UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended ~~October~~April 3130, ~~2016~~2017

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~___________~~ _______________ to ~~__________~~______________

Commission File Number 000-55499

GAWK ~~INC.~~INCORPORATED (Exact name of registrant as specified in its charter)

Nevada		33-1220317
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
5300 Melrose Avenue, Suite 42, Los Angeles, CA		90038
(Address of principal executive offices)		(Zip Code)

888-754-6190 (Registrant’s telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report)

5300 Melrose Avenue, Suite 42, Los Angeles, CA		90038
(Address of principal executive offices)		(Zip Code)

~~Indicate by check mark whether the registrant~~ (1632) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x YES ¨ NO893-8909

~~Indicate~~(Registrant’s bytelephone ~~check mark whether the registrant has submitted electronically and posted on its corporate Web site~~number, ifincluding ~~any,~~area ~~every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter~~code) ~~during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x YES ¨ NO~~

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

~~Large~~(Former ~~accelerated~~name, ~~filer~~former oaddress ~~Accelerated~~and ~~filer~~former ofiscal ~~Non-accelerated~~year, ~~filer o Smaller reporting company x (Do not check~~ if achanged ~~smaller~~since ~~reporting~~last ~~company~~report)

Indicate by check mark whether the registrant is(1) ahas ~~shell~~filed ~~company~~all ~~(as~~reports ~~defined~~required into ~~Rule~~be ~~12b-2~~filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) ¨, ~~YES~~ and (2) has been subject to such filing requirements for the past 90 days. x YES o NO

~~APPLICABLE~~Indicate ~~ONLY~~by TOcheck ~~ISSUERS~~mark ~~INVOLVED~~whether INthe ~~BANKRUPTCYPROCEEDINGS~~registrant ~~DURING~~has ~~THE~~submitted ~~PRECEDING~~electronically ~~FIVE~~and ~~YEARS~~posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x YES o NO

~~Check~~Indicate by check mark whether the registrant ~~has~~is ~~filed~~a ~~all~~large ~~documents~~accelerated ~~and~~filer, ~~reports~~an ~~required~~accelerated tofiler, bea ~~filed~~non-accelerated byfiler, ~~Sections~~smaller 12reporting company, 13 or ~~15(d)~~an ofemerging ~~the~~growth ~~Exchange~~company. ~~Act~~See ~~after~~ the ~~distribution~~definitions of ~~securities~~“large ~~under~~accelerated afiler,” ~~plan~~“accelerated ~~confirmed~~filer,” by“smaller areporting ~~court.~~company,” ¨and ~~YES ¨~~“emerging NOgrowth company” in Rule 12b-2 of the Exchange Act.

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

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o YES x NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. o YES o NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

16,~~280~~342,~~741~~546,~~569~~507 common shares issued and outstanding as of ~~December~~February 81, ~~2016~~2018.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3	3
Item 2.	Management'’s Discussion and Analysis of Financial Condition orand ~~Plan~~Results of ~~Operation~~Operations	16	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20	24
Item 4.	Controls and Procedures	20	24
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	22	25
Item 1A.	Risk Factors	22	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22	26
Item 3.	Defaults Upon Senior Securities	22	26
Item 4.	Mine Safety Disclosures	22	26
Item 5.	Other Information	22	26
Item 6.	Exhibits	23	26
SIGNATURES		24

2 Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

GAWK INCORPORATED

CONSOLIDATED BALANCE SHEETS

(Unaudited)

			October 31,				January 31,
		April 30,				January 31,
			2016				2016
		2017				2017
ASSETS
Current Assets
Cash and cash equivalents	~~Cash and cash equivalents~~	$	$38,106	~~188,583~~		$	$133,249	~~64,944~~
	Accounts receivable			246,749				45,721
Accounts receivable, net			138,412				232,305
Marketable securities - available for sale	~~Marketable securities - available for sale~~		74,400	~~162,900~~			102,300	~~78,300~~
	Deposit - CipherLoc			562,500				562,500
Prepaid and other current assets			55,328				54,028
	Prepaid and other current assets			55,514				32,200
Total Current Assets			306,246				521,882
Total Current Assets				1,216,246				783,665
Intangible assets and proprietary technology, net of accumulated amortization of $806,751 and $656,244			999,324				1,149,831
Equipment, net of depreciation of $0 and $73,740				-				103,235
Goodwill			1,416,851				1,416,851
Intangible assets and proprietary technology, net of amortization $722,426 and $162,562				1,517,025				2,286,345
TOTAL ASSETS		$	2,722,421			$	3,088,564
Goodwill				4,043,486				4,076,505
LIABILITIES AND STOCKHOLDERS' DEFICIT
Assets held for sale				289,585				-
Current Liabilities
TOTAL ASSETS			$	7,066,342			$	7,249,750
Accounts payable and accrued liabilities		$	1,905,185			$	1,953,401
LIABILITIES AND STOCKHOLDERS' DEFICIT
Note payable, net of unamortized discounts of $104,829 and $1,546			323,765				98,930
Current Liabilities
Current portion of notes payable -related party			614,085				614,085
	Accounts payable and accrued liabilities		$	819,162			$	717,469
Current portion of convertible notes payable, net of unamortized discounts of $544,037 and $598,790			2,064,460				2,061,952
	Note payable, net of discounts of $2,687 and $0			146,152				85,000
Investor payable - common shares			658,000				658,000
	Current portion of note payable -related party			776,806				868,361
Due to related parties			271,887				305,458
	Current portion of convertible notes payable, net of discounts of $303,447 and $148,069			2,215,852				1,934,932
Derivative liabilities			1,428,011				2,088,684
	Investor payable - common shares			658,000				658,000
Total Current Liabilities			7,265,393				7,780,510
	Preferred shares payable			-				13,438
Long-Term Liabilities
	Contingent consideration			1,000,000				1,000,000
Notes payables -related party, less current portion			63,805				159,514
	Due to related parties			288,873				27,942
TOTAL LIABILITIES			7,329,198				7,940,024
	Other current liabilities			12,482				-
Series C Convertible Preferred stock, $0.001 par value, 100 shares designated; 16 shares issued and outstanding			16,000,000				16,000,000
	Derivative liabilities			890,267				620,237
Series D Convertible Preferred stock, $0.001 par value, 1,000 shares designated; 21 shares issued and outstanding			2,100,000				2,100,000
Total Current Liabilities				6,807,594				5,925,379
			18,100,000				18,100,000
Long-Term Liabilities
Stockholders' Deficit
	Convertible note payable, net of discounts of $42,850 and $56,358			2,650				10,307
Preferred stock, $0.001 par value; authorized 100,000,000 shares
	Note payable -related party, less current portion			-				388,889
Series A Preferred stock, $0.001 par value, 1,000 shares designated; 1,000 shares issued and outstanding			1				1
TOTAL LIABILITIES				6,810,244				6,324,575
Series B Convertible Preferred stock, $0.001 par value, 95,000,000 shares designated; 68,187,500 shares issued and outstanding			68,188				68,188
	Series C Convertible Preferred stock, $0.001 par value, 100 shares designated; 14 shares issued and outstanding, respectively			14,000,000				14,000,000
Common stock, $0.001 par value, 14,900,000,000 shares authorized; 6,342,546,507 and 2,357,089,633 shares issued and outstanding, respectively			6,343,046				2,357,089
	Series D Convertible Preferred stock, $0.001 par value, 1,000 shares designated; 1 and 0 share issued and outstanding, respectively			100,000				-
Additional paid-in capital			1,091,741				984,577
				14,100,000				14,000,000
Common stock issued at discount to par value			(3,244,638	)			-
Stockholders' Deficit
Accumulated deficit			(26,965,115	)			(26,361,315	)
	Preferred stock, $0.001 par value; authorized 100,000,000 shares
Total Stockholders' Deficit			(22,706,777	)			(22,951,460	)
	Series A Preferred stock, $0.001 par value, 1,000 shares designated; 1,000 shares issued and outstanding			1				1
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	2,722,421			$	3,088,564
	Series B Convertible Preferred stock, $0.001 par value, 95,000,000 shares designated; 68,187,500 and 50,000,000 shares issued and outstanding, respectively			68,188				50,000
	Common stock, $0.001 par value, 1,400,000,000 shares authorized; 875,634,685 and 261,863,258 shares issued and outstanding, respectively			875,634				261,863
	Additional paid-in capital			1,809,835				670,962
	Accumulated deficit			(16,597,560	)			(14,057,651	)
	Total Stockholders' Deficit			(13,843,902	)			(13,074,825	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	7,066,342			$	7,249,750

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

Table of Contents

GAWK INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS ~~AND COMPREHENSIVE INCOME (LOSS)~~

(Unaudited)

	For the Three Months Ended October 31,						For the Nine Months Ended October 31,
	For the Three Months Ended
	2016			2015			2016			2015
	April 30,
Revenue	$	1,811,716		$	526,761		$	4,591,798		$	1,143,422
	2017			2016
Cost of revenue		1,221,442			332,704			3,210,305			725,333
Revenue	$	1,367,724		$	1,374,961
Gross profit		590,274			194,057			1,381,493			418,089
Operating expenses
Operating expenses
Cost of revenue		972,025			1,055,033
Stock-based compensation		160,755			309,000			398,912			366,083
General and administration		714,114			469,451
General and administration		583,977			307,247			1,667,489			820,439
Legal settlement		25,000			-
Accounts payable forgiven		(250,000	)		-			(250,000	)		-
Depreciation and amortization		150,507			186,621
Research and development		-			-			-			2,500
Total operating expenses		1,861,646			1,711,105
Depreciation and amortization		231,292			93,278			693,876			238,053
Net loss from operations		(493,922	)		(336,144	)
Total operating expenses		726,024			709,525			2,510,277			1,427,075
Other income (expense)
Net loss from operations		(135,750	)		(515,468	)		(1,128,784	)		(1,008,986	)
Other income		5,783			5,608
Other income (expense)
Interest expense, net		(567,158	)		(431,320	)
Other income		6,372			-			16,658			-
Unrealized gain (loss) on marketable securities		(27,900	)		17,700
Interest expense, net		(96,894	)		(56,665	)		(435,009	)		(146,868	)
Change in fair value of derivative liabilities		416,784			(54,890	)
Amortization of debt discount and deferred financing fees		(269,046	)		(105,203	)		(835,664	)		(284,303	)
Gain on settlement of debt		62,613			-
Unrealized gain (loss) on marketable securities		67,200			(52,500	)		84,600			128,550
Total other expense		(109,878	)		(462,902	)
Change in fair value of derivative liabilities		(149,358	)		(36,268	)		(250,987	)		(36,268	)
Loss from continuing operations		(603,800	)		(799,046	)
Gain on settlement of debt		9,277			-			9,277			-
Loss from discontinued operations		-			(14,767	)
Total other expense		(432,449	)		(250,636	)		(1,411,125	)		(338,889	)
Net loss	$	(603,800	)	$	(813,813	)
Net loss		(568,199	)		(766,104	)	$	(2,539,909	)	$	(1,347,875	)
Basic and diluted loss per common share from continued operation	$	(0.00	)	$	(0.00	)
Other comprehensive income		-			-			-			442
Basic and diluted loss per common share from discontinued operation	$	(0.00	)	$	(0.00	)
Comprehensive Loss	$	(568,199	)	$	(766,104	)	$	(2,539,909	)	$	(1,347,433	)
Weighted average number of common shares outstanding, basic and diluted		4,256,370,359			298,186,922
Basic and dilutive loss per common share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding		648,943,956			196,682,424			446,743,266			182,828,588

