Gawk Inc. - FORM 10-K - May 24, 2016

Attached files

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EX-32.1 - EX-32.1 - Gawk Inc.	ex-32_1.htm
EX-31.1 - EX-31.1 - Gawk Inc.	ex-31_1.htm
EX-21.1 - EX-21.1 - Gawk Inc.	ex-21_1.htm
EX-10.2 - EX 10.2 - Gawk Inc.	ex-10_2.htm
EX-10.1 - EX 10.1 - Gawk Inc.	ex-10_1.htm
EX-3.3 - EX-3.3 - Gawk Inc.	ex-3_3.htm
EX-3.2 - EX-3.2 - Gawk Inc.	ex-3_2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended January 31, 2016

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

For the transition period from N/A to N/A

Commission File Number: 000-55499

Gawk Incorporated

(Name of small business issuer as specified in its charter)

(Formerly Media Mechanics, Inc.)

Nevada		33-1220317
State of Incorporation		IRS Employer Identification No.

5300 Melrose Avenue, Suite 42

Los Angeles, CA 90038

(Address of principal executive offices)

(888) 754-6190

(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.01 par value per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non–Accelerated filer	☐	Small reporting company	☒

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

Aggregate market value of the voting stock held by non-affiliates: $1,501,187 as based on the closing price of the stock on July 31, 2015. The voting stock held by non-affiliates on that date consisted of 100,079,156 shares of common stock.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of May 10, 2016, there were 342,254,092 shares of common stock, par value $0.001, issued and outstanding, 1,000 Series A Preferred stock $0.001 par value, issued and outstanding, 63,437,500 Series B Preferred stock $0.001 par value, issued and outstanding, and 14 Series C Preferred stock $0.001 par value, issued and outstanding.

Documents Incorporated by Reference: None

Gawk Incorporated

FORM 10-K ANNUAL REPORT

FOR THE FISCAL YEAR ENDED JANUARY 31, 2016

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	10
ITEM 1B.	UNRESOLVED STAFF COMMENTS	10
ITEM 2.	PROPERTIES	10
ITEM 3.	LEGAL PROCEEDINGS	10
ITEM 4.	MINE SAFETY DISCLOSURES	11

PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	11
ITEM 6.	SELECTED FINANCIAL DATA	13
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 8.	CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	21
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	50
ITEM 9A.	CONTROLS AND PROCEDURES	50
ITEM 9B.	OTHER INFORMATION	51

PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	51
ITEM 11.	EXECUTIVE COMPENSATION	55
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	57
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	60
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	60

PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	61
	SIGNATURES	62

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Special Note Regarding Forward-Looking Statements

Some of our statements under "Business," "Properties," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations," “the Notes to Financial Statements” and elsewhere in this report constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to certain events, risks and uncertainties that may be outside our control. Some of these forward-looking statements include statements of:

	●	management's plans, objectives and budgets for its future operations and future economic performance;
	●	capital budget and future capital requirements;
	●	meeting future capital needs;
	●	realization of any deferred tax assets;
	●	the level of future expenditures;
	●	impact of recent accounting pronouncements;
	●	the outcome of regulatory and litigation matters;
	●	the assumptions described in this report underlying such forward-looking statements; and
	●	Actual results and developments may materially differ from those expressed in or implied by such statements due to a number of factors, including:
	●	those described in the context of such forward-looking statements;
	●	future service costs;
	●	changes in our incentive plans;
	●	the markets of our domestic operations;
	●	the impact of competitive products and pricing;
	●	the political, social and economic climate in which we conduct operations; and
	●	the risk factors described in other documents and reports filed with the Securities and Exchange Commission.

In some cases, forward-looking statements are identified by terminology such as "may," "will," "should," "could," "would," "expects," "plans," "intends," "anticipates," "believes," "estimates," "approximates," "predicts," "potential" or "continue" or the negative of such terms and other comparable terminology.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor anyone else assumes responsibility for the accuracy and completeness of such statements and is under no duty to update any of the forward-looking statements after the date of this report.

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PART I

ITEM 1. BUSINESS.

General

The financial statements presented in this report are of Gawk Incorporated, a Nevada corporation. When the terms “Gawk”, the “Company,” “we,” “us” or “our” are used in this document, those terms refer to Gawk Incorporated.

Our Company

Gawk Incorporated, either directly or through its various subsidiaries (collectively, “Gawk”, “we”, or “the Company”), offers a comprehensive 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. Our advanced, cloud services platforms enable the integration of leading edge solutions in the cloud, increasing customer collaboration and productivity by seamlessly connecting employees, partners, customers and vendors.

In the Business Services segment, Gawk is focused on becoming our business customers’ single source for leveraging the increasing power of the cloud, providing a robust package of what we believe to be the essential services that form the foundation for their successful migration to, and efficient use of, the cloud. Our cloud computing and Infrastructure as a Service (“IaaS”) solutions are designed to provide our customers with a platform on which additional cloud services can be layered. Complemented by Software as a Service (“SaaS”) solutions such as storage, security and business continuity, our advanced cloud offerings allow our customers to experience the increased efficiencies and agility delivered by the cloud. Gawk's cloud-based services are flexible, scalable and rapidly deployed, reducing our customers’ cost of ownership while increasing their productivity.

As a result of our growth through acquisition strategy, Gawk continues to expand its business customer base, revenue stream and added a significant number of network facilities and points of presence expanding its geographic reach. Through these acquisitions, 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.

Our business plan is to roll up data centers and other strategic businesses within the cloud computing and Voice over IP sector across the United States, of which we have identified more than a dozen. With this strategy we expect to announce a series of Letters of Intent over the coming months, launching GAWK's plan to create revenue by acquiring strategically aligned businesses.

The asset purchase of Net D on May 1, 2015 was the first of in our long range plan of growth through acquisition. With the addition of Net D we accomplished several key items in our strategic plan:

1. Increased Revenues

2. Broadened the appeal to the political dialing arena by leveraging our ability to terminate short duration calls

3. Added key personnel to our management team

The acquisition of Connexum, LLC as a wholly owned subsidiary on January 18, 2016 is the second step in rounding out our voice service offerings. Part of Gawk's long range plans were accomplished with this acquisition by adding the following:

1. Increased Revenues

2. Added key personnel to our management team

3. Added Hosted PBX as a service offering

4. Added Hosted Call Center as a service offering

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These two acquisitions coupled with the acquisition of Webrunners in the prior fiscal year round out the base service offerings while also establishing a solid foundation for future acquisitions while we continue to focus on our core competencies.

Gawk is pursuing a three-tiered 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.

Item 1. Description of Business

Business Services

Our Cloud-based services are designed to meet the communications, network and computing requirements of growing businesses, while maximizing the price-performance ratio. We believe that giving our customers access to the Cloud provides a more cost-effective, reliable and secure communications and IT experience, and relieves them of the capital and support burdens associated with more traditional services. Additionally, customers can reduce costs while adding features and functionality and improving productivity across the enterprise. Gawk is increasingly focused on providing specialized, market-based solutions to important verticals and larger enterprises, matching our advanced solutions to key industry-specific customer requirements.

We offer a suite of advanced data center and cloud-based services, including fault tolerant, high availability cloud servers, which encompasses PaaS (platform as a service), IaaS (infrastructure as a service) and a worldwide CDN (content delivery network). In-building connectivity provides diverse and redundant access to the cloud for our Irvine location customers. The Company’s managed network services converge voice and data applications, structured cabling, wireless, security services, and includes Internet access via Ethernet or Fiber at speeds ranging from 10 Mbps to 10 Gbps. Our data center solutions include cloud services, colocation services, and business continuity services such as storage, and security.

Gawk’s services are designed to provide significant benefits to businesses of all sizes, with single or multiple locations. The integration of cloud solutions on our advanced services platform allows customers to seamlessly connect people with the information they need to collaborate effectively, regardless of the device they use.

Our cloud solutions are also designed to minimize upfront capital costs, increase the scalability and flexibility of the customer’s communications network and service environment, provide robust features and functionality to increase productivity, and reduce the overall cost of communications.

Our cloud platform allows us to quickly respond to customer requirements for new or enhanced products and services as well as provide for maximum flexibility and cost containment for our clients. Gawk’s growing suite of business services includes.

Carrier Services

Gawk operates a robust and reliable carrier grade network and infrastructure that delivers high quality, diverse and secure connections to our Cloud services. Our Managed Network Services, Internet Access, Ethernet, Fiber and Cloud based solutions can be provided either on-net leveraging our own extensive network, or off-net using the networks of our carrier partners, for truly diverse and redundant connections.

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SIP Trunking

Gawk's state of the art SIP softswitches offers a full suite of wholesale services with all US services supporting ANI, G711, RFC 2833 and T.38 specializing in high call per second with short term duration and maximum capacity availability.

Hosted PBX

Gawk now offers a complete phone system with the power of an enterprise-class phone system without the cost and complexity of bulky hardware. Set up in minutes, and command your system to work the way you do. You can access and manage it from anywhere, connect remote personal as if they are in the same room, and give your employees access to all the phone and features they need. Some of the key features of our Cloud Hosted PBX

24/7 CUSTOMER SUPPORT
No set up or activation fees
Voicemail to Email
Unlimited inbound Internet faxes
HD Video Calling
Free Conference Calling
Auto Attendant and dial-byname directory
Toll-Free Minutes Included
Keep your existing phone numbers

Unified Communications

The Gawk Unified Communications platform compliments our Cloud and Data Center solutions with integrated service features that seamlessly combine, voice, PBX, SIP trunks, wireless, messaging, and targeted automated dialing solutions. Our integrated suite of services are device and location agnostic, allowing clients of all sizes to increase productivity, lower costs by simplifying communications over the most preferred or available device.

Cloud Computing

Gawk’s Cloud Computing service centralizes information management, hardware, network and infrastructure in an off-premise location, hosted and managed by Gawk. Offered as private, hybrid or community solutions, Gawk’s secure offerings drive efficiencies in both costs and resources allowing for rapid scalability and deployment of applications. These offerings provide a predictable, utility-based OpEx model, which eliminates significant capital expenditures, removes obsolescence concerns and future-proofs customer investments.

