162,328 plus accrued interest of $329,357 for total convertible debts as of June 30, 2017 of $1,491,684 representing 256,130 post-reverse split new dilutive common shares if converted at the applicable rates. The effects of these notes have been excluded in net loss per diluted share for the three and six months ended June 30, 2017 as the effects would be anti-dilutive. 

Dividends

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

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

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The Company has accrued common stock dividends payable of $30,000 as of June 30, 2018 and December 31, 2017 as the Class D Preferred Stock has yet to be issued for the dividend.

Stock-Based Compensation

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

Derivative Liabilities

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

Related Parties

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

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

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

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provides an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had an allowance for doubtful accounts of $20,000 and $20,000 as of June 30, 2018 and December 31, 2017, respectively.

Accounts Receivable Factoring 

Limecom executed a factoring and security agreement with a financial institution on June 22, 2017, whereby it sells certain of its accounts receivable in exchange for cash. These factoring transactions qualify for sales treatment in accordance with FASB ASC 860, Transfers and Servicing. Upon purchase of the accounts receivable, the Company shall be deemed to have sold, transferred, assigned, set over and conveyed to the financial institution, without recourse except as expressly stated in the agreement, all of the Company’s right, title and interest in and to the purchased accounts receivable. Purchases have an initial gross liquidation advance rate of 90%, up to a maximum cumulative outstanding face amount of $4,000,000. The initial discount fee is 2.1%, and an additional 0.85% of certain receivables.

The Company has a credit insurance policy covering all factored accounts receivable, under which the financial institution is the beneficiary on the policy if default were to occur.

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $0 and $34,722 as of June 30, 2018 and December 31, 2017, respectively.

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Investments

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

During the year ended December 31, 2017, the Company acquired 50,000 shares of common stock of Green Spirit Industries, a publicly held company, as a referral fee. The total value of the common shares was recorded as other income using the price of the common stock as quoted on Nasdaq on the date received resulting in other income of $550,000 during the year ended December 31, 2017. At December 31, 2017, the Company marked the value of the shares to fair value resulting in an unrealized loss of $300,000 being recorded as other comprehensive loss for the year ended December 31, 2017. On June 30, 2018, the Company measured the fair value of the common stock as quoted on Nasdaq resulting in an unrealized loss of $70,000 being recorded as other expense for the six months ended June 30, 2018. The fair value of the common shares, as quoted by Nasdaq, as of June 30, 2018 and December 31, 2017 was $180,000 and $250,000, respectively.

On January 1, 2018, the Company adopted FASB Accounting Standards Update (“ASU”) 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update provides guidance to improve certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company’s adoption of ASU 2016-01 resulted in an adjustment to beginning retained earnings in the current period equal to the accumulated unrealized net losses on available for sale securities previously carried in other accumulated comprehensive income totaling $300,000.

Recently Issued Accounting Standards 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments apply to reporting entities that are required to make disclosures about recurring or nonrecurring fair value measurements and should improve the cost, benefit, and effectiveness of the disclosures. ASU 2018-13 categorized the changes into those disclosures that were removed, those that were modified, and those that were added. The primary disclosures that were removed related to transfers between Level 1 and Level 2 investments, along with the policy for timing of transfers between levels. In addition, disclosing the valuation processes for Level 3 fair value measurements was removed. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company notes that this guidance will impact its disclosures beginning January 1, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”. The amendments in this update simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. This update is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing after January 1, 2017. The Company notes that this guidance applies to its reporting requirements and will implement the new guidance accordingly in performing goodwill impairment testing; however, the Company does not believe this update will have a material impact on the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which revises the definition of a business. This update is effective for annual periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company has adopted this guidance on January 1, 2018.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduces the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company evaluated the impacts of ASU 2016-10 and determined it did not have an impact on the Company’s revenue recognition practices.

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In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes the guidance in ASC 840, “Leases.” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated balance sheets or consolidated statements of operations.

On August 26, 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB ASC 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company has adopted this standard which does not have an impact on the Company’s presentation of the consolidated statements of cash flows.

On May 10, 2017, The FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms of conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, ASU 2017-09 is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. The Company has adopted this standard and has not yet had an impact on its accounting practices.

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

NOTE 3 – GOING CONCERN

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had net income of $537,108 and a loss of $4,176,268 and net cash used in operating activities of $97,327 and $116,881, for the six months ended June 30, 2018 and 2017, respectively. The Company has a working capital deficit of $5,976,529 and $7,075,716, and an accumulated deficit of $13,953,044 and $14,207,568 as of June 30, 2018 and December 31, 2017, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of this report. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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

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NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable

During the year ended December 31, 2017, the Company entered into two separate loans to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The first loan resulted in cash proceeds of $125,000 to the Company for future payments totaling $168,750 from future receivables and requires daily repayments of $1,339. The second resulted in cash proceeds of $50,000 for future payments totaling $68,000 from future receivables and requires daily cash repayments of $540. There was $0 and $46,048 due for the agreements as of June 30, 2018 and December 31, 2017, respectively, included in current notes payable.

On May 1, 2017, the Company received a loan from an unrelated party for $25,000. The loan is due on demand and as such is included in current notes payable. The note does not accrue interest and had a principal balance due of $25,000 as of June 30, 2018 and December 31, 2017, respectively.

On April 25, 2018, the Company entered into a loan agreement to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The loan resulted in cash proceeds to the Company of $180,000 for future payments totaling $234,000 from future receivables and requires daily repayments of $1,858. There was $47,015 and $0 due as of June 30, 2018 and December 31, 2017, respectively, included in current notes payable.

Convertible Notes Payable

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

The Company settled the majority of its convertible notes payable in December 2017 for a combination of cash and shares of common stock. An additional convertible note payable was settled in January 2018 for a combination of cash and shares of common stock.

The following table summarizes all convertible notes payable activity for the six months ended June 30, 2018:

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2017		Repayments			Conversions to Common Stock			Forgiveness of Principal			Balance, June 30, 2018
Noteholder 5	11/9/2015	11/9/2016		100,000		48,897		(12,000	)		(26,640	)		(10,257	)		-
Totals			$	100,000	$	48,897	$	(12,000	)	$	(26,640	)	$	(10,257	)	$	-

The following is a summary of all convertible notes outstanding as of June 30, 2018:

Holder	Issue Date	Due Date	Principal		Discount		Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 6	11/2/2016	11/2/2017		-		-		-		-		5,326
Totals			$	-	$	-	$	-	$	-	$	5,326

Accrued Interest

There was $5,326 and $35,136 of accrued interest due on all convertible notes as of June 30, 2018 and December 31, 2017, respectively which is included in accounts payable and accrued liabilities on the balance sheet (see Note 8 – Accounts Payable and Accrued Liabilities).

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NOTE 5 – DERIVATIVE LIABILITIES

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

As of June 30, 2018, the Company had a $119,269 derivative liability on the balance sheet and recorded gains from derivative liability fair value adjustments of $14,729 and $427,935 during the three and six months ended June 30, 2018.  The derivative liability activity comes from convertible notes payable as discussed in Note 4 – Notes Payable and Convertible Notes Payable. In addition to derivative liabilities associated with convertible notes payable, the Company recorded a derivative liability due to a ratchet strike price feature associated with the options issued in the sale of TPP. Taking into account the effect of the reverse stock split (see Note 9 – Stockholders’ Equity), the options are exercisable at $54 per share unless the Company’s common stock is quoted at a price greater than $150 per share at which point the options are exercisable at $0.30 per share.

A summary of outstanding derivative liabilities as of June 30, 2018 is as follows:

Holder	Derivative Balance
Option Holder	$	119,269
Total	$	119,269

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

	June 30, 2018	December 31, 2017
Expected volatility	213%	178% - 334%
Expected term	1.76 years	.01 - 2.25 years
Risk free rate	2.52%	0.97% - 1.89%
Forfeiture rate	0%	0%
Expected dividend yield	0%	0%

A summary of the changes in derivative liabilities balance for the six months ended June 30, 2018 is as follows:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	574,130
Initial measurement of derivative liabilities		-
Change in fair value		(427,935	)
Change due to conversion		(26,926	)
Balance, June 30, 2018	$	119,269

NOTE 6 – STOCK OPTIONS

The following table summarizes all stock option activity for the six months ended June 30, 2018, taking into account the effect of the reverse stock split (see Note 9 – Stockholders’ Equity):  

	Shares		Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2017		105,378	$	39.27
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding, June 30, 2018		105,378	$	39.27

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The following table discloses information regarding outstanding and exercisable options at June 30, 2018:

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	54.00		58,334	$	54.00		2.34		36,112	$	54.00
	21.00		47,044		21.00		1.99		47,044		21.00
			105,378	$	39.27		2.16		83,156	$	35.33

On May 31, 2016, the Company issued 33,334 options to a board member pursuant to its agreement with the member. One third of the 33,334 options issued vested immediately upon execution of the related agreement. The remaining shares of the issuance vest based on performance milestones which the Company believes is 80% likely of occurring resulting in stock based expense of $334,997 during the year ended December 31, 2017. There was no change in the estimated probability to attain the performance criteria during the six months ended June 30, 2018. The remaining fair value of the unvested shares of $223,331 will be recognized according to the estimated probability of the performance obligations being achieved.

On March 31, 2017, the Company, as part of its sale of TPP issued 25,000 options that are exercisable for a period of three years and carry an exercise price of $54 per share. The options carried a value of $898,490 which was recorded as a derivative liability as discussed in Note 5 – Derivative Liabilities. The options carry a ratchet pricing feature whereby they become exercisable at $0.30 per share if the Company’s common stock trades at a price greater than $150 per share.

There was an unrecognized stock option based expense of $223,331 as of June 30, 2018.

As discussed in Note 9 – Stockholders’ Equity, as of June 30, 2018 the Company has committed to issue more shares of common stock than it has authorized. The Company does not have available shares in its treasury to issue should option holders choose to exercise. As a result, the value of certain stock options are included in stock based liabilities on the balance sheet and subject to remeasurement at each reporting period. During August 2018, the Company effected a 1:300 reverse stock split on its common shares to remedy the shortfall in its authorized common shares.

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company has had extensive dealings with related parties including those in which our Chief Executive Officer holds a significant ownership interest as well as an executive position during the six months ended June 30, 2018 and year ended December 31, 2017. Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and holds an executive position. During the first calendar quarter of 2017, Next Communications, Inc. filed for bankruptcy protection. As a result, the related party payable is being handled by a court appointed trustee as an asset of Next Communications, Inc. and the Company may need to begin repaying the amounts due on a more fixed schedule.

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

Related party balances at June 30, 2018 and December 31, 2017 consisted of the following:

Due from related parties

	June 30, 2018		December 31, 2017
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

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Related party payables, net of discounts

	June 30, 2018		December 31, 2017
(b) Due to Next Communications, Inc. (current)	$	2,943,519	$	2,919,615
(c) Due to Asiya Communications SAPI de C.V. (current)		19,009		5,998
(d) Michael DePrado (current)		99,604		99,604
(e) Orlando Taddeo, net of discount of $0 and $72,069 (long term, due July 21, 2019)		2,607,670		2,535,601
(f) Next Cala 360 (current)		10,350		7,350
Total related party payables	$	5,680,152	$	5,568,168

(a)	Glocal Card Services is our partner in the Glocal Joint Venture
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer
(e)	Amount due to Orlando Taddeo from the acquisition of Limecom
(f)	Next Cala 360, is a Florida corporation established and managed by our Chief Executive Officer.

During the three and six months ended June 30, 2018 and 2017, the Company recorded interest expense of $59,760 and $59,760 and $119,517 and $119,518 using an interest rate equal to that on the outstanding convertible notes payable as discussed in Note 4 – Notes Payable and Convertible Notes Payable as imputed interest on the related party payable due to Next Communications. The interest was immediately forgiven by the related party and recorded to additional paid in capital.

Accounts Receivable, Related Party

The Company had outstanding accounts receivable of $610,006 from related parties as of June 30, 2018 of which $609,312 was due from Next Communications and $694 was due from Asiya Communications SAPI de C.V. The accounts receivable arose from the sale of wholesale telecommunications minutes to these entities.

Accounts Payable, Related Party

The Company had outstanding accounts payable of $1,341,427 to related parties as of June 30, 2018 all of which was to Asiya Communications SAPI de C.V.

Revenues (Related Party)

The Company made sales to and generated revenues from related parties of $8,941,435 and $73,638 during the three months ended June 30, 2018 and 2017 as itemized below:

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,688,134	$	71,666
Asiya Communications SAPI de C.V.		4,253,301		1,972
Next Cala 360		-		-
Total	$	8,941,435	$	73,638

The Company made sales to and generated revenues from related parties of $11,189,379 and $77,431 during the six months ended June 30, 2018 and 2017 as itemized below:

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	5,812,611	$	71,666
Asiya Communications SAPI de C.V.		5,376,768		1,972
Next Cala 360		-		3,793
Total	$	11,189,379	$	77,431

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Costs of Revenues (Related Party)

The Company made purchases from related parties totaling $8,361,849 and $0 during the three months ended June 30, 2018 and 2017 which are included in cost of revenues as itemized below:

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	3,579,013	$	-
Asiya Communications SAPI de C.V.		4,782,836		-
Total	$	8,361,849	$	-

The Company made purchases from related parties totaling $11,434,687 and $0 during the six months ended June 30, 2018 and 2017 which are included in cost of revenues as itemized below:

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,701,659	$	-
Asiya Communications SAPI de C.V.		6,733,028		-
Total	$	11,434,687	$	-

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30, 2018		December 31, 2017
Trade payables	$	2,671,537	$	5,067,841
Settlements payable (see Note 12 – Commitments and Contingencies)		1,133,858		1,438,994
Accrued expenses		235,742		153,223
Accrued interest		13,129		40,955
Accrued salaries and wages		470,607		329,037
Total	$	4,524,873	$	7,030,050

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NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

At the time of incorporation, the Company was authorized to issue 60,000,000 shares of preferred stock with a par value of $0.001 of which 50,000,000 was undesignated and 10,000,000 was designated as Series B. With the completion of the recapitalization as discussed in Note 1 – Organization and Description of Business, the outstanding Series A preferred shares were cancelled leaving a balance outstanding of Preferred Series A of -0-.

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

The Company has 36,000,000 shares of Preferred Stock designated as Series D. The Class D Preferred Stock must be redeemed within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia , Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). There were no Series D Preferred shares issued or outstanding as of June 30, 2018 or December 31, 2017.

Common Stock

Effective November 20, 2015 the Company amended its Articles of Incorporation to decrease the common shares authorized from 9,500,000,000 to 360,000,000 with a par value of $0.001. On August 7, 2018, the Board approved a one-for-three hundred (1:300) reverse stock split of the common stock. The effects of the reverse stock split have been reflected in the financial statements retroactively.

During the six months ended June 30, 2018, the Company issued 38,095 common shares as the settlement for common stock subscriptions totaling $400,000; 11,479 common shares valued at $154,973 for the settlement of stock based liabilities and 2,000 common shares for the settlement of a convertible note payable.

Summary of common stock activity for the six months ended June 30, 2018	Outstanding shares
Balance, December 31, 2017		1,140,398
Shares issued for common stock subscriptions		38,095
Shares issued as settlement of stock based liabilities		11,479
Shares issued for settlement of convertible notes payable and accrued interest (a)		2,000
Balance, June 30, 2018		1,191,972

(a) Shares issued in connection with outstanding convertible note payable and convertible accrued interest on convertible notes payable in accordance with a settlement agreement entered into as discussed in Note 4 – Notes Payable and Convertible Notes Payable.

The Company has 1,191,972 common shares issued and outstanding and 107,889 common shares committed to be issued as of June 30, 2018. The values of the unissued shares are subject to fair value measurement at each reporting period. As of June 30, 2018, stock based liabilities consisted of:

	Number of Common Shares and Common Share Equivalents		Fair Value
Common stock to be issued (1)		107,889	$	803,122
Options to purchase common stock (2)		80,378		458,608
Totals		188,267	$	1,261,730

(1)	Includes 34,537 common shares committed to be issued in connection with our acquisition of Limecom as discussed in Note 1 Organization and Description of Business.
(2)	Excludes 25,000 options with ratchet pricing features included in derivative liabilities. The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.

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As of June 30, 2018, the Company did not have adequate authorized common shares to fulfill its obligations under certain agreements. Specifically, the Company had committed to issue common shares in excess of authorized shares totaling 32,365,826 (pre-reverse split); has 31,613,142 (pre- reverse split) options to purchase common stock issued of which 24,946,476 (pre-reverse split) are exercisable and has outstanding convertible accrued interest on a convertible note payable the holder of which has the right to convert into 441,554 (pre-reverse split) shares of common stock as of June 30, 2018. Total common stock and common stock equivalents in excess of the Company’s authorized common shares are summarized as follows:

	Pre-Reverse Split		Post-reverse split
Committed shares beyond authorized		32,365,826		107,889
Stock options granted		31,613,142		105,378
Convertible notes payable and accrued interest		441,554		1,472
Total		64,420,522		214,739

The Company effected a 1:300 reverse split on its common stock on August 7, 2018 to remedy the shortfall in authorized unissued shares.

NOTE 10 – CUSTOMER CONCENTRATION 

The Company generated approximately 79% of its revenues for the three months ended June 30, 2018 and 51% of its revenues for the six months ended June 30, 2018 from three separate customers. The Company did not have any one customer account for more than 10% of its revenues during the three or six months ended June 30, 2017.

As of June 30, 2018, four separate customers accounted for approximately 94% of the Company’s total accounts receivable. Of this amount, one customer representing 12% of the outstanding accounts receivable was due from a related party. As of December 31, 2017, three separate customers accounted for approximately 78% of the Company’s total accounts receivable.