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

Table of Contents

GAWK INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended October 31,
	For the Three Months Ended
	2016			2015
	April 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2603,~~539,909~~800	)	$	(1813,~~347,875~~813	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services		-			150,083
Stock-based compensation		107,164			-
Common stock options issued for services		177,000			-
Amortization of debt discount and deferred financing fees		420,784			271,349
Common stock issued for legal settlement		-			54,000
Unrealized loss (gain) on marketable securities		27,900			(17,700	)
Stock-based compensation		221,913			216,000
Amortization expense of intangible assets		150,507			186,621
Amortization of debt discount and deferred financing fees		835,664			284,303
Depreciation expense from discontinued operations		-			14,748
Unrealized gain on marketable securities		(84,600	)		(128,550	)
Amortization expense from discontinued operations		-			29,922
Depreciation and amortization		693,876			238,053
Gain on settlement of liabilities		(62,613	)		-
Expense for conversion of debt		-			8,540
Change in fair value of derivative liabilities		(416,784	)		54,890
Accounts payable forgiven		(250,000	)		-
Change in fair value of derivative liabilities		250,987			36,268
Gain on settlement of debt		(9,277	)		-
Changes in operating assets and liabilities:
(Increase) decrease in operating assets:
Accounts receivable		~~(170~~93,~~800~~893	)		(774,~~115~~816	)
Prepaid expenses and other assets		(21,~~565~~300	)		-
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities		~~402~~50,~~215~~581			~~138~~112,~~330~~355
Due to related parties		~~260~~(33,~~931~~571	)		38136,~~620~~497
Other current liabilities		3,962			-
Net Cash Used In Operating Activities		(267,239	)		(99,947	)
Net Cash Used In Operating Activities		(210,603	)		(319,343	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of XTELUS, net of cash acquired		397			-
Net cash paid for acquisition of Net D’s assets		-			(138,250	)
Net Cash Provided by (Used in) Investing Activities		397			(138,250	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		~~147~~327,~~050~~901			~~25,000~~-
Proceeds from convertible notes, net of original issue discounts and deferred financing fees		691,733			191,000
Payment of notes payable		(120,033	)		-
Proceeds from notes payable - related party		25,000			-
Proceeds from convertible notes, net of original issue discounts and deferred financing fees		60,000			245,116
Payment of notes payable - related party		(505,444	)		-
Payment of convertible notes payable		(63	)		(33,333	)
Payment of convertible notes payable		(33,333	)		-
Payment of notes payable - related party		(95,709	)		(101,111	)
Payment of notes payable		(11,161	)		-
Proceeds from issuance of Series B Preferred stock		-			20,000
Proceeds from issuance of Series B Preferred stock		20,000			17,500
Net Cash Provided By Financing Activities		172,096			130,672
Proceeds from issuance of common stock		-			5,000
Net increase (decrease) in cash and cash equivalents		(95,143	)		30,725
Net Cash Provided By Financing Activities		333,845			238,500
Cash and cash equivalents, beginning of period		133,249			64,944
Effect of exchange rate changes		-			442
Cash and cash equivalents, end of period	$	38,106		$	95,669
Net decrease in cash and cash equivalents		123,639			(218,651	)
Cash and cash equivalents, beginning of period		64,944			255,455
Cash and cash equivalents, end of period	$	188,583		$	36,804
Supplemental cash flow information
Cash paid for interest	$	~~242~~72,~~902~~178		$	-100,834
Cash paid for taxes	$	-		$	-
Non-cash financing transactions:
Acquisition of XTELUS through issuance of preferred shares	$	100,000		$	-
Issuance of common stock for conversion of debt and accrued interest	$	742,319		$	535,442
Series B Preferred shares issued to settle preferred share payable	$	13,438		$	-
Debt discount from derivative liability	$	343,063		$	324,995
Preferred share payable for preferred C stock	$	-		$	1,000,000
Accrued interest added to principal	$	-		$	1,159
Acquisition of goodwill	$	-		$	3,554,622
Series C Preferred shares issued to settle preferred share payable	$	-		$	13,438
Issuance of preferred shares payable for acquisition	$	-		$	2,000,000
Issuance of investor payable for acquisition	$	-		$	1,556,000
Issuance of common stock for conversion of debt and accrued interest	$	509,353		$	64,030
Common stock issued in exchange for warrants	$	41,000		$	206,000
Intangible assets assumed from acquisition	$	-		$	363,128
Accounts payable assumed from acquisition	$	-		$	11,750
Debt discount from derivative liability	$	848,172		$	166,500
Note payable assumed from acquisition	$	-		$	350,000
Reclassification of derivative liability from additional paid in capital due to tainted instruments	$	-		$	586,250
Derivative resolution	$	1,006,129		$	122,588
Accrued interest added to principal	$	1,159		$	-
Convertible note issued for prepayment penalty	$	31,438		$	-
Replacement of note payable to Convertible note	$	75,000		$	-
Reclassification of assets as held for sale	$	289,585		$	-

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

Table of Contents

GAWK INCORPORATED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~October~~April 3130, ~~2016~~2017

NOTE 1 -– DESCRIPTION OF BUSINESS

Gawk Incorporated (“we”, “our”, the “Company”) was incorporated in the state of Nevada on January 6, 2011 with principal business address at 5300 Melrose Avenue, Suite 42, Los Angeles, CA. The Company offers a suite of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium, and large businesses; and offers domestic and international voice services to communications carriers worldwide. It offers a suite of advanced data center and cloud-based services, ~~including fault tolerant, high availability cloud servers, which comprise platform as a service, infrastructure as a service, and a content delivery network;~~ managed network services that converge voice and data applications, structured cabling, wireless, and security services, as well as include Internet access via Ethernet or fiber at speeds ranging from 10 Mbps to 10 Gbps; and data center solutions, including cloud services, colocation services, and business continuity services, such as storage and security. ~~Our website is located at www.gawkinc.com~~

NOTE 2 -– ~~BASIS~~GOING ~~OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS~~CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a deficiency in equity of $22,706,777, a working capital deficit of $6,959,147, and an accumulated deficit of $26,965,115.

These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's continued existence is dependent upon management's ability to develop profitable operations, continued contributions from the Company's executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company's products and business.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation of Interim Financial Statements

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In ~~the~~our opinion ~~of management~~, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three ~~and nine~~ months ended ~~October~~April 3130, ~~2016~~2017 are not necessarily indicative of the results that may be expected for the year ending January 31, ~~2017~~2018. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year ~~2016~~2017 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended January 31, ~~2016~~2017 included in the Company’s Form 10-K/A as filed with the Securities and Exchange Commission on ~~May~~October 24, ~~2016~~2017.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. We currently have no investments accounted for using the equity or cost methods of accounting.

Reclassifications

Certain ~~amounts~~prior inyear ~~the~~amounts ~~fiscal 2016 financial statements~~ have been reclassified to conform towith the ~~fiscal~~current ~~2017~~year presentation.

Revenue Recognition

The Company pursues opportunities to realize revenues from consulting services. It is the company’s policy that revenues and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue Recognition.” Under ASC Topic 605-10-25, revenue earning activities are recognized when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Table of Contents

Our Business Services revenue includes monthly recurring charges (“MRC”) to customers, for whom charges are contracted over a specified period of time, and variable usage fees charged to customers that purchase our business products and services. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. MRCs continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs.

Our Carrier Services revenue is primarily derived from usage fees charged to other carriers that terminate voice traffic over our network. Variable revenue is earned based on the length of a call, as measured by the number of minutes of duration. It is recognized upon completion of the call, and is adjusted to reflect the allowance for billing adjustments. Revenue for each customer is calculated from information received through our network switches. Our customized software tracks the information from the switches and analyzes the call detail records against stored detailed information about revenue rates. This software provides us with the ability to complete a timely and accurate analysis of revenue earned in a period. We believe that the nature of this process is such that recorded revenues are unlikely to be revised in future periods.

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging”, since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The Black-Scholes option valuation model was used to estimate the fair value of the embedded conversion options and warrants. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of our common stock, equal to the weighted average life of the options.

Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash, accounts ~~receivable, accounts~~ payable and accrued ~~liabilities~~expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

The Company adopted ASC Topic 820, “Fair Value Measurements, (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements is defined as follows:

· Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; · Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; · Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement

· Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

· Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement

The following table summarizes fair value measurements by level at October 31, 2016 and January 31, 2016 measured at fair value on a recurring basis:

Carrying Value at October 31, 2016

October 31, 2016	Level 1		Level 2		Level 3		Total
Marketable securities- available for sale		162,900		-		-		162,900
Total assets		162,900		-		-		162,900
Derivative liabilities		-		-		890,267		890,267
Total liabilities		-		-		890,267		890,267

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~~Carrying~~The ~~Value~~following table summarizes fair value measurements by level at April 30, 2017 and January 31, ~~2016~~2017 for assets measured at fair value on a recurring basis:

January 31, 2016	Level 1		Level 2		Level 3		Total
Marketable securities- available for sale		78,300		-		-		78,300
Total assets		78,300		-		-		78,300
Derivative liabilities		-		-		620,237		620,237
Total liabilities		-		-		620,237		620,237

Carrying Value at April 30, 2017

April 30, 2017	Level 1		Level 2		Level 3		Total
Marketable securities- available for sale	$	74,400	$	-	$	-	$	74,400
Total assets		74,400		-		-		74,400

Derivative liabilities		-		-		1,428,011		1,428,011
Total liabilities	$	-	$	-	$	1,428,011	$	1,428,011

Carrying Value at January 31, 2017

January 31, 2017	Level 1		Level 2		Level 3		Total

Marketable securities- available for sale	$	102,300	$	-	$	-	$	102,300
Total assets		102,300		-		-		102,300

Derivative liabilities		-		-		2,088,684		2,088,684
Total liabilities	$	-	$	-	$	2,088,684	$	2,088,684

Recent Accounting Pronouncements

NoIn ~~accounting~~May ~~standards~~2014, orFASB ~~interpretations~~ issued ~~recently~~ASU ~~are~~2014-09, Revenue ~~expected~~from toContracts awith ~~have~~Customers (“Topic 606”). Topic 606 removes inconsistencies and weaknesses in revenue requirements, provides a ~~material~~more ~~impact~~robust onframework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the ~~Company's~~preparation of financial ~~position~~statements by reducing the number of requirements to which an entity must refer. The guidance in this update supersedes the revenue recognition requirements in Topic 605, ~~operations~~Revenue orRecognition, ~~cash~~and ~~flows~~most industry-specific guidance throughout the Industry Topics of the Codification. In August 2015, ASU 2015-14 was issued which delayed the effective date for public entities to reporting periods beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this new standard.

~~NOTE~~In 3March 2016, the FASB issued ASU 2016-08, ~~GOING~~Revenue ~~CONCERN~~from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance in the new revenue standard on assessing whether an entity is a principal or an agent in a revenue transaction. This conclusion impacts whether an entity reports revenue on a gross or net basis. We are currently evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.

~~The~~In ~~accompanying~~April ~~financial~~2016, ~~statements~~the ~~have~~FASB ~~been~~issued ~~prepared~~ASU in2016-10, ~~conformity~~Revenue from Contracts with ~~accounting~~Customers: ~~principles~~Identifying ~~generally~~Performance ~~accepted~~Obligations and Licensing, which clarifies the guidance in the ~~United~~new ~~States~~revenue ofstandard ~~America,~~regarding ~~which~~an ~~contemplate~~entity’s ~~continuation~~identification of ~~the~~its ~~Company~~performance asobligations in a ~~going concern. However~~contract, ~~the~~as ~~Company~~well ~~has~~as aan ~~net~~entity’s ~~loss~~evaluation ~~for~~of the ~~nine~~nature ~~months~~of ~~ended~~its ~~October~~promise ~~31,~~to ~~2016~~grant a license of ~~$2,539,909,~~intellectual anproperty ~~accumulated~~and ~~deficit~~whether ofor ~~$16,597,560,~~not ~~cash~~that ~~flows~~revenue ~~used~~is recognized over time or at a point in ~~operating~~time. ~~activities~~We are currently evaluating the impact of ~~$210,603~~this ~~and~~standard ~~needs~~on ~~additional~~our ~~cash~~Consolidated toFinancial ~~maintain~~Statements ~~its~~and ~~operations~~related disclosures.