Cloud-Based Storage

Gawk offers a solution that addresses the explosive growth of data across all industries with a cost-effective and secure storage solution hosted in the cloud. This scalable, fully redundant solution is hosted off-premise, reduces customer data center footprints and resource requirements, and facilitates additional SaaS solutions that can be accommodated on the same cloud platform. Gawk delivers a storage and data back-up assessment service as part of its storage offering, measuring growth and duplication benchmarked against best practices. The solution consolidates requirements across the enterprise, increases efficiency and achieves economies of scale designed to reduce overall customer costs.

Service Plans

Gawk’s business communications services generally offer several different service packages designed to meet specific customer needs and requirements. Base level plans offer a basic service package for a low monthly recurring charge. Additional charges, such as SIP, PBX, wireless, security or network consulting are charges on an individual case basis. Optional value-added features for basic services are available for an incremental monthly charge appropriate for the service. Cloud connectivity services such as In Building Internet access services and/or private line services are charged on a fixed monthly basis, and are generally based on the bandwidth utilized and the endpoints involved. Cloud computing services are based on a utility pricing model, and charges for managed cloud solutions are generally composed of an upfront charge and a monthly recurring charge. Gawk’s business customer contracts range from one to five years.

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Network

Gawk operates a robust and reliable carrier-grade network and infrastructure that delivers high quality, diverse and secure connections to our Cloud services. Our Managed Network Services, Internet Access, Ethernet, Fiber and Cloud based solutions can be provided either on-net leveraging our own extensive network, or off-net using the networks of our carrier partners, for truly diverse and redundant connections.

Our Data Center and Business Services network operations centers are highly automated and monitored 24 hours per day, 7 days per week. Our centers employ state-of-the-art monitoring and alert systems that are designed to ensure quality of service and a proactive response to potential customer service issues.

The Gawk network is characterized by its low cost of deployment and low recurring costs. It has been constructed to meet actual, rather than speculative, customer demand with on-net and off-net connections to provide ubiquitous access, delivering maximum cost efficiency without sacrificing quality. Our robust network is designed as a fully meshed OSPF (Open Shortest Path First) running BGP with multiple peers. OSPF automatically detects changes in the topology, such as link failures, and selects a new routing structure within seconds.

Gawk’s centralized network elements are housed in carrier-grade facilities located in secure carrier buildings that house many other carriers and are interconnected to other major carrier buildings. These locations allow for cost-effective and rapid interconnection and capacity expansion to carrier customers, as well as major enterprise customers. Gawk believes its selected locations and equipment choices provide the platform required to support its envisioned growth and will allow it to quickly embrace emerging technologies as they become commercially available and viable.

Cloud Services Platform

Our custom Cloud services platform was designed and developed by our own team of experienced technicians with many years using advanced, yet proven technology. This platform is scalable, flexible and secure, delivering an integrated portfolio of Cloud-based communications services that enable businesses of every size to increase productivity and efficiency while controlling costs. Information management, hardware, network and infrastructure are centralized off-premise, hosted and managed by us, allowing customers to rapidly adjust to fluctuating and unpredictable service demands, drive efficiencies in staff and space, and eliminate the need for costly technology upgrades. The architecture of our platform has been designed to allow for the seamless integration of additional Cloud-based applications, whether or not developed by Gawk. Gawk’s custom platform allows faster, easier, more cost-effective introduction of new, business-critical applications, delivering a unique feature set engineered to quickly respond to customer demands and market requirements. We differentiate ourselves from our competitors by combining our robust carrier-grade network services to enable secure connections to the Cloud, delivering true diversity and a fully integrated solution for maximum efficiency and cost savings.

Our custom platform has been engineered using advanced technologies, best of breed equipment and provides for redundancy, fault tolerance and future geographical diversity. The platform has been designed for scalability as well as resiliency, and can be easily expanded to accommodate any required number of connections and customers. Platform solutions are location and device neutral, serving multiple as well as single locations nationwide, connecting users to customers and other employees on desktops, laptops, handsets, tablets and mobile phones, wherever they may be. The platform is currently deployed in our Irvine data center; the platform has a fully functional, redundant system whose services can be replicated at additional locations in a cost effective and timely manner. Thus, should one of the data centers be hit with a catastrophic event, customers should experience no interruption of service. The result is to ensure a proven, reliable and consistent uptime, which is crucial for delivering mission critical solutions.

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Sales and Marketing

We market and sell our business services to small, medium and large customers through distribution partners, direct sales personnel and inside sales representatives. Our independent distribution partners are typically paid commissions based on their sales and, thereafter, the continued use of our services by the customers sold by them. Our sales employees, including direct sales and inside sales, are typically compensated through a combination of base salary and commissions based on their actual sales performance.

Our distribution partners generally target smaller- to medium- size businesses, while our direct sales force focuses on the larger enterprise customers in our targeted verticals. We believe that our Cloud platform, infrastructure, systems and connectivity provide a strong competitive advantage in serving these larger enterprise customers, creating real value with specialized solutions that meet their more complex and rigorous requirements. Referrals, strategic relationships and the strength of our corporate relationships are also a key part of our overall sales and marketing plan. We believe that the substantial experience and relationships of our executives and directors will assist us in organically growing our business through the addition of new customers.

Strategy

Our recent acquisitions and improved financial performance are important milestones in our strategic roadmap as we work to become the industry’s leading and most successful cloud services provider. Our plans for growth are supported by an experienced and tested management team and dedicated staff, our advanced cloud services platforms, and leading edge systems and infrastructure. We believe we are well positioned to continue to execute on our strategy to organically grow our revenue from the Business Services segment, develop vertically oriented solutions and acquire additional cloud services companies.

Gawk intends to grow organically through direct as well as indirect channel sales efforts; by securing large strategic distribution partners to extend our geographic and vertical market reach; through the up-sale and cross-sale of services to our existing customer base; and by leveraging management, Board and shareholder relationships to help penetrate larger enterprises.

We intend to increasingly focus our sales and marketing efforts on developing vertically oriented solutions for targeted markets that require the kind of specialized solutions made possible by our state-of-the-art network and advanced services platforms. Our vertically oriented solutions offer a substantial opportunity to gain market share.

Gawk intends to build on the success of its WebRunners transactions through additional acquisitions of cloud services companies. We believe that the experience gained in integrating people, products, systems, platforms and customers positions us well to advance our growth. We will continue to look to acquire companies that can expand our customer base and distribution capability, add additional cloud-based products and services and help us increase the scale of our operations.

Competition

Each of Gawk’s business segments are highly competitive, rapidly evolving, and subject to constant technological change. In each of our business segments, we compete with companies that are significantly larger and have substantially greater market presence, financial, technical, operational and marketing resources than we do. In the event that such a competitor expends significant sales and marketing resources in one or several markets where we compete with them, we may not be able to compete successfully in those markets. Specialized cloud services providers, who focus on one or more cloud service or application, could adopt aggressive pricing and promotion practices that could impact our ability to compete. We also believe that competition will continue to increase, placing downward pressure on prices. Such pressure could adversely affect our gross margins if we are not able to reduce our costs commensurate with the price reductions of our competitors. Further, the pace of technological change makes it impossible for us to predict whether we will face new competitors using different technologies to provide the same or similar services offered or proposed to be offered by us. If our competitors were to provide better and more cost effective services than ours, we may not be able to increase our revenues or capture any significant market share.

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Employees

As of January 31, 2016, we had 8 full time employees. None of our employees are represented by a labor union or collective bargaining agreement. We consider our employee relations to be good, and, to date, we have not experienced a work stoppage.

Available Information

Our principal executive offices are located at 5300 Melrose Avenue, Suite 42, Los Angeles, California 90038. The telephone number at our executive offices is 888-754-6190 and our main corporate website is www.Gawkinc.com. The information on the Company’s website is neither a part of, nor incorporated by reference into, this report.

We make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, free of charge on our website, www.Gawkinc.com as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission or SEC. Additionally, copies of materials filed by us with the SEC may be accessed at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549, between the hours of 10:00 am to 3:00 pm, or at the SEC’s web site www.sec.gov. For information about the SEC’s Public Reference Room, please call 1-800-SEC-0339.

The Market and Industry

Through Gawk’s recent acquisitions we have focused our efforts within the technology sector specializing in high-demand, high-availability hosting solutions and professional IT services. Gawk provides enterprise-level hosting services to businesses of any size through our carefully-planned architecture and commitment to providing excellent support. Products offered include PaaS (platform as a service), IaaS (infrastructure as service), colocation space, dedicated servers, cloud services, shared hosting, email, spam filtering and network consulting services. Additional infrastructure services at our Irvine location include in-building bandwidth services; in-building structured cabling and managed network services. At various customer sites across Southern California Gawk provides private cloud services, security services and managed network services.

Our cloud-based services are designed to meet the communications, network and computing requirements of growing businesses, while maximizing the price-performance ratio. Our experience has demonstrated that giving our customers access to the cloud provides a more cost-effective, reliable and secure IT experience; relieves them of the capital and support burdens associated with traditional services. Additionally, customers can reduce costs while adding features, functionality and improving productivity across the enterprise.

“Amazon Web Services’ (AWS) continues to hold the lead in market share for cloud infrastructure services despite competition from Microsoft, according to latest figures from Synergy Research. The research, which examines infrastructure as a service (IaaS), platform as a service (PaaS), private and hybrid cloud, sees AWS’ overall share at 28%, compared to Microsoft’s 10%, IBM at 7%, Google at 5%, Salesforce 4%, and Rackspace 3%. Year on year growth saw Microsoft (96%) and Google (88%) the biggest climbers, with Amazon (51%) and IBM (48%) holding steady.

Comparative figures from Synergy in previous quarters have shown Microsoft strive to claim second position in the cloud infrastructure market, with AWS way out in front. Many actual or perceived barriers to cloud adoption have now been removed, and the worldwide market is on a strong growth trajectory.” Source: By James Bourne 03 February 2015, Cloudtech, www. cloudcomputing-news.net

AWS continues to be the provider of choice for the large enterprise customer however; the cost to scale AWS instances can be prohibitively expensive even in the wake of recent price cuts. Price sensitive customers and knowledgeable IT professions find that the cost to grow infrastructure and the ability to migrate to another platform from AWS is a major concern. The Cloud services we offer are flexible, secure, and highly portable while simultaneously price completive in the market place.