NOTE 11 – RESTATEMENT OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

The Company has restated its statement of operations and statement of cash flows for the six months ended June 30, 2017 to correct an error in the treatment of the disposal of a subsidiary. The Company had originally recorded the elimination of the non-controlling interest component of equity of the sold subsidiary as an equity only transaction by absorbing $2,540,903 of non-controlling interest equity into that of the Company. The correct treatment of the disposal necessitates the amount of non-controlling interest to be included in the calculation of the gain or loss on the disposal of a subsidiary recognized through the income statement. The impact to the financial statements is an increase in loss from discontinued operations and net loss by $2,540,903 for the six months ended June 30, 2017 and no change for the three months ended June 30, 2017. Net loss per common share increased from $4.23 as originally stated to $4.71 as restated for the six months ended June 30, 2017 with no change for the three months ended June 30, 2017. There was no impact on the net cash used in operations during the six months ended June 30, 2017 as a result of the restatement. Although not presented, the impact of the restatement on the Company’s consolidated balance sheet as of June 30, 2017 is an increase to additional paid in capital and increase to accumulated deficit of $2,540,903.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

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

On April 7, 2016, the Company executed an agreement with a service provider to provide certain services for the Company. In addition to cash and stock compensation, the agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reaches $750,000,000. The Company recorded an expense associated with the non-variable portion of the agreement. However, the probability of the Company’s market capitalization reaching these thresholds is uncertain at present and the Company has not accrued a contingent fee as of June 30, 2018 or December 31, 2017 as a result.

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

On February 12, 2018, the Company was served with a complaint from Viber for reimbursement of attorney’s fees and costs totaling $527,782 arising from the litigation listed above. The Company is vigorously defending their rights in this case as we believe this demand is premature as litigation is ongoing. The Company has not accrued an estimated loss related to this complaint as of June 30, 2018 or December 31, 2017 given the premature nature of the motion.

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On October 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries will be dismissed as defendants and has not accrued a contingent loss as of June 30, 2018 or December 31, 2017 as a result.

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

On December 20, 2017, a Complaint was filed by J. P. Carey Enterprises, Inc., alleging a claim for $473,264 related to the Franjose Yglesias-Bertheau filed lawsuit against PLKD listed above. Even though NGH made the agreed payment of $10,000 on January 2, 2017 and issued 3,600,720 shares as conversion of the $70,000 note as agreed in the settlement agreement, the Plaintiff alleges damages which NGH claims are without merit because they received full compensation as agreed. NGH is in the process of defending itself against these claims. The Company has not accrued losses related to this claim due to the early stages of litigation.

During 2016, Limecom had disputed accounts payable with three (3) carriers, for which the Company entered into separate settlement agreements, totaling approximately $1,147,000. Under the terms of these settlement agreements, the Company was provided with extended payment terms on the outstanding balances. These settlement agreements are non-interest bearing and include certain default provisions as disclosed in the related agreements. The Company assumed a total of $676,563 of this liability on October 23, 2017 as part of its acquisition of Limecom and made repayments totaling $10,000 during the period of acquisition to December 31, 2017 and $95,136 during the six months ended June 30, 2018. The remaining outstanding principal balance of these settlement agreements amounted to approximately $571,427 and $666,563 as of June 30, 2018 and December 31, 2017, respectively. Of these totals, $571,427 and $546,563 is current and included in accrued liabilities and $0 and $120,000 is long term and represented by other long term liabilities as of June 30, 2018 and December 31, 2017, respectively.

On October 23, 2017, the Company assumed a settlement liability Limecom had entered into with American Express as part of its acquisition as discussed in Note 1 – Organization and Description of Business. As of the date of acquisition, there was a total outstanding balance of $995,158. The Company made repayments totaling $102,727 from the period of October 23, 2017 to December 31, 2017 and $330,000 during the six months ended June 30, 2018 leaving a remaining balance due of $562,431 and $892,431 as of June 30, 2018 and December 31, 2017, respectively. The balance due is included in accounts payable and accrued liabilities as of June 30, 2018 and December 31, 2017.

On October 23, 2018, the Company received service of a complaint filed against it by a former supplier citing unspecified damages in excess of $15,000. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

On October 25, 2018, the Company was notified by its registered agent in the state of Florida it had received notification of a filed complaint by a former employee that alleges breach of contract. The Company is in the early stages of discovery with a response to the complaint due on November 14, 2018. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process.

On October 25, 2018, the Company was received a claim letter issued by TCA Gloal Master Fund in which it claims the Company is liable for unpaid investment banking services totaling $2,500,000. The Company believes this claim to be without merit and has responded to the letter as such. The Company has not accrued any losses or a liability related to this letter as of June 30, 2018. 

On November 7, 2018, the Company was serviced with a complaint from a former service provider claiming breach of contract. The complaint alleges services were performed for which the Company owes $28,833 plus interest. The Company believes this claim to be without merit and has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

The Company executed a lease for office space effective July 10, 2018 with a term to October 31, 2018. The lease requires monthly rental payments of $4,750 plus monthly maintenance costs of $100. Total future guaranteed payments under this lease are $19,400.

NOTE 13 – PRO FORMA STATEMENTS OF OPERATIONS

On October 23, 2017, the Company completed its acquisition of Limecom as discussed in Note 1 – Organization and Description of Business. The Company is furnishing the following pro forma statements of operations representing the combined results of the Company and Limecom for the six months ended June 30, 2017 had the acquisition been completed on January 1, 2017.

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CUENTAS, INC.

(FORMERLY NEXT GROUP HOLDINGS, INC.)

COMBINED PRO FORMA STATEMENTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2017

	NGH			Limecom			Pro Forma Adjustments			Pro Forma
Revenue	$	1,074,655		$	46,783,665		$	-		$	47,858,320
Cost of revenue		785,432			45,354,949			214,286	(a)		46,354,667
Gross margin		289,223			1,428,716			(214,286	)		1,503,653
Operating expenses
Officer compensation		363,943			125,165			-			489,108
Professional fees		1,132,887			257,600			-			1,390,487
General and administrative		229,580			570,196			-			799,776
Total operating expenses		1,726,410			952,961			-			2,679,371
Loss from operations		(1,437,187	)		475,755			(214,286	)		(1,175,718	)
Other income (expense)
Other income		179,580			65,465			-			245,045
Interest expense		(597,719	)		(123,230	)		-			(720,949	)
Loss on derivative liability		(1,993,142	)		-			-			(1,993,142	)
Total other income (expense)		(2,411,281	)		(57,765	)		-			(2,469,046	)
Net income (loss) from continuing operations	$	(3,848,468	)	$	417,990		$	(214,286	)	$	(3,644,764	)

(a) Amortization of acquired intangible assets from acquisition

NOTE 14 – SUBSEQUENT EVENTS

On August 7, 2018, the Company effected a 1:300 reverse stock split on its common stock. The effects of this stock split on the Company’s number of shares issued and outstanding has been retroactively applied to these financial statements.

Subsequent to the balance sheet date, the Company issued a total of 781 shares of common stock in conjunction with rounding from its reverse stock split; 61,001 shares of common stock for the settlement of stock based liabilities; 2,167 common shares as part of a settlement agreement; 13,333 for services and 35,834 shares of common stock for cash proceeds of $107,500.

The Company entered into a separate securities purchase agreement to raise a total of $440,000 of cash in exchange for 146,669 shares of common stock. As of the date of this filing, the Company has received total cash of $90,000. The common shares will be issued upon the receipt of all cash due under the agreement. The shares associated with this agreement have not been issued and are not included in the preceding paragraph.

On August 23, 2018, the Company committed to issue a total of 60,639 common shares for services. Of this total, 33,334 were issued in exchange for previously outstanding options totaling 33.334 which carried an exercise price of $54.

On September 13, 2018, the Company and certain officers agreed to convert $282,623 of past wages and other compensation owing to shares of common stock at a rate of $4 per share resulting in 70,657 common shares being committed to be issued. Additionally, a total of 90,000 options to purchase common stock were granted with each option grant vesting equally over a three year period and exercisable at $3 per share. The options expire in September 2023.

On November 6, 2018, the Company finalized an accounts receivable factoring agreement whereby the factor agent will purchase outstanding accounts receivable at its sole discretion less certain commissions. The factoring agent commission due under the agreement is 1.19% of the face value of the purchased accounts receivable for the twenty days immediately following invoice issuance plus 0.59% for each twenty days thereafter. The factoring agent may advance cash to the Company at its sole discretion up to 90% of the purchase price with an initial maximum advance capacity of $4,000,000. The Company may request increases to the maximum advance allowed under the agreement not to exceed an additional $1,000,000 during each 90 day period immediately following execution for up to a maximum advance of $8,000,000.

The Company will issue compensation to its financial advisor with respect to the agreement totaling 2.5% of the initial credit line limit, or $100,000, in four equal installments. The advisor will receive further compensation of 3.0% of any future increases in the credit limit above $4,000,000 up to $8,000,000. The advisor also received a warrant to purchase 74,866 shares of common stock at an exercise price of $3.74 per share for a period of five years. The warrant may be exchanged without the payment of any additional consideration for the Company’s common stock based upon the values of the warrant and the stock at the time of the exchange.

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

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

Forward-Looking Statements

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

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

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

Business History

Cuentas, Inc. (the “Company”) invests in financial technology and currently derives its revenues from the sales of prepaid and wholesale calling minutes. Additionally, the Company has an agreement with Incomm, a leading processor of general purpose reloadable (“GPR”) debit cards, to market and distribute a line of GPR cards targeted towards the Latin American market. The Company intends to launch the cards upon successful completion of appropriate financing and has yet to generate revenues from this activity.

Next Group Holdings, Inc was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned), NxtGn, Inc. (65% owned) and Next Mobile 360, Inc. (100% owned) and SDI Next Distribution LLC (51% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016. During the year ended December 31, 2016, the Company acquired a business segment, Tel3, from an existing corporation. Tel3 was merged into Meimoun and Mammon, LLC effective January 1, 2017. On October 23, 2017, the Company acquired 100% of the outstanding interests in Limecom, Inc.

Overview

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

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

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

On June 25, 2018, holders of a majority of the Company’s voting stock approved by written consent in lieu of a special meeting of stockholders in accordance with 607.0704 of the Florida Business Corporation Act to change the company name to Cuentas, Inc and effect a reverse stock split of 1:300. In early August 2018, FINRA approved the new stock symbol CUEN and also approved the 1:300 reverse stock split.

Cuentas, formerly Next Group Holdings, through its operating subsidiaries, engages in the business of using proprietary technology and certain licensed technology to provide innovative telecommunications and telecommunications mobility and remittance solutions in emerging markets. The Company offers prepaid telecommunications minutes to consumers through its Tel3 division and also offers wholesale telecommunications minutes through its Limecom subsidiary.

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Results of operations for the three months ended June 30, 2018 and 2017

Revenue

The Company generates revenues through the sale and distribution of prepaid telecom minutes and other related telecom services.

	Three Months Ended June 30,
	2018		2017		Change
Revenue	$	11,967,987	$	500,426	$	11,467,561
Revenue, related party		8,941,435		73,638		8,867,797
Total revenue	$	20,909,422	$	574,064	$	20,335,358

Revenues during the three months ended June 30, 2018 totaled $20,909,422 compared to $574,064 for the three months ended June 30, 2017. The increase in revenues of $20,335,358 is due to the acquisition of Limecom which was consolidated for the full three months ended June 30, 2018 and not included in the three months ended June 30, 2017. Limecom contributed a total of $20,499,288 of revenues during the three months ended June 30, 2018.

Costs of Revenue

Costs of revenue consists of the purchase of wholesale minutes for resale and related telecom platform costs.

	Three Months Ended June 30,
	2018		2017		Change
Cost of revenue	$	12,293,982	$	450,175	$	11,843,807
Cost of revenue, related party		8,361,849		-		8,361,849
Total cost of revenue	$	20,655,831	$	450,175	$	20,205,656

Cost of revenues during the three months ended June 30, 2018 totaled $20,655,831 compared to $450,175 for the three months ended June 30, 2017. The increase in cost of revenues of $20,205,656 is due to the acquisition of Limecom which was consolidated for the full three months ended June 30, 2018 and not included in the three months ended June 30, 2017. Limecom contributed a total of $20,306,388 of costs of revenues during the three months ended June 30, 2018.

Operating Expenses

	Three Months Ended June 30,
	2018		2017		Change
Officer compensation	$	193,525	$	147,777	$	45,748
Professional fees		214,340		641,603		(427,263	)
General and administrative		419,997		132,688		287,309
Total operating expenses	$	827,862	$	922,068	$	(94,206	)

Operating expenses totaled $827,862 during the three months ended June 30, 2018 compared to $922,068 during the three months ended June 30, 2017 representing a net decrease of $94,206. The Company incurred approximately $45,000 of incremental officer compensation expenses during the three months ended June 30, 2018 as the three months ended June 30, 2017 due to stock based compensation occurring in the current period not present in the prior period totaling $44,333. Additionally, the Company incurred fewer professional fees during the current period as the result of issuing fewer shares of common stock for professional services in the current period when compared to the same quarter in 2017. Lastly, the increase in general and administrative expenses is the result of the acquisition of Limecom which contributed a total of $329,186 of general and administrative expenses during the three months ended June 30, 2018.

Other Income (Expense)

	Three Months Ended June 30,
	2018			2017			Change
Other income	$	-		$	178,712		$	(178,712	)
Other expense		(69,912	)		-			(69,912	)
Interest expense		(346,325	)		(238,477	)		(107,848	)
Gain (loss) on derivative liability		14,729			(1,579,105	)		1,593,834
Gain on fair value of stock based liabilities		(3,069	)		-			(3,069	)
Total other income (expense)	$	(404,577	)	$	(1,638,870	)	$	1,234,293

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The Company recognized other expense of $404,577 during the three months ended June 30, 2018 compared to a net expense of $1,638,870 during the three months ended June 30, 2017. The net change from the prior period to the current is driven by a $1,593,834 favorable change in the gain recognized on the fair value measurement of derivative liabilities, offset by a decrease in other income of $178,712.

The fair value measurements related to derivative liabilities and stock-based liabilities are driven by market inputs and inherently subject to volatility. The decrease in other income is the result of the Company recognizing forgiveness of accounts payable during the three months ended June 30, 2017 that was not present during the current period.

Net Loss

	Three Months Ended June 30,
	2018			2017			Change
Net income (loss)	$	(978,848	)	$	(2,437,049	)	$	1,458,201
Net income attributable to non-controlling interest		9,619			(144	)		9,763
Net loss attributable to Cuentas, Inc.	$	(969,229	)	$	(2,437,193	)	$	1,467,964

The Company recognized a net loss for the three months ended June 30, 2018 of $969,229 compared to a loss of $2,437,193 for the three months ended June 30, 2017. The change in net loss for the three months ended June 30, 2018 is due mainly to the increased revenues and margins in absolute dollars during the current period combined with favorable changes in gains for the fair value measurements of derivative and stock-based liabilities.

Results of operations for the six months ended June 30, 2018 and 2017

Revenue

The Company generates revenues through the sale and distribution of prepaid telecom minutes and other related telecom services.

	Six Months Ended June 30,
	2018		2017		Change
Revenue	$	29,718,263	$	997,224	$	28,721,039
Revenue, related party		11,189,379		77,431		11,111,948
Total revenue	$	40,907,642	$	1,074,655	$	39,832,987

Revenues during the six months ended June 30, 2018 totaled $40,907,642 compared to $1,074,655 for the six months ended June 30, 2017. The increase in revenues of $39,832,987 is due to the acquisition of Limecom which was consolidated for the full six months ended June 30, 2018 and not included in the six months ended June 30, 2017. Limecom contributed a total of $40,086,285 of revenues during the six months ended June 30, 2018.

Costs of Revenue

Costs of revenue consists of the purchase of wholesale minutes for resale and related telecom platform costs.

	Six Months Ended June 30,
	2018		2017		Change
Cost of revenue	$	28,479,619	$	785,432	$	27,694,187
Cost of revenue, related party		11,434,687		-		11,434,687
Total cost of revenue	$	39,914,306	$	785,432	$	39,128,874

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Cost of revenues during the six months ended June 30, 2018 totaled $39,914,306 compared to $785,432 for the six months ended June 30, 2017. The increase in cost of revenues of $39,128,874 is due to the acquisition of Limecom which was consolidated for the full six months ended June 30, 2018 and not included in the six months ended June 30, 2017. Limecom contributed a total of $39,265,195 of costs of revenues during the six months ended June 30, 2018.

Operating Expenses

	Six Months Ended June 30,
	2018		2017		Change
Officer compensation	$	328,717	$	363,943	$	(35,226	)
Professional fees		514,698		1,132,887		(618,189	)
General and administrative		855,003		229,580		625,423
Total operating expenses	$	1,698,418	$	1,726,410	$	(27,992	)

Operating expenses totaled $1,698,418 during the six months ended June 30, 2018 compared to $1,726,410 during the six months ended June 30, 2017 representing a net decrease of $27,992. The Company incurred fewer officer compensation expenses during the six months ended June 30, 2018 from there being approximately $110,000 of stock option-based compensation recognized during the six months ended June 30, 2017 compared to approximately $44,000 during the six months ended June 30, 2018. Additionally, the Company incurred fewer professional fees during the current period as the result of issuing fewer shares of common stock for professional services in the current period when compared to the same period in 2017. Lastly, the increase in general and administrative expenses is the result of the acquisition of Limecom which contributed a total of $670,066 of general and administrative expenses during the six months ended June 30, 2018.