~~These~~In ~~factors~~May ~~raise~~2016, ~~substantial~~the ~~doubt~~FASB ~~about~~issued ASU 2016-12, Revenue from Contracts with Customers: Narrow- Scope Improvements and Practical Expedients which amends the ~~Company's~~guidance ~~ability~~in tothe ~~continue~~new asrevenue astandard ~~going~~on ~~concern~~collectability, noncash consideration, presentation of sales tax, and transition. The ~~accompanying~~amendments ~~financial~~are ~~statements~~intended doto ~~not~~address ~~include~~implementation ~~any~~issues ~~adjustments~~and ~~that~~provide ~~might~~additional ~~result~~practical ~~from~~expedients to reduce the ~~outcome~~cost and complexity of ~~this~~applying ~~uncertainty~~the new revenue standard. ~~The~~These ~~Company's~~amendments ~~continued~~have ~~existence~~the issame ~~dependent~~effective ~~upon~~date ~~management's~~as ~~ability~~the tonew ~~develop~~revenue ~~profitable~~standard. ~~operations,~~While ~~continued~~we ~~contributions~~are ~~from~~currently evaluating the ~~Company's~~method ~~executive~~of ~~officers~~adoption toand ~~finance~~the ~~its~~impact ~~operations~~of the new revenue standard, as amended, on our Consolidated Financial Statements and related disclosures, we believe the ~~ability~~adoption toof ~~obtain~~the ~~additional~~new ~~funding~~standard ~~sources~~may have a significant impact on the accounting for certain transactions with multiple elements or “bundled” arrangements because the requirement to ~~explore~~have ~~potential~~VSOE ~~strategic~~for ~~relationships~~undelivered ~~and~~elements under current accounting standards is eliminated under the new standard. Accordingly, we may be required to ~~provide~~recognize ~~capital~~as ~~and~~revenue ~~other~~a ~~resources~~portion ~~for~~of the ~~further~~sales ~~development~~price ~~and~~upon ~~marketing~~delivery of the ~~Company's~~software, ~~products~~as compared to the current requirement of recognizing the entire sales price ratably over an estimated offering period. We continue to evaluate the impact of the new revenue standard on our Consolidated Financial Statements and ~~business~~related disclosures.

~~NOTE~~In 4 June 2016, the FASB issued ASU 2016- ~~ACQUISITION~~13, Financial Instruments: Measurement of Credit Losses on Financial Instruments which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for Company’s ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected will a valuation provision. The amendments will be effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of this amendment on our consolidated financial statements and related disclosures.

On June 27, 2016, the Company entered into an acquisition agreement with NEOGEN Holdings LLC, whereby the Company acquired 100% of the membership interest of XTELUS LLC and XETLUS S.A. (“XTELUS”). The acquisition of XTELUS met the definition of a business in accordance with FASB ASC Topic 805, "Business Combinations". As such, the Company accounted for the acquisition as a business combination.

Management determined that the Company was the acquirer in the business combination in accordance with FASB ASC Topic 805, "Business Combinations," based on the following factors: (i) there was a change in control of XTELUS; (ii) the Company was the entity in the transaction that issued its equity instruments, and in a business combination, the acquirer usually is the entity that issues its equity interests; (iii) the Company's pre-transaction directors retained the largest relative voting rights of the Company post-transaction; (iv) the composition of the Company's current board of directors and management was the result of the appointment by the Company's pre-transaction directors.

The purchase price paid for the acquisition of XTELUS amounted to $100,000 and consisted of 1 Series D Preferred Stock, which is convertible into $100,000 of common shares at any time following 12 months from the issuance of such shares. The following table summarizes the fair value of the consideration paid by the Company and the fair value amounts assigned to the assets acquired on the acquisition date:

Fair Value of Consideration:	June 26,2016
1 share of Series D Preferred Shares	$	100,000
Total Purchase Price	$	100,000
Assets and Liabilites:	June 26,2016
Current assets	$	51,374
Current liabilities		(29,260	)
Goodwill		77,886
Fair value of total assets	$	100,000

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~~Revenues~~In ofFebruary ~~$498~~2016,~~035~~ ~~and~~FASB ~~net~~issued ~~loss~~ASU ~~of $51~~2016-02,~~376~~ Leases. ~~since~~The ~~the~~guidance ~~acquisition~~would ~~date~~require ~~are~~lessees ~~included~~to inrecognize ~~the~~most ~~consolidated~~leases ~~statements~~on their balance sheets as lease liabilities with corresponding right –of-use ~~operations~~assets. ~~and~~The ~~comprehensive~~guidance ~~income~~is ~~(loss)~~effective for ~~the~~annual ~~nine~~and ~~months~~interim ~~ended~~reporting ~~October~~periods 31beginning on or after December 15, ~~2016~~2018. The Company is currently evaluating the impact of its pending adoption of ASU 2016-02 on its consolidated financial statements

~~Unaudited~~NOTE ~~proforma~~4 ~~results~~– ofDISCONTINUED ~~operations for the nine months ended October 31, 2016 and 2015 as though the Company acquired XTELUS on the first day of each period are set forth below:~~OPERATIONS

	Nine months ended October 31,
	2016			2015
Revenues	$	5,008,007		$	1,293,174
Cost of revenues		3,530,143			857,044
Gross profit		1,477,864			436,130
Operating expenses		2,680,809			1,428,672
Operating loss		(1,202,945	)		(992,542	)
Other expense		(1,411,125	)		(338,889	)
Net Loss	$	(2,614,070	)	$	(1,331,431	)

On October 31, 2016, the Company entered into the asset purchase and sale agreement (the “Agreement”) with Giggle Fiber, LLC. Pursuant to the terms of the Agreement, the Company sold the equipment, customer list of Webrunner and bank accounts related to Webrunner for $413,861, payable in installments. The Company recorded gain on sales of assets of $111,467 as discontinued operations during the year ended January 31, 2017. The total consideration received was $401,052.

~~NOTE~~The ~~5 - NOTES~~following ~~PAYABLE~~table shows the results of operations of Webrunner for the three months ended April 30, 2017 and 2016 which are included in the loss from discontinued operations:

The Company had the following notes payable and notes payable - related party outstanding as of October 31, 2016 and January 31, 2016:

	April 30,
	2017		2016
Revenue	$	-	$	85,692

Operating expenses
General and administration		-		(55,789	)
Depreciation and amortization		-		(44,670	)
Loss from discontinued operations	$	-	$	(14,767	)

NOTE 5 – NOTES PAYABLE

The Company had the following notes payable and notes payable - related party outstanding as of April 30, 2017 and January 31, 2017:

Notes Payable

	October 31,2016			January, 31,2016
	April 30,			January 31,
	2017			2017
Dated – October 30, 2014	$	10,000		$	10,000
Dated – June 3, 2015		-			25,000
Dated – August 4, 2016		25,000			25,000
Dated – December 11, 2015		-			50,000
Dated – September 30, 2016		-			65,476
Dated – August 4, 2016		25,000			-
Dated - March 10, 2017		246,645			-
Dated – September 30, 2016		113,839			-
Dated – April 11, 2017		146,949			-
Total notes payable	$	~~148~~428,~~839~~594		$	85100,~~000~~476
Less: debt discount and deferred financing fees		(2104,~~687~~829	)		-(1,546	)
		146,152			85,000
		323,765			98,930
Less: current portion of notes payable		~~146~~323,~~152~~765			8598,~~000~~930
Long-term portion of notes payable		-			-
Long-term notes payable		-			-

The Company recognized amortization expense related to the debt discount and deferred financing fees of $~~263~~16,965 and $0 for the ~~nine~~three months ended ~~October~~April 3130, 2017 and 2016, respectively. The total borrowings and ~~2015~~principal repayment on note payable during the three months ended April 30, 2017 was $327,901 and $120,033, respectively.

Dated - October 30, 2014

On October 30, 2014, the Company exercised the comprehensive acquisition agreement of Webrunner, LLC (“Webrunner”) and in the acquisition the Company assumed the debt of RNC Media in the amount of $10,000. The Note does not have any interest payable and is due upon demand.

Dated - June 3, 2015, December 11, 2015

The two notes were issued to Mr. Doyle Knudson, are subject to annual interest of 15% and are convertible into a total of 863,000 common shares. The note issued on June 3, 2015 matured in December 2015. On August 4, 2016, the Company entered into the new agreement with Crossover Capital Fund I, LLC, which the Company issued a new convertible note of $75,000 for the payment of the two notes of $75,000. As a result of this agreement, the Company recognized gain on debt settlement of $9,277.

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Dated – August 4, 2016

The note was issued to Mr. Doyle Knudson, are subject to annual interest of 15% and are ~~convertible~~secured ~~into~~by 250,000 shares of common ~~shares~~stock. The note matured in February 2017. The total cash proceeds received from the note was $25,000

Dated – September 30, 2016

The Company entered into the revenue based factoring agreement with Powerup Lending Group, Ltd. and received cash of $125,000. The note includes an original issue discount and financing fee of $2,950 and the Company received cash of $122,050. The Company is required to make weekly principal and interest payments of $4,560 for a period of 34 weeks through May 30, 2017. During the three months ended April 30, 2017, the Company repaid $65,476 fully.

Dated – March 10, 2017

The Company entered into the revenue based factoring agreement with PIRS Capital, LLC. The principal amount of note is $291,900 and the note includes an original issue discount and financing fee of $86,499 and the Company received cash of $205,401. The Company is required to make weekly principal and interest payments of $5,657 for a period of 51 weeks through February 23, 2018.

Dated – April 11, 2017

The Company entered into the revenue based factoring agreement with Powerup Lending Group, Ltd. The principal amount of note is $156,250 and the note includes an original issue discount and financing fee of $33,750 and the Company received cash of $122,500. The Company is required to make weekly principal and interest payments of $4,560 for a period of 34 weeks through December 5, 2017.

Notes Payable - related party

	October 31,2016		January, 31,2016
	April 30,		January 31,
Dated – April 23, 2015	$	221,250	$	282,250
	2017		2017
Dated - January 18, 2016		555,556		975,000
Dated – April 23, 2015	$	231,250	$	231,250
Total notes payable		776,806		1,257,250
Dated - December 21, 2016		446,640		542,349
Less: current portion of notes payable		776,806		868,361
Total notes payable		677,890		773,599
Long-term notes payable	$	-	$	388,889
Less: current portion of notes payable		614,085		614,085
Long-term notes payable	$	63,805	$	159,514

The total borrowings and principal repayment on related party note payable during the three months ended April 30, 2017 and 2016 was $95,709 and $101,111, respectively

Dated - April 23, 2015

On May 1, 2015, in connection with the acquisition of the assets of Net D Consulting, Inc. (“Net D”), the Company issued a $350,000 note which bears no interest and matures on October 7, 2016. The Company made repayments on the note of $~~61,000~~0 during the ~~nine~~three months ended ~~October~~April 3130, ~~2016~~2017.

Dated -– ~~January~~December 1821, 2016

On ~~January~~December 1821, 2016, inthe ~~connection~~Company ~~with~~entered into the ~~acquisition~~new ofagreement ~~Connexum,~~which the ~~Company~~company issued a note payable of $1574,~~000,000~~252 ~~note~~for topayment ~~Net~~of Dthe ~~which~~Note ~~bears~~dated ~~annual~~January 18, 2016. The Note bears interest rate of 18$7.29% for 1st 12 months and then 3.25% for 13 through 18 months. The Company is required to make monthly principal and interest payments of $63226,~~806~~985 for a period of 18 months through ~~August~~June 120, ~~2017~~2018. The Company paid principal and interest payments of $~~444~~95,~~444~~709 for the ~~nine~~three months ended ~~October~~April 3130, ~~2016~~2017.

NOTE 6 - CONVERTIBLE NOTES PAYABLE

The Company had the following convertible notes payable outstanding as of October 31, 2016 and January 31, 2016:

	October 31,2016			January, 31, 2016
Promissory Note - Issued August 22, 2014, with a fixed conversion price of $0.10 per common share or 17,000,000 shares of common stock.	$	1,700,000		$	1,700,000
Promissory notes – Issued in fiscal year 2016, with variable conversion features.		114,444			449,666
Promissory notes – Issued in fiscal year 2017, with variable conversion features.		750,355			-
Total convertible notes payable		2,564,799			2,149,666
Less: debt discount and deferred financing fees		(346,297	)		(204,427	)
		2,218,502			1,945,239
Less: current portion of convertible notes payable		2,215,852			1,934,932
Long-term convertible notes payable	$	2,650		$	10,307

The Company recognized amortization expense related to the debt discount and deferred financing fees of $835,401 and $284,303 for the nine months ended October 31, 2016 and 2015, respectively.

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NOTE 6 – CONVERTIBLE NOTES PAYABLE

The Company had the following convertible notes payable outstanding as of April 30, 2017 and January 31, 2017:

	April 30,			January 31,
	2017			2017
Promissory Note - Issued August 22, 2014, with a fixed conversion price of $0.10 per common share or 17,000,000 shares of common stock.	$	1,700,000		$	1,700,000
Promissory notes – Issued in fiscal year 2016, with variable conversion features.		40,378			83,951
Promissory notes – Issued in fiscal year 2017, with variable conversion features.		524,945			876,791
Promissory notes – Issued in fiscal year 2017, with variable conversion features.		343,174			-
Total convertible notes payable		2,608,497			2,660,742
Less: debt discount and deferred financing fees		(544,037	)		(598,790	)
		2,064,460			2,061,952
Less: current portion of convertible notes payable		2,064,460			2,061,952
Long-term convertible notes payable	$	-		$	-

The Company recognized amortization expense related to the debt discount and deferred financing fees of $403,817 and $271,349 for the three months ended April 30, 2017 and 2016, respectively.