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Our latest Cloud offering frees us from proprietary third party hardware and the associated cost constraints to our growth. We continue to enjoy our long standing relationships with companies like cPanel, Microsoft, Spam Experts and the Irvine Company. We welcome recent relationships with OnApp, WHMCS and Level3 .

REGULATIONS

There are no regulatory requirements for this internet medium other than as follows:

Release Management Supplement, v1.0, Published June 28, 2013

This CMS Technical Reference Architecture – Release Management Supplement, Version 1.0 complements the CMS TRA by providing rules and engineering guidance for developing, testing, and hosting CMS distributed systems and business applications within the agency’s data center Development, Test, Implementation, and Production Processing environments.

This supplement provides the rules governing the support and use of CMS data center environments for the conduct of pre-approved, scheduled Development, Validation Testing, and Implementation Testing of distributed CMS systems, infrastructure, and business applications.

The CMS Chief Technology Officer authorizes and approves the publication of the Release Management Supplement and its contents. This supplement augments and aligns with the CMS TRA Foundation 3.0, and CMS will update it on an as-needed basis.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-K 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 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 1A. RISK FACTORS

This information is not required for small reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

This Item is not applicable.

ITEM 2. PROPERTIES

The Company rents office space at 5300 Melrose Avenue, Suite 42, Los Angeles, CA 90038. The Company pays $100 per month in rent on a month to month basis. With our acquisition of WebRunners, Inc. starting in November 2014 the company rents space at 300 Spectrum center drive, Suite 140, Irvine, CA 92618. The company pays $6,313 per month in rent and has a lease ending February 2018 with an option to renew for an additional 5 years.

ITEM 3. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations other than as follows:

On or around April 27, 2016, Tarpon Bay Partners, LLC (“Tarpon Bay”) initiated action against the Company in New York State Supreme Court, case #652178/2016. Tarpon Bay has elected for summary judgment in lieu of complaint. Tarpon Bay is claiming, inter alia, that the Company owes $93,500 in unpaid notes and services. The claims stems from intended transactions the Company was to enter with Tarpon Bay. Tarpon 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, but Tarpon Bay provided no funding or services and is not entitled to repayment of any note given by the Company. The Company intends to vehemently defend the foregoing action.

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Gawk’s common stock is traded in the over-the-counter market, and quoted in the National Association of Securities Dealers Inter-dealer Quotation System (“Electronic Bulletin Board) and can be accessed on the Internet at OTCmarkets.com under the symbol “GAWK.” There are 51 holders of certificates and 342,254,092 are outstanding as of May 10, 2016. There are 175,009,936 shares held by the Depository Trust Company.

The following table sets forth for the periods indicated the high and low bid quotations for Gawk’s common stock. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions.

Periods	High		Low
Fiscal Year 2016
First Quarter (February – April 2015)	$	0.0385	$	0.004
Second Quarter (May – July 2015)	$	0.0389	$	0.015
Third Quarter (August - October 2015)	$	0.02	$	0.0037
Fourth Quarter (November – January 2016)	$	0.0152	$	0.0071

Fiscal Year 2015
First Quarter (February – April 2014)	$	8.65	$	0.18
Second Quarter (May – July 2014)	$	0.215	$	0.08
Third Quarter (August - October 2014)	$	0.1299	$	0.0501
Fourth Quarter (November – January 2015)	$	0.145	$	0.0052

On May 10, 2016, the closing bid price of our common stock was $0.0038.

Dividends

We may never pay any dividends to our shareholders. We did not declare any dividends for the year ended January 31, 2016. Our Board of Directors does not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

Transfer Agent

Gawk’s Transfer Agent and Registrar for the common stock is V Stock Transfer LLC, 77 Spruce Street, Suite 201, Cedarhurst, NY 11516, 646-536-3179.

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Recent sales of Unregistered Securities

Fiscal Year Ended January 31, 2016 to the date of filing

Subsequent to January 31, 2016 and through the date of this annual report, an aggregate of 80,390,834 common shares were issued for the conversion of debt, accrued interest and associated fees of $205,964.

Fiscal Year Ended January 31, 2016

Common Stock

During the year ended January 31, 2016, the Company issued common shares, as follows:

2,700,000 common shares with a fair market value of $54,000 to James E McCrink Trust in accordance with a settlement agreement reached with the latter on January 19, 2015 in connection with a complaint filed on November 4, 2014.

21,000,000 shares with a fair value of $161,100 as compensation to board members and employees.

16,150,000 shares with a fair value of $134,960 as compensation to consultants.

4,587,156 shares with a fair value of $20,183 to settle a $40,000 payable. The Company recognized a gain on settlement of liabilities of $19,817.

1,545,000 shares with a fair value of $13,042 as deferred financing fees

4,960,000 shares in exchange for warrants for a total consideration of $496,000.

5,000,000 shares with fair value of $66,500 in connection with the acquisition of Net D’s assets.

44,189,102 common shares were issued for the conversion of debt, accrued interest and associated fees of $121,958.

Preferred Stock

During the year ended January 31, 2016, the Company issued Series B Preferred shares, as follows:

437,500 shares were sold for cash on June 22, 2015 for a total consideration of $17,500.

25,000,000 shares with fair value of $415,625 in connection with the acquisition of Net D’s assets (see Note 5). Of this amount, the par value of $13,438 related to the 13,437,500 shares in excess of the authorized shares at January 31, 2016 is reported as preferred stock payable in the consolidated balance sheets

5,000,000 shares with a fair value of $54,375 in connection with the acquisition of Connexum (see Note 5).

25,000,000 shares with a fair value of $415,625 as settlement of amounts due to the CEO totaling $438,854. As a result, the Company recorded a loss on settlement of liabilities of $2,976,771 (see also below).

8,000,000 shares were sold for cash in January 2016 for a total consideration of $30,000

During the year ended January 31, 2016, the Company issued Series C Preferred shares, as follows:

1 share to settle the preferred stock payable of $1,000,000 recorded in connection with the acquisition of Webrunner

3 shares with fair value of $3,000,000 in connection with the acquisition of Net D’s assets (see Note 5).

3 shares with a fair value of $3,000,000 as settlement of amounts due to the CEO totaling $438,854. As a result, the Company recorded a loss on settlement of liabilities of $2,976,771.

Stock Options/Warrants

In November 2015, the Company issued 27,000,000 stock options with an exercise price of $0.005 per share. The options can be exercised by the holder any time prior to December 1, 2016.

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ITEM 6. SELECTED FINANCIAL DATA

This is not required for smaller reporting companies and the company has elected to omit this information.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K.

Overview

We were incorporated 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.

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 we completed two 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 and the second was an acquisition of Connexum completed near the end of our fiscal year on January 18, 2016.

The Future of Gawk

Fiscal Year Ended January 31, 2016, Compared to Fiscal Year Ended January 31, 2015

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RESULTS OF OPERATIONS

The following comparative analysis on results of operations was based primarily on the comparative audited consolidated financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report.

Overview

For the year ended January 31, 2016 we have generated losses from operations. As of January 31, 2016, our accumulated deficit was $14,057,651. Our net loss for year ended January 31, 2016 and 2015 was $6,743,113 and $5,787,631, respectively. Our cash used in operations was $472,072 and $3,561,240 for the year ended January 31, 2016 and 2015, respectively. Our Stockholders’ Equity (deficit) was $925,175 and ($976,648) as of January 31, 2016 and 2015, respectively.

	January 31,
	2016		2015			Change			%
Cash	$	64,944	$	255,455		$	(190,511	)		(75	%)
Total Assets	$	7,249,750	$	3,297,640		$	3,952,110			120	%
Total Liabilities	$	6,324,575	$	4,274,288		$	2,050,287			48	%
Stockholders’ Equity (Deficit)	$	925,175	$	(976,648	)	$	1,901,823			195	%

Revenue

	For the Year Ended January 31,
	2016			2015			Change			%
Revenue		$	1,652,156		$	167,806		$	1,484,350		885	%
Cost of revenue			1,145,278			-			1,145,278		-
Gross profit		$	506,878		$	167,806		$	339,072		202	%

Revenue increased to $1,652,156 from $167,806 for the years ended January 31, 2016 and 2015, respectively. We purchased two businesses and expanded the focus to include the business of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium and large businesses.

Cost of revenue increased to $1,145,278 from $0 for the years ended January 31, 2016 and 2015, respectively. We purchased two businesses and expanded the focus to include the business of cloud communications, cloud connectivity, cloud computing, and managed cloud-based applications solutions to small, medium and large businesses.

Operating Expenses

	For the Year Ended January 31,
	2016		2015		Change			%
General and administration	$	1,984,451	$	2,042,906	$	(58,455	)		(3	%)
Research and development		2,500		605,142		(602,642	)		(100	%)
Legal settlement		54,000		2,550,000		(2,496,000	)		(98	%)
Related party payments		-		401,034		(401,034	)		(100	%)
Impairment loss		1,762,503		-		1,762,503			-
Depreciation and amortization		334,416		51,497		282,919			549	%
Total operating expenses	$	4,137,870	$	5,650,579	$	(1,512,709	)		(27	%)

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Operating expenses were $4,137,870 for the year ended January 31 2016, compared to $5,650,579 for the year ended January 31, 2015, a decrease of $1,512,709, or 27%. The significant decrease in operating expenses was largely due to reduced legal settlement of $2,496,000, research and development of 602,642 and related party payment of $401,034.

Research and development costs decreased to $2,500 from $605,142 for the years ended January 31, 2016 and 2015, respectively. Our research and development decrease is related to updates to our software and development of our software platform.

Legal settlement expense decreased to $54,000 from $2,550,000 for the years ended January 31, 2016 and 2015, respectively. Our legal settlement decreased from the cost of legal expenses related to the settlement with Doyle Knudson.