Other Income (Expense)

	Six Months Ended June 30,
	2018			2017			Change
Other income	$	-		$	179,580		$	(179,580	)
Other expense		(94,862	)		-			(94,862	)
Interest expense		(748,907	)		(597,719	)		(151,188	)
Gain (loss) on derivative liability		427,935			(1,993,142	)		2,421,077
Gain on extinguishment of debt		98,611			-			98,611
Gain on fair value of stock based liabilities		1,559,413			-			1,559,413
Total other income (expense)	$	1,242,190		$	(2,411,281	)	$	3,653,471

The Company recognized other income of $1,242,190 during the six months ended June 30, 2018 compared to a net expense of $2,411,281 during the six months ended June 30, 2017. The net change from the prior period to the current is driven by a $2,421,077 favorable change in the gain recognized on the fair value measurement of derivative liabilities, $98,611 favorable variance in the gain on extinguishment of debt and $1,559,413 favorable change in gains recognized from the fair value measurements of stock-based liabilities.

The fair value measurements related to derivative liabilities and stock-based liabilities are driven by market inputs and inherently subject to volatility. The increase in the gain on extinguishment of debt is from the Company entering into a settlement agreement with a convertible noteholder during the current period where similar events did not exist during the six months ended June 30, 2017.

25

Loss from Discontinued Operations

	Six Months Ended June 30,
	2018		2017		Change
Loss from discontinued operations	$	-	$	327,800	$	(327,800	)

The Company recorded a loss from discontinued operations of $327,800 during the six months ended June 30, 2017 from its disposal of a former subsidiary, Transaction Processing Products, LLC. There were no discontinued operations or disposals of business entities or segments during the six months ended June 30, 2018.

Net Income (Loss)

	Six Months Ended June 30,
	2018		2017			Change
Net income (loss)	$	537,108	$	(4,176,268	)	$	4,713,376
Net income attributable to non-controlling interest		17,416		9,630			7,786
Net loss attributable to Cuentas, Inc.	$	554,524	$	(4,166,638	)	$	4,721,162

The Company recognized net income for the six months ended June 30, 2018 of $554,524 compared to a loss of $4,166,638 for the six months ended June 30, 2017. The change in net income (loss) for the six months ended June 30, 2018 is due mainly to the increased revenues and margins during the current period combined with favorable changes in gains for the fair value measurements of derivative and stock-based liabilities.

GOING CONCERN, LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2018, the Company had cash of $12,770, current assets of $5,132,441 and current liabilities of $11,108,970 creating a working capital deficit of $5,976,529. Net cash used in operating activities was $97,327 during the six months ended June 30, 2018 and $116,881 used during the six months ended June 30, 2017. Current assets consisted of $12,770 of cash; $4,382,269 of accounts receivable; $610,006 of related party accounts receivable; $90,755 of prepaid expenses and other current assets; $36,000 of related party receivables and $641 of other receivables.

As of December 31, 2017, the Company had $92,714 of cash, total current assets of $7,934,821 and total current liabilities of $15,010,537 creating a working capital deficit of $7,075,716. Current assets as of December 31, 2017 consisted of $92,714 of cash, accounts receivable net of allowance of $7,623,197, accounts receivable from related parties totaling $8,545, prepaid expenses and other current assets of $74,365, related party receivables of $36,000 and an other receivable of $100,000.

Liquidity and Other Considerations

During the six months ended June 30, 2018, the Company’s loss from operations was $705,082. As of June 30, 2018, the Company had $12,770 of cash, a working capital deficit of $5,976,529, which included accounts payable and accrued liabilities of $4,524,873 and accounts payable to related parties of $1,341,427, and the Company’s shareholder deficit was $4,333,280. During 2017, the Company acquired a cash flow positive subsidiary.

Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and holds an executive position. During the first calendar quarter of 2017, Next Communications, Inc. filed for bankruptcy protection. As a result, the related party payable is being handled by a court appointed trustee as an asset of Next Communications, Inc. and the Company may need to begin repaying the amounts due on a more fixed schedule. There was $2,943,519 and $2,919,615 due to Next Communications as of June 30, 2018 and December 31, 2017, respectively.

26

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had net income of $554,524 and a net loss of $4,176,268 and net cash used in operating activities of $97,327 and $116,881, for the six months ended June 30, 2018 and 2017, respectively. The Company has a working capital deficit of $5,976,529 and $7,075,716, and an accumulated deficit of $13,953,044 and $14,207,568 as of June 30, 2018 and December 31, 2017, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of this report. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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

Operating Activities

The Company used $97,327 of cash in operations during the six months ended June 30, 2018 and $116,881 during the six months ended June 30, 2017. The Company’s primary uses of cash have been for professional support, marketing expenses and working capital. Net cash used in operating activities during the six months ended June 30, 2018 consisted of net income of $537,108, net non-cash gains of $1,529,660 and changes in working capital totaling $895,225.  

Investing Activities

The Company used cash of $11,499 in investing activities during the six months ended June 30, 2018 which consisted solely of the purchase of equipment. There was no cash used in or provided by investing activities during the six months ended June 30, 2017.

Financing Activities

The Company generated $28,882 of cash in financing activities during the six months ended June 30, 2018 compared to using $75,549 during the six months ended June 30, 2017. Cash generated by financing activities during the six months ended June 30, 2018 consisted of repayments of convertible notes payable of $12,000, proceeds from related party loans of $40,199, proceeds from loans payable of $967 and repayments of related party loans of $284. Cash used in financing activities during the six months ended June 30, 2017 consisted of repayments of a bank overdraft of $7, proceeds from loans payable of $25,000 and repayments on related party loans of $100,542.

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

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

Impact of Inflation

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

Off-Balance Sheet Arrangements

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

27

Critical Accounting Policies

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

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

Critical Accounting Estimates and New Accounting Pronouncements

Critical Accounting Estimates

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

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

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

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

Share-Based Compensation Expense

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

Recent Accounting Pronouncements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

28

ITEM 4. CONTROLS AND PROCEDURES.

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

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

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

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

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

Lack of appropriate oversight of third party service providers,

Lack of appropriate segregation of duties,

Lack of an independent audit committee,

Lack of information technology (“IT”) controls over revenue,

Lack of adequate review of internal controls to ascertain effectiveness,

Lack of communication to third party service providers regarding key events and agreements within the organization,

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

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

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

29

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

On February 12, 2018, the Company was served with a complaint from Viber for reimbursement of attorneys fees and costs totaling $527,782 arising from the litigation listed above. The Company is vigorously defending their rights in this case as we believe this demand is premature as litigation is ongoing. The Company has not accrued an estimated loss related to this complaint as of June 30, 2018 or December 31, 2017 given the premature nature of the motion.

On October 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries will be dismissed as defendants and has not accrued a contingent loss as of June 30, 2018 or December 31, 2017 as a result.

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

On December 20, 2017, a Complaint was filed by J. P. Carey Enterprises, Inc., alleging a claim for $473,264 related to the Franjose Yglesias-Bertheau filed lawsuit against PLKD listed above. Even though NGH made the agreed payment of $10,000 on January 2, 2017 and issued 3,600,720 shares as conversion of the $70,000 note as agreed in the settlement agreement, the Plaintiff alleges damages which NGH claims are without merit because they received full compensation as agreed. NGH is in the process of defending itself against these claims. The Company has not accrued losses related to this claim due to the early stages of litigation.

On October 23, 2018, the Company received service of a complaint filed against it by a former supplier citing unspecified damages in excess of $15,000. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

On October 25, 2018, the Company was notified by its registered agent in the state of Florida it had received notification of a filed complaint by a former employee that alleges breach of contract. The Company is in the early stages of discovery with a response to the complaint due on November 14, 2018. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process.

On October 25, 2018, the Company was received a claim letter issued by TCA Gloal Master Fund in which it claims the Company is liable for unpaid investment banking services totaling $2,500,000. The Company believes this claim to be without merit and has responded to the letter as such. The Company has not accrued any losses or a liability related to this letter as of June 30, 2018. 

On November 7, 2018, the Company was serviced with a complaint from a former service provider claiming breach of contract. The complaint alleges services were performed for which the Company owes $28,833 plus interest. The Company believes this claim to be without merit and has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

ITEM 1A. RISK FACTORS

Not applicable.

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

During the six months ended June 30, 2018, the Company issued 38,095 common shares as the settlement for common stock subscriptions totaling $400,000; 11,479 common shares valued at $154,973 for the settlement of stock based liabilities and 2,000 common shares for the settlement of a convertible note payable.

ITEM 3. DEFAULTS UPON SENIOR DEBT

None.

ITEM 4. REMOVED AND RESERVED

None.

30

ITEM 6. EXHIBITS

Exhibit No.	Description	Location
2	Articles of Merger- NYBD Holding, Inc/Pleasant Kids, Inc.	(1)
3.1	Articles of Incorporation- League Now Holdings, Corporation, dated September 21, 2005	(1)
3.2	Articles of incorporation – Pleasant Kids, Inc., dated July 19, 2013	(1)
3.3	Amendment to articles of incorporation, dated May 9, 2013	(1)
3.9	Amendment to articles of incorporation, dated February 25, 2015	(2)
3.10	Amendment to articles of incorporation, dated March 19, 2015	(2)
3.11	Joint Venture Agreement between NextCala, Inc. and Glocal Payment Solutions, Inc. dated May 27, 2016	(3)
3.12	Addendum to joint venture agreement between NextCala, Inc. and Glocal Payment Solutions, Inc. dated August 9, 2016	(3)
3.13	Debt Purchase and Assignment Agreement and Stock Purchase Agreement of Transaction Processing Products, Inc. dated July 10, 2016	(4)
3.14	Agreement Regarding Purchase and Sale of All Assets and Certain Liabilities of Tel3 dated August 11, 2016	(4)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith

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

31

SIGNATURES

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

	Next Group Holdings, Inc.
	(Registrant)
Date: November 21, 2018	By:	/s/ Arik Maimon
		Chief Executive Officer
	By:	/s/ Michael DePrado
		Chief Financial Officer

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Arik Maimon, certify that:

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

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

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

(4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Arik Maimon
	Arik Maimon
	Chief Executive Officer November 21, 2018

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Michael DePrado, certify that:

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

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

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

(4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Michael DePrado
	Michael DePrado Chief Financial Officer
	November 21, 2018

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cuentas, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission (the “Report”), Arik Maimon, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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

By:	/s/ Arik Maimon
	Arik Maimon
	Chief Executive Officer November 21, 2018

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

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cuentas, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission (the “Report”), I, Michael DePrado, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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

By:	/s/ Michael DePrado
	Michael DePrado Chief Financial Officer
	November 21, 2018

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Nov. 21, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Cuentas Inc.
Entity Central Index Key	0001424657
Document Type	10-Q
Trading Symbol	CUEN
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		1,305,088

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 12,770	$ 92,714
Accounts receivable, net	4,382,269	7,623,197
Accounts receivable, related party	610,006	8,545
Prepaid expenses and other current assets	90,755	74,365
Related party receivable	36,000	36,000
Other receivable	641	100,000
Total current assets	5,132,441	7,934,821
Equipment, net of accumulated depreciation	15,734	5,608
Intangible assets, net of accumulated amortization	2,721,472	2,935,757
License fee, net of accumulated amortization		34,722
Investments	180,000	250,000
Goodwill	1,333,713	1,333,713
Total assets	9,383,360	12,494,621
Current liabilities
Accounts payable and accrued liabilities	4,524,873	7,030,050
Accounts payable, related party	1,341,427	499,668
Dividends payable	30,000	30,000
Deferred revenue	612,174	685,905
Loan payable	75,000	75,000
Convertible notes payable, net of discounts and debt issue costs		48,897
Derivative liability	119,269	574,130
Related party payables	3,072,482	3,032,567
Notes payable, current	72,015	71,048
Stock based liabilities	1,261,730	2,963,272
Total current liabilities	11,108,970	15,010,537
Related party payables, net of discounts	2,607,670	2,535,601
Other long term liabilities		120,000
Total liabilities	13,716,640	17,666,138
Commitments and contingencies
Stockholders' Deficit
Common stock subscribed		400,000
Common stock, authorized 360,000,000 shares, $0.001 par value; 1,191,972 and 1,140,398 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	1,192	1,140
Additional paid in capital	10,254,782	9,554,844
Accumulated deficit	(13,953,044)	(14,207,568)
Accumulated other comprehensive income		(300,000)
Total Cuentas, Inc. stockholders' deficit	(3,687,070)	(4,541,584)
Non-controlling interest in subsidiaries	(646,210)	(629,933)
Total stockholders' deficit	(4,333,280)	(5,171,517)
Total liabilities and stockholders' deficit	9,383,360	12,494,621
Series A preferred stock
Stockholders' Deficit
Preferred stock, value
Series B preferred stock
Stockholders' Deficit
Preferred stock, value	$ 10,000	$ 10,000

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	60,000,000	60,000,000
Common stock, shares authorized	360,000,000	360,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	1,191,972	1,140,398
Common stock, shares outstanding	1,191,972	1,140,398
Series A preferred stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B preferred stock
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares designated	10,000,000	10,000,000
Preferred stock, shares issued	10,000,000	10,000,000
Preferred stock, shares outstanding	10,000,000	10,000,000

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Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Revenue	$ 11,967,987	$ 500,426	$ 29,718,263	$ 997,224
Revenue, sales to related parties	8,941,435	73,638	11,189,379	77,431
Total revenue	20,909,422	574,064	40,907,642	1,074,655
Cost of revenue	12,293,982	450,175	28,479,619	785,432
Cost of revenue, purchases from related parties	8,361,849		11,434,687
Gross profit (loss)	253,591	123,889	993,336	289,223
Operating expenses
Officer compensation	193,525	147,777	328,717	363,943
Professional fees	214,340	641,603	514,698	1,132,887
General and administrative	419,997	132,688	855,003	229,580
Total operating expenses	827,862	922,068	1,698,418	1,726,410
Loss from operations	(574,271)	(798,179)	(705,082)	(1,437,187)
Other income (expense)
Other income		178,712		179,580
Other expense	(69,912)		(94,862)
Interest expense	(346,325)	(238,477)	(748,907)	(597,719)
Gain (loss) on derivative liability	14,729	(1,579,105)	427,935	(1,993,142)
Gain on extinguishment of debt			98,611
Gain (loss) on fair value of stock based liabilities	(3,069)		1,559,413
Total other income (expense)	(404,577)	(1,638,870)	1,242,190	(2,411,281)
Loss from discontinued operations				(327,800)
Income (loss) before income taxes	(978,848)	(2,437,049)	537,108	(4,176,268)
Income taxes
Net income (loss)	(978,848)	(2,437,049)	537,108	(4,176,268)
Net (income) loss attributable to non-controlling interest	9,619	(144)	17,416	9,630
Net income (loss) attributable to Cuentas, Inc.	$ (969,229)	$ (2,437,193)	$ 554,524	$ (4,166,638)
Net income (loss) per basic share	$ (0.81)	$ (2.62)	$ 0.47	$ (4.71)
Net income (loss) per diluted share	$ (0.81)	$ (2.62)	$ 0.43	$ (4.71)
Weighted average number of basic common shares outstanding	1,191,972	930,122	1,183,555	884,706
Weighted average number of diluted common shares outstanding	1,191,972	930,122	1,287,382	884,706

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities:
Net income (loss)	$ 537,108	$ (4,176,268)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Shares issued for services		720,200
Stock based compensation	44,333	154,943
Imputed interest	119,517	119,518
Gain on extinguishment of debt	(98,611)
Loss on fair value of investments	70,000
Debt discount amortization	72,069	328,537
Gain on derivative fair value adjustment	(427,935)	1,993,142
License fee amortization	34,722	41,667
Amortization of debt issue costs		13,004
Loss on disposal of business		327,800
Gain on fair value of stock based liabilities	(1,559,413)
Allowance for doubtful accounts		25,000
Depreciation expense	1,373
Amortization of intangible assets	214,285
Changes in Operating Assets and Liabilities:
Accounts receivable	3,240,928	1,363
Accounts receivable, related party	(601,461)	(49,720)
Prepaid expenses	(16,390)	44,758
Other receivable	99,359
Accounts payable	(2,595,239)	317,301
Accounts payable, related party	841,759
Deferred revenue	(73,731)	21,874
Net Cash Used by Operating Activities	(97,327)	(116,881)
Cash Flows from Investing Activities:
Purchase of equipment	(11,499)
Net Cash Used by Investing Activities	(11,499)
Cash Flows from Financing Activities:
Bank overdraft		(7)
Proceeds from loans payable	967	25,000
Repayments of convertible notes	(12,000)
Proceeds from related party loans	40,199
Repayments of related party loans	(284)	(100,542)
Net Cash Provided by (Used in) Financing Activities	28,882	(75,549)
Net Increase (Decrease) in Cash	(79,944)	(192,430)
Cash at Beginning of Period	92,714	256,302
Cash at End of Period	12,770	63,872
Supplemental disclosure of cash flow information
Cash paid for interest	586,145
Cash paid for income taxes
Supplemental disclosure of non-cash financing activities
Common stock issued as related party loan and accrued interest repayment		294,923
Common stock issued for conversion of convertible note principal	26,640	167,069
Common stock issued for conversion of convertible accrued interest		11,580
Common stock issued for settlement of stock based liabilities	154,973
Common stock issued for settlement of common stock subscribed	$ 400,000

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Organization and Description of Business

6 Months Ended

Jun. 30, 2018

Organization and Description of Business [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Cuentas, Inc. (the “Company”) invests in financial technology and currently derives its revenues from the sales of prepaid and wholesale calling minutes. Additionally, the Company has an agreement with Incomm, a leading processor of general purpose reloadable (“GPR”) debit cards, to market and distribute a line of GPR cards targeted towards the Latin American market. The Company intends to launch the cards upon successful completion of appropriate financing and has yet to generate revenues from this activity. In September 2018, the Company changed its name to Cuentas, Inc. to better represent its intended business activities.