Promissory Note - August 22, 2014

In connection with the settlement agreement entered into with Doyle Knudson, an investor, in 2014, the Company issued a $1.8 million convertible promissory note with a fixed conversion price of $0.10 per share or 1718,000,000 shares of common stock. The note is subject to annual interest of 10%, matured in August 2015 and is currently past due. In May and December 2015, a total of $100,000 note principal was transferred to another lender.

The Company initially recorded a discount on the convertible note due to a beneficial conversion feature of $358,200 and fully amortized for the year ended January 31, 2016. Due to the variable conversion rates in the other convertible notes (see below), the $1,700,000 balance of the note became tainted and the embedded fixed conversion option was bifurcated and accounted for as a derivative liability. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $358,200 and amortized $0 and $208,950 for the nine months ended October 31, 2016 and 2015, respectively.

Promissory Notes - Issued in fiscal year 2016

During the year ended January 31, 2016, the Company issued a total of $449,666 of promissory notes with the following terms:

· Terms ranging from 9 months to 2 years · Annual interest rates ranging from 5% to 12% · Convertible at the option of the holders either at issuance or 180 days from issuance. The note dated September 29, 2015 is convertible at the later of the maturity date or date of default. · Conversion prices are typically based on the discounted (50% to 60% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be the lower of $0.01 or the discounted trading price

· Annual interest rates ranging from 5% to 12%

· Convertible at the option of the holders either at issuance or 180 days from issuance. The note dated September 29, 2015 is convertible at the later of the maturity date or date of default.

· Conversion prices are typically based on the discounted (50% to 60% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be the lower of $0.01 or the discounted trading price

Certain notes allow the Company to redeem the notes at rates ranging from 118% to 148% depending on the redemption date provided that no redemption is allowed after the 180^th day. Likewise, certain notes include original issue discounts totaling to $24,166. During the year ended January 31, 2016, the Company also recognized deferred financing fees totaling $55,142

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible during the year amounted to $459,733. $~~250~~209,~~733~~000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $~~209~~250,~~000~~733 was recognized as a “day 1” derivative loss.

During the nine months ended October 31, 2016, the fair value of the derivative liability for all the notes that became convertible amounted to $327,870. $219,500 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $108,370 was recognized as a “day 1” derivative loss.

During the nine months ended October 31, 2016, the Company repaid notes with principal amounts totaling to $33,333 and converted notes with principal amounts of $303,048 and accrued interest of $21,692 into 150,793,678 shares of common stock. The corresponding derivative liability at the date of conversion of $553,477 was credited to additional paid in capital.

During the nine months ended October 31, 2016, the Company assigned 10 notes with principal amounts totaling to $375,750 to one lender which resulted to the payment of prepayment penalties amounting to $142,672.

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Promissory Notes - Issued in fiscal year 2017

During the ~~nine~~year ~~months~~ ended ~~October~~January 31, ~~2016~~2017, the Company issued a total of $~~927~~1,~~272~~266,417 of promissory notes with the following terms:

· Terms ranging from 9 months to 20 months · Annual interest rates ranging from 8% to 12% · Convertible at the option of the holders either at issuance or 180 days from issuance. · Conversion prices are typically based on the discounted (50% to 60% discount) lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be a floor of $0.0005 and $0.00005 per share.

·11 ~~Annual~~Table ~~interest~~of ~~rates ranging from 8% to 12%~~Contents

·Certain ~~Convertible~~notes allow the Company to redeem the notes at rates ranging from 118% to 150% depending on the ~~option~~redemption date provided that no redemption is allowed after the 180th day. Likewise, certain notes include original issue discounts and deferred financing cost totaling to $146,976. The Company received cash of $785,858. During the ~~holders~~year ~~either~~ended atJanuary ~~issuance~~31, or2017, ~~180~~the ~~days~~Company ~~from~~repaid ~~issuance~~notes with principal amounts totaling to $33,333 and a total of $5,517 accrued interest was also added to principal.

·The ~~Conversion~~Company ~~prices~~valued ~~are~~the ~~typically~~conversion ~~based~~feature onusing the ~~discounted~~Black ~~(50%~~Scholes ~~discount)~~valuation ~~lowest~~model. ~~trading~~The ~~prices~~fair value of the ~~Company’s~~derivative ~~shares~~liability ~~during~~for ~~various~~all ~~periods~~the notes that became convertible, including the notes issued in prior years, during the year ended January 31, 2017 amounted to ~~conversion~~$3,245,991. ~~Certain~~$1,356,692 ~~notes~~of ~~allow~~the ~~for~~value assigned to the ~~conversion~~derivative ~~price~~liability towas berecognized as a ~~floor~~debt discount to the notes while the balance of $~~0.0005~~1,889,299 ~~and~~was ~~$0.00005~~recognized ~~per~~as ~~share~~a “day 1” derivative loss.

~~Certain~~Promissory ~~notes~~Notes ~~allow~~- ~~the~~Issued ~~Company~~in tofiscal ~~redeem~~year the notes at rates ranging from 118% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, certain notes include original issue discounts totaling to $70,476. During the nine months ended October 31, 2016, the Company also recognized deferred financing fees totaling $58,625 and the Company received cash of $691,733.2018

During the three months ended April 30, 2017, the Company issued a total of $349,063 of promissory notes with the following terms:

	·	Terms 9 months
	·	Annual interest rates 10%
	·	Convertible at the option of the holders either at issuance.
	·	Conversion prices are typically based on the 40% discount lowest trading prices of the Company’s shares during various periods prior to conversion.

Certain notes allow the Company to redeem the notes at rates ranging from 125% to 140% depending on the redemption date provided that no redemption is allowed after the 180^th day. Likewise, certain notes include original issue discounts totaling to $6,000 and the Company received cash of $60,000 and replaced old notes and accrued interest of $283,063.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible during the ~~nine~~three months ended ~~October~~April 3130, ~~2016~~2017 amounted to $1935,~~299,291~~978. $~~628~~343,~~672~~063 of the value assigned to the derivative liability was recognized as a debt discount to the notes, ~~while the balance of~~ $~~670~~160,~~619~~000 was recognized as a “day 1” derivative loss and $60,161 was recognized as gain on settlement of debt and $493,076 offset the fair value of the derivative liability that related to the notes that were replaced by the new notes.

During the nine months ended October 31, 2016, the Company converted notes with principal amounts of $176,918 and accrued interest of $7,695 into 421,977,749 shares of common stock. The corresponding derivative liability at the date of conversion of $314,434 was credited to additional paid in capital.Conversion

~~NOTE~~During ~~7 - DERIVATIVE~~the ~~LIABILITIES~~three months ended April 30, 2017, the Company converted notes with principal amounts of $200,566 and accrued interest of $13,962 into 3,985,956,874 shares of common stock. The corresponding derivative liability at the date of conversion of $526,791 was credited to common stock issued at a discount.

Replacement of Notes

During the year ended January 31, 2017, the Company assigned 16 notes with outstanding principal amounts totaling to $424,178 to two lenders which resulted to the payment of prepayment penalties amounting to $156,809 and recognized loss on debt settlement of $267,646 due to the modification of the replacement note conversion feature, and the difference between the fair value of derivative of the conversion feature.

The following table summarizes the detail of assigned sixteen (16) notes;

	Assigned		Principal		Accrued		Prepayment
	Notes		amount		interest		penalties
Tranches in effect as of January 31, 2017		5	$	147,741	$	12,992	$	66,412
Tranches in effect during the three months ended April 30, 2017		9		200,680		17,061		65,322

Tranches in not effect as of April 30, 2017
Tranches in effect as of May 12, 2017		2		75,757		7,827		25,075
Total		16	$	424,178	$	37,880	$	156,809

As a result of replacement of notes during the three months ended April 30, 2017, the Company recognized gain on settlement of debt of $62,613.

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NOTE 7 – DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of ~~October~~April 3130, ~~2016~~2017. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk -free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the ~~October~~April 3130, ~~2016~~2017 and January 31, ~~2016 valuations~~2017:

	Nine MonthsEnded			YearEnded
	Three Months Ended			Year Ended
	October 31,2016			January 31,2016
	April 30, 2017			January 31, 2017
Expected term	0.~~008~~13 - 10.5088 years			0.4 - 21.50 years
Expected average volatility	~~120~~299% - ~~381~~483%		%	~~249~~120% - ~~328~~716%		%
Expected dividend yield		-			0-
Risk-free interest rate	0.0051% - 0.6799%		%	0.0518% - 0.8384%		%

12At ~~Table~~April 30, 2017, the estimated fair values of ~~Contents~~the liabilities measured on a recurring basis are as follows:

At October 31, 2016, the estimated fair values of the liabilities measured on a recurring basis are as follows:

April 30, 2017	Level 1		Level 2		Level 3		Total
Promissory Note – Issued August 22, 2014	$	-	$	-	$	1,700	$	1,700
Promissory Notes – Issued in fiscal year 2016		-		-		80,755		80,755
Promissory Notes – Issued in fiscal year 2017		-		-		830,094		830,094
Promissory Notes – Issued in fiscal year 2018		-		-		515,462		515,462
Total liabilities	$	-	$	-	$	1,428,011	$	1,428,011

October 31, 2016	Level 1		Level 2		Level 3		Total
Promissory Note – Issued August 22, 2014	$	-	$	-	$	6,800	$	6,800
Promissory Notes – Issued in fiscal year 2016		-		-		137,737		137,737
Promissory Notes – Issued in fiscal year 2017		-		-		745,620		745,620
Warrants -Issued in fiscal year 2016		-		-		110		110
Warrants -Issued in fiscal year 2017		-		-		-		-
Total liabilities	$	-	$	-	$	890,267	$	890,267

The following table summarizes the changes in the derivative liabilities during the three months ended April 30, 2017:

The following table summarizes the changes in the derivative liabilities during the nine months ended October 31, 2016:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - January 31, 2017	$	2,088,684
Addition of new derivatives recognized as debt discounts		343,063
Addition of new derivatives recognized as loss on derivatives		160,000
Derivatives settled upon conversion of debt and exercise of warrants		(526,791	)
Gain on debt extinguishment		(60,161	)
Gain on change in fair value of the derivative		(576,784	)
Balance - April 30, 2017	$	1,428,011

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance - January 31, 2016	$	620,237
Addition of new derivatives recognized as debt discounts		848,172
Addition of new derivatives recognized as options compensation		177,000
Addition of new derivatives recognized as loss on derivatives		778,989
Derivatives settled upon conversion of debt and exercise of warrants		(1,006,129	)
Loss on change in fair value of the derivative		(528,002	)
Balance - October 31, 2016	$	890,267

The net gain (loss) on derivatives during the three months ended April 30, 2017 and 2016 was $416,784 and ($54,890), respectively.

~~The~~NOTE ~~net~~8 ~~loss~~– ~~on derivatives during the nine months ended October 31, 2016 and 2015 was $250,987 and $36,268, respectively.~~EQUITY

NOTE 8 - EQUITY

Preferred Stock

Series A Preferred Stock

There were no issuances of the Series A Preferred Stock during the ~~nine~~three months ended ~~October~~April 3130, ~~2016~~ 2017.

~~Series~~As Bof ~~Convertible~~April 30, 2017 and January 31, 2017, 1,000 shares of Series A Preferred Stock were issued and outstanding, respectively.

During the nine months ended October 31, 2016, the Company issued Series B Preferred shares, as follows:

· On December 21, 2015, the Company recorded preferred stock payable of $13,438 for 13,437,500 Series B Preferred shares related to the acquisition of the assets of Net D. During the nine months ended October 31, 2016 the Company issued 13,437,500 Series B Preferred shares to settle this payable.

· On February 3, 2016, 4,750,000 shares were sold for cash of $20,000. On issuance, value of the underlining common stock represented a beneficial conversion feature of $23,344. The beneficial conversion feature will be recognized when the preferred stock becomes convertible on August 3, 2016 as a deemed dividend.

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Series B Convertible Preferred Stock

There were no issuances of the Series B Preferred Stock during the three months ended April 30, 2017.

As of April 30, 2017 and January 31, 2017, 68,178,500 shares of Series B Preferred Stock were issued and outstanding, respectively.