Related party transactions decreased to $0 from $401,034 for the years ended January 31, 2016 and 2015, respectively. Our related party transactions decreased because of unauthorized withdraws of funds that prior managed disbursed to them as follows:

Related Party Expenses for the years ended January 31, 2016 and 2015:

		January 31, 2016		January 31, 2015
Legal	Personal Expenses of Mars Callahan	$	-	$	102,114
Unauthorized withdrawals	Personal Expenses of John Hermansen		-		193,215
Unauthorized withdrawals	Personal Expenses of Mars Callahan		-		105,705
Related Party Expenses		$	-	$	401,034

The above related party expenses are unauthorized withdrawal of expenses for personal expenses and past legal bills of Mars Callahan.

Impairment loss increased to $1,762,503 from $0 for the years ended January 31, 2016 and 2015, respectively. We recognized $1,200,003 impairment loss of Goodwill of Webrunner because we determined the implied fair value of goodwill was substantially below the carrying value of the reporting unit's goodwill and $562,500 impairment loss of Deposit – CipherLoc (CLOK) - because the software has not been delivered to us.

Depreciation and amortization expense increased to $334,416 from $14,748 for the years ended January 31, 2016 and 2015, respectively. Our depreciation and amortization expenses increase 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.

General and administrative expenses

	For the Year Ended January 31,
	2016		2015		Change			%
Professional fees	$	507,956	$	688,331	$	(180,375	)		(26	%)
Marketing / Advertising expense		51,635		781,375		(729,740	)		(93	%)
Salaries and wages		888,559		313,845		574,714			183	%
Other general and administrative expense		536,301		259,355		276,946			107	%
	$	1,984,451	$	2,042,906	$	(58,455	)		(3	%)

General and administrative expenses decreased to $1,984,451 from $2,042,906 for the years ended January 31, 2016 and 2015, respectively. The decrease in general and administrative expenses during 2016, are primarily related to a decrease in marketing expenses of $729,740, and professional fees of $180,375 and an increase in compensation of $574,714 and other expenses of $276,946.

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Other income (expense)

	For the Year Ended January 31,
	2016			2015			Change			%
Other income	$	13,200		$	-		$	13,200			-
Interest expense, net		(544,616	)		(228,808	)		(315,808	)		138	%
Unrealized gain (loss) on marketable securities		49,350			(76,050	)		125,400			165	%
Change in fair value of derivative liabilities		326,899			-			326,899			-
Loss on issuance of stock		(2,956,954	)		-			(2,956,954	)		-
	$	(3,112,121	)	$	(304,858	)	$	(2,807,263	)		921	%

Other income increased to $13,200 from $0 for the years ended January 31, 2016 and 2015, respectively. Other income increased due to the customers abandoned calling card.

Interest expense increased to $544,616 from $228,808 for the years ended January 31, 2016 and 2015, respectively. Our interest expenses increase due to the amortization of debt discount.

Unrealized gain (loss) increased to $49,350 from ($76,050) for the years ended January 31, 2016 and 2015, respectively. Our unrealized gain (loss) increased due to an increase in price of our marketable securities as of January 31, 2016 of which the Company still holds those securities and the current market value as of May 6, 2016 is $111,000 versus the booked value of $78,300 at January 31, 2016.

Change in fair value of derivative liabilities increased to $326,899 from $0 for the years ended January 31, 2016 and 2015, respectively. Our change in fair value of derivative liabilities increased due to the issuance of convertible notes payable.

Loss on issuance of stock increased to $2,956,954 from $0 for the years ended January 31, 2016 and 2015, respectively. Loss on issuance of stock increased due to the conversion of all deferred compensation to the CEO to preferred shares.

Liquidity and Capital Resources

The following tables present selected financial information on our capital and cash flows as of and for the years ended January 31, 2016 and 2015.

	January 31,
	2016				2015				Change				%
Current Assets		$	783,665			$	1,420,267			$	(636,602	)		(45	%)
Current Liabilities			5,925,379				4,274,288				1,651,091			39	%
Working Capital Deficiency		$	(5,141,714	)		$	(2,854,021	)		$	(2,287,693	)		80	%

	For the Year Ended January 31,
	2016			2015			Change
Cash Flows used in Operating Activities	$	(472,072	)	$	(3,561,240	)	$	3,089,168
Cash Flows used in Investing Activities		(134,531	)		(1,159,069	)		1,024,538
Cash Flows from Financing Activities		415,650			3,941,554			(3,525,904	)
Foreign currency translation adjustment		442			-			442
Net Decrease in Cash During the Year	$	(190,511	)	$	(778,755	)	$	588,244

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As of January 31, 2016 and 2015 our cash was $64,944 and $255,455, 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 January 31, 2016, we experienced an increase in working capital deficiency of $2,287,693 or 80%, as compared to January 31, 2015. The change in working capital deficiency during 2015 was primarily from a reduction in current assets by $636,602 as compared to January 31, 2015, due to a reduction in cash as of January 31, 2016 of $190,511 to $64,944 and reduction of deposit of $562,500 to $562,500 and an increase in current liabilities by $1,651,091 as compared to January 31, 2015, due to an increase in accounts payable and accrued liabilities of $330,384 to $717,469, increase in Note payable – related party of $868,361 ($0 at January 31, 2015) and increase in derivative liabilities of $620,237 ($0 at January 31, 2015).

Cash flows from operations. Our cash used in operating activities were $472,072 and $3,561,240 for the years ended January 31, 2016 and 2015, respectively. Net loss increased to $6,743,113 from $5,787,631, however the decrease in cash flows used in operations was primarily attributable to impairment loss of $1,762,503 and loss on settlement of liabilities of $2,956,954.

Cash flows from investing activities. Cash used in investing activities were $134,531 and $1,159,069 for the years ended January 31, 2016 and 2015, respectively. Net cash paid for acquisition of Connexum and Net D’s assets was $134,531 during the year ended January 31, 2016. On June 11, 2014 we entered into a license and subscription agreement with CipherLoc Corp. (CLOK) formerly Cloud Medical Doctor Software Corporation (NSCT) (“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. As of May 9, 2016, the software has not been delivered to the Company, as such the cash paid for the encryption licensing agreement has been accounted as a deposit for $562,500, net of a write down in fiscal year ended January 31, 2016. Net cash paid for the acquisition of Webrunners, Inc. was $34,069.

Cash flows from financing activities. Cash provided by financing activities were $415,650 and $3,941,554 for the years ended January 31, 2016 and 2015, respectively. We received cash from notes payable of $75,000, convertible note of $380,900, issuance of Series B Preferred stock of $47,500 and contributions of $5,000 and paid notes payable of $92,750 for the year ended January 31, 2106. We received cash from Doyle Knudson of $3,300,000, received advances from our CEO of $40,000, and proceeds of $699,200 from investors and refund of $150,000 of subscription payable for the year ended January 31, 2015.

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 January 31, 2016 of $14,057,651 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.

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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.

Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact on our business operations and any associated risks related to these policies are discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

The material estimates for our company are that of the valuation of intangibles, goodwill impairment, derivatives, stock-based compensation recorded for options and warrants issued, and the income tax valuation allowance recorded for deferred tax assets. The fair values of options are determined using the Black-Scholes option pricing model. We have no historical data on the accuracy of these estimates. The estimated sensitivity to change is related to the various variables of the Black-Scholes option pricing model stated below. The specific quantitative variables are included in the notes to the consolidated financial statements. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the expected life, dividend yield, expected volatility, and risk-free interest rate weighted-average assumptions used for options and warrants granted. Expected volatility for 2016 and 2015 was estimated using the average historical volatility of Gawk’s historical common stock prices. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of options is based on the life of the instrument on grant date.

Basis of Accounting and Going Concern

Our consolidated financial statements have been prepared on the accrual basis of accounting in conformity with GAAP. In addition, the accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We generated accumulated losses of approximately $14.0 million through January 31, 2016 and have insufficient working capital and cash flows to support operations. These factors raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty.

Marketable securities and other investments

We adopted ASC 825, “The Fair Value Option for Financial Assets and Financial Liabilities. Under this statement, an entity may elect to use fair value to measure eligible items. The adoption of this statement did not have an impact on our results of operations or financial condition. We classify these investments as current assets and carry them at fair value. We recognize all unrealized and realized gains and losses on our available-for-sale securities in other income in the accompanying statement of operations.

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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.

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. MRC 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.

Share-Based Compensation

The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Employee awards are accounted for under ASC 718 - where the awards are valued at grant date. Awards given to nonemployees are accounted for under ASC 505 where the awards are valued at earlier of commitment date or completion of services. Compensation cost for employee awards is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted.

Convertible Notes

Convertible notes are regarded as compound instruments, consisting of a liability component and an equity component. The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized as additional paid-in capital and included in equity, net of income tax effects, and is not subsequently remeasured. After initial measurement, they are carried at amortized cost using the effective interest method.

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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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 conversion options. 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.

Also, refer Note 3 – Summary of Significant Accounting Policies in the consolidated financial statements that are included in this Report.

Recent accounting pronouncements

During the fourth quarter of January 31, 2016, the Company adopted Accounting Standards Update (“ASU”) 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability. This standard requires retrospective application. There were no debt issuance costs in the prior year that required reclassification.

For discussion of other recently issued and adopted accounting pronouncements, please see Note 3 to the consolidated financial statements included herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 8. FINANCIAL STATEMENTS

GAWK INCORPORATED

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		Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		22

FINANCIAL STATEMENTS:

Consolidated Balance Sheets at January 31, 2016 and 2015		23

Consolidated Statements of Operations and Comprehensive Loss for the years ended January 31, 2016 and 2015		24

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended January 31, 2016 and 2015		25

Consolidated Statements of Cash Flows for the years ended January 31, 2016 and 2015		26

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		27

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Gawk, Inc.