Cuentas, Inc. was incorporated under the laws of the State of Florida on September 21, 2005 to act as a holding company for its subsidiaries, both current and future. Its subsidiaries are Meimoun and Mammon, LLC (100% owned), Next Cala, Inc (94% owned), NxtGn, Inc. (65% owned), Next Mobile 360, Inc. (100% owned) and SDI Next Distribution, LLC (51% owned). Additionally, Next Cala, Inc. has a 60% interest in NextGlocal, a subsidiary formed in May 2016. During the year ended December 31, 2016, the Company acquired a business segment, Tel3, from an existing corporation. Tel3 was merged into Meimoun and Mammon, LLC effective January 1, 2017. On October 23, 2017, the Company acquired 100% of the outstanding interests in Limecom, Inc.

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

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

NxtGn, Inc. (“NxtGn”) was formed under the laws of Florida on August 24, 2011 to develop a High Definition telepresence product (AVYDA) which allows users to connect with celebrities, public figures, healthcare and education applications via a mobile phone, tablet or personal computer.  NxtGn has entered into a joint venture with telephony platform industry leader Telarix, Inc. to develop and market the AVYDA Powered by Telarix™ HD telepresence platform. The AVYDA Powered by Telarix™ product is marketed throughout the world by the Telarix sales force.

On May 27, 2016, Next Cala entered into a Joint Venture Agreement (the “Agreement”) with Glocal Payments Solutions, Inc (“Glocal”) to form a joint venture, NextGlocal, in which Cala has a 60% controlling interest and Glocal has a 40% interest. The Joint Venture sought to launch and activate up to 45,000 prepaid debit cards under the Cala brand by December 31, 2016 and 360,000 additional cards during the 2017 calendar year. Neither milestone was achieved. Either party may terminate the agreement at December 31, 2016 if certain objectives are not met. The joint venture has not had activity since the year ended December 31, 2016 but has not been formally dissolved.

On July 22, 2016, the Company completed its acquisition of Transaction Processing Products, Inc. (“TPP”) which has a 64% interest in Accent InterMedia, LLC (“AIM”) and no other assets or liabilities. The Company disposed of TPP during the year ended December 31, 2017.

On August 10, 2016, M&M, a wholly owned subsidiary of the Company, closed the acquisition of Tel3 from a related party. Tel3 provides prepaid calling cards to consumers directly and operates in a complimentary space as M&M. Tel3 was originally acquired by the Company’s CEO in a private transaction and sold to the Company for $10 cash.

On October 23, 2017, the Company closed the acquisition of Limecom, Inc. (“Limecom”). Limecom is a global telecommunication company, providing services to telecommunication providers from all over the world. Limecom operates a network built on internet protocol (“IP”) switching equipment.

The Company has a Market Partner Agreement with InsightPOS, LLC since September 17, 2016. InsightPOS is a “State of the Art”, “Super Functional Point Of Sale” system that has a combination of tools that we believe makes the retail experience quicker and better both for the shopper and for store management. The Company previously installed about 10 units including training by InsightPOS. These units were withdrawn due to required programming development and improved network interconnections.

On December 6, 2017, the Company completed its formation of SDI NEXT Distribution LLC in which it holds a 51% interest, previously announced August 24, 2017 as a Letter of Intent with Fisk Holdings, LLC. As Managing Member of the newly formed LLC, the Company will contribute a total of $500,000, to be paid per an agreed-upon schedule over a twelve-month period beginning December 2017. Fisk Holdings, LLC will contribute 30,000 active Point of Sale locations for distribution of retail telecommunications and prepaid financial products and services to include, but not be limited to: prepaid general purpose reloadable cards, prepaid gift cards, prepaid money transfer, prepaid utility payments, and other prepaid products. There has been no activity in or cash contributions to this entity since formation.

The Company, through its affiliate, Next Communications, Inc., has the right to sell STI Mobile, Next Cala and any Next products to 8,800 locations that were serviced by a prepaid distribution network. The Company will offer the InsightPOS system to clients of this distribution network as well via direct sales through its own sales force and affiliates. When a system is installed, NGH receives 50% of the gross profits received by InsightPOS after retailer commissions are paid.

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Summary of Significant Accounting Policies and Basis of Presentation

6 Months Ended

Jun. 30, 2018

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

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

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting of interim financial information. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Accordingly, these statements do not include all the disclosures normally required by accounting principles generally accepted in the United States for annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2017 and notes thereto and other pertinent information contained in our annual report on form 10-K as filed with the Securities and Exchange Commission. The unaudited condensed consolidated statements of operations and cash flows for the periods ended June 30, 2018 are not necessarily indicative of the consolidated results of operations or cash flows to be expected for any future period or for the year ending December 31, 2018.

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

Basis of Presentation

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

Principles of Consolidation

The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated.

Use of Estimates

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

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of June 30, 2018 or December 31, 2017. The Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

Revenue recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. Adoption of ASC 606 did not have a significant impact on the Company’s financial statements. The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division and the sale of wholesale telecom minutes through its Limecom subsidiary. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use.

Consumer Prepaid Minutes Revenues

The Company recognizes revenues from the sale of prepaid telecommunications minutes directly to consumers at the retail level. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use. Generally, consumers will prepay a fixed dollar amount then consume the prepayment upon making telephone calls on the Company’s telecommunications network. Revenues from direct to consumer retail sales were $385,802 and $493,458 and $797,025 and $994,049 during the three and six months ended June 30, 2018 and 2017, respectively.

Wholesale Telecommunications Revenues

The Company recognizes revenues from the brokering of sales of minutes from one telecommunications carrier to another. The Company receives an order for a defined number of minutes to a defined geographic region at which point it sources those minutes and purchases them with an immediate resale to the customer. Revenues from wholesale telecommunications minutes were $20,499,288 and $0 and $40,086,285 and $0 during the three and six months ended June 30, 2018 and 2017, respectively.

Significant Judgments

The Company’s contracts with consumers and telecommunications wholesalers can include promises to transfer multiple products and services. Determining whether multiple products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company’s retail products are sold with a limited right of return and the Company may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize.

Deferred Revenue

Deferred revenue is comprised mainly of unearned revenue related to prepayments from retail consumers for telecommunications minutes. The following table represents the changes in deferred revenue for the six months ended June 30, 2018:

	Deferred Revenue
Balance at December 31, 2017	$	685,905
Deferred revenue		723,294
Recognition of deferred revenue		(797,025	)
Balance at June 30, 2018	$	612,174

Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $612,174 as of June 30, 2018, of which the Company expects to recognize 100% of the revenue over the next 12 months.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has elected to immediately expense contract acquisition costs that would be amortized in one year or less. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. There were no capitalized contract acquisition costs as of June 30, 2018.

Property and equipment

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

Goodwill and Intangible Assets

Goodwill represents the excess cost over the fair value of the assets of an acquired business. Goodwill and intangible assets acquired in a business combination accounted for as a purchase and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. The Company evaluates the possible impairment of goodwill annually as part of its reporting process for the fourth quarter of each fiscal year. The Company determines the fair value of each subsidiary the goodwill relates to and compares the fair value to the carrying amount of the subsidiary. To the extent the carrying amount of the subsidiary exceeds the fair value of it, an impairment loss is recorded.

Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows:

Year ended December 31,
2018	$	214,286
2019		428,571
2020		428,571
2021		428,571
2022		428,571
Thereafter		792,902
Total	$	2,721,472

Amortization expense was $107,143 and $214,285 and $0 and $0 for the three and six months ended June 30, 2018 and 2017, respectively. Amortization expense for each period is included in cost of revenue.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There were no impairment losses recorded to long-lived assets during the three or six months ended June 30, 2018 or 2017.

Non-Controlling Interest

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

Derivative and Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

Except as discussed in Note 5 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of June 30, 2018 or December 31, 2017.

Income Taxes

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

Basic Income (Loss) Per Share

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

At June 30, 2018, the Company had one outstanding convertible note payable with conversion rights that are exercisable. The amount of outstanding principal on this convertible note is $0 plus accrued interest of $5,326 for total convertible debt as of June 30, 2018 of $5,326 representing 1,472 new post-reverse split dilutive common shares if converted at the applicable rates. Additionally, the Company has committed to issue a total of 107,889 post-reverse split shares of common stock for the settlement of a related party note payable and services which are not yet issued or outstanding. The effects of this note and total common shares committed to be issued have been included in net income per diluted share for the six months ended June 30, 2018. The effects of these notes have been excluded from net loss per diluted share for the three months ended June 30, 2018 as the impacts would be antidilutive due to the Company recording a net loss for the period.

At June 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $1,162,328 plus accrued interest of $329,357 for total convertible debts as of June 30, 2017 of $1,491,684 representing 256,130 post-reverse split new dilutive common shares if converted at the applicable rates. The effects of these notes have been excluded in net loss per diluted share for the three and six months ended June 30, 2017 as the effects would be anti-dilutive. 

Dividends

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

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

The Company has accrued common stock dividends payable of $30,000 as of June 30, 2018 and December 31, 2017 as the Class D Preferred Stock has yet to be issued for the dividend.

Stock-Based Compensation

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

Derivative Liabilities

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

Related Parties

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

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

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

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provides an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had an allowance for doubtful accounts of $20,000 and $20,000 as of June 30, 2018 and December 31, 2017, respectively.

Accounts Receivable Factoring 

Limecom executed a factoring and security agreement with a financial institution on June 22, 2017, whereby it sells certain of its accounts receivable in exchange for cash. These factoring transactions qualify for sales treatment in accordance with FASB ASC 860, Transfers and Servicing. Upon purchase of the accounts receivable, the Company shall be deemed to have sold, transferred, assigned, set over and conveyed to the financial institution, without recourse except as expressly stated in the agreement, all of the Company’s right, title and interest in and to the purchased accounts receivable. Purchases have an initial gross liquidation advance rate of 90%, up to a maximum cumulative outstanding face amount of $4,000,000. The initial discount fee is 2.1%, and an additional 0.85% of certain receivables.

The Company has a credit insurance policy covering all factored accounts receivable, under which the financial institution is the beneficiary on the policy if default were to occur.

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $0 and $34,722 as of June 30, 2018 and December 31, 2017, respectively.

Investments

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

During the year ended December 31, 2017, the Company acquired 50,000 shares of common stock of Green Spirit Industries, a publicly held company, as a referral fee. The total value of the common shares was recorded as other income using the price of the common stock as quoted on Nasdaq on the date received resulting in other income of $550,000 during the year ended December 31, 2017. At December 31, 2017, the Company marked the value of the shares to fair value resulting in an unrealized loss of $300,000 being recorded as other comprehensive loss for the year ended December 31, 2017. On June 30, 2018, the Company measured the fair value of the common stock as quoted on Nasdaq resulting in an unrealized loss of $70,000 being recorded as other expense for the six months ended June 30, 2018. The fair value of the common shares, as quoted by Nasdaq, as of June 30, 2018 and December 31, 2017 was $180,000 and $250,000, respectively.

On January 1, 2018, the Company adopted FASB Accounting Standards Update (“ASU”) 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update provides guidance to improve certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company’s adoption of ASU 2016-01 resulted in an adjustment to beginning retained earnings in the current period equal to the accumulated unrealized net losses on available for sale securities previously carried in other accumulated comprehensive income totaling $300,000.

Recently Issued Accounting Standards 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments apply to reporting entities that are required to make disclosures about recurring or nonrecurring fair value measurements and should improve the cost, benefit, and effectiveness of the disclosures. ASU 2018-13 categorized the changes into those disclosures that were removed, those that were modified, and those that were added. The primary disclosures that were removed related to transfers between Level 1 and Level 2 investments, along with the policy for timing of transfers between levels. In addition, disclosing the valuation processes for Level 3 fair value measurements was removed. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company notes that this guidance will impact its disclosures beginning January 1, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”. The amendments in this update simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. This update is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing after January 1, 2017. The Company notes that this guidance applies to its reporting requirements and will implement the new guidance accordingly in performing goodwill impairment testing; however, the Company does not believe this update will have a material impact on the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which revises the definition of a business. This update is effective for annual periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company has adopted this guidance on January 1, 2018.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduces the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company evaluated the impacts of ASU 2016-10 and determined it did not have an impact on the Company’s revenue recognition practices.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes the guidance in ASC 840, “Leases.” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated balance sheets or consolidated statements of operations.

On August 26, 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB ASC 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company has adopted this standard which does not have an impact on the Company’s presentation of the consolidated statements of cash flows.

On May 10, 2017, The FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms of conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, ASU 2017-09 is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. The Company has adopted this standard and has not yet had an impact on its accounting practices.

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

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Going Concern

6 Months Ended

Jun. 30, 2018

Going Concern [Abstract]

GOING CONCERN

NOTE 3 – GOING CONCERN

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had net income of $537,108 and a loss of $4,176,268 and net cash used in operating activities of $97,327 and $116,881, for the six months ended June 30, 2018 and 2017, respectively. The Company has a working capital deficit of $5,976,529 and $7,075,716, and an accumulated deficit of $13,953,044 and $14,207,568 as of June 30, 2018 and December 31, 2017, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of issuance of this report. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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

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Notes Payable and Convertible Notes Payable

6 Months Ended

Jun. 30, 2018

Notes Payable and Convertible Notes Payable [Abstract]

NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

NOTE 4 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Notes Payable

During the year ended December 31, 2017, the Company entered into two separate loans to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The first loan resulted in cash proceeds of $125,000 to the Company for future payments totaling $168,750 from future receivables and requires daily repayments of $1,339. The second resulted in cash proceeds of $50,000 for future payments totaling $68,000 from future receivables and requires daily cash repayments of $540. There was $0 and $46,048 due for the agreements as of June 30, 2018 and December 31, 2017, respectively, included in current notes payable.

On May 1, 2017, the Company received a loan from an unrelated party for $25,000. The loan is due on demand and as such is included in current notes payable. The note does not accrue interest and had a principal balance due of $25,000 as of June 30, 2018 and December 31, 2017, respectively.

On April 25, 2018, the Company entered into a loan agreement to be paid by collection of its future accounts receivable and secured by substantially all assets of the Company including accounts receivable, cash, equipment, intangible assets, inventory and other receivables. The loan resulted in cash proceeds to the Company of $180,000 for future payments totaling $234,000 from future receivables and requires daily repayments of $1,858. There was $47,015 and $0 due as of June 30, 2018 and December 31, 2017, respectively, included in current notes payable.

Convertible Notes Payable

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

The Company settled the majority of its convertible notes payable in December 2017 for a combination of cash and shares of common stock. An additional convertible note payable was settled in January 2018 for a combination of cash and shares of common stock.

The following table summarizes all convertible notes payable activity for the six months ended June 30, 2018:

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2017		Repayments			Conversions to Common Stock			Forgiveness of Principal			Balance, June 30, 2018
Noteholder 5	11/9/2015	11/9/2016		100,000		48,897		(12,000	)		(26,640	)		(10,257	)		-
Totals			$	100,000	$	48,897	$	(12,000	)	$	(26,640	)	$	(10,257	)	$	-

The following is a summary of all convertible notes outstanding as of June 30, 2018:

Holder	Issue Date	Due Date	Principal		Discount		Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 6	11/2/2016	11/2/2017		-		-		-		-		5,326
Totals			$	-	$	-	$	-	$	-	$	5,326

Accrued Interest

There was $5,326 and $35,136 of accrued interest due on all convertible notes as of June 30, 2018 and December 31, 2017, respectively which is included in accounts payable and accrued liabilities on the balance sheet (see Note 8 – Accounts Payable and Accrued Liabilities).

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Derivative Liabilities

6 Months Ended

Jun. 30, 2018

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

NOTE 5 – DERIVATIVE LIABILITIES

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

As of June 30, 2018, the Company had a $119,269 derivative liability on the balance sheet and recorded gains from derivative liability fair value adjustments of $14,729 and $427,935 during the three and six months ended June 30, 2018.  The derivative liability activity comes from convertible notes payable as discussed in Note 4 – Notes Payable and Convertible Notes Payable. In addition to derivative liabilities associated with convertible notes payable, the Company recorded a derivative liability due to a ratchet strike price feature associated with the options issued in the sale of TPP. Taking into account the effect of the reverse stock split (see Note 9 – Stockholders’ Equity), the options are exercisable at $54 per share unless the Company’s common stock is quoted at a price greater than $150 per share at which point the options are exercisable at $0.30 per share.