Series C Convertible Preferred Stock

There were no issuances of the Series C Preferred Stock during the ~~nine~~three months ended ~~October~~April 3130, ~~2016~~2017.

As of April 30, 2017 and January 31, 2017, 16 shares of Series C Preferred Stock were issued and outstanding, respectively.

The Company determined the Series C Convertible Preferred Stock is considered to be contingently redeemable convertible and as a result, has been classified as mezzanine equity in the Company's balance sheet, as of April 30, 2017 and January 31, 2017.

Series D Convertible Preferred Stock

OnThere ~~June~~were ~~23,~~no ~~2016,~~issuances ~~pursuant to its Articles~~ of ~~Incorporation and Bylaws,~~ the ~~Board~~Series ofD ~~Directors~~Preferred ofStock ~~the~~during ~~Company, unanimously approved~~ the ~~designation~~three ofmonths aended ~~new~~April ~~series of preferred stock~~30, ~~"Series D Convertible Preferred Stock~~2017.

~~Each~~As ~~share~~ of ~~the~~April ~~Series D Preferred Stock shall be convertible~~30, at2017 ~~the option of the holder thereof~~ and ~~subject~~January to31, ~~notice~~2017, ~~requirements~~21 atshares ~~any time following 12 months from the issuance~~ of ~~such~~Series ~~shares,~~D ~~into~~Preferred ~~such~~Stock ~~number~~were ofissued ~~fully paid~~ and ~~non-assessable common shares worth $100~~outstanding,~~000~~ respectively.

~~During~~The ~~nine~~Company ~~months~~determined ~~ended~~the ~~October~~Series ~~31,~~D ~~2016,~~Convertible ~~the~~Preferred ~~Company~~Stock ~~issued~~is 1considered ~~share~~to ofbe ~~Series~~contingently Dredeemable ~~Preferred~~convertible ~~Stock~~and ~~with~~as a ~~fair~~result, ~~value~~has ofbeen ~~$100,000~~classified inas ~~connection~~mezzanine ~~with~~equity in the ~~acquisition~~Company's balance sheet, as of ~~XTELUS~~April ~~(see~~30, ~~Note~~2017 4)and January 31, 2017.

As of October 31, 2016 and January 31, 2016, 1 and 0 shares of Series D Preferred Stock were issued and outstanding, respectively.

Common stock

~~During~~The ~~the~~Company ~~nine~~is ~~months~~authorized ~~ended~~to ~~October~~issue 3114, ~~2016~~900,000,000 ~~the~~shares ~~Company~~of ~~issued~~ common ~~shares,~~stock asat ~~follows:~~a par value of $0.001.

	·	572,771,427 common shares were issued for the conversion of debt and accrued interest of $509,352.
	·	41,000,000 common shares in exchange for the exercise of options for no consideration

During the three months ended April 30, 2017, the Company issued common shares, as follows:

3,985,956,874 common shares were issued for the conversion of debt and accrued interest of $214,528.

As of April 30, 2017, and January 31, 2017, 6,343,046,507 and 2,357,089,633 shares of common stock were issued and outstanding, respectively.

Warrants and Options

Warrants

As of April 30, 2017, and January 31, 2017, there are no warrants outstanding.

Options

~~During~~The ~~nine months ended October 31, 2016, the~~ Company ~~entered~~has ~~into three separate agreements with consultants to provide the Company with consulting services in exchange for options of 17~~9,~~000~~100,000, ~~5,000,000 and 17,000,000 with an exercise price of $0, respectively. The~~ options ~~can~~issued bein ~~exercised~~connection ~~by the holder any time prior to June 30, August 31, and September 30, 2016. These options were tainted as a result of the convertible notes~~ with ~~variable conversion rates (see Note 7) and were accounted for as derivative instruments at~~ the ~~time~~acquisition of ~~issuance~~Webrunner. The fair value of the options amounting to $177,000 was recorded as stock compensation expense during the nine months ended October 31, 2016, with a corresponding credit to derivative liability (see Note 7).

AThe ~~summary~~following oftable ~~activity~~summarizes ~~during~~information ~~the~~relating ~~period~~to ~~ended~~outstanding ~~October~~and ~~31,~~exercisable ~~2016~~stock ~~follows~~options as of April 30, 2017:

	~~Options Outstanding~~		Options Outstanding
					~~Weighted Average~~		Weighted Average
	~~Shares~~		Shares		~~Exercise Price~~		Exercise Price
Outstanding, January 31, 2016		36,100,000			$	0.03
1/31/2017	Outstanding, January 1, 2017			9,100,000			$	0.10
~~Granted~~	Granted	~~39,000,000~~		344,000	$	-		-
~~Exercised~~	Exercised	~~(41,000,000~~	)	-	$	~~(0.0009~~	)	-
Forfeited/expired		(5,000,000	)		$	-
	Forfeited/canceled			-				-
Outstanding, October 31, 2016		29,100,000			$	0.03
4/30/2017	Outstanding, January 1, 2017			9,444,000			$	0.10

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The following table summarizes information relating to outstanding and exercisable stock options as of October 31, 2016:

Options Outstanding						Options Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
	9,100,000		2.50	$	0.10		9,100,000	$	0.10
	9,100,000		2.50	$	0.10		9,100,000	$	0.10

Options Outstanding						Options Exercisable
Number ofShares		Weighted Average Remaining Contractual life (in years)		Weighted AverageExercise Price		Number ofShares		Weighted AverageExercise Price
	9,100,000		3.00	$	0.10		9,100,000	$	0.10
	20,000,000		0.08	$	0.005		20,000,000	$	0.005
	29,100,000		1.00	$	0.03		29,100,000	$	0.03

The options have no intrinsic value at April 30, 2017.

The options have an intrinsic value at October 31, 2016 and January 31, 2016 of $0 and $59,400, respectively.

Employee Incentive Bonus Plan

On June 27, 2016, the Company entered into employee agreement with two employees that contain preferred share issuance incentive bonuses based on various sales targets for XTELUS, for the 12- month period ending June 27, 2017. The first award contains cash compensation of $10,000 per month and the ability to earn 500,000 shares of Series B preferred stock if XTELUS revenue of $1,000,000 is generated within 12 months. The second award contains cash compensation of $20,000 per month, 5 shares of Series D preferred stock earned on June 27, 2017 (with 1 share earned immediately upon revenue of $100,000 being generated within first six months) and the ability to earn up to 6,500,000 shares of Series B preferred stock based upon XTELUS revenue targets up to $1,000,000 over 12 months and up to an additional 3,000,000 shares of Series B preferred stock based upon XTELUS revenue targets up between $1,000,000 and greater than $7,000,000 over 12 months. The Company assessed the probability that the revenue targets will be met and determined that the target revenue will most likely meet $1,000,000 and based on the stock awards, estimated the fair value of 6,500,000 shares of Preferred B stock at $32,500, 5 shares of Preferred D stock at $500,000 and 500,000 shares of Preferred B stock at $2,500, respectively. For the ~~period~~three months ended ~~October~~April 3130, 2017 and 2016, the Company recognized stock based compensation of $~~221~~107,~~912~~164 and $0 under these awards, with a corresponding credit to additional paid in capital.

NOTE 9 - ~~RELATED~~– ~~PARTY TRANSACTIONS~~CONTINGENCIES

AsThe ofCompany ~~October~~is ~~31,~~a ~~2016~~party ~~and~~to ~~January~~various ~~31,~~legal ~~2016,~~claims which have arisen in the ~~CEO~~normal ~~had~~course ~~accrued~~of ~~salaries~~business, none of ~~$98~~which are expected to have a material adverse effect on the financial position,~~000~~ ~~and~~results $0of operations, ~~respectively~~or cash flows of the Company.

~~During~~NOTE ~~the~~10 ~~nine~~– ~~months~~RELATED ~~ended~~PARTY October 31, 2016 and 2015, the CEO advanced the Company cash of $200 and $0, respectively. As of October 31, 2016 and January 31, 2016, the amount owed to the CEO for advances was $200 and $0, respectively.TRANSACTIONS

AsDuring ~~of October 31, 2016,~~ the ~~Company~~three ~~has~~months ~~outstanding~~ended ~~notes~~April ~~payable~~30, ~~to Net D totaling to $776~~2017,~~806~~ ~~in connection with~~ the Company’s ~~acquisition~~paid ~~of Connexum and certain assets of Net D. The sole owner of Net D is~~ a ~~director~~total ~~and officer~~ of ~~the~~$72,200 ~~Company.~~consulting ~~Net~~fees Dto ~~also performs certain services for~~ the ~~Company in connection with the latter~~company’s ~~Carrier Services business~~officers. ~~During the period ended October 31, 2016, the Company incurred total fees in connection with such services of $58,784.~~

As of ~~October~~April 3130, ~~2016~~2017, and January 31, ~~2016~~2017, the ~~Company~~amount owed ~~related~~to ~~parties~~the company’s officers was $~~288~~46,~~873~~000 and $270,~~942,~~ respectively.

~~NOTE~~As ~~10 -~~of ~~COMMITMENTS~~April ~~AND~~30, ~~CONTINGENCIES~~2017, and January 31, 2017, the Company has outstanding notes payable to Net D totaling to $677,890 and $773,599, respectively, in connection with the Company’s acquisition of Connexum and certain assets of Net D (see Note 5). The sole owner of Net D is a director the Company. Net D also performs certain services for the Company in connection with the latter’s Carrier Services business. During the three months ended April 30, 2017, the Company incurred total fees in connection with such services of $65,529. As of April 30, 2017, and January 31, 2017, the Company has an outstanding payable to Net D of $225,887 and $305,458, respectively.

Licensing Agreement / Deposit

On June 11, 2014, we entered into a license and subscription agreement with Cloud Medical Doctor Software Corporation formerly National Scientific Corporation (NSCT) which changed its name to Cipher Loc Corporation and ticker symbol to (CLOK) ("Cloud") for $1,125,000. The agreement grants to us a non-exclusive encryption license agreement which entitles us to utilize Cloud's encryption software solution within the Customer's business. We purchased a 48 months encryption licensing agreement to incorporate into our existing web based software. The licensing agreement will protect members of our platform from hackers and other privacy intrusion vehicles. CipherLoc has various features that will further protect our members and end users of our web developed platform. During the year ended January 31, 2016, the Company wrote off 50% of the deposit amounting to $562,500 to impairment expense. As of October 31, 2016, the software has not been delivered to the Company and the remaining amount of $562,500 continues to be reported as a deposit in the consolidated balance sheet.

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

~~Connexum,~~NOTE ~~LLC.~~REGARDING FORWARD-LOOKING STATEMENTS

OnManagement’s ~~January~~Discussion ~~18,~~and ~~2016,~~Analysis contains various “forward looking statements” within the ~~Company~~meaning ~~entered~~of ~~into~~Section an21E ~~acquisition~~of ~~agreement~~the ~~with Net~~Securities DExchange Act of 1934, ~~whereby~~as amended, regarding future events or the ~~Company~~future ~~acquired~~financial ~~100%~~performance of the ~~membership~~Company ~~interest~~that ofinvolve ~~Connexum~~risks and uncertainties. Certain statements included in this Form 10-Q, ~~LLC~~including, (without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “~~Connexum~~anticipates”)., ~~The~~“believes”, ~~agreement~~“plans”, ~~also~~“expects”, ~~provided~~“future” ~~for~~and ~~contingent~~similar ~~consideration~~statements ofor 1expressions, ~~Series~~identify Cforward ~~Preferred~~looking ~~share~~statements. ~~convertible~~Any ~~into~~forward-looking $1statements herein are subject to certain risks and uncertainties in the Company’s business,~~000,000~~ ~~common~~including ~~shares~~but ifnot ~~Connexum~~limited ~~achieves~~to, ~~80%~~reliance ofon ~~anticipated~~key ~~revenue~~customers and ~~another~~competition 1in ~~Series~~its Cmarkets, ~~Preferred~~market ~~share~~demand, ~~convertible~~delayed ~~into~~payments $1of accounts receivables,~~000~~ technological developments,~~000~~ ~~common~~maintenance ~~shares~~of ifrelationships ~~Connexum~~with ~~achieves~~key ~~100%~~suppliers, difficulties of ~~anticipated~~hiring ~~revenue~~or ~~within~~retaining ~~one~~key ~~year~~personnel ~~from~~and ~~the~~any ~~date~~changes ofin ~~acquisition.~~current ~~The~~accounting ~~Company~~rules, ~~determined~~all ~~that~~of ~~Connexum~~which ~~will~~may ~~meet~~be ~~80%~~beyond the control of the ~~anticipated~~Company. Management will elect additional changes to revenue ~~and~~recognition ~~has~~to ~~recognized~~comply with the ~~fair~~most ~~value~~conservative ofSEC recognition on a forward going accrual basis as the ~~contingent~~model ~~consideration~~is ofreplicated ~~$1,000,000~~with ~~both~~other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of ~~October~~certain 31factors, ~~2016~~including ~~and~~those ~~January~~set ~~31,~~forth ~~2016~~therein.