Los Angeles, California

We have audited the accompanying consolidated balance sheets of Gawk, Inc. and its subsidiaries (collectively, the “Company”) as of January 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit) and cash flows for the years then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gawk, Inc. and its subsidiaries as of January 31, 2016 and 2015, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

May 24, 2016

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GAWK INCORPORATED

CONSOLIDATED BALANCE SHEETS

	January 31,			January 31,
	2016			2015

ASSETS
Current Assets
Cash and cash equivalents	$	64,944		$	255,455
Accounts receivable		45,721			10,862
Marketable securities - available for sale		78,300			28,950
Deposit - CipherLoc		562,500			1,125,000
Prepaid and other current assets		32,200			-
Total Current Assets		783,665			1,420,267

Equipment, net of depreciation of $73,740 and $14,748		103,235			162,227
Intangible assets and proprietary technology, net of amortization $312,173 and $36,749		2,286,345			404,238
Goodwill		4,076,505			1,310,908

TOTAL ASSETS	$	7,249,750		$	3,297,640

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities		717,469			330,384
Notes payable		85,000			10,000
Current portion of notes payable -related party		868,361			-
Current portion of convertible note payable, net of discount of $148,069 and $208,950		1,934,932			1,591,050
Investor payable - common shares		658,000			1,154,000
Preferred shares payable		13,438			1,000,000
Contingent consideration		1,000,000			-
Due to related parties		27,942			188,854
Derivative liabilities		620,237			-
Total Current Liabilities		5,925,379			4,274,288

Long-Term Liabilities
Convertible note payable, net of discount $56,358 and $0		10,307			-
Notes payable -related party		388,889			-

TOTAL LIABILITIES		6,324,575			4,274,288

Stockholders' Equity (Deficit)
Preferred stock, $0.001 par value; authorized 100,000,000 shares
Series A Preferred stock, $0.001 par value, 1,000 shares designated; 1,000 shares issued and outstanding		1			1
Series B Preferred stock, $0.001 par value, 95,000,000 shares designated; 50,000,000 and 0 shares issued and outstanding, respectively		50,000			-
Series C Preferred stock, $0.001 par value, 100 shares designated; 14 and 7 shares issued and outstanding, respectively		-			-
Common stock, $0.001 par value, 1,400,000,000 shares authorized; 261,863,258 and 161,732,000 shares issued and outstanding, respectively		261,863			161,732
Additional paid in capital		14,670,962			6,176,599
Accumulated other comprehensive income (loss)		-			(442	)
Accumulated deficit		(14,057,651	)		(7,314,538	)
Total Stockholders' Equity (Deficit)		925,175			(976,648	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	7,249,750		$	3,297,640

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

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GAWK INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	For the Year Ended January 31,
	2016			2015

Revenues	$	1,652,156		$	167,806
Cost of revenues		1,145,278			-
Gross profit		506,878			167,806

Operating Expenses
General and administration		1,984,451			2,042,906
Research and development		2,500			605,142
Legal settlement		54,000			2,550,000
Related party payments		-			401,034
Impairment loss		1,762,503			-
Depreciation and amortization		334,416			51,497
Total operating expenses		4,137,870			5,650,579

Net loss from operations		(3,630,992	)		(5,482,773	)

Other income (expense)
Other income (expense)		13,200			-
Interest expense, net		(544,616	)		(228,808	)
Unrealized gain (loss) on marketable securities		49,350			(76,050	)
Change in fair value of derivative liabilities		326,899			-
Loss on settlement of liabilities		(2,956,954	)		-
Total other income (expense)		(3,112,121	)		(304,858	)

Net loss	$	(6,743,113	)	$	(5,787,631	)

Other comprehensive income		442			-

Comprehensive Loss	$	(6,742,671	)	$	(5,787,631	)

Basic and dilutive loss per common share	$	(0.03	)	$	(0.03	)

Weighted average number of common shares outstanding		194,920,175			169,720,932

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

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GAWK INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED JANUARY 31, 2016, AND 2015

																			Additional							Other
	A Preferred Stock				B Preferred Stock				C Preferred Stock				Common Stock						Paid in			Preferred stock		Common stock		Comprehensive			Accumulated
	Shares Outstanding		Amount		Shares Outstanding		Amount		Shares Outstanding		Amount		Shares Outstanding			Amount			Capital			Payable		Payable		Income (Loss)			Deficit			Total

Balance, January 31, 2014		-	$	-		-	$	-		-	$	-		302,000,000		$	302,000		$	485,000		$	-	$	-	$	(442	)	$	(1,526,907	)	$	(740,349	)

Series C Preferred acquisition		-		-		-		-		7		-		-			-			3,300,000			-		-		-			-			3,300,000
Common stock exchanged for Series A Preferred stock		1,000		1		-		-		-		-		(150,000,000	)		(150,000	)		149,999			-		-		-			-			-
Common shares issued for Series B Preferred replacement		-		-		-		-		-		-		9,232,000			9,232			913,968			-		-		-			-			923,200
Common stock issued for services		-		-		-		-		-		-		500,000			500			49,500			-		-		-			-			50,000
Contribution by CEO		-		-		-		-		-		-		-			-			40,000			-		-		-			-			40,000
Options issued for acquisition		-		-		-		-		-		-		-			-			879,932			-		-		-			-			879,932
Discount of note payable - BCF		-		-		-		-		-		-		-			-			358,200			-		-		-			-			358,200
Net loss		-		-		-		-		-		-		-			-			-			-		-		-			(5,787,631	)		(5,787,631	)

Balance, January 31, 2015		1,000		1		-		-		7		-		161,732,000			161,732			6,176,599			-		-		(442	)		(7,314,538	)		(976,648	)

Common stock issued to directors		-		-		-		-		-		-		21,000,000			21,000			140,100			-		-		-			-			161,100
Common stock issued for services, financing fees and to settle accounts payable		-		-		-		-		-		-		22,282,156			22,282			145,903			-		-		-			-			168,185
Common stock issued for legal settlement		-		-		-		-		-		-		2,700,000			2,700			51,300													54,000
Common stock issued in exchange for warrants		-		-		-		-		-		-		4,960,000			4,960			491,040			-		-		-			-			496,000
Series C Preferred shares issued for acquisition - Webrunner		-		-		-		-		1		-		-			-			1,000,000			-		-		-			-			1,000,000
Series B Preferred shares issued for acquisition - Net D’s assets		-		-		11,562,500		11,562		3		-		5,000,000			5,000			3,452,125			-		-		-			-			3,468,687
Series B Preferred shares issued for cash		-		-		8,437,500		8,438		-		-		-			-			39,062			-		-		-			-			47,500
Series B and C Preferred shares issued for acquisition - Connexum		-		-		5,000,000		5,000		-		-		-			-			49,375			-		-		-			-			54,375
Series B Preferred B and C shares issued for due to related parties		-		-		25,000,000		25,000		3		-		-			-			3,390,625			-		-		-			-			3,415,625
Contribution		-		-		-		-		-		-		-			-			5,000			-		-		-			-			5,000
Common stock issued from conversion of debt		-		-		-		-		-		-		44,189,102			44,189			77,769			-		-		-			-			121,958
Foreign currency translation adjustment		-		-		-		-		-		-		-			-			-			-		-		442			-			442
Reclassification of derivative liability from additional paid in capital		-		-		-		-		-		-		-			-			(586,250	)		-		-		-			-			(586,250	)
Derivative resolution		-		-		-		-		-		-		-			-			238,314			-		-		-			-			238,314
Net loss		-		-		-		-		-		-		-			-			-			-		-		-			(6,743,113	)		(6,743,113	)

Balance, January 31, 2016		1,000	$	1		50,000,000	$	50,000		14	$	0		261,863,258		$	261,863		$	14,670,962		$	-	$	-	$	-		$	(14,057,651	)	$	925,175

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

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GAWK INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended January 31,
	2016			2015

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,743,113	)	$	(5,787,631	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock and warrants issued for services		656,443			50,000
Common stock issued for legal settlement		54,000			-
Amortization of debt discount		342,831			149,250
Revenues from the receipt of securities for consulting		-			(105,000	)
Unrealized (gain) loss on marketable securities		(49,350	)		76,050
Depreciation and amortization		334,416			51,497
Convertible note payable due to legal settlement		-			1,800,000
Bad debt expense		11,782			-
Impairment loss		1,762,503			-
Loss on settlement of liabilities		2,956,954			-
Change in fair value of derivative liabilities		(326,899	)		-
Changes in operating assets and liabilities:
(Increase) decrease in operating assets:
Accounts receivable		41,212			(10,862	)
Prepaid and other current assets		(32,200	)		-
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities		241,407			215,456
Due to related parties		277,942			-
Net Cash Used in Operating Activities		(472,072	)		(3,561,240	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit for license agreement		-			(1,125,000	)
Net cash paid for Webrunner acquisition		-			(34,069	)
Net cash paid for acquisition of Connexum and Net D’s assets		(134,531	)		-
Net Cash Used in Investing Activities		(134,531	)		(1,159,069	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from shareholder		-			52,354
Proceeds (refund) of subscription payable		-			(150,000	)
Proceeds from notes payable		75,000			-
Proceeds from convertible notes, net of original issue discounts and fees		380,900			-
Payment of notes payable		(92,750	)		-
Proceeds for investor payable		-			699,200
Proceeds from the sale of Preferred C stock		-			3,300,000
Proceeds from issuance of Series B preferred stock		47,500			-
Proceeds from contributions		5,000			40,000
Net Cash Provided By Financing Activities		415,650			3,941,554

Effect of exchange rate changes		442			-

Net decrease in cash and cash equivalents		(190,511	)		(778,755	)
Cash and cash equivalents, beginning of period		255,455			1,034,210
Cash and cash equivalents, end of period	$	64,944		$	255,455

Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

Non-cash transactions:
Common stock exchanged for Series A Preferred shares	$	-		$	150,000
Debt from RND Media	$	-		$	10,000
Series B and Series C Preferred shares issued for due to related parties	$	438,854		$	-
Acquisition of Net D’s assets through issuance of preferred shares, common shares and note payable	$	3,843,875		$	-
Series C Preferred shares issued to settle preferred share payable	$	1,000,000		$	-
Acquisition of Connexum/Webrunner through issuance of preferred shares and note payable	$	1,054,375		$	1,928,870
Contingent consideration related to acquisition of Connexum	$	1,000,000		$	-
Preferred shares payable for acquisition of Webrunner	$	-		$	1,000,000
Issuance of common stock for conversion of debt and accrued interest	$	121,958		$	-
Common shares issued for deferred financing fees	$	13,042			-
Common shares issued for Preferred B replacement	$	-		$	923,200
Common stock issued in exchange for warrants	$	496,000		$	-
Options issued for acquisition	$	-		$	879,932
Accounts payable assumed from acquisition	$	-		$	4,869
Debt discount from derivative liability	$	259,000		$	-
Beneficial conversion feature	$	-		$	358,200
Reclassification of derivative liability from additional paid in capital due to tainted instruments	$	586,250		$	-
Derivative resolution - conversion	$	238,314		$	-

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

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GAWK INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JANUARY 31, 2016 AND 2015

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 – GOING 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 an accumulated deficit at January 31, 2016 of $14,057,651, a net loss for the year ended January 31, 2016 of $6,743,113, cash flows used in operating activities of $472,072 and needs additional cash to maintain its operations.