A summary of outstanding derivative liabilities as of June 30, 2018 is as follows:

Holder	Derivative Balance
Option Holder	$	119,269
Total	$	119,269

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

	June 30, 2018	December 31, 2017
Expected volatility	213%	178% - 334%
Expected term	1.76 years	.01 - 2.25 years
Risk free rate	2.52%	0.97% - 1.89%
Forfeiture rate	0%	0%
Expected dividend yield	0%	0%

A summary of the changes in derivative liabilities balance for the six months ended June 30, 2018 is as follows:

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	574,130
Initial measurement of derivative liabilities		-
Change in fair value		(427,935	)
Change due to conversion		(26,926	)
Balance, June 30, 2018	$	119,269

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Stock Options

6 Months Ended

Jun. 30, 2018

Stock Options [Abstract]

STOCK OPTIONS

NOTE 6 – STOCK OPTIONS

The following table summarizes all stock option activity for the six months ended June 30, 2018, taking into account the effect of the reverse stock split (see Note 9 – Stockholders’ Equity):  

	Shares		Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2017		105,378	$	39.27
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding, June 30, 2018		105,378	$	39.27

The following table discloses information regarding outstanding and exercisable options at June 30, 2018:

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	54.00		58,334	$	54.00		2.34		36,112	$	54.00
	21.00		47,044		21.00		1.99		47,044		21.00
			105,378	$	39.27		2.16		83,156	$	35.33

On May 31, 2016, the Company issued 33,334 options to a board member pursuant to its agreement with the member. One third of the 33,334 options issued vested immediately upon execution of the related agreement. The remaining shares of the issuance vest based on performance milestones which the Company believes is 80% likely of occurring resulting in stock based expense of $334,997 during the year ended December 31, 2017. There was no change in the estimated probability to attain the performance criteria during the six months ended June 30, 2018. The remaining fair value of the unvested shares of $223,331 will be recognized according to the estimated probability of the performance obligations being achieved.

On March 31, 2017, the Company, as part of its sale of TPP issued 25,000 options that are exercisable for a period of three years and carry an exercise price of $54 per share. The options carried a value of $898,490 which was recorded as a derivative liability as discussed in Note 5 – Derivative Liabilities. The options carry a ratchet pricing feature whereby they become exercisable at $0.30 per share if the Company’s common stock trades at a price greater than $150 per share.

There was an unrecognized stock option based expense of $223,331 as of June 30, 2018.

As discussed in Note 9 – Stockholders’ Equity, as of June 30, 2018 the Company has committed to issue more shares of common stock than it has authorized. The Company does not have available shares in its treasury to issue should option holders choose to exercise. As a result, the value of certain stock options are included in stock based liabilities on the balance sheet and subject to remeasurement at each reporting period. During August 2018, the Company effected a 1:300 reverse stock split on its common shares to remedy the shortfall in its authorized common shares.

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

The Company has had extensive dealings with related parties including those in which our Chief Executive Officer holds a significant ownership interest as well as an executive position during the six months ended June 30, 2018 and year ended December 31, 2017. Due to our operational losses, the Company has relied to a large extent on funding received from Next Communications, Inc., an organization in which our Chief Executive Officer and Chairman holds a controlling equity interest and holds an executive position. During the first calendar quarter of 2017, Next Communications, Inc. filed for bankruptcy protection. As a result, the related party payable is being handled by a court appointed trustee as an asset of Next Communications, Inc. and the Company may need to begin repaying the amounts due on a more fixed schedule.

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

Related party balances at June 30, 2018 and December 31, 2017 consisted of the following:

Due from related parties

	June 30, 2018		December 31, 2017
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

Related party payables, net of discounts

	June 30, 2018		December 31, 2017
(b) Due to Next Communications, Inc. (current)	$	2,943,519	$	2,919,615
(c) Due to Asiya Communications SAPI de C.V. (current)		19,009		5,998
(d) Michael DePrado (current)		99,604		99,604
(e) Orlando Taddeo, net of discount of $0 and $72,069 (long term, due July 21, 2019)		2,607,670		2,535,601
(f) Next Cala 360 (current)		10,350		7,350
Total related party payables	$	5,680,152	$	5,568,168

(a)	Glocal Card Services is our partner in the Glocal Joint Venture
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer
(e)	Amount due to Orlando Taddeo from the acquisition of Limecom
(f)	Next Cala 360, is a Florida corporation established and managed by our Chief Executive Officer.

During the three and six months ended June 30, 2018 and 2017, the Company recorded interest expense of $59,760 and $59,760 and $119,517 and $119,518 using an interest rate equal to that on the outstanding convertible notes payable as discussed in Note 4 – Notes Payable and Convertible Notes Payable as imputed interest on the related party payable due to Next Communications. The interest was immediately forgiven by the related party and recorded to additional paid in capital.

Accounts Receivable, Related Party

The Company had outstanding accounts receivable of $610,006 from related parties as of June 30, 2018 of which $609,312 was due from Next Communications and $694 was due from Asiya Communications SAPI de C.V. The accounts receivable arose from the sale of wholesale telecommunications minutes to these entities.

Accounts Payable, Related Party

The Company had outstanding accounts payable of $1,341,427 to related parties as of June 30, 2018 all of which was to Asiya Communications SAPI de C.V.

Revenues (Related Party)

The Company made sales to and generated revenues from related parties of $8,941,435 and $73,638 during the three months ended June 30, 2018 and 2017 as itemized below:

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,688,134	$	71,666
Asiya Communications SAPI de C.V.		4,253,301		1,972
Next Cala 360		-		-
Total	$	8,941,435	$	73,638

The Company made sales to and generated revenues from related parties of $11,189,379 and $77,431 during the six months ended June 30, 2018 and 2017 as itemized below:

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	5,812,611	$	71,666
Asiya Communications SAPI de C.V.		5,376,768		1,972
Next Cala 360		-		3,793
Total	$	11,189,379	$	77,431

Costs of Revenues (Related Party)

The Company made purchases from related parties totaling $8,361,849 and $0 during the three months ended June 30, 2018 and 2017 which are included in cost of revenues as itemized below:

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	3,579,013	$	-
Asiya Communications SAPI de C.V.		4,782,836		-
Total	$	8,361,849	$	-

The Company made purchases from related parties totaling $11,434,687 and $0 during the six months ended June 30, 2018 and 2017 which are included in cost of revenues as itemized below:

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,701,659	$	-
Asiya Communications SAPI de C.V.		6,733,028		-
Total	$	11,434,687	$	-

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Accounts Payable and Accrued Liabilities

6 Months Ended

Jun. 30, 2018

Accounts Payable and Accrued Liabilities [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30, 2018		December 31, 2017
Trade payables	$	2,671,537	$	5,067,841
Settlements payable (see Note 12 – Commitments and Contingencies)		1,133,858		1,438,994
Accrued expenses		235,742		153,223
Accrued interest		13,129		40,955
Accrued salaries and wages		470,607		329,037
Total	$	4,524,873	$	7,030,050

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred Stock

At the time of incorporation, the Company was authorized to issue 60,000,000 shares of preferred stock with a par value of $0.001 of which 50,000,000 was undesignated and 10,000,000 was designated as Series B. With the completion of the recapitalization as discussed in Note 1 – Organization and Description of Business, the outstanding Series A preferred shares were cancelled leaving a balance outstanding of Preferred Series A of -0-.

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

The Company has 36,000,000 shares of Preferred Stock designated as Series D. The Class D Preferred Stock must be redeemed within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation’s affiliates lawsuit against ViberMedia , Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the “Lawsuit”). There were no Series D Preferred shares issued or outstanding as of June 30, 2018 or December 31, 2017.

Common Stock

Effective November 20, 2015 the Company amended its Articles of Incorporation to decrease the common shares authorized from 9,500,000,000 to 360,000,000 with a par value of $0.001. On August 7, 2018, the Board approved a one-for-three hundred (1:300) reverse stock split of the common stock. The effects of the reverse stock split have been reflected in the financial statements retroactively.

During the six months ended June 30, 2018, the Company issued 38,095 common shares as the settlement for common stock subscriptions totaling $400,000; 11,479 common shares valued at $154,973 for the settlement of stock based liabilities and 2,000 common shares for the settlement of a convertible note payable.

Summary of common stock activity for the six months ended June 30, 2018	Outstanding shares
Balance, December 31, 2017		1,140,398
Shares issued for common stock subscriptions		38,095
Shares issued as settlement of stock based liabilities		11,479
Shares issued for settlement of convertible notes payable and accrued interest (a)		2,000
Balance, June 30, 2018		1,191,972

(a) Shares issued in connection with outstanding convertible note payable and convertible accrued interest on convertible notes payable in accordance with a settlement agreement entered into as discussed in Note 4 – Notes Payable and Convertible Notes Payable.

The Company has 1,191,972 common shares issued and outstanding and 107,889 common shares committed to be issued as of June 30, 2018. The values of the unissued shares are subject to fair value measurement at each reporting period. As of June 30, 2018, stock based liabilities consisted of:

	Number of Common Shares and Common Share Equivalents		Fair Value
Common stock to be issued (1)		107,889	$	803,122
Options to purchase common stock (2)		80,378		458,608
Totals		188,267	$	1,261,730

(1)	Includes 34,537 common shares committed to be issued in connection with our acquisition of Limecom as discussed in Note 1 Organization and Description of Business.
(2)	Excludes 25,000 options with ratchet pricing features included in derivative liabilities. The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.

As of June 30, 2018, the Company did not have adequate authorized common shares to fulfill its obligations under certain agreements. Specifically, the Company had committed to issue common shares in excess of authorized shares totaling 32,365,826 (pre-reverse split); has 31,613,142 (pre- reverse split) options to purchase common stock issued of which 24,946,476 (pre-reverse split) are exercisable and has outstanding convertible accrued interest on a convertible note payable the holder of which has the right to convert into 441,554 (pre-reverse split) shares of common stock as of June 30, 2018. Total common stock and common stock equivalents in excess of the Company’s authorized common shares are summarized as follows:

	Pre-Reverse Split		Post-reverse split
Committed shares beyond authorized		32,365,826		107,889
Stock options granted		31,613,142		105,378
Convertible notes payable and accrued interest		441,554		1,472
Total		64,420,522		214,739

The Company effected a 1:300 reverse split on its common stock on August 7, 2018 to remedy the shortfall in authorized unissued shares.

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Customer Concentration

6 Months Ended

Jun. 30, 2018

Customer Concentration [Abstract]

CUSTOMER CONCENTRATION

NOTE 10 – CUSTOMER CONCENTRATION 

The Company generated approximately 79% of its revenues for the three months ended June 30, 2018 and 51% of its revenues for the six months ended June 30, 2018 from three separate customers. The Company did not have any one customer account for more than 10% of its revenues during the three or six months ended June 30, 2017.

As of June 30, 2018, four separate customers accounted for approximately 94% of the Company’s total accounts receivable. Of this amount, one customer representing 12% of the outstanding accounts receivable was due from a related party. As of December 31, 2017, three separate customers accounted for approximately 78% of the Company’s total accounts receivable.

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Restatement of the Three and Six Months Ended June 30, 2017

6 Months Ended

Jun. 30, 2018

Restatement of the Three and Six Months Ended June 30, 2017 [Abstract]

RESTATEMENT OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

NOTE 11 – RESTATEMENT OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2017

The Company has restated its statement of operations and statement of cash flows for the six months ended June 30, 2017 to correct an error in the treatment of the disposal of a subsidiary. The Company had originally recorded the elimination of the non-controlling interest component of equity of the sold subsidiary as an equity only transaction by absorbing $2,540,903 of non-controlling interest equity into that of the Company. The correct treatment of the disposal necessitates the amount of non-controlling interest to be included in the calculation of the gain or loss on the disposal of a subsidiary recognized through the income statement. The impact to the financial statements is an increase in loss from discontinued operations and net loss by $2,540,903 for the six months ended June 30, 2017 and no change for the three months ended June 30, 2017. Net loss per common share increased from $4.23 as originally stated to $4.71 as restated for the six months ended June 30, 2017 with no change for the three months ended June 30, 2017. There was no impact on the net cash used in operations during the six months ended June 30, 2017 as a result of the restatement. Although not presented, the impact of the restatement on the Company’s consolidated balance sheet as of June 30, 2017 is an increase to additional paid in capital and increase to accumulated deficit of $2,540,903.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

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

On April 7, 2016, the Company executed an agreement with a service provider to provide certain services for the Company. In addition to cash and stock compensation, the agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reaches $750,000,000. The Company recorded an expense associated with the non-variable portion of the agreement. However, the probability of the Company’s market capitalization reaching these thresholds is uncertain at present and the Company has not accrued a contingent fee as of June 30, 2018 or December 31, 2017 as a result.

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

On February 12, 2018, the Company was served with a complaint from Viber for reimbursement of attorney’s fees and costs totaling $527,782 arising from the litigation listed above. The Company is vigorously defending their rights in this case as we believe this demand is premature as litigation is ongoing. The Company has not accrued an estimated loss related to this complaint as of June 30, 2018 or December 31, 2017 given the premature nature of the motion.

On October 20, 2016, the Company received a notice it has been named as a defendant in a suit brought against Next Communications, an entity controlled by our CEO. In addition to being named a defendant, it was requested the Company provide certain documents for the discovery process. Due to the original suit being filed against a related party and not against the Company or its subsidiaries, we believe it likely the Company and its subsidiaries will be dismissed as defendants and has not accrued a contingent loss as of June 30, 2018 or December 31, 2017 as a result.

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

On December 20, 2017, a Complaint was filed by J. P. Carey Enterprises, Inc., alleging a claim for $473,264 related to the Franjose Yglesias-Bertheau filed lawsuit against PLKD listed above. Even though NGH made the agreed payment of $10,000 on January 2, 2017 and issued 3,600,720 shares as conversion of the $70,000 note as agreed in the settlement agreement, the Plaintiff alleges damages which NGH claims are without merit because they received full compensation as agreed. NGH is in the process of defending itself against these claims. The Company has not accrued losses related to this claim due to the early stages of litigation.

During 2016, Limecom had disputed accounts payable with three (3) carriers, for which the Company entered into separate settlement agreements, totaling approximately $1,147,000. Under the terms of these settlement agreements, the Company was provided with extended payment terms on the outstanding balances. These settlement agreements are non-interest bearing and include certain default provisions as disclosed in the related agreements. The Company assumed a total of $676,563 of this liability on October 23, 2017 as part of its acquisition of Limecom and made repayments totaling $10,000 during the period of acquisition to December 31, 2017 and $95,136 during the six months ended June 30, 2018. The remaining outstanding principal balance of these settlement agreements amounted to approximately $571,427 and $666,563 as of June 30, 2018 and December 31, 2017, respectively. Of these totals, $571,427 and $546,563 is current and included in accrued liabilities and $0 and $120,000 is long term and represented by other long term liabilities as of June 30, 2018 and December 31, 2017, respectively.

On October 23, 2017, the Company assumed a settlement liability Limecom had entered into with American Express as part of its acquisition as discussed in Note 1 – Organization and Description of Business. As of the date of acquisition, there was a total outstanding balance of $995,158. The Company made repayments totaling $102,727 from the period of October 23, 2017 to December 31, 2017 and $330,000 during the six months ended June 30, 2018 leaving a remaining balance due of $562,431 and $892,431 as of June 30, 2018 and December 31, 2017, respectively. The balance due is included in accounts payable and accrued liabilities as of June 30, 2018 and December 31, 2017.

On October 23, 2018, the Company received service of a complaint filed against it by a former supplier citing unspecified damages in excess of $15,000. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

On October 25, 2018, the Company was notified by its registered agent in the state of Florida it had received notification of a filed complaint by a former employee that alleges breach of contract. The Company is in the early stages of discovery with a response to the complaint due on November 14, 2018. The Company has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process.

On October 25, 2018, the Company was received a claim letter issued by TCA Gloal Master Fund in which it claims the Company is liable for unpaid investment banking services totaling $2,500,000. The Company believes this claim to be without merit and has responded to the letter as such. The Company has not accrued any losses or a liability related to this letter as of June 30, 2018. 

On November 7, 2018, the Company was serviced with a complaint from a former service provider claiming breach of contract. The complaint alleges services were performed for which the Company owes $28,833 plus interest. The Company believes this claim to be without merit and has not accrued any losses as of June 30, 2018 related to the complaint given the early nature of the process. 

The Company executed a lease for office space effective July 10, 2018 with a term to October 31, 2018. The lease requires monthly rental payments of $4,750 plus monthly maintenance costs of $100. Total future guaranteed payments under this lease are $19,400.

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Pro Forma Statements of Operations

6 Months Ended

Jun. 30, 2018

Pro Forma Statements of Operations [Abstract]

PRO FORMA STATEMENTS OF OPERATIONS

NOTE 13 – PRO FORMA STATEMENTS OF OPERATIONS

On October 23, 2017, the Company completed its acquisition of Limecom as discussed in Note 1 – Organization and Description of Business. The Company is furnishing the following pro forma statements of operations representing the combined results of the Company and Limecom for the six months ended June 30, 2017 had the acquisition been completed on January 1, 2017.

	NGH			Limecom			Pro Forma Adjustments			Pro Forma
Revenue	$	1,074,655		$	46,783,665		$	-		$	47,858,320
Cost of revenue		785,432			45,354,949			214,286	(a)		46,354,667
Gross margin		289,223			1,428,716			(214,286	)		1,503,653
Operating expenses
Officer compensation		363,943			125,165			-			489,108
Professional fees		1,132,887			257,600			-			1,390,487
General and administrative		229,580			570,196			-			799,776
Total operating expenses		1,726,410			952,961			-			2,679,371
Loss from operations		(1,437,187	)		475,755			(214,286	)		(1,175,718	)
Other income (expense)
Other income		179,580			65,465			-			245,045
Interest expense		(597,719	)		(123,230	)		-			(720,949	)
Loss on derivative liability		(1,993,142	)		-			-			(1,993,142	)
Total other income (expense)		(2,411,281	)		(57,765	)		-			(2,469,046	)
Net income (loss) from continuing operations	$	(3,848,468	)	$	417,990		$	(214,286	)	$	(3,644,764	)

(a) Amortization of acquired intangible assets from acquisition

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 – SUBSEQUENT EVENTS

On August 7, 2018, the Company effected a 1:300 reverse stock split on its common stock. The effects of this stock split on the Company’s number of shares issued and outstanding has been retroactively applied to these financial statements.