~~Windstream~~Forward-looking ~~Holdings~~statements involve risks, ~~Inc~~uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended January 31, 2017, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.

AtIn ~~the time of acquisition of Connexum~~addition, ~~Windstream Holdings, Inc. ("Windstream"), a provider of voice and data network communications, and managed services, to businesses in~~ the ~~United~~foregoing ~~States, claimed~~factors ~~that~~may ~~Connexum~~affect ~~owed~~generally ~~them~~our ~~$600~~business,~~000,~~ ~~which~~results charges Connexum denies. In 2015, Connexum contracted with Windstream to purchase high cost long distance services. When receiving the initial invoices Connexum noticed the bill was not what was expected and issued a dispute for the incorrect charges and paid the non-disputed amount of ~~just~~operations ~~over $20,000. Then, without notice, Windstream turned off services. Shortly thereafter Windstream~~ and ~~Connexum~~financial ~~disputed over high cost traffic~~position. ~~Windstream~~Forward-looking ~~continued~~statements tospeak ~~bill~~only ~~Connexum~~as ~~for many months even after disconnecting its service, which ended up totaling nearly $580,000~~ of ~~disputed~~ ~~fees.~~the Atdate the ~~time~~statement ~~of disconnection, there~~ was ~~approximately $20,000 in actual unpaid usage fees~~made. ItWe isdo ~~unlikely that the Company would pay these fees. Windstream has~~ not ~~threatened~~undertake ~~litigation at this point~~ and ~~Connexum~~specifically isdecline ~~actively~~any ~~working~~obligation to ~~settle~~update ~~the~~any ~~disputed~~forward-looking ~~amount~~statements.

OnGeneral ~~May 25, 2016, the Company reached a settlement with Windstream for $20,000. As of the filing of this report, the Company paid the $20,000.~~Overview

~~Tarpon~~We ~~Bay~~were ~~Partners~~incorporated ~~LLC~~in the state of Nevada on January 6, 2011 and our principal business address 5300 Melrose Avenue, Suite 42, Las Angeles, CA 90038. Gawk, Inc. offers a suite of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium, and large businesses; and offers domestic and international voice services to communications carriers worldwide. It offers a suite of advanced data center and cloud-based services, including fault tolerant, high availability cloud servers, which comprise platform as a service, infrastructure as a service, and a content delivery network; managed network services that converge voice and data applications, structured cabling, wireless, and security services, as well as include Internet access via Ethernet or fiber at speeds ranging from 10 Mbps to 10 Gbps; and data center solutions, including cloud services, colocation services, and business continuity services, such as storage and security. www.gawkinc.com.

OnAs ~~May~~a ~~26,~~result ~~2016,~~of ~~Tarpon~~our ~~Bay~~growth ~~Partners,~~through ~~LLC~~acquisition ~~(“Tarpon~~strategy, ~~Bay”)~~Gawk ~~initiated~~continues ~~action~~to ~~against~~expand ~~the~~its ~~Company~~business incustomer ~~New York State Supreme Court~~base, ~~case~~revenue ~~#652178/2016.~~stream ~~Tarpon~~and ~~Bay~~added ~~has~~a ~~elected~~significant ~~for~~number ~~summary judgment in lieu~~ of ~~complaint.~~network ~~Tarpon~~facilities ~~Bay is claiming, inter alia, that the Company owes $93,500 in unpaid notes~~ and ~~services.~~points ~~The~~of ~~claims~~presence ~~stems~~expanding ~~from~~its ~~intended~~geographic ~~transactions the Company was to enter with Tarpon Bay~~reach. ~~Tarpon~~Through ~~Bay~~these ~~was~~acquisitions, towe ~~provide~~acquired ~~the~~advanced ~~Company~~systems ~~with funding~~ and ~~certain~~infrastructure, ~~services~~augmented inour ~~exchange~~management ~~for~~team ~~promissory~~and ~~notes~~employee ~~from~~base ~~the~~with ~~Company.~~talented, ~~The~~experienced, ~~notes~~well-trained ~~were executed by the Company~~professionals, ~~but~~while ~~Tarpon~~continuing ~~Bay provided no funding or services and is not entitled~~ to ~~repayment~~provide ofa ~~any~~strong ~~note~~platform ~~given~~for byfurther ~~the Company~~acquisitions. ~~The Company intends to vehemently defend the foregoing action.~~

~~NOTE~~Gawk ~~12 –~~is ~~ASSETS~~pursuing ~~HELD~~a ~~FOR~~three-tiered ~~SALE~~growth strategy: developing specialized solutions for key vertical markets, targeting cloud services companies for acquisition, and accelerating organic growth. Our continuing effort to deliver advanced cloud solutions to companies with more complex requirements is supported by our cloud solutions platform that allows us to rapidly respond to our customers and potential customers’ needs for customized or enhanced solutions. We also intend to continue to develop vertically oriented solutions to expand our revenue opportunities and further differentiate our service suite. We intend to acquire additional cloud services companies that can further expand our customer base, allow us to introduce additional cloud products and services, and gain scale. Our strategy to organically grow our Business Services revenue includes securing large strategic distribution partners, increasing our direct as well as indirect channel sales efforts, upselling solutions to our existing base and leveraging our management, Board of Directors and shareholder relationship network.

On16 ~~October~~Table ~~31, 2016, the Company entered into the asset purchase and sale agreement (the “Agreement”) with Giggle Fiber, LLC. Pursuant to the terms~~ of the Agreement, the Company sold the equipment and customer list of Webrunner for $400,000, payable in instalments. As title will not transfer until payments are made we are classifying these assets as held for sale as of October 31, 2016.Contents

~~The~~Results ~~following table summarizes the carrying amounts~~ of ~~the assets held for sale;~~Operations

	October 31,
Assets held for sale	2016
Equipment, net of depreciation of $117,984	$	58,991
Intangible assets, net of amortization $239,378		119,689
Goodwill		110,905
Total assets held for sale	$	289,585

Three Months Ended April 30, 2017, Compared to Three Months Ended April 30, 2016

~~16 Table of Contents~~Revenue

NOTE 13 – ACCOUNTS PAYABLE FORGIVEN

	For the Three Months Ended
	April 30,
	2017		2016		Change			%

Revenue	$	1,367,724	$	1,374,961	$	(7,237	)	(1%	)

~~During~~The ~~the~~decrease ~~period~~in ~~ended~~revenue ~~October~~by ~~31,~~1% ~~2016~~during 2017, ais ~~vendor~~primarily ~~forgave~~related ~~accounts~~to ~~payable~~the ~~owing~~discontinued operations of ~~$250,000.~~our ~~The~~legacy ~~Company~~business ~~recorded~~unit ~~the~~that ~~amount~~we tosold ~~operating expenses~~ on ~~the~~October ~~Statement~~31, ~~of Operations~~2016.

~~NOTE~~Operating 14Expenses ~~- SUBSEQUENT EVENT~~

Subsequent to October 31, 2016, the Company sold the equipment and customer list of Webrunner for $400,000 (see Note 12).

	For the Three Months Ended
	April 30,
	2017		2016		Change			%
Cost of revenue	$	972,025	$	1,055,033	$	(83,008	)	(8%		)
General and administration		714,114		469,451		244,663			52%
Legal settlement		25,000		-		25,000			-
Depreciation and amortization		150,507		186,621		(36,114	)	(19%		)
Total operating expenses	$	1,861,646	$	1,711,105	$	150,541			9%

~~Subsequent~~General toand ~~October~~administrative 31expenses increased by $244,663 ~~2016~~or 52% for the three months ended April 30, 2017, from $469,451 for the ~~Company~~three ~~issued~~months ~~common~~ended ~~shares~~April as30, ~~follows;~~2016. The increase in general and administrative expenses is primarily related increased staffing costs.

·Legal ~~405,106,884~~settlement ~~shares~~ of ~~common~~$25,000 ~~stock~~was ~~for~~related to the ~~conversion~~Tarpon ofBay ~~debt~~settlement ~~and accrued interest of $51,379~~agreement.

17Depreciation ~~Table~~and amortization expenses were $150,507 from $186,621 for the three months ended April 30, 2017 and 2016, respectively. Depreciation and amortization expenses decreased in 2017, due to the sale of ~~Contents~~Webrunner and impairment of customer list in Net D.

~~Item~~Net ~~2. Management's Discussion and Analysis of Financial Condition or Plan of Operation~~loss

~~FORWARD-LOOKING~~For ~~STATEMENTS~~the three months ended April 30, 2017, the Company had a net loss of $603,800, as compared to a net loss for the three months ended April 30, 2016 of $813,813.

~~Management’s~~Liquidity ~~Discussion~~ and ~~Analysis~~Capital contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, delayed payments of accounts receivables, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.Resources

~~Forward-looking~~The ~~statements~~following ~~involve~~table ~~risks,~~presents ~~uncertainties~~selected ~~and~~financial ~~other~~information ~~factors,~~on ~~which~~our ~~may~~capital ~~cause~~as ~~our~~of ~~actual~~April ~~results~~30, ~~performance~~2017 ~~or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors~~ and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended January 31, ~~2016, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future~~2017.

In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

	April 30,		January 31,
	2017		2017		Change			%
Current Assets	$	306,246	$	521,882	$	(215,636	)	(41%)
Current Liabilities		7,265,393		7,780,510		(515,117	)	(7%)
Working Capital Deficiency	$	6,959,147	$	7,258,628	$	(299,481	)	(4%)

~~General~~17 ~~Overview~~Table of Contents

WeThe ~~were~~following ~~incorporated~~table inpresents ~~the~~selected ~~state~~financial ofinformation ~~Nevada~~ on ~~January 6, 2011 and~~ our ~~principal~~cash ~~business~~flows ~~address~~as ~~5300 Melrose Avenue, Suite 42, Las Angeles, CA 90038. Gawk, Inc. offers a suite~~ of ~~cloud communications, cloud connectivity, cloud computing,~~ and ~~managed~~for ~~cloud-based~~the ~~applications~~three ~~solutions~~months toended ~~small,~~April ~~medium~~30, ~~and~~2017 ~~large businesses;~~ and ~~offers domestic and international voice services to communications carriers worldwide~~2016. It offers a suite of advanced data center and cloud-based services, including fault tolerant, high availability cloud servers, which comprise platform as a service, infrastructure as a service, and a content delivery network; managed network services that converge voice and data applications, structured cabling, wireless, and security services, as well as include Internet access via Ethernet or fiber at speeds ranging from 10 Mbps to 10 Gbps; and data center solutions, including cloud services, colocation services, and business continuity services, such as storage and security. www.gawkinc.com.

As a result of our growth through acquisition, Gawk continues to go through a significant transformation and has expanded its business customer base and added a significant number of network facilities and points of presence expanding its geographic reach. Through this strategy, we acquired advanced systems and infrastructure, augmented our management team and employee base with talented, experienced, well-trained professionals, while continuing to provide a strong platform for further acquisitions. During the past fiscal year and current reporting period, we completed three transactions which have significantly grown our revenue base while greatly enhancing our service offerings within the voice arena. The first was an asset purchase of Net D completed on May 1, 2015, the second was an acquisition of Connexum completed near the end of our fiscal year on January 18, 2016, and the third was the acquisition of XTELUS completed on June 27, 2016.

	For the Three Months Ended
	2017			2016		Change
Cash Flows used in Operating Activities	$	267,239		$	99,947	$	167,292
Cash Flows provided by (used in) Investing Activities		-			-		-
Cash Flows provided by Financing Activities		172,096			130,672		41,424
Net Increase (Decrease) in Cash During the Period	$	(95,143	)	$	30,725	$	(125,868	)

18As ~~Table~~of April 30, 2017 and January 31, 2017 our cash was $38,106 and $133,249, respectively. The Company does not believe its existing balances of ~~Contents~~cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations over the 12 months.