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

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:

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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. The Company’s most significant estimates relate to the valuation of its intangible assets, goodwill impairment, derivative liabilities, and the valuation of its common stock.

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.

Reclassifictions

Certain prior year amounts have been reclassified to conform with the current year presentation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At January 31, 2016 and 2015, cash and cash equivalents include cash on hand and cash in the bank.

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.

We completed an evaluation of goodwill at January 31, 2016 and recognized an impairment loss of $1,200,003 during the year ended Janaury31, 2016. No impairment loss was recognized for the year ended January 31, 2015.

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.

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Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

Property and Equipment

Property and equipment, consisting mostly of computer equipment, is recorded at cost reduced by accumulated depreciation. Depreciation expense is recognized over the assets’ estimated useful lives of three years using the straight-line method. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Estimated useful lives are periodically reviewed and, when appropriate, changes are made prospectively. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.

Accounts Receivable and Allowance for Uncollectible Accounts

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 maintains 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 that the receivable will not be recovered. As of January 31, 2016 and 2015, the Company had no valuation allowance for the Company’s accounts receivable. During the years ended January 31, 2016 and 2015, the Company recorded bad debt expense for uncollectible amounts of $11,782 and $0, respectively.

Marketable securities and other investments

We classify these investments as current assets and carry them at fair value. We recognize all unrealized and realized gains and losses on our available-for-sale securities in other income in the accompanying consolidated statements of operations and comprehensive income (loss).

Revenue Recognition

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.

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Income Taxes

The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized.

The Company uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At January 31, 2016 and 2015, the Company did not record any liabilities for uncertain tax positions.

Research and Development and Software Development Costs

Capitalization of certain software development costs are recorded after the determination of technological feasibility. Based on our product development process, technological feasibility is determined upon the completion of a working model. To date, costs incurred by us from the completion of the working model to the point at which the product is ready for general release have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period incurred. Our research and development costs for the years ended January 31, 2016 and 2015 were $2,500 and $605,142, respectively.

Share-Based Compensation

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Basic and Diluted Net Loss per Common Share

Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. There were 36,100,000 and 9,100,000 options/warrants, a convertible note for $2,149,666 and $1,800,000 secured by 84,133,879 and 18,000,000 shares of common stock issued by the Company during the years ended January 31, 2016 and 2015, respectively.

Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss.

Concentration of Credit Risk

All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote.

Derivative Financial Instruments

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 payable and accrued 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.

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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

The following table summarizes fair value measurements by level at January 31, 2016 and January 31, 2015 for assets measured at fair value on a recurring basis:

Carrying Value at January 31, 2016

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 January 31, 2015

January 31, 2015	Level 1		Level 2		Level 3		Total
Marketable securities- available for sale	$	28,950	$	-	$	-	$	28,950
Total assets		28,950		-		-		28,950

Derivative liabilities		-		-		-		-
Total liabilities	$	-	$	-	$	-	$	-

Accounting Pronouncements Adopted

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In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” Currently deferred taxes for each tax jurisdiction are presented as a net current asset or liability and net noncurrent asset or liability on the balance sheet. To simplify the presentation, the new guidance requires that deferred tax liabilities and assets for all jurisdictions along with any related valuation allowances be classified as noncurrent in a classified statement of financial position. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016, and early adoption is permitted. The Company has adopted this guidance in the fourth quarter of the year ended January 31, 2016 on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s financial position, results of operations or cash flows, and did not have any effect on prior periods due to the full valuation allowance against the Company’s net deferred tax assets.

Recent Accounting Pronouncements

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

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

In January 2016, the FASB issued ASU 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance.

In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement –Period Adjustments.” Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquiree recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquiree. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for periods beginning after December 15, 2015. The Company is currently evaluating the impact of adopting this guidance.

In August 2015, the FASB issued ASU No. 2015-14, Revenue From Contracts With Customers (Topic 606)." The amendments in this ASU defer the effective date of ASU 2014-09. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are still evaluating the effect of the adoption of ASU 2014-09.

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In April 2015, the FASB issued ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement," which provides guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance.

In April 2015, the FASB issued guidance related to a customer’s accounting for fees paid in a cloud computing arrangement. This standard provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The Company will adopt this guidance on January 1, 2016. The adoption of this guidance is not expected to have a material impact on its financial position, results of operations or cash flows.

NOTE 4 – MARKETABLE SECURITIES

On September 4, 2014 Cloud issued 30,000 post-split common shares through a consulting agreement with Gawk Incorporated valued at $105,000. The common stock issued to Gawk, for consulting services, has been accounted for as a marketable security valued at $105,000. The services have been earned and completed in accordance with the agreement.

The Company fair valued the marketable security available for sale at January 31, 2016 and 2015 and recorded a gain on change in fair value of the asset of $49,350 and a loss on change in fair value of the asset of $76,050, respectively. Total fair value of the available for sale security at January 31, 2016 and 2015 is $78,300 and $28,950, respectively.

NOTE 5 – ACQUISITIONS

WebRunner, LLC

On October 30, 2014, the Company, through a comprehensive agreement with Webrunner, LLC (“Webrunner”), has purchased a complete data center.

The fair value of the consideration and the assets acquired is based on the aggregate value of the common stock issued in exchange for the software as shown below:

The acquisition consisted primarily of the purchase of a data center and all of its business, which are considered to meet 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.

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Management determined that the Company was the acquirer in the business combination in accordance with ASC Topic 805, "Business Combinations", based on the following factors: (i) there was a change in control of Webrunner; (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 was $2,104,932 which included $225,000 in cash, 1 Series C Preferred share convertible into $1,000,000 of common stock and 9,100,000 options to purchase stock at an exercise price of $0.10 valued at $879,932 using the Black Scholes option pricing model. The assumptions used to value the options were as follows: a) stock price of $0.0978; b) strike price of $0.10, c) term of 5 years and d) volatility of 268%. 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:

	October 30, 2014
Fair Value of Consideration:
Cash	$	225,000
1 Series C Preferred share convertible into common shares		1,000,000
9,100,000 options at an exercise price of $0.10		879,932
Total Purchase Price	$	2,104,932

Recognized amounts of identifiable assets acquired:
Assets:
Cash	$	190,931
IP Address		81,920
Customer list		359,067
Equipment		176,975
Goodwill		1,310,908
Fair value of total assets		2,119,801
Note payable RND Media		(10,000	)
Accounts payable and accrued liabilities		(4,869	)
Fair value of net assets	$	2,104,932

Webrunner, Inc. assets includes IP Address space assigned to it through American Registry for Internet Numbers (ARIN) which consists of a /19, pronounced “Slash Nineteen”, which contains 8192 IP Addresses that are used in conjunction with our services provided to our customers.

An Internet Protocol address (IP address) is a numerical label assigned to each device (e.g., computer, printer) participating in a computer network that uses the Internet Protocol for communication. An IP address serves two principal functions: host or network interface identification and location addressing.

The designers of the Internet Protocol defined an IP address as a 32-bit number and this system, known as Internet Protocol Version 4 (IPv4), is still in use today. However, because of the growth of the Internet and the predicted depletion of available addresses, a new version of IP (IPv6), using 128 bits for the address, was developed in 1995. IPv6 was standardized as RFC 2460 in 1998, and its deployment has been ongoing since the mid-2000s.

IP addresses are usually written and displayed in human-readable notations, such as 172.16.254.1 (IPv4), and 2001:db8:0:1234:0:567:8:1 (IPv6).

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The Internet Assigned Numbers Authority (IANA) manages the IP address space allocations globally and delegates five regional Internet registries (RIRs) to allocate IP address blocks to local Internet registries (Internet service providers) and other entities.

The expected of the Equipment, IP Addresses and Customer List is 3 years of which we will be applying both amortization and depreciation on a quarterly basis in a straight line format.

The comprehensive agreement call for the implementation of three employment agreement and three management agreements for the members of Webrunner LLC. The Company has not adopted an employee stock option plan which has been approved by the shareholders.

Net D Consulting Inc.

On April 24, 2015, the Company entered into an asset purchase and sale agreement with Net D Consulting Inc. ("Net D") which closed on May 1, 2015.

The fair value of the consideration and the assets acquired is based on the aggregate value of the common stock issued in exchange for the software as shown below:

The acquisition consisted of the purchase of a customer list which 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 ASC Topic 805, "Business Combinations", based on the following factors: it involved a transaction or other event in which an acquirer obtains control of one or more businesses, which an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits directly to investors or other owners, members, or participants.

The purchase price paid for the assets acquired, as amended on December 21, 2015, amounted to $3,982,125 and consisted of the following: $150,000 in cash, a $350,000 note with 0% annual interest and payable on October 7, 2016, 5,000,000 common shares valued at $66,500, 25,000,000 Series B Preferred shares valued at $415,625 and 3 Series C Preferred shares convertible into $3,000,000 common 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:
Cash	$	150,000
Note payable		350,000
5,000,000 common shares		66,500
25,000,000 Series B Preferred shares convertible into common shares		415,625
3 Series C Preferred shares convertible into common shares		3,000,000
Total Purchase Price	$	3,982,125

Recognized amounts of identifiable assets acquired:
Assets:
Customer list	$	433,376
Goodwill		3,548,749
Fair value of total assets	$	3,982,125

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Connexum, LLC.