Subsequent to the balance sheet date, the Company issued a total of 781 shares of common stock in conjunction with rounding from its reverse stock split; 61,001 shares of common stock for the settlement of stock based liabilities; 2,167 common shares as part of a settlement agreement; 13,333 for services and 35,834 shares of common stock for cash proceeds of $107,500.

The Company entered into a separate securities purchase agreement to raise a total of $440,000 of cash in exchange for 146,669 shares of common stock. As of the date of this filing, the Company has received total cash of $90,000. The common shares will be issued upon the receipt of all cash due under the agreement. The shares associated with this agreement have not been issued and are not included in the preceding paragraph.

On August 23, 2018, the Company committed to issue a total of 60,639 common shares for services. Of this total, 33,334 were issued in exchange for previously outstanding options totaling 33.334 which carried an exercise price of $54.

On September 13, 2018, the Company and certain officers agreed to convert $282,623 of past wages and other compensation owing to shares of common stock at a rate of $4 per share resulting in 70,657 common shares being committed to be issued. Additionally, a total of 90,000 options to purchase common stock were granted with each option grant vesting equally over a three year period and exercisable at $3 per share. The options expire in September 2023.

On November 6, 2018, the Company finalized an accounts receivable factoring agreement whereby the factor agent will purchase outstanding accounts receivable at its sole discretion less certain commissions. The factoring agent commission due under the agreement is 1.19% of the face value of the purchased accounts receivable for the twenty days immediately following invoice issuance plus 0.59% for each twenty days thereafter. The factoring agent may advance cash to the Company at its sole discretion up to 90% of the purchase price with an initial maximum advance capacity of $4,000,000. The Company may request increases to the maximum advance allowed under the agreement not to exceed an additional $1,000,000 during each 90 day period immediately following execution for up to a maximum advance of $8,000,000.

The Company will issue compensation to its financial advisor with respect to the agreement totaling 2.5% of the initial credit line limit, or $100,000, in four equal installments. The advisor will receive further compensation of 3.0% of any future increases in the credit limit above $4,000,000 up to $8,000,000. The advisor also received a warrant to purchase 74,866 shares of common stock at an exercise price of $3.74 per share for a period of five years. The warrant may be exchanged without the payment of any additional consideration for the Company’s common stock based upon the values of the warrant and the stock at the time of the exchange.

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

6 Months Ended

Jun. 30, 2018

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

Basis of Presentation

Basis of Presentation

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

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its wholly-owned and majority-owned subsidiaries. All inter-company balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

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

Cash

Cash

For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company held no cash equivalents as of June 30, 2018 or December 31, 2017. The Company did not hold cash with any one financial institution in excess of the FDIC insured limit of $250,000.

Revenue recognition

Revenue recognition

The Company follows ASC 606 of the FASB Accounting Standards Codification for revenue recognition. Adoption of ASC 606 did not have a significant impact on the Company’s financial statements. The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected to be received in exchange for those products or services. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company primarily generates revenues through the sale of prepaid calling minutes to consumers through its Tel3 division and the sale of wholesale telecom minutes through its Limecom subsidiary. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use.

Consumer Prepaid Minutes Revenues

The Company recognizes revenues from the sale of prepaid telecommunications minutes directly to consumers at the retail level. While the Company collects payment for prepaid consumer minutes in advance, revenue is recognized upon delivery to and consumption of minutes by the consumer or upon the forfeiture of minutes with forfeitures occurring after 12 consecutive months of non-use. Generally, consumers will prepay a fixed dollar amount then consume the prepayment upon making telephone calls on the Company’s telecommunications network. Revenues from direct to consumer retail sales were $385,802 and $493,458 and $797,025 and $994,049 during the three and six months ended June 30, 2018 and 2017, respectively.

Wholesale Telecommunications Revenues

The Company recognizes revenues from the brokering of sales of minutes from one telecommunications carrier to another. The Company receives an order for a defined number of minutes to a defined geographic region at which point it sources those minutes and purchases them with an immediate resale to the customer. Revenues from wholesale telecommunications minutes were $20,499,288 and $0 and $40,086,285 and $0 during the three and six months ended June 30, 2018 and 2017, respectively.

Significant Judgments

The Company’s contracts with consumers and telecommunications wholesalers can include promises to transfer multiple products and services. Determining whether multiple products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company’s retail products are sold with a limited right of return and the Company may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize.

Deferred Revenue

Deferred revenue is comprised mainly of unearned revenue related to prepayments from retail consumers for telecommunications minutes. The following table represents the changes in deferred revenue for the six months ended June 30, 2018:

	Deferred Revenue
Balance at December 31, 2017	$	685,905
Deferred revenue		723,294
Recognition of deferred revenue		(797,025	)
Balance at June 30, 2018	$	612,174

Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”). Contracted not recognized revenue was $612,174 as of June 30, 2018, of which the Company expects to recognize 100% of the revenue over the next 12 months.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has elected to immediately expense contract acquisition costs that would be amortized in one year or less. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year. There were no capitalized contract acquisition costs as of June 30, 2018.

Property and equipment

Property and equipment

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

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill represents the excess cost over the fair value of the assets of an acquired business. Goodwill and intangible assets acquired in a business combination accounted for as a purchase and determined to have an indefinite useful life are not amortized but are tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed periodically for impairment. The Company evaluates the possible impairment of goodwill annually as part of its reporting process for the fourth quarter of each fiscal year. The Company determines the fair value of each subsidiary the goodwill relates to and compares the fair value to the carrying amount of the subsidiary. To the extent the carrying amount of the subsidiary exceeds the fair value of it, an impairment loss is recorded.

Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows:

Year ended December 31,
2018	$	214,286
2019		428,571
2020		428,571
2021		428,571
2022		428,571
Thereafter		792,902
Total	$	2,721,472

Amortization expense was $107,143 and $214,285 and $0 and $0 for the three and six months ended June 30, 2018 and 2017, respectively. Amortization expense for each period is included in cost of revenue.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

In accordance with ASC Topic 360, formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of its asset based on estimates of its undiscounted future cash flows. If these estimated future cash flows are less than the carrying value of the asset, an impairment charge is recognized for the difference between the asset’s estimated fair value and its carrying value. There were no impairment losses recorded to long-lived assets during the three or six months ended June 30, 2018 or 2017.

Non-Controlling Interest

Non-Controlling Interest

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

Derivative and Fair Value of Financial Instruments

Derivative and Fair Value of Financial Instruments

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

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

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

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

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

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

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

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

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

Except as discussed in Note 5 – Derivative Liabilities the Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 825-10 as of June 30, 2018 or December 31, 2017.

Income Taxes

Income Taxes

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

Basic Income (Loss) Per Share

Basic Income (Loss) Per Share

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

At June 30, 2018, the Company had one outstanding convertible note payable with conversion rights that are exercisable. The amount of outstanding principal on this convertible note is $0 plus accrued interest of $5,326 for total convertible debt as of June 30, 2018 of $5,326 representing 1,472 new post-reverse split dilutive common shares if converted at the applicable rates. Additionally, the Company has committed to issue a total of 107,889 post-reverse split shares of common stock for the settlement of a related party note payable and services which are not yet issued or outstanding. The effects of this note and total common shares committed to be issued have been included in net income per diluted share for the six months ended June 30, 2018. The effects of these notes have been excluded from net loss per diluted share for the three months ended June 30, 2018 as the impacts would be antidilutive due to the Company recording a net loss for the period.

At June 30, 2017, the Company had eighteen outstanding convertible notes payable with conversion rights that are exercisable. The amount of outstanding principal on these convertible notes total $1,162,328 plus accrued interest of $329,357 for total convertible debts as of June 30, 2017 of $1,491,684 representing 256,130 post-reverse split new dilutive common shares if converted at the applicable rates. The effects of these notes have been excluded in net loss per diluted share for the three and six months ended June 30, 2017 as the effects would be anti-dilutive.

Dividends

Dividends

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

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

The Company has accrued common stock dividends payable of $30,000 as of June 30, 2018 and December 31, 2017 as the Class D Preferred Stock has yet to be issued for the dividend.

Stock-Based Compensation

Stock-Based Compensation

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

Derivative Liabilities

Derivative Liabilities

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

Related Parties

Related Parties

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

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

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

Accounts Receivable

Accounts Receivable

Accounts receivable balances are established for amounts owed to the Company from its customers from the sales of services and products. The Company closely monitors the collectability of outstanding accounts receivable and provides an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company had an allowance for doubtful accounts of $20,000 and $20,000 as of June 30, 2018 and December 31, 2017, respectively.

Accounts Receivable Factoring

Accounts Receivable Factoring 

Limecom executed a factoring and security agreement with a financial institution on June 22, 2017, whereby it sells certain of its accounts receivable in exchange for cash. These factoring transactions qualify for sales treatment in accordance with FASB ASC 860, Transfers and Servicing. Upon purchase of the accounts receivable, the Company shall be deemed to have sold, transferred, assigned, set over and conveyed to the financial institution, without recourse except as expressly stated in the agreement, all of the Company’s right, title and interest in and to the purchased accounts receivable. Purchases have an initial gross liquidation advance rate of 90%, up to a maximum cumulative outstanding face amount of $4,000,000. The initial discount fee is 2.1%, and an additional 0.85% of certain receivables.

The Company has a credit insurance policy covering all factored accounts receivable, under which the financial institution is the beneficiary on the policy if default were to occur.

License Fee

License Fee

The Company entered into an agreement with a certain vendor whereby it obtained a license to market and distribute certain closed loop general purpose reloadable debit cards for an initial term of three years. The Company remitted $250,000 as a license fee in connection with the agreement which it is recognizing over the initial term of the agreement on a straight line basis. The unamortized balance of the license fee was $0 and $34,722 as of June 30, 2018 and December 31, 2017, respectively.

Investments

Investments

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

During the year ended December 31, 2017, the Company acquired 50,000 shares of common stock of Green Spirit Industries, a publicly held company, as a referral fee. The total value of the common shares was recorded as other income using the price of the common stock as quoted on Nasdaq on the date received resulting in other income of $550,000 during the year ended December 31, 2017. At December 31, 2017, the Company marked the value of the shares to fair value resulting in an unrealized loss of $300,000 being recorded as other comprehensive loss for the year ended December 31, 2017. On June 30, 2018, the Company measured the fair value of the common stock as quoted on Nasdaq resulting in an unrealized loss of $70,000 being recorded as other expense for the six months ended June 30, 2018. The fair value of the common shares, as quoted by Nasdaq, as of June 30, 2018 and December 31, 2017 was $180,000 and $250,000, respectively.

On January 1, 2018, the Company adopted FASB Accounting Standards Update (“ASU”) 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The update provides guidance to improve certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company’s adoption of ASU 2016-01 resulted in an adjustment to beginning retained earnings in the current period equal to the accumulated unrealized net losses on available for sale securities previously carried in other accumulated comprehensive income totaling $300,000.

Recently Issued Accounting Standards

Recently Issued Accounting Standards 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments apply to reporting entities that are required to make disclosures about recurring or nonrecurring fair value measurements and should improve the cost, benefit, and effectiveness of the disclosures. ASU 2018-13 categorized the changes into those disclosures that were removed, those that were modified, and those that were added. The primary disclosures that were removed related to transfers between Level 1 and Level 2 investments, along with the policy for timing of transfers between levels. In addition, disclosing the valuation processes for Level 3 fair value measurements was removed. The amendments are effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company notes that this guidance will impact its disclosures beginning January 1, 2020.

In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”. The amendments in this update simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. This update is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing after January 1, 2017. The Company notes that this guidance applies to its reporting requirements and will implement the new guidance accordingly in performing goodwill impairment testing; however, the Company does not believe this update will have a material impact on the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which revises the definition of a business. This update is effective for annual periods beginning after December 15, 2017, including interim periods within those years. Early adoption is permitted. The Company has adopted this guidance on January 1, 2018.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The amendments in this update clarify the following two aspects to Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The entity first identifies the promised goods or services in the contract and reduces the cost and complexity. An entity evaluates whether promised goods and services are distinct. Topic 606 includes implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The Company evaluated the impacts of ASU 2016-10 and determined it did not have an impact on the Company’s revenue recognition practices.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes the guidance in ASC 840, “Leases.” The purpose of the new standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Modified retrospective application is required. Early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated balance sheets or consolidated statements of operations.

On August 26, 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB ASC 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company has adopted this standard which does not have an impact on the Company’s presentation of the consolidated statements of cash flows.

On May 10, 2017, The FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms of conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, ASU 2017-09 is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. The Company has adopted this standard and has not yet had an impact on its accounting practices.

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

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

6 Months Ended

Jun. 30, 2018

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

Schedule of changes in deferred revenue

	Deferred Revenue
Balance at December 31, 2017	$	685,905
Deferred revenue		723,294
Recognition of deferred revenue		(797,025	)
Balance at June 30, 2018	$	612,174

Schedule of amortization of intangible assets

Year ended December 31,
2018	$	214,286
2019		428,571
2020		428,571
2021		428,571
2022		428,571
Thereafter		792,902
Total	$	2,721,472

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Notes Payable and Convertible Notes Payable (Tables)

6 Months Ended

Jun. 30, 2018

Notes Payable and Convertible Notes Payable [Abstract]

Summary of convertible notes payable activity

Holder	Issue Date	Due Date	Original Principal		Balance, December 31, 2017		Repayments			Conversions to Common Stock			Forgiveness of Principal			Balance, June 30, 2018
Noteholder 5	11/9/2015	11/9/2016		100,000		48,897		(12,000	)		(26,640	)		(10,257	)		-
Totals			$	100,000	$	48,897	$	(12,000	)	$	(26,640	)	$	(10,257	)	$	-

Summary of convertible notes outstanding

Holder	Issue Date	Due Date	Principal		Discount		Unamortized Debt Issue Costs		Carrying Value		Accrued Interest
Noteholder 6	11/2/2016	11/2/2017		-		-		-		-		5,326
Totals			$	-	$	-	$	-	$	-	$	5,326

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Derivative Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Liabilities [Abstract]

Schedule of outstanding derivative liabilities

Holder	Derivative Balance
Option Holder	$	119,269
Total	$	119,269

Schedule of value embedded derivative liabilities

	June 30, 2018	December 31, 2017
Expected volatility	213%	178% - 334%
Expected term	1.76 years	.01 - 2.25 years
Risk free rate	2.52%	0.97% - 1.89%
Forfeiture rate	0%	0%
Expected dividend yield	0%	0%

Schedule of changes in derivative liabilities

Fair Value of Embedded Derivative Liabilities:
Balance, December 31, 2017	$	574,130
Initial measurement of derivative liabilities		-
Change in fair value		(427,935	)
Change due to conversion		(26,926	)
Balance, June 30, 2018	$	119,269

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Stock Options (Tables)

6 Months Ended

Jun. 30, 2018

Stock Options [Abstract]

Schedule of stock option activity

	Shares		Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2017		105,378	$	39.27
Granted		-		-
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding, June 30, 2018		105,378	$	39.27

Schedule of information regarding outstanding and exercisable options

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	54.00		58,334	$	54.00		2.34		36,112	$	54.00
	21.00		47,044		21.00		1.99		47,044		21.00
			105,378	$	39.27		2.16		83,156	$	35.33

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transaction [Line Items]

Summary of related party balance

Due from related parties

	June 30, 2018		December 31, 2017
(a) Glocal Card Services		36,000		36,000
Total Due from related parties	$	36,000	$	36,000

Related party payables, net of discounts

	June 30, 2018		December 31, 2017
(b) Due to Next Communications, Inc. (current)	$	2,943,519	$	2,919,615
(c) Due to Asiya Communications SAPI de C.V. (current)		19,009		5,998
(d) Michael DePrado (current)		99,604		99,604
(e) Orlando Taddeo, net of discount of $0 and $72,069 (long term, due July 21, 2019)		2,607,670		2,535,601
(f) Next Cala 360 (current)		10,350		7,350
Total related party payables	$	5,680,152	$	5,568,168

(a)	Glocal Card Services is our partner in the Glocal Joint Venture
(b)	Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer
(c)	Asiya Communications SAPI de C.V.is a telecommunications company organized under the laws of Mexico, in which our Chief Executive Officer holds a substantial interest and is involved in active management.
(d)	Michael DePrado is our Chief Operating Officer
(e)	Amount due to Orlando Taddeo from the acquisition of Limecom
(f)	Next Cala 360, is a Florida corporation established and managed by our Chief Executive Officer.

Related Party Revenues [Member]

Related Party Transaction [Line Items]

Schedule of generated revenues from related parties

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,688,134	$	71,666
Asiya Communications SAPI de C.V.		4,253,301		1,972
Next Cala 360		-		-
Total	$	8,941,435	$	73,638

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	5,812,611	$	71,666
Asiya Communications SAPI de C.V.		5,376,768		1,972
Next Cala 360		-		3,793
Total	$	11,189,379	$	77,431

Related Party Costs of Revenues [Member]

Related Party Transaction [Line Items]

Schedule of generated revenues from related parties

	For the Three Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	3,579,013	$	-
Asiya Communications SAPI de C.V.		4,782,836		-
Total	$	8,361,849	$	-

	For the Six Months Ended June 30,
	2018		2017
Next Communications, Inc.	$	4,701,659	$	-
Asiya Communications SAPI de C.V.		6,733,028		-
Total	$	11,434,687	$	-

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Accounts Payable and Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Accounts Payable and Accrued Liabilities [Abstract]

Schedule of accounts payable and accrued liabilities

	June 30, 2018		December 31, 2017
Trade payables	$	2,671,537	$	5,067,841
Settlements payable (see Note 12 – Commitments and Contingencies)		1,133,858		1,438,994
Accrued expenses		235,742		153,223
Accrued interest		13,129		40,955
Accrued salaries and wages		470,607		329,037
Total	$	4,524,873	$	7,030,050

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Stockholders' Equity [Abstract]

Summary of common stock activity

Summary of common stock activity for the six months ended June 30, 2018	Outstanding shares
Balance, December 31, 2017		1,140,398
Shares issued for common stock subscriptions		38,095
Shares issued as settlement of stock based liabilities		11,479
Shares issued for settlement of convertible notes payable and accrued interest (a)		2,000
Balance, June 30, 2018		1,191,972

(a) Shares issued in connection with outstanding convertible note payable and convertible accrued interest on convertible notes payable in accordance with a settlement agreement entered into as discussed in Note 4 – Notes Payable and Convertible Notes Payable.