As of April 30, 2017, we experienced an increase in working capital of $299,481 or 4%, as compared to January 31, 2017. The ~~Future~~increase in working capital during April 30, 2017 was primarily from reduced derivative liabilities. Current assets decreased primarily due to reduced cash, accounts receivable and marketable securities as of ~~Gawk~~April 30, 2017. The decrease in current liabilities by $515,117 was primarily due to a reduced derivative liability.

~~Gawk~~Cash isflows ~~pursuing~~from aoperating ~~three-tiered growth strategy: developing specialized solutions for key vertical markets, targeting cloud services companies for acquisition, and accelerating organic growth~~activities. The ~~Our~~increase ~~continuing~~in ~~effort~~cash toflows ~~deliver~~used ~~advanced~~in ~~cloud~~operating ~~solutions~~activities towas ~~companies~~primarily ~~with~~attributable ~~more complex requirements is supported by our cloud solutions platform that allows us~~ to ~~rapidly~~non-cash respond to our customers and potential customers’ needs for customized or enhanced solutions. We also intend to continue to develop vertically oriented solutions to expand our revenue opportunities and further differentiate our service suite. We intend to acquire additional cloud services companies that can further expand our customer baseadjustments, ~~allow~~primarily usfrom toa ~~introduce~~change ~~additional~~in ~~cloud~~derivative ~~products and services, and gain scale~~liability. Our strategy to organically grow our Business Services revenue includes securing large strategic distribution partners, increasing our direct as well as indirect channel sales efforts, upselling solutions to our existing base and leveraging our management, Board of Directors and shareholder relationship network.

~~Results~~Cash flows from financing activities. Cash provided by financing activities were $172,096 and $130,672 for the three months ended April 30, 2017 and 2016, respectively. We received cash from convertible notes of ~~Operations~~$60,000, note payable of $327,901, and repaid notes payable of $120,033, notes payable – related party of $95,079 and convertible notes of $63 for the three months ended April 30, 2017.

~~Three~~We ~~Months~~expect ~~Ended~~to ~~October~~incur ~~31,~~substantial ~~2016~~expenses and generate significant operating losses as we continue to grow our operations, ~~Compared~~as well as incur expenses related to ~~Three~~operating ~~Months~~as ~~Ended~~a ~~October~~public ~~31,~~company ~~2015~~and compliance with regulatory requirements.

~~Revenue~~The independent auditor’s report on our financial statements, for the year ended January 31, 2017, contains explanatory language that substantial doubt exists about our ability to continue as a going concern. We have an accumulated deficit at April 30, 2017 of $ 26,965,115 and need additional cash flows to maintain our operations. We depend on the continued need to raise financing to finance our operations and need to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of our products and business. We expect our cash needs for the next 12 months to be $750,000 to fund our operations. The ability of the Company to continue its operations is dependent on the successful execution of management’s plans, which include expectations of raiding debt or equity based capital until such time that funds from operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with related parties to sustain the Company’s existence. There is no assurance that such funding, if required will be available to us or, if available, will be available upon terms favorable to us.

	For the Three Months Ended October 31,
	2016			2015			Change		%
Revenue	$	1,811,716		$	526,761		$	1,284,955		244	%
Cost of revenue		1,221,442			332,704			888,738		267	%
Gross profit	$	590,274		$	194,057		$	396,217		204	%
Gross profit percentage		33	%		37	%

These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s continued existence is dependent upon management’s ability to develop profitable operations, continued contributions from the Company’s executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company’s products and business.

~~The~~Off-Balance ~~increase~~Sheet ~~in revenue by 244% during 2016, is primarily related to the business combination of Connexum during the past year and XTELUS during the three months ended October 31, 2016.~~Arrangements

~~Cost~~We ofhave ~~revenue~~no ~~likewise~~off-balance ~~increased~~sheet byarrangements ~~267%~~that ~~during~~have ~~2016~~or are reasonably likely to have a current or future effect on our financial condition, ~~which~~changes isin ~~primarily~~financial ~~related~~condition, torevenues ~~the~~or ~~business~~expenses, ~~combination~~results of ~~Connexum~~operations, ~~during~~liquidity, ~~the~~capital ~~past~~expenditures ~~year~~or ~~and~~capital ~~XTELUS~~resources ~~during~~that ~~the~~is ~~current~~material ~~period~~to stockholders.

~~Operating~~18 ~~Expenses~~ Table of Contents

	For the Three Months Ended October 31,
	2016			2015		Change			%
Stock-based compensation	$	160,755		$	309,000	$	(148,245	)	(48%)
General and administration		583,977			307,247		276,730			90	%
Accounts payable forgiven		(250,000	)		-		(250,000	)		-
Depreciation and amortization		231,292			93,278		138,014			148	%
Total operating expenses	$	726,024		$	709,525	$	16,499			2	%

Critical Accounting Policies

~~Stock-based~~Substantially ~~compensation~~all ~~expenses~~of ~~decreased~~the ~~48%~~Company’s ~~for~~accounts ~~the~~receivable ~~three~~balance ~~months~~is ~~ended~~related ~~October~~to ~~31,~~trade ~~2016,~~receivables. asTrade ~~compared~~accounts toreceivable are recorded at the ~~three~~invoiced ~~months~~amount ~~ended~~and ~~October~~do ~~31,~~not ~~2015~~bear interest. ~~Stock-based~~The ~~compensation~~allowance for doubtful accounts is the ~~compensation~~Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for ~~directors,~~doubtful ~~our~~accounts ~~employees~~for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and ~~external~~specific ~~consultants~~estimates are recorded. The ~~decrease~~remaining accounts receivable balances are then grouped in ~~stock~~categories ~~based~~by ~~compensation~~the ~~expenses~~number of days the balance is ~~primarily~~past due, toand nothe ~~stock~~estimated ~~compensation~~loss tois ancalculated ~~external~~as ~~consultant~~a ~~for~~percentage of the ~~three~~total ~~months~~category ~~ended~~based ~~October~~upon ~~31,~~past ~~2016~~history. asAccount ~~compared~~balances toare charged against the ~~same~~allowance ~~period~~when init ~~2015~~is probable the receivable will not be recovered.

~~General~~Revenue and administrative expenses increased by $276,730 or 90% for the three months ended October 31, 2016, from $307,247 for the three months ended October 31, 2015. The increase in general and administrative expenses is primarily related to the business combination of Connexum during the past year and XTELUS during the quarter ended October 31, 2015.Recognition

~~For~~The Company pursues opportunities to realize revenues from consulting services. It is the ~~three~~company’s ~~months~~policy ~~ended~~that ~~October~~revenues 31and gains will be recognized in accordance with ASC Topic 605-10-25, “Revenue ~~2016~~Recognition.” Under ASC Topic 605-10-25, ~~the~~revenue ~~Company~~earning activities are recognized ~~accounts~~when ~~payable~~all ~~forgivenof~~of ~~$250~~the following criteria are met: (i) persuasive evidence of an arrangement exists,~~000,~~ as(ii) ~~compared~~the toservices ~~accounts~~have ~~payable~~been ~~forgiven~~rendered ~~for~~to the ~~three~~customer, ~~months~~(iii) ~~ended~~the ~~October~~sales 31price is fixed or determinable, ~~2016~~and of(iv) ~~$0.~~collectability is reasonably assured.

19Our ~~Table~~Business Services revenue includes monthly recurring charges (“MRC”) to customers, for whom charges are contracted over a specified period of ~~Contents~~time, and variable usage fees charged to customers that purchase our business products and services. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. MRCs continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs.

~~Depreciation~~Our ~~and~~Carrier ~~amortization~~Services ~~expenses~~revenue ~~were~~is ~~$231,292~~primarily derived from ~~$93,278~~usage ~~for~~fees ~~the~~charged ~~three~~to ~~months~~other ~~ended~~carriers ~~October~~that ~~31,~~terminate ~~2016~~voice ~~and~~traffic ~~2015,~~over ~~respectively~~our network. ~~Depreciation~~Variable ~~and~~revenue ~~amortization~~is ~~expenses~~earned ~~increased~~based inon ~~2016~~the length of a call, ~~due~~as tomeasured by the ~~business~~number ~~combination~~of minutes of ~~Connexum~~duration. ~~whereas~~It is recognized upon completion of the ~~assets~~call, ~~were~~and ~~placed~~is inadjusted ~~service~~to reflect the allowance for billing adjustments. Revenue for each customer is calculated from information received through our network switches. Our customized software tracks the information from the switches and ~~depreciate~~analyzes ~~over~~the call detail records against stored detailed information about revenue rates. This software provides us with the ability to complete a ~~three~~timely ~~(3)~~and ~~year~~accurate analysis of revenue earned in a period. ~~starting~~We ~~January~~believe ~~18,~~that ~~2016,~~the ~~respectively~~nature of this process is such that recorded revenues are unlikely to be revised in future periods.

~~Net~~Long-lived ~~loss~~Assets

~~For~~The ~~the~~Company ~~three~~reviews ~~months~~its ~~ended~~fixed ~~October~~assets ~~31,~~and ~~2016,~~certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the ~~Company~~carrying ~~had~~amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a ~~net~~comparison ~~loss~~of the carrying amount of ~~$568~~an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired,~~199,~~ asthe ~~compared~~impairment to abe ~~net~~recognized ~~loss~~is ~~for~~measured by the ~~nine~~amount ~~months~~by ~~ended~~which ~~October~~the ~~31,~~carrying ~~2015~~amount of ~~$766,104~~the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

~~Nine~~Goodwill ~~Months~~and ~~Ended~~Other ~~October~~Intangible ~~31, 2016, Compared to Nine Months Ended October 31, 2015~~Assets

~~Revenue~~We account for goodwill and intangible assets in accordance with ASC 350 "Intangibles-Goodwill and Other" ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

	For the Nine Months Ended October 31,
	2016			2015			Change		%
Revenue	$	4,591,798		$	1,143,422		$	3,448,376		302	%
Cost of revenue		3,210,305			725,333			2,484,972		343	%
Gross profit	$	1,381,493		$	418,089		$	963,404		230	%
Gross profit percentage		30	%		37	%

Table of Contents

~~Revenue~~The ~~was~~cost $4of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed,~~591~~ either on a straight-line or accelerated basis over the estimated periods benefited. Patents,~~798~~ technology and ~~$1,143,422~~other ~~for~~intangibles ~~the~~with ~~nine~~contractual ~~months~~terms ~~ended~~are ~~October~~generally 31amortized over their respective legal or contractual lives. Customer relationships, ~~2016~~brands and ~~2015,~~other ~~respectively.~~non-contractual ~~The~~intangible ~~increase~~assets inwith ~~revenue~~determinable bylives ~~302%,~~are ~~during~~amortized ~~2016,~~over isperiods ~~primarily~~3 ~~related~~years. toWhen ~~the~~certain ~~business~~events ~~combination~~or ofchanges ~~Net~~in Doperating ~~and~~conditions ~~Connexum~~occur, ~~during~~an ~~the~~impairment ~~past~~assessment ~~year~~is performed and ~~XTELUS~~lives ~~during~~of ~~the~~intangible ~~quarter~~assets ~~ended~~with ~~October~~determinable ~~31,~~lives ~~2016~~may be adjusted.

~~Cost~~We ofhave ~~revenue~~no ~~was~~off-balance ~~$3,210,305~~sheet ~~and~~arrangements ~~$725,333~~including ~~for~~arrangements ~~the~~that ~~nine~~would ~~months~~affect ~~ended~~the ~~October 31~~liquidity, ~~2016~~capital ~~and 2015~~resources, ~~respectively.~~market ~~The~~risk ~~increase~~support ~~in cost of revenue of 343%, is primarily related to the business combination of Net D~~ and ~~Connexum~~credit ~~during~~risk ~~the~~support ~~past~~or ~~year~~other ~~and XTELUS during quarter ended October 31, 2016~~benefits.

~~Operating~~Derivative ~~Expenses~~ Financial Instruments

	For the Nine Months Ended October 31,
	2016			2015		Change			%
Stock-based compensation	$	398,912		$	366,083	$	32,829			9	%
General and administration		1,667,489			820,439		847,050			103	%
Accounts payable forgiven		(250,000	)		-		(250,000	)		-
Research and development		-			2,500		(2,500	)	(100%)
Depreciation and amortization		693,876			238,053		455,823			191	%
Total operating expenses	$	2,510,277		$	1,427,075	$	1,083,202			76	%

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging,” since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

~~Stock-based~~The ~~compensation~~accounting ~~expenses~~treatment ~~decreased~~of toderivative 9%financial ~~for~~instruments requires that the ~~nine~~Company ~~months~~record ~~ended~~the ~~October~~embedded ~~31,~~conversion ~~2016,~~option and warrants at their fair values as ~~compared~~of tothe inception date of the ~~nine~~agreement ~~months~~and ~~ended~~at ~~October~~fair ~~31,~~value ~~2015~~as of each subsequent balance sheet date. ~~Stock-based~~Any ~~compensation~~change in fair value is ~~the~~recorded ~~compensation~~as non-operating, non-cash income or expense for ~~directors~~each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, ~~our~~the ~~employees~~contract ~~and~~is ~~external~~reclassified ~~consultants~~as of the date of the event that caused the reclassification.