On January 18, 2016, the Company entered into an acquisition agreement with Net D, whereby the Company acquired 100% of the membership interest of Connexum, LLC (“Connexum”). The acquisition of Connexum 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 Connexum; (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 Connexum amounted to $2,054,375 and consisted of the following: a $1,000,000 note with annual interest of 18% which matures on August 1, 2017 and 5,000,000 Series B Preferred shares valued at $54,375. The note provides for monthly principal and interest payments of $63,806. The agreement also provides for contingent consideration of 1 Series C Preferred share convertible into $1,000,000 common shares if Connexum achieves 80% of anticipated revenue and another 1 Series C Preferred share convertible into $1,000,000 common shares if Connexum achieves 100% of anticipated revenue within one year from the date of acquisition. The Company determined that Connexum will meet 80% of the anticipated revenue and has recognized the fair value of the contingent consideration of $1,000,000 as of January 31, 2016. 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:	January 18, 2016
Note payable		$	1,000,000
5,000,000 Series B Preferred shares			54,375
Contingent consideration - 1 Series C Preferred share			1,000,000
Total Purchase Price		$	2,054,375

Fair Value of Consideration:	January 18, 2016
Current assets		$	86,132
Current liabilities assumed			(172,763	)
Customer list			1,724,155
Goodwill			416,851
Fair value of total assets		$	2,054,375

Revenues of $59,259 and net income of $6,923 since the acquisition date are included in the consolidated statements of operations and comprehensive income (loss) for the year ended January 31, 2016.

Unaudited proforma results of operations for the years ended January 31, 2016 and 2015 as though the Company acquired Connexum on the first day of each fiscal year are set forth below:

	Year Ended January 31,
	2016			2015
Revenues	$	5,632,531		$	4,068,353
Cost of revenues		3,751,241			2,582,590
Gross profit		1,881,289			1,485,763

Operating expenses		5,596,381			6,892,576

Net Loss		(6,858,124	)		(5,711,671	)

Net loss per share basic and diluted	$	(0.04	)	$	(0.03	)

Weighted average of shares outstanding		194,920,175			169,720,932

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NOTE 6 – EQUIPMENT

Equipment at January 31, 2016 and 2015 consist of the following:

	January 31, 2016			January 31, 2015
Computer equipment	$	176,975		$	176,975
Less - accumulated depreciation		(73,740	)		(14,748	)
	$	103,235		$	162,227

Depreciation expense for the years ended January 31, 2016 and 2015 amounted to $58,992 and $14,748, respectively.

NOTE 7 – INTANGIBLES AND GOODWILL

Intangible assets at January 31, 2016 and 2015 consist of the following:

	January 31, 2016			January 31, 2015
Customer list - Webrunner	$	359,067		$	359,067
IP Address - Webrunner		81,920			81,920
Customer list - Net D		433,376			-
Customer list - Connexum		1,724,155			-
		2,598,518			440,987
Less - accumulated amortization of intangible assets		(312,173	)		(36,749	)
	$	2,286,345		$	404,238

The intangible assets are amortized over an estimated useful life of 3 years. Amortization expense amounted to $275,424 and $36,749 for the years ended January 31, 2016 and 2015, respectively. No impairment loss was recognized during the years ended January 31, 2016 and 2015.

Goodwill at January 31, 2016 and 2015 consist of the following:

	January 31, 2016		January 31, 2015
Goodwill of Webrunner	$	110,905	$	1,310,908
Goodwill of Net D		3,548,749		-
Goodwill of Connexum		416,851		-
Total	$	4,076,505	$	1,310,908

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During the year ended January 31, 2016, we determined that the carrying value of Webrunner, which is a separate reporting unit, exceeded its fair value at the measurement date, requiring step two in the impairment test process. The fair value of the Webrunner reporting unit was determined primarily using an income approach based on the present value of discounted cash flows. We determined the implied fair value of goodwill was substantially below the carrying value of the reporting unit's goodwill. Accordingly, we recognized a goodwill impairment loss of $1,200,003, which resulted in goodwill of $110,905 remaining for Webrunner as of January 31, 2016. No impairment of goodwill was recognized for the year ended January 31, 2015.

NOTE 8 – NOTES PAYABLE

The Company had the following notes payable and notes payable – related party outstanding as of January 31, 2016 and 2015:

Notes payable
	January, 31, 2016			January, 31, 2015
Dated – October 30, 2014	$	10,000		$	10,000
Dated – June 3, 2015		25,000			-
Dated – December 11, 2015		50,000			-
Total notes payable		85,000			10,000
Less: current portion of notes payable		(85,000	)		(10,000	)
Long-term notes payable	$	-		$	-

Dated – October 30, 2014

On October 30, 2014 the Company exercised the comprehensive acquisition agreement of Webrunner, LLC 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 and 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 notes matured in December 2015 and are currently past due.

Notes payable - related party
	January, 31, 2016			January, 31, 2015
Dated – April 23, 2015	$	282,250		$	-
Dated - January 18, 2016		975,000			-
Total notes payable		1,257,250			-
Less: current portion of notes payable		(868,361	)		-
Long-term notes payable	$	388,889		$	-

Dated – April 23, 2015

On May 1, 2015, in connection with the acquisition of the assets of 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 $67,750 during the year ended January 31, 2016.

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Dated – January 18, 2016

On January 18, 2016, in connection with the acquisition of Connexum, the Company issued a $1,000,000 note to Net D which bears annual interest of 18%. The Company is required to make monthly principal and interest payments of $63,806 for a period of 18 months through August 1, 2017. The Company paid $25,000 in a good faith advance on January 27, 2016.

NOTE 9 – CONVERTIBLE NOTES PAYABLE

The Company had the following convertible notes payable outstanding as of January 31, 2016 and 2015:

	January, 31, 2016			January, 31, 2015
Dated – August 22, 2014	$	1,700,000		$	1,800,000
Dated – July 31, 2015		65,000			-
Dated - August 12, 2015 and December 15, 2015		66,666			-
Dated - August 18, 2015		38,000			-
Dated - September 29, 2015		27,500			-
Dated - October 7, 2015		26,500			-
Dated - October 26, 2015		28,500			-
Dated - November 6, 2015		34,000			-
Dated - November 18, 2015		50,000			-
Dated - December 29, 2015		35,000			-
Dated - January 4, 2016		40,000			-
Dated - January 20, 2016		38,500			-
		2,149,666			1,800,000
Less: debt discount and deferred financing fees		(204,427	)		(208,950	)
		1,945,239			1,591,050
Less: current portion of convertible notes payable		1,934,932			(1,591,050	)
Long-term convertible notes payable	$	10,307		$	-

The Company recognized amortization expense related to the debt discount and deferred financing fees of $342,831 and $149,250 for the years ended January 31, 2016 and 2015, respectively, which are included in interest expense in the consolidated statements of operations and comprehensive income (loss).

Dated – August 22, 2014

On June 17, 2014 a verified complaint was filed in Maricopa County, Arizona being case number CV 2014-008511 against the Company by an investor known as Doyle Knudson. On August 22, 2014 the parties settled this case recognizing that the settlement constitutes a compromise of disputed claims by the respective Parties, liability for which is expressly denied by the Parties. The summary of the settlement is as follows:

The Company transferred $750,000 to Mr. Knudson on the day of settlement, executed a $1.8 million Convertible Promissory Note with a conversion price of $0.10 per share, a Settlement Agreement and amended Mr. Knudson’s Series C Preferred Stock Purchase Agreement to provide that Mr. Knudson can convert his seven (7) Series C Preferred shares into common stock at any time after the date of this Settlement Agreement. The Company has also amended the Certificate of Designation for the Series C Preferred shares to reflect that the shares are convertible on any date after the date of this Settlement Agreement as reflected in the Amendment to the Certificate of Designation. The total value of the legal settlement was $2,550,000.

Mr. Knudson has filed a Stipulation to Dismiss the Lawsuit with prejudice.

The Company recorded a discount on the convertible note due to a beneficial conversion feature of $358,200 and amortized $208,950 and $149,250 for the years ended January 31, 2016 and 2015, respectively.

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On May 21, 2015, the convertible note was amended to transfer $50,000 of the note principal to another lender. The amendment was accounted for as a debt extinguishment and the corresponding unamortized discount was written off to interest expense. Due to the variable conversion rates in the other convertible notes (see below), the balance of the note after the transfer of $1,750,000 became tainted and the embedded conversion option was bifurcated and accounted for as a derivative liability. The fair value of the derivative liability, on the $1,750,000 convertible note, amounting to $586,250 was calculated using the Black Scholes valuation model and was reclassified from additional paid in capital. On December 9, 2015, the note was again amended to transfer $50,000 of the note principal to the same lender as noted above. Since the embedded conversion option was already accounted for as a derivative liability, the amendment did not require to be analyzed under the debt modification guidance.

The two notes transferred to another lender, as disclosed above, totaling to $100,000 are convertible at the option of the holder at a conversion price per share equal to 50% of the lowest closing bid price for the common stock during 30 trading days immediately preceding a conversion. Due to the variable conversion rates in the notes, the embedded conversion option was bifurcated and accounted for as a derivative liability. The fair value of the derivative liability amounting to $268,997 was calculated using the Black Scholes valuation model. $50,000 of the value assigned to the derivative liability was recognized as a debt discount to the note while the balance of $218,997 was recognized as a “day 1” derivative loss. During the year ended January 31, 2016, the two convertible notes totaling $100,000, accrued interest of $12,198, and the associated fees of this conversion of $9,760 were converted into 44,189,102 common shares and the corresponding derivative liability at the date of conversion of $238,314 was credited to additional paid in capital.

Dated – Issued in fiscal year 2016

During the year ended January 31, 2016, the Company issued a total of $449,666 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 or180 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. $209,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $250,733 was recognized as a “day 1” derivative loss.

NOTE 10 – 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.