Summary of fair value measurement stock based liabilities

	Number of Common Shares and Common Share Equivalents		Fair Value
Common stock to be issued (1)		107,889	$	803,122
Options to purchase common stock (2)		80,378		458,608
Totals		188,267	$	1,261,730

(1)	Includes 34,537 common shares committed to be issued in connection with our acquisition of Limecom as discussed in Note 1 Organization and Description of Business.
(2)	Excludes 25,000 options with ratchet pricing features included in derivative liabilities. The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.

Schedule of total common stock and common stock equivalents in excess authorized

	Pre-Reverse Split		Post-reverse split
Committed shares beyond authorized		32,365,826		107,889
Stock options granted		31,613,142		105,378
Convertible notes payable and accrued interest		441,554		1,472
Total		64,420,522		214,739

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Pro Forma Statements of Operations (Tables)

6 Months Ended

Jun. 30, 2018

Pro Forma Statements of Operations [Abstract]

Schedule of pro forma statements

	NGH			Limecom			Pro Forma Adjustments			Pro Forma
Revenue	$	1,074,655		$	46,783,665		$	-		$	47,858,320
Cost of revenue		785,432			45,354,949			214,286	(a)		46,354,667
Gross margin		289,223			1,428,716			(214,286	)		1,503,653
Operating expenses
Officer compensation		363,943			125,165			-			489,108
Professional fees		1,132,887			257,600			-			1,390,487
General and administrative		229,580			570,196			-			799,776
Total operating expenses		1,726,410			952,961			-			2,679,371
Loss from operations		(1,437,187	)		475,755			(214,286	)		(1,175,718	)
Other income (expense)
Other income		179,580			65,465			-			245,045
Interest expense		(597,719	)		(123,230	)		-			(720,949	)
Loss on derivative liability		(1,993,142	)		-			-			(1,993,142	)
Total other income (expense)		(2,411,281	)		(57,765	)		-			(2,469,046	)
Net income (loss) from continuing operations	$	(3,848,468	)	$	417,990		$	(214,286	)	$	(3,644,764	)

(a) Amortization of acquired intangible assets from acquisition

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Organization and Description of Business (Details)			6 Months Ended
	Dec. 06, 2017 USD ($)	Aug. 10, 2016 USD ($)	Jun. 30, 2018	Dec. 31, 2017 DebitCards	Oct. 23, 2017	Dec. 31, 2016 DebitCards	Jul. 22, 2016	May 31, 2016	May 27, 2016
Organization and Description of Business (Textual)
Private transaction sale | $		$ 10
Transaction Processing Products, Inc. [Member]
Organization and Description of Business (Textual)
Ownership percentage in subsidiaries			100.00%
Percentage of interests and shares received							64.00%
Next Cala, Inc [Member]
Organization and Description of Business (Textual)
Ownership percentage in subsidiaries			94.00%
Percentage of interests and shares received								60.00%
Next Cala, Inc [Member] | Joint Venture Agreement [Member]
Organization and Description of Business (Textual)
Interest in joint venture agreement									60.00%
Number of debit cards | DebitCards						45,000
Additional cards | DebitCards				360,000
NxtGn, Inc. [Member]
Organization and Description of Business (Textual)
Ownership percentage in subsidiaries			65.00%
Next Mobile 360, Inc. [Member]
Organization and Description of Business (Textual)
Ownership percentage in subsidiaries			100.00%
NextGlocal, Inc. [Member] | Joint Venture Agreement [Member]
Organization and Description of Business (Textual)
Interest in joint venture agreement									40.00%
Limecom, Inc. [Member]
Organization and Description of Business (Textual)
Percentage of interests and shares received					100.00%
Meimoun and Mammon, LLC [Member]
Organization and Description of Business (Textual)
Ownership percentage in subsidiaries			100.00%
Fisk Holdings, LLC [Member]
Organization and Description of Business (Textual)
Business acquisition contribute | $	$ 500,000
SDI NEXT Distribution LLC [Member]
Organization and Description of Business (Textual)
Percentage of acquisition			51.00%
Next Communications, Inc. [Member]
Organization and Description of Business (Textual)
Percentage of acquisition	50.00%

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Summary of Significant Accounting Policies and Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Summary of Significant Accounting Policies and Basis of Presentation [Abstract]
Balance at December 31, 2017	$ 685,905
Deferred revenue	723,294
Recognition of deferred revenue	(797,025)
Balance at June 30, 2018	$ 612,174

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Summary of Significant Accounting Policies and Basis of Presentation (Details 1)	Jun. 30, 2018 USD ($)
Year ended December 31,
2018	$ 214,286
2019	428,571
2020	428,571
2021	428,571
2022	428,571
Thereafter	792,902
Total	$ 2,721,472

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Summary of Significant Accounting Policies and Basis of Presentation (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($) shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2018 USD ($) ConvertibleNote shares	Jun. 30, 2017 USD ($) shares	Dec. 31, 2017 USD ($) shares
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
FDIC insured limit	$ 250,000		$ 250,000
Revenues	$ 20,909,422	$ 574,064	$ 40,907,642	$ 1,074,655
Contracted, description			Contracted not recognized revenue was $612,174 as of June 30, 2018, of which the Company expects to recognize 100% of the revenue over the next 12 months.
Number of outstanding convertible note payable | ConvertibleNote			1
Number of new dilutive common shares | shares	1,191,972	930,122	1,287,382	884,706
License fee					$ 34,722
Percentage of initial gross liquidation advance rate			90.00%
Maximum cumulative outstanding face amount			$ 4,000,000
Percentage initial discount fee			2.10%
Percentage of additional of certain receivables			0.85%
Common stock dividends payable			$ 30,000		30,000
Debit cards initial term			3 years
Dividends, description			Pursuant to the dividend, the special stock dividend will be distributed to owners of the Company's common stock as of the record date in a ratio of one share of Class D Redeemable Preferred Stock for every 1 share of common stock owned as of the record date. The Company originally had set the record date as June 10, 2016 but was later modified to July 22, 2016. The Class D Preferred Stock must be redeemed within six (6) months (or as soon thereafter as permitted by law) following final resolution of the Corporation's affiliates lawsuit against ViberMedia, Inc. (Next Communications, Inc. and Nxtgn, Inc. v. Viber Media, Inc.) which is, as of the date of this filing, pending in U.S. District Court for the Southern District of New York or any successor or other lawsuit relating to the subject matter thereof in which the Corporation (or any successor-in-interest) is named as a plaintiff (the "Lawsuit"). The Designation fixes the redemption price of each share of Class D Preferred stock as the greater of par value or the amount obtained by dividing (a) 9.03 percent of the net proceeds to the Corporation of the Lawsuit after payment of fees and expenses incurred in connection with such law suit and the resolution of any creditor claims against Next Communications and all taxes on net income accrued or paid with respect to such amount, by (b) the total number of shares of Class D Preferred stock issued and outstanding as of the Redemption Date, which amount shall be rounded to the nearest whole cent.
License fee remitted			$ 250,000
Unrealized loss on investments
Fair value of investments	180,000		180,000		250,000
Allowance for doubtful accounts				25,000
Amortization expense	107,143	$ 214,286	214,285
Other expense	69,912		94,862
Other income		178,712		179,580
Post-reverse split shares of common stock | shares			107,889
Cost of Revenue [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Amortization expense	107,143	214,285	$ 0	0
Accounts Receivable [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Allowance for doubtful accounts			$ 20,000		$ 20,000
Property and equipment [Member] | Minimum [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Estimated useful life			3 years
Property and equipment [Member] | Maximum [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Estimated useful life			5 years
Convertible notes payable [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Convertible notes outstanding	0	1,162,328	$ 0	1,162,328
Accrued interest	5,326	329,357	5,326	329,357
Convertible debts amount	5,326	1,491,684	$ 5,326	$ 1,491,684
Number of new dilutive common shares | shares			1,472	256,130
Green Spirit Industries [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Acquisition, shares of common stock | shares					50,000
Other comprehensive income total					$ 300,000
Other income					$ 550,000
Consumer Retail Sales [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Revenues	385,802	493,458	$ 797,025	$ 994,049
Wholesale Telecommunications [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Revenues	$ 20,499,288	$ 0	40,086,285	$ 0
Common Stock [Member]
Summary of Significant Accounting Policies and Basis of Presentation (Textual)
Other expense			$ 70,000

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Going Concern (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Going Concern (Textual)
Net income (loss)	$ (978,848)	$ (2,437,049)	$ 537,108	$ (4,176,268)
Net cash used in operating activities			(97,327)	$ (116,881)
Working capital deficit	5,976,529		5,976,529		$ 7,075,716
Accumulated deficit	$ (13,953,044)		$ (13,953,044)		$ (14,207,568)

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Notes Payable and Convertible Notes Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Short-term Debt [Line Items]
Balance	$ 48,897
Repayments	$ (12,000)
Note issued on 11/9/2015 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 5
Issue Date	Nov. 09, 2015
Due Date	Nov. 09, 2016
Original Principal	$ 100,000
Balance	48,897
Repayments	(12,000)
Conversions to Common Stock	(26,640)
Forgiveness of Principal	(10,257)
Balance
Totals [Member]
Short-term Debt [Line Items]
Original Principal	100,000
Balance	48,897
Repayments	(12,000)
Conversions to Common Stock	(26,640)
Forgiveness of Principal	(10,257)
Balance

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Notes Payable and Convertible Notes Payable (Details 1) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Short-term Debt [Line Items]
Carrying Value		$ 48,897
Accrued Interest	$ 13,129	$ 40,955
Note issued on 11/2/2016 [Member]
Short-term Debt [Line Items]
Holder	Noteholder 6
Issue Date	Nov. 02, 2016
Due Date	Nov. 02, 2017
Principal
Discount
Unamortized Debt Issue Costs
Carrying Value
Accrued Interest	5,326
Totals [Member]
Short-term Debt [Line Items]
Principal
Discount
Unamortized Debt Issue Costs
Carrying Value
Accrued Interest	$ 5,326

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Notes Payable and Convertible Notes Payable (Details Textual) - USD ($)		1 Months Ended	6 Months Ended	12 Months Ended
	May 01, 2017	Apr. 25, 2018	Jun. 30, 2018	Dec. 31, 2017
Convertible Notes Payable (Textual)
Accrued interest			$ 13,129	$ 40,955
Current notes payable			72,015	71,048
Loan Agreement [Member]
Convertible Notes Payable (Textual)
Cash proceeds from loan		$ 180,000
Future payments totaling		234,000
Repayments of future loans receivables		$ 1,858
Due to cash repayments			$ 47,015	0
Convertible Notes Payable [Member]
Convertible Notes Payable (Textual)
Annual interest rate			8.00%
Accrued interest			$ 5,326	35,136
Description of debt conversion terms			The terms of the outstanding convertible notes are substantially similar and accrue interest at 8% annually with a default interest rate of 24% and allow for the conversion of outstanding principal and interest to common stock at a price equal to 45% to 50% from the lowest trading price in the preceding 20 days.
First Loan [Member]
Convertible Notes Payable (Textual)
Cash proceeds from loan				125,000
Future payments totaling				168,750
Repayments of future loans receivables				1,339
Due to cash repayments			$ 0	46,048
Second Loan [Member]
Convertible Notes Payable (Textual)
Cash proceeds from loan				50,000
Future payments totaling				68,000
Repayments of future loans receivables				540
Notes Payable [Member]
Convertible Notes Payable (Textual)
Loan from an unrelated party	$ 25,000
Principal balance due			$ 25,000	$ 25,000

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Derivative Liabilities (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Total	$ 119,269	$ 574,130
Option Holder [Member]
Derivative [Line Items]
Total	$ 119,269

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Derivative Liabilities (Details 1)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Expected volatility	213.00%
Expected term	1 year 9 months 3 days
Risk free rate	2.52%
Forfeiture rate	0.00%	0.00%
Expected dividend yield	0.00%	0.00%
Minimum [Member]
Derivative [Line Items]
Expected volatility		178.00%
Expected term		4 days
Risk free rate		0.97%
Maximum [Member]
Derivative [Line Items]
Expected volatility		334.00%
Expected term		2 years 2 months 30 days
Risk free rate		1.89%

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Derivative Liabilities (Details 2)	6 Months Ended
	Jun. 30, 2018 USD ($)
Fair Value of Embedded Derivative Liabilities:
Balance, Beginning	$ 574,130
Initial measurement of derivative liabilities
Change in fair value	(427,935)
Change due to conversion	(26,926)
Balance, Ending	$ 119,269

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Derivative Liabilities (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Derivative Liabilities (Textual)
Derivative liability	$ 119,269		$ 119,269		$ 574,130
Gain from derivative fair value adjustment	$ 14,729	$ (1,579,105)	$ 427,935	$ (1,993,142)
Derivative liability exercisable, description			The options are exercisable at $54 per share unless the Company's common stock is quoted at a price greater than $150 per share at which point the options are exercisable at $0.30 per share.

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Stock Options (Details) - Stock Option [Member]	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding, Beginning | shares	105,378
Granted | shares
Exercised | shares
Forfeited | shares
Expired | shares
Outstanding, Ending | shares	105,378
Weighted - Average Exercise Price Per Share Outstanding, Beginning | $ / shares	$ 39.27
Weighted - Average Exercise Price Per Share, Granted | $ / shares
Weighted - Average Exercise Price Per Share, Exercised | $ / shares
Weighted - Average Exercise Price Per Share, Forfeited | $ / shares
Weighted - Average Exercise Price Per Share, Expired | $ / shares
Weighted - Average Exercise Price Per Share Outstanding, Ending | $ / shares	$ 39.27

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Stock Options (Details 1) - Stock Option [Member] - $ / shares	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices
Outstanding, Number of Option Shares	105,378	105,378
Outstanding, Weighted Average Exercise Price	$ 39.27	$ 39.27
Outstanding, Weighted Average Remaining Life (Years)	2 years 1 month 27 days
Exercisable, Number of Option Shares	83,156
Exercisable, Weighted Average Exercise Price	$ 35.33
54.00 Exercise Prices [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices	$ 54.00
Outstanding, Number of Option Shares	58,334
Outstanding, Weighted Average Exercise Price	$ 54.00
Outstanding, Weighted Average Remaining Life (Years)	2 years 4 months 2 days
Exercisable, Number of Option Shares	36,112
Exercisable, Weighted Average Exercise Price	$ 54.00
21.00 Exercise Prices [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Prices	$ 21.00
Outstanding, Number of Option Shares	47,044
Outstanding, Weighted Average Exercise Price	$ 21.00
Outstanding, Weighted Average Remaining Life (Years)	1 year 11 months 26 days
Exercisable, Number of Option Shares	47,044
Exercisable, Weighted Average Exercise Price	$ 21.00

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Stock Options (Details Textual) - USD ($)	1 Months Ended				6 Months Ended	12 Months Ended
	Aug. 31, 2018	Aug. 23, 2018	Mar. 31, 2017	May 31, 2016	Jun. 30, 2018	Dec. 31, 2017
Stock Options (Textual)
Stock based expense					$ 223,331
Fair value of unvested shares					$ 223,331
Stock based expense						$ 334,997
Percentage of stock based expense					80.00%
Subsequent Events [Member]
Stock Options (Textual)
Exercise price of options		$ 54
Reverse stock split, description	1:300 reverse stock split
Stock Option [Member]
Stock Options (Textual)
Options issued
Options exercise price per share					$ 35.33
Stock Option [Member] | TPP [Member]
Stock Options (Textual)
Options issued			25,000
Exercise price of options			$ 54
Term of options			3 years
Option value			$ 898,490		$ 898,490
Options exercise price per share			$ 0.30
Stock options granted with an exercise price			$ 150
Board [Member]
Stock Options (Textual)
Number of options vested				33,334
Board [Member] | One third [Member]
Stock Options (Textual)
Number of options vested				33,334

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Related Party Transactions (Details) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Due from related parties
Glocal Card Services	[1]	$ 36,000	$ 36,000
Total Due from related parties		36,000	36,000
Related party payables, net of discounts
Due to Next Communications, Inc. (current)	[2]	2,943,519	2,919,615
Due to Asiya Communications SAPI de C.V. (current)	[3]	19,009	5,998
Michael DePrado (current)	[4]	99,604	99,604
Orlando Taddeo, net of discount of $0 and $72,069 (long term, due July 21, 2019)	[5]	2,607,670	2,535,601
Next Cala 360 (current)	[6]	10,350	7,350
Total related party payables		$ 5,680,152	$ 5,568,168

[1] Glocal Card Services is our partner in the Glocal Joint Venture

[2] Next Communication, Inc. is a corporation in which our Chief Executive Officer holds a controlling interest and serves as the Chief Executive Officer

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

[4] Michael DePrado is our Chief Operating Officer

[5] Amount due to Orlando Taddeo from the acquisition of Limecom

[6] Next Cala 360, is a Florida corporation established and managed by our Chief Executive Officer.