~~General~~The ~~and~~Black-Scholes ~~administrative~~option ~~expenses~~valuation ~~increased~~model towas ~~$1,667,489~~used ~~from~~to ~~$820,439~~estimate ~~for~~ the ~~nine~~fair ~~months~~value ~~ended~~of ~~October~~the ~~31,~~embedded ~~2016~~conversion options and ~~2015, respectively~~warrants. The ~~increase~~model inincludes ~~general~~subjective ~~and~~input ~~administrative~~assumptions ~~expenses~~that can materially affect the fair value estimates. The expected volatility is ~~primarily~~estimated ~~related~~based toon the ~~business~~most ~~combination~~recent historical period of ~~Net~~time, Dof ~~and~~our ~~Connexum~~common ~~during~~stock, ~~the~~equal ~~past~~to ~~year~~the ~~and~~weighted ~~XTELUS~~average ~~during~~life ~~current~~of ~~year~~the options.

~~For~~Conversion ~~the~~options ~~nine~~are ~~months~~recorded ~~ended~~as ~~October~~debt ~~31,~~discount ~~2016~~and ~~the~~are ~~Company~~amortized ~~recognized accounts payable forgiven of $250,000,~~ as ~~compared~~interest toexpense ~~accounts~~over ~~payable~~the ~~forgiven~~life ~~for~~of the ~~nine~~underlying ~~months~~debt ~~ended October 31, 2016 of $0~~instrument.

Depreciation and amortization expenses increased to $693,876 from $238,053 for the nine months ended October 31, 2016 and 2015, respectively. Depreciation and amortization expenses increased due to the business combination of Net D and Connexum whereas the assets were placed in service and depreciate over a three (3) year period starting May 1, 2015 and January 18, 2016, respectively.

20 Table of Contents

Net loss

For the nine months ended October 31, 2016, the Company had a net loss of $2,539,909, as compared to a net loss for the nine months ended October 31, 2015 of $1,347,875.

Liquidity and Capital Resources

The following table presents selected financial information on our capital as of October 31, 2016 and January 31, 2016.

	October 31,		January 31,
	2016		2016		Change		%
Current Assets	$	1,216,246	$	783,665	$	432,581		55	%
Current Liabilities		6,807,594		5,925,379		882,215		15	%
Working Capital Deficiency	$	5,591,348	$	5,141,714	$	449,634		9	%

The following table presents selected financial information on our cash flows as of and for the nine months ended October 31, 2016 and 2015.

	For the Nine Months Ended October 31,
	2016		2015			Change
Cash Flows used in Operating Activities	$	210,603	$	319,343		$	(108,740	)
Cash Flows provided by (used in) Investing Activities		397		(138,250	)		138,647
Cash Flows from Financing Activities		333,845		238,500			95,345
Foreign currency translation adjustment		-		442			(442	)
Net Increase (Decrease) in Cash During the Period	$	123,639	$	(218,651	)	$	342,290

As of October 31, 2016 and January 31, 2016 our cash was $188,583 and $64,944, respectively. The Company does not believe its existing balances of cash and cash equivalents will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations over the 12 months.

As of October 31, 2016, we experienced an increase in working capital deficiency of $449,634 or 9%, as compared to January 31, 2016. The reduction in working capital during 2016 was primarily from current assets only increasing by $432,581 and currently liabilities increasing by $882,215, as compared to January 31, 2016. Current assets increasedprimarily due to an increase in accounts receivable of $201,028 and cash of $123,639.The increase in current liabilities by was due to an increase in accounts payable and accrued liabilities of $101,693, due to related parties of $260,931, convertible notes payable of $280,920, and derivative liabilities of $270,030.

Cash flows from operations. The decrease in cash flows used in operating activities was primarily attributable to an adjustments to net income relating to non-cash expenses.

Cash flows from investing activities. Cash provided by investing activities was $397 for the nine months ended October 31, 2016 and cash used in investing activities was $138,250 for nine months ended October 31, 2015. Net cash received for acquisition of XTELUS was $397 for the nine months ended October 31, 2016. Net cash paid for acquisition of Net D’s assets was $138,250 for the nine months ended October 31, 2015.

Cash flows from financing activities. Cash provided by financing activities were $333,845 and $238,500 for the nine months ended October 31, 2016 and 2015, respectively. We received cash from convertible notes of $691,733, note payable of $147,050, note payable – related party of $25,000 and issuance of Series B Preferred stock of $20,000 and paid note payable of $11,161, notes payable – related party of $505,444 and convertible note of $33,333 for the nine months ended October 31, 2016. We received cash from note payable of 25,000, convertible notes of $191,000, issuance of common stock of $5,000 and issuance of Series B Preferred stock of $17,500 for the nine months ended October 31, 2015.

21 Table of Contents

We expect to incur substantial expenses and generate significant operating losses as we continue to grow our operations, as well as incur expenses related to operating as a public company and compliance with regulatory requirements.

The independent auditor’s report on our financial statements contains explanatory language that substantial doubt exists about our ability to continue as a going concern. We have an accumulated deficit at October 31, 2016 of $16,609,560 and need additional cash flows to maintain our operations. We depend on the continued need to raise financing to finance our operations and need to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of our products and business. We expect our cash needs for the next 12 months to be $750,000 to fund our operations. The ability of the Company to continue its operations is dependent on the successful execution of management’s plans, which include expectations of raiding debt or equity based capital until such time that funds from operations are sufficient to fund working capital requirements. The Company may need to incur additional liabilities with related parties to sustain the Company’s existence. There is no assurance that such funding, if required will be available to us or, if available, will be available upon terms favorable to us.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable the receivable will not be recovered.

Revenue Recognition

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Long-lived Assets

The Company reviews its fixed assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Goodwill and Other Intangible Assets

We account for goodwill and intangible assets in accordance with ASC 350 "Intangibles-Goodwill and Other" ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. Customer relationships, brands and other non-contractual intangible assets with determinable lives are amortized over periods 3 years. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

We have no off-balance sheet arrangements including arrangements that would affect the liquidity, capital resources, market risk support and credit risk support or other benefits.

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging,” since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

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Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Quarterly Report on Form 10-Q in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and ~~Principal~~Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our Chief Executive Officer and ~~Principal~~Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective.

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Our Chief Executive Officer and ~~Principal~~Chief Financial Officer are responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, our Chief Executive Officer and ~~Principal~~Chief Financial Officer have concluded that our internal control over financial reporting were not effective as of ~~October~~April 3130, ~~2016~~2017. There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Our company's material weaknesses in financial reporting were:

a. ~~There~~Lack isof noan independent board of directors, including an independent financial expert; and b. Lack of segregation of duties asand ~~our~~adequate ~~CEO~~documentation isof ~~also~~ our ~~CFO~~internal controls.

b. It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

OnOther orthan ~~around~~as ~~April~~set ~~27,~~out ~~2016~~below, ~~Tarpon~~we ~~Bay~~know ~~Partners,~~of ~~LLC~~no ~~(“Tarpon~~material ~~Bay”)~~pending ~~initiated~~legal ~~action~~proceedings ~~against~~to ~~the~~which ~~Company~~our incompany ~~New~~is ~~York~~a ~~State~~party ~~Supreme~~or ~~Court,~~of ~~case~~which ~~#652178/2016.~~any ~~Tarpon Bay has elected for summary judgment in lieu~~ of ~~complaint.~~our ~~Tarpon Bay is claiming~~properties, ~~inter~~or ~~alia, that~~ the ~~Company~~properties ~~owes~~of ~~$93~~our subsidiaries,~~500~~ inis ~~unpaid notes and services. The claims stems from intended transactions~~ the ~~Company was to enter with Tarpon Bay~~subject. ~~Tarpon~~In ~~Bay was to provide the Company with funding and certain services in exchange for promissory notes from the Company. The notes were executed by the Company~~addition, ~~but~~we ~~Tarpon~~do ~~Bay provided no funding or services and is~~ not ~~entitled~~know ~~to repayment~~ of any ~~note~~such ~~given~~proceedings contemplated by ~~the~~any ~~Company.~~governmental ~~The Company intends to vehemently defend the foregoing action~~authorities.

On orMay ~~around July 22~~26, 2016, ~~the~~Tarpon ~~Company’s~~Bay ~~wholly owned subsidiary~~Partners, ~~Webrunners,~~LLC ~~Inc.~~ (“~~Webrunners”),~~Tarpon ~~filed a law suit (“WR v. Management~~Bay”) ~~against~~initiated ~~several~~action former Webrunners directors and officers for mismanaging Webrunners and usurping or interfering with Webrunners’ business relationships. On or around July 22, 2016, the former management and related entities filed a lawsuit against the Company in ~~the~~New ~~Superior~~York ~~Court~~State ofSupreme ~~Orange County~~Court, CA case #~~30-~~652178/2016~~-00865197-CU-BC-CJC,~~. ~~alleging,~~The ~~inter~~company ~~alia,~~and ~~breach~~Tarpon ofBay ~~the agreements pursuant to which the Company acquired Webrunners~~Partners, ~~fraud,~~LLC ~~and~~reached ~~negligent misrepresentation. The Company filed~~ a ~~counterclaim~~settlement on orDecember ~~around September 9~~29, 2016, ~~alleging,~~and ~~inter~~the ~~alia,~~Company ~~breach~~paid ~~of contract. On or around September 15~~$50,000 ~~2016, the court~~ in WRaccordance v.with ~~Management granted an injunction against~~ the ~~former~~settlement ~~management forcing them to turn over all documents and assets of Webrunners and preventing them from interfering further with Webrunners’ business~~agreement.

On or about November 11, 2016 a verified complaint was filed in the Circuit Court for Howard County, Maryland being case number C-16-107586-DT against the Company by an investor known as John Boritz. The Company intends to fervently defend the foregoing action.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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

During the three months ended October 31, 2016, the Company issued 417,624,152 common shares for the conversion of debt and accrued interest of $173,346 and 17,000,000 common shares in exchange for options for no considerationNone.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not ~~Applicable~~applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number		Description of Exhibits
ExhibitNumber		Description
3.1		Articles of Incorporation(1)
(31)		Rule 13a-14 (d)/15d-14d) Certifications
3.2		Bylaws(1)
31.1*		Section 302 Certification by the Principal Executive Officer
10.1*		Acquisition agreement with NEOGEN Holdings Inc.
31.2*		Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
14.1		Code of Ethics(2)
(32)		Section 1350 Certifications
31.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Section 906 Certification by the Principal Executive Officer
31.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted Section 302 of the Sarbanes-Oxley Act of 2002.
32.2**		Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101**		Interactive Data File
101.INS**		XBRL Instance Document
101.INS		XBRL Instance Document
101.SCH**		XBRL Taxonomy Schema
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL**		XBRL Taxonomy Calculation Linkbase
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**		XBRL Taxonomy Definition Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**		XBRL Taxonomy Label Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE**		XBRL Taxonomy Presentation Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

~~___________~~__________

(1)	Filed as an Exhibit on Form S-1 with the SEC on April 6, 2012.
(2)	10-SB/12g filed on February 13, 2008

* Filed herewith.

** ~~Filed~~Furnished herewith.**Furnished ~~herewith~~

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SIGNATURES

InPursuant ~~accordance~~to ~~with~~the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		GAWK INC.
		GAWK INCORPORATED
		(Registrant)
Dated: December 20, 2016		/s/ Scott Kettle
Dated: February 2, 2018		/s/ Scott Kettle
		Scott Kettle
		Chief Executive Officer
		Chief Executive Officer, President, Chief Information Officer and Director
		(Principal Executive Officer)
Dated: December 20, 2016		/s/ Chris Hall
Dated: February 2, 2018		/s/ Chris Hall
		Chris Hall
		Chief Financial Officer
		Chief Financial Officer and Director
		(Principal Financial Officer and Principal Accounting Officer)

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