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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 January 31, 2016. 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 January 31, 2016 and January 31, 2015:

	Year Ended			Year Ended
	January 31, 2016			January 31, 2015
Expected term	0.4 - 2 years				-
Expected average volatility		249% - 328	%		-
Expected dividend yield		-			-
Risk-free interest rate		0.05% - 0.83	%		-

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

January, 31, 2016	Level 1		Level 2		Level 3		Total
Dated – August 22, 2014	$	-	$	-	$	122,400	$	122,400
Dated – July 31, 2015		-		-		102,743		102,743
Dated - August 12, 2015 and December 15, 2015		-		-		108,616		108,616
Dated – September 29, 2015		-		-		87,420		87,420
Dated - October 7, 2015		-		-		42,891		42,891
Dated - January 20, 2016		-		-		67,105		67,105
Warrants dated - November 9		-		-		89,062		89,062
Total liabilities	$	-	$	-	$	620,237	$	620,237

The following table summarizes the changes in the derivative liabilities during the year ended January 31, 2016:

Fair Value Measurements Using Significant Observable Inputs (Level 3)

Balance - January 31, 2015	$	-
Addition of new derivatives recognized as debt discounts		259,000
Addition of new derivatives for tainted warrants		340,200
Addition of new derivatives recognized as loss on derivatives		469,730
Derivatives settled upon conversion of debt		(238,314	)
Reclassification from APIC to derivative liability due to tainted instruments		586,250
Gain on change in fair value of the derivative liability		(796,629	)
Balance - January, 31, 2016	$	620,237

The net gain on derivatives during the year ended January 31, 2016 and 2015 was $326,899 and $0, respectively.

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NOTE 11 – STOCK PAYABLE

Investor payable - common shares

In December 2013 and January 2014, the Company entered into stock purchase agreements with third parties for 100,000 and 250,000 Series B Preferred shares, respectively, for a total consideration of $100,000 and $250,000, respectively. The Company was unable to issue the preferred shares and has accounted for the amounts received as investor payable.

The Company also issued 8,000,000 Preferred B Warrants with the acquisition of Poker Junkies LLC. These Preferred Series B Warrants once exercised would require the Company to issue Series B Preferred shares. From November 2013 through January 31, 2014 the Company issued 1,028,000 of Series B Preferred stock valued at $1,028,000 for the exercise of the Preferred B warrants. From February 2014 through April 2014 the Company issued 699,200 of Series B Preferred stock valued at $699,200 for the exercise of the Preferred B warrants. On June 18, 2014 the Company rescinded this transaction due to the failure of the holder to deliever the Preferred B warrants. The Company decided to issue common shares in lieu of issuing the Series B Preferred shares related to the acquisition of Poker Junkies LLC and those issued in connection with the stock purchase agreements disclosed above. The Company agreed to issue common stock at 125% of the value of the Series B Preferred shares. During the years ended January 31, 2016 and 2015, the Company issued 4,960,000 and 9,232,000 common shares, respectively, for a total consideration of $496,000 and $923,200, respectively.

As of January 31, 2016 and 2015, investor payable – common stock totaled $658,000 and $1,154,000, respectively.

Preferred Stock Payable

On October 30, 2014, the Company recorded $1,000,000 as preferred share payable which shall be converted to 1 Series C Preferred share for the acquisition of Webrunner. On April 9, 2015, the Company issued 1 Series C Preferred Share to settle this payable.

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 (see Note 5) since as of January 31, 2016, the Company did not have sufficient unissued Series B preferred shares.

As of January 31, 2016 and 2015, preferred stock payable totaled $13,438 and $1,000,000, respectively.

NOTE 12 – EQUITY

Amendment to Articles of Incorporation or Bylaws

On January 7, 2016, the Company filed a Certificate of Amendment with the state of Nevada, to the Company’s Articles of Incorporation, to increase the number of authorized shares of capital stock to 1,500,000,000 shares. With 1,400,000,000 shares of common stock, par value $0.001 and 100,000,000 shares of preferred stock, par value $0.001.

Preferred Stock

Series A Preferred Stock

The Company is authorized to issue 1,000 shares of series A Preferred Stock at a par value of $0.001. The terms of the Certificate of Designation of the Series A Preferred Stock, include the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote (“Super Majority Voting Rights”). The Series A Preferred Stock will be entitle to this 51% voting right no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.

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As of January 31, 2016 and 2015, 1,000 shares of series A Preferred Stock were issued and outstanding, respectively.

Series B Convertible Preferred Stock

On March 11, 2016, the Company amended its Articles of Incorporation to increase the number of preferred shares designated Series B Convertible Shares (the “Series B”) from 50,000,000 to 95,000,000. Holders of the Series B Preferred shares shall be entitled to receive dividends or other distributions with the holders of the Company’s common shares on an “as converted” basis when, as, and if declared by the directors of the Company.

The Holders have the right to convert each Series B Preferred share, at any time after 6 months from the date of issuance, into fully paid and non-assessable common shares on the basis of 1 Series B Preferred share for 1.25 common shares (1:1.25).

During the year ended January 31, 2016, the Company issued Series B Preferred shares, as follows:

437,500 shares were sold for cash on June 22, 2015 for a total consideration of $17,500.

5,000,000 shares with a fair value of $54,375 in connection with the acquisition of Connexum (see Note 5).

8,000,000 shares were sold for cash in January 2016 for a total consideration of $30,000

As of January 31, 2016 and 2015, 50,000,000 and 0 shares of Series B Preferred Stock were issued and outstanding, respectively.

Series C Convertible Preferred Stock

The Series C Preferred Stock consists of 100 shares, at a par value of $0.001 per share, with certain rights, privileges, preferences and restrictions as set forth in Series C Preferred Stock Certificate of Designation. Holders of the Series C Preferred shares shall be entitled to receive dividends or other distributions with the holders of the Company’s common share on an “as converted” basis when, as and if, declared by the directors of the Company.

Each share of the Series C Preferred Stock shall be convertible, at the option of the holder thereof and subject to notice requirements at any time following 12 months from the issuance of such shares, into such number of fully paid and non-assessable common shares worth $1,000,000.

During the year ended January 31, 2016, the Company issued Series C Preferred shares, as follows:

1 share to settle the preferred stock payable of $1,000,000 recorded in connection with the acquisition of Webrunner

3 shares with a fair value of $3,000,000 in connection with the acquisition of Net D’s assets (see Note 5).

3 shares with a fair value of $3,000,000 as settlement of amounts due to the CEO totaling $438,854. As a result, the Company recorded a loss on settlement of liabilities of $2,976,771.

On April 11, 2014, the Company and Doyle Knudson entered into a Series C Preferred Stock Purchase Agreement dated as of April 10, 2014, pursuant to which the Company sold 7 Series C Preferred shares for an aggregate purchase price of $3,300,000.

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As of January 31, 2016 and 2015, 14 and 7 shares of Series C Preferred Stock were issued and outstanding, respectively.

Common stock

The Company is authorized to issue 1,400,000,000 shares of common stock at a par value of $0.001.

During the year ended January 31, 2016, the Company issued common shares, as follows:

21,000,000 shares with a fair value of $161,100 as compensation to board members and employees.

16,150,000 shares with a fair value of $134,960 as compensation to consultants.

4,587,156 shares with a fair value of $20,183 to settle a $40,000 payable. The Company recognized a gain on settlement of liabilities of $19,817.

1,545,000 shares with a fair value of $13,042 as deferred financing fees

4,960,000 shares in exchange for warrants for a total consideration of $496,000 (see Note 11).

5,000,000 shares with fair value of $66,500 in connection with the acquisition of Net D’s assets (see Note 5).

44,189,102 common shares were issued for the conversion of debt, accrued interest and associated fees of $121,958.

During the year ended January 31, 2015, the Company issued common shares, as follows:

9,232,000 shares of common stock valued at the trading prices of $0.10 for value of $923,200 for conversion from Series B Preferred Stock.

500,000 shares of common stock valued at the trading price of $0.10 for value of $50,000 for services rendered.

Cancelled 150,000,000 common shares with par value of $150,000, which were surrended by a Company controlled by our CEO and is a related party.

As of January 31, 2016 and 2015, 261,863,258 and 161,732,000 shares of common stock were issued and outstanding, respectively.

Warrants and Options

Warrants

As of January 31, 2016 and 2015, there are no warrants outstanding.

Options

The Company has 9,100,000 options issued in connection with the acquisition of Webrunner (see Note 5).

On October 21, 2015, the Company entered into two separate agreements with consultants to provide the Company with consulting services in exchange for common shares of 20,000,000 and 7,000,000, respectively. In November, 2015, the Company amended these two agreements. As a result of the amendment, the Company issued 27,000,000 stock options with an exercise price of $0.005 per share instead of the common shares. The options can be exercised by the holder any time prior to December 1, 2016. These options were tainted as a result of the convertible notes with variable conversion rates (see Note 9) and were accounted for as derivative instruments at the time of issuance. The fair value of the options amounting to $340,200 was recorded as stock compensation expense during the year ended January 31, 2016, with a corresponding credit to derivative liability (see Note 10).

The following table summarizes information relating to outstanding and exercisable stock options as of January 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		3.75		$	0.10		9,100,000		$	0.10
	27,000,000		0.84		$	0.005		27,000,000		$	0.005
	36,100,000		1.57		$	0.03		36,100,000		$	0.03

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

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NOTE 13 – COMMITMENTS AND CONTINGENCIES

Rent

Rent expense for the years ended January 31, 2016 and 2015 was $82,486 and $19,311, respectively.

Months of Term or Period (Beginning March 1, 2013)	Monthly Rate Per Rentable Square Foot	Monthly Basic Rent (rounded to the nearest dollar)
1 to 12	$2.13	$5,534
13 to 24	$2.23	$5,794
25 to 36	$2.33	$6,053
37 to 48	$2.43	$6,313
49 to 60	$2.54	$6,599

Minimum future rental payments under operating leases as of January 31, 2016:

	Amount
2017	$	75,496
2018		78,902
2019		6,599
Thereafter		-
Total minimum lease payments	$	160,997

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 it’s 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. As of January 31, 2016, the software has not been delivered to the Company and as such the cash paid for the encryption licensing agreement of $1,125,000 has been accounted as a deposit. During the year ended January 31, 2016, the Company wrote off 50% of the deposit amounting to $562,500 to impairment expense.

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Contingency

At the time of acquisition of Connexum, Windstream Holdings, Inc. ("Windstream"), a provider of voice and data network communications, and managed services, to businesses in the United States, claimed that Connexum owed them $600,000, which 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 over $20,000. Then, without notice, Windstream turned off services. Shortly thereafter Windstream and Connexum disputed over high cost traffic. Windstream