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Related Party Transactions (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Related Party Transaction [Line Items]
Total	$ 8,941,435	$ 73,638	$ 11,189,379	$ 77,431
Related Party Revenues [Member]
Related Party Transaction [Line Items]
Next Communications, Inc.	4,688,134	71,666	5,812,611	71,666
Asiya Communications SAPI de C.V.	4,253,301	1,972	5,376,768	1,972
Next Cala 360				3,793
Total	8,941,435	73,638	11,189,379	77,431
Related Party Costs of Revenues [Member]
Related Party Transaction [Line Items]
Next Communications, Inc.	3,579,013		4,701,659
Asiya Communications SAPI de C.V.	4,782,836		6,733,028
Total	$ 8,361,849		$ 11,434,687

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Related Party Transactions (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Related Party Transactions (Textual)
Interest rate of related party			9.00%
Interest expense	$ 59,760	$ 59,760	$ 119,517	$ 119,518
Revenues from related parties	8,941,435	73,638	11,189,379	77,431
Purchases from related parties	8,361,849	$ 0	11,434,687	$ 0
Outstanding accounts receivable	610,006		610,006
Accounts payable, related party	1,341,427		1,341,427		$ 499,668
Related party net of discount	0		$ 0		$ 72,069
Related party long term due			Jul. 21, 2019
Asiya Communications SAPI de C.V. [Member]
Related Party Transactions (Textual)
Accounts payable, related party	694		$ 694
Next Communications Inc [Member]
Related Party Transactions (Textual)
Accounts payable, related party	$ 609,312		$ 609,312

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Accounts Payable and Accrued Liabilities (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Accounts Payable and Accrued Liabilities [Abstract]
Trade payables	$ 2,671,537	$ 5,067,841
Settlements payable (see Note 12 - Commitments and Contingencies)	1,133,858	1,438,994
Accrued expenses	235,742	153,223
Accrued interest	13,129	40,955
Accrued salaries and wages	470,607	329,037
Total	$ 4,524,873	$ 7,030,050

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Stockholders' Equity (Details)	6 Months Ended
	Jun. 30, 2018 shares
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Balance, December 31, 2017	1,140,398
Balance, June 30, 2018	1,191,972
Common Stock [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Balance, December 31, 2017	1,140,398
Shares issued for common stock subscriptions	38,095
Shares issued as settlement of stock based liabilities	11,479
Shares issued for settlement of convertible notes payable and accrued interest	2,000	[1]
Balance, June 30, 2018	1,191,972

[1] Shares issued in connection with outstanding convertible note payable and convertible accrued interest on convertible notes payable in accordance with a settlement agreement entered into as discussed in Note 4 Notes Payable and Convertible Notes Payable.

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Stockholders' Equity (Details 1) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Number of Common Shares and Common Share Equivalents, Totals		188,267
Fair Value, Totals		$ 1,261,730	$ 2,963,272
Common stock to be issued [Member] | Stock Based Liabilities [Member]
Number of Common Shares and Common Share Equivalents, Totals	[1]	107,889
Fair Value, Totals	[1]	$ 803,122
Options to purchase common stock [Member] | Stock Based Liabilities [Member]
Number of Common Shares and Common Share Equivalents, Totals	[2]	80,378
Fair Value, Totals	[2]	$ 458,608

[1] Includes 34,537 common shares committed to be issued in connection with our acquisition of Limecom as discussed in Note 1 Organization and Description of Business.

[2] Excludes 25,000 options with ratchet pricing features included in derivative liabilities. The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.

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Stockholders' Equity (Details 2)	Jun. 30, 2018 shares
Pre-reverse split [Member]
Option Indexed to Issuer's Equity [Line Items]
Committed shares beyond authorized	32,365,826
Stock options granted	31,613,142
Convertible notes payable and accrued interest	441,554
Total	64,420,522
Post-reverse split [Member]
Option Indexed to Issuer's Equity [Line Items]
Committed shares beyond authorized	107,889
Stock options granted	105,378
Convertible notes payable and accrued interest	1,472
Total	214,739

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Stockholders' Equity (Details Textual) - USD ($)		6 Months Ended
	Aug. 07, 2018	Jun. 30, 2018	Dec. 31, 2017	Nov. 20, 2015
Stockholders' Equity (Textual)
Preferred stock, shares authorized		60,000,000	60,000,000
Preferred stock, par value		$ 0.001	$ 0.001
Preferred stock, shares undesignated		50,000,000	50,000,000
Common stock, shares authorized		360,000,000	360,000,000
Common stock, par value		$ 0.001	$ 0.001
Stock issued for conversion of debt, shares		38,095
Stock issued for settlement of stock based liabilities		2,000
Common stock committed to subscribed for cash		34,537
Derivative liabilities options ratchet pricing		25,000
Reverse stock split of common stock, description		The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.
Pre-reverse split [Member]
Stockholders' Equity (Textual)
Options to purchase common stock issued		31,613,142
Convertible notes payable and accrued interest		441,554
Subsequent Event [Member]
Stockholders' Equity (Textual)
Reverse stock split of common stock, description	The Company effected a 1:300 reverse stock split on its common stock. The effects of this stock split on the Company's number of shares issued and outstanding has been retroactively applied to these financial statements.
Series A Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, par value		$ 0.001	$ 0.001
Preferred stock, shares designated		50,000,000	50,000,000
Preferred stock, shares outstanding		0	0
Preferred stock, shares issued		0	0
Series B Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, par value		$ 0.001	$ 0.001
Preferred stock, shares designated		10,000,000	10,000,000
Preferred stock, voting rights, description		The holders of Series B Preferred Stock shall be entitled to 1,000 votes for each share of Series B Stock that is held when voting together with holders of the Common Stock.
Preferred stock, shares outstanding		10,000,000	10,000,000
Preferred stock, shares issued		10,000,000	10,000,000
Issuance of common stock in conversion of convertible notes payable
Series D Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, par value		$ 0.001	$ 0.001
Preferred stock, shares designated		36,000,000	36,000,000
Preferred stock, shares outstanding
Preferred stock, shares issued
Common Stock [Member]
Stockholders' Equity (Textual)
Common stock, par value		$ 0.001
Stock issued for conversion of debt, shares		1,191,972
Issuance of common stock in conversion of convertible notes payable		$ 400,000
Stock issued for settlement of stock based liabilities		11,479
Stock issued for settlement of stock based liabilities, value		$ 154,973
Common stock committed to subscribed for cash		102,335
Reverse stock split of common stock, description		The Company effected a 1:300 reverse split on its common stock on August 7, 2018 to remedy the shortfall in authorized unissued shares.
Common Stock [Member] | Pre-reverse split [Member]
Stockholders' Equity (Textual)
Common shares in excess of authorized		32,365,826
Options to purchase common stock issued		31,613,142
Common stock issued exercisable		24,946,476
Convertible notes payable and accrued interest		441,554
Common Stock [Member] | Subsequent Event [Member]
Stockholders' Equity (Textual)
Reverse stock split of common stock, description	The Board approved a one-for-three hundred (1:300) reverse stock split of the common stock. The effects of the reverse stock split have been reflected in the financial statements retroactively.
Common Stock [Member] | Minimum [Member]
Stockholders' Equity (Textual)
Common stock, shares authorized				360,000,000
Common stock, par value				$ 0.001
Common Stock [Member] | Maximum [Member]
Stockholders' Equity (Textual)
Common stock, shares authorized				9,500,000,000
Common stock, par value				$ 0.001

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Customer Concentration (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018 Customers SeparateCustomer	Jun. 30, 2017 Customers	Jun. 30, 2018 Customers SeparateCustomer	Jun. 30, 2017 Customers	Dec. 31, 2017 SeparateCustomer
Revenues [Member]
Customer Concentration (Textual)
Concentration risk, percentage	79.00%	10.00%	51.00%	10.00%
Number of customers	3	1	3	1
Accounts receivable [Member]
Customer Concentration (Textual)
Concentration risk, percentage			94.00%		78.00%
Number of customers | SeparateCustomer	4		4		3
Accounts receivable [Member] | Customer [Member]
Customer Concentration (Textual)
Concentration risk, percentage			12.00%
Number of customers | Customers	1		1

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Restatement of the Three and Six Months Ended June 30, 2017 (Details)	6 Months Ended
	Jun. 30, 2018
Restatement of the Three and Six Months Ended June 30, 2017 (Textual)
Restatement, description	The Company has restated its statement of operations and statement of cash flows for the six months ended June 30, 2017 to correct an error in the treatment of the disposal of a subsidiary. The Company had originally recorded the elimination of the non-controlling interest component of equity of the sold subsidiary as an equity only transaction by absorbing $2,540,903 of non-controlling interest equity into that of the Company. The correct treatment of the disposal necessitates the amount of non-controlling interest to be included in the calculation of the gain or loss on the disposal of a subsidiary recognized through the income statement. The impact to the financial statements is an increase in loss from discontinued operations and net loss by $2,540,903 for the six months ended June 30, 2017 and no change for the three months ended June 30, 2017. Net loss per common share increased from $4.23 as originally stated to $4.71 as restated for the six months ended June 30, 2017 with no change for the three months ended June 30, 2017. There was no impact on the net cash used in operations during the six months ended June 30, 2017 as a result of the restatement. Although not presented, the impact of the restatement on the Company's consolidated balance sheet as of June 30, 2017 is an increase to additional paid in capital and increase to accumulated deficit of $2,540,903.

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Commitments and Contingencies (Details) - USD ($)				1 Months Ended				6 Months Ended	12 Months Ended
	Nov. 07, 2018	Feb. 12, 2018	Apr. 07, 2016	Oct. 25, 2018	Oct. 23, 2018	Dec. 20, 2017	Oct. 23, 2017	Jun. 30, 2018	Dec. 31, 2016	Dec. 31, 2017
Commitments and Contingencies (Textual)
Commitments, description			The agreement requires 1% of the outstanding common share equivalent to be issued to the third party when the market capitalization of the Company reaches $500,000,000 and an additional 1% when it reaches $750,000,000.						Limecom had disputed accounts payable with three (3) carriers, for which the Company entered into separate settlement agreements, totaling approximately $1,147,000. Under the terms of these settlement agreements, the Company was provided with extended payment terms on the outstanding balances. These settlement agreements are non-interest bearing and include certain default provisions as disclosed in the related agreements. The Company assumed a total of $676,563 of this liability on October 23, 2017 as part of its acquisition of Limecom and made repayments totaling $10,000 during the period of acquisition to December 31, 2017 and $95,136 during the six months ended June 30, 2018. The remaining outstanding principal balance of these settlement agreements amounted to approximately $571,427 and $666,563 as of June 30, 2018 and December 31, 2017, respectively.
Claim for related party						$ 473,264
Legal settlement alleging claim, description						Even though NGH made the agreed payment of $10,000 on January 2, 2017 and issued 3,600,720 shares as conversion of the $70,000 note as agreed in the settlement agreement, the Plaintiff alleges damages which NGH claims are without merit because they received full compensation as agreed.
Reimbursement of attorneys fees and costs		$ 527,782
Current accrued liabilities								$ 571,427		$ 546,563
Long term accrued liabilities								0		$ 120,000
Business acquisition, description							The Company assumed a settlement liability Limecom had entered into with American Express as part of its acquisition as discussed in Note 1 Organization and Description of Business. As of the date of acquisition, there was a total outstanding balance of $995,158. The Company made repayments totaling $102,727 from the period of October 23, 2017 to December 31, 2017 and $330,000 during the six months ended June 30, 2018 leaving a remaining balance due of $562,431 and $892,431 as of June 30, 2018 and December 31, 2017, respectively. The balance due is included in accounts payable and accrued liabilities as of June 30, 2018 and December 31, 2017.
Monthly rental payments of lease								4,750
Maintenance costs of lease								100
Future guaranteed payments under lease								$ 19,400
Lease expiration date								Oct. 31, 2018
Subsequent Event [Member]
Commitments and Contingencies (Textual)
Unspecified damages					$ 15,000
Unpaid investment banking services				$ 2,500,000
Claim amount plus interest	$ 28,833

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Pro Forma Statements of Operations (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Business Acquisition [Line Items]
Revenue		$ 11,967,987	$ 500,426	$ 29,718,263	$ 997,224
Cost of revenue		12,293,982	450,175	28,479,619	785,432
Gross margin		253,591	123,889	993,336	289,223
Operating expenses
Officer compensation		193,525	147,777	328,717	363,943
Professional fees		214,340	641,603	514,698	1,132,887
General and administrative		419,997	132,688	855,003	229,580
Total operating expenses		827,862	922,068	1,698,418	1,726,410
Loss from operations		(574,271)	(798,179)	(705,082)	(1,437,187)
Other income (expense)
Other income			178,712		179,580
Interest expense		(346,325)	(238,477)	(748,907)	(597,719)
Loss on derivative liability		14,729	(1,579,105)	427,935	(1,993,142)
Total other income (expense)		(404,577)	(1,638,870)	1,242,190	(2,411,281)
Net income (loss) from continuing operations		$ (978,848)	$ (2,437,049)	$ 537,108	(4,176,268)
Pro Forma Adjustments [Member]
Business Acquisition [Line Items]
Revenue
Cost of revenue	[1]				214,286
Gross margin					(214,286)
Operating expenses
Officer compensation
Professional fees
General and administrative
Total operating expenses
Loss from operations					(214,286)
Other income (expense)
Other income
Interest expense
Loss on derivative liability
Total other income (expense)
Net income (loss) from continuing operations					(214,286)
Pro Forma [Member]
Business Acquisition [Line Items]
Revenue					47,858,320
Cost of revenue					46,354,667
Gross margin					1,503,653
Operating expenses
Officer compensation					489,108
Professional fees					1,390,487
General and administrative					799,776
Total operating expenses					2,679,371
Loss from operations					(1,175,718)
Other income (expense)
Other income					245,045
Interest expense					(720,949)
Loss on derivative liability					(1,993,142)
Total other income (expense)					(2,469,046)
Net income (loss) from continuing operations					(3,644,764)
NGH [Member]
Business Acquisition [Line Items]
Revenue					1,074,655
Cost of revenue					785,432
Gross margin					289,223
Operating expenses
Officer compensation					363,943
Professional fees					1,132,887
General and administrative					229,580
Total operating expenses					1,726,410
Loss from operations					(1,437,187)
Other income (expense)
Other income					179,580
Interest expense					(597,719)
Loss on derivative liability					(1,993,142)
Total other income (expense)					(2,411,281)
Net income (loss) from continuing operations					(3,848,468)
Limecom [Member]
Business Acquisition [Line Items]
Revenue					46,783,665
Cost of revenue					45,354,949
Gross margin					1,428,716
Operating expenses
Officer compensation					125,165
Professional fees					257,600
General and administrative					570,196
Total operating expenses					952,961
Loss from operations					475,755
Other income (expense)
Other income					65,465
Interest expense					(123,230)
Loss on derivative liability
Total other income (expense)					(57,765)
Net income (loss) from continuing operations					$ 417,990

[1] Amortization of acquired intangible assets from acquisition

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Subsequent Events (Details) - USD ($)				1 Months Ended	6 Months Ended
	Nov. 06, 2018	Sep. 13, 2018	Aug. 07, 2018	Aug. 23, 2018	Jun. 30, 2018
Subsequent Events (Textual)
Reverse stock split, description					The total value of $458,608 will be reclassified to equity in conjunction with the timing of our reverse stock split taking effect on August 7, 2018.
Conversion of common stock					38,095
Subsequent Events [Member]
Subsequent Events (Textual)
Reverse stock split, description			The Company effected a 1:300 reverse stock split on its common stock. The effects of this stock split on the Company's number of shares issued and outstanding has been retroactively applied to these financial statements.
Subsequent event, description			The Company issued a total of 781 shares of common stock in conjunction with rounding from its reverse stock split; 61,001 shares of common stock for the settlement of stock based liabilities; 2,167 common shares as part of a settlement agreement; 13,333 for services and 35,834 shares of common stock for cash proceeds of $107,500.
Securities purchase agreement, description			Raise a total of $440,000 of cash in exchange for 146,669 shares of common stock. As of the date of this filing, the Company has received total cash of $90,000. The common shares will be issued upon the receipt of all cash due under the agreement.
Accounts receivable factoring agreement, description	The factoring agent commission due under the agreement is 1.19% of the face value of the purchased accounts receivable for the twenty days immediately following invoice issuance plus 0.59% for each twenty days thereafter. The factoring agent may advance cash to the Company at its sole discretion up to 90% of the purchase price with an initial maximum advance capacity of $4,000,000. The Company may request increases to the maximum advance allowed under the agreement not to exceed an additional $1,000,000 during each 90 day period immediately following execution for up to a maximum advance of $8,000,000.
Common shares for services				60,639
Common stock issued in exchange for previously				33,334
Common stock outstanding options totaling				33,334
Exercise price of options				$ 54
Line of credit, description	The Company will issue compensation to its financial advisor with respect to the agreement totaling 2.5% of the initial credit line limit, or $100,000, in four equal installments. The advisor will receive further compensation of 3.0% of any future increases in the credit limit above $4,000,000 up to $8,000,000. The advisor also received a warrant to purchase 74,866 shares of common stock at an exercise price of $3.74 per share for a period of five years. The warrant may be exchanged without the payment of any additional consideration for the Company's common stock based upon the values of the warrant and the stock at the time of the exchange.
Officer [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Conversion of common stock		70,657
Conversion of common stock, value		$ 282,623
Common stock rate, per share		$ 4
Options to purchase common stock granted		90,000
Option grant vesting period		3 years
Exercisable price per share		$ 3
Option expiration period		Sep. 30, 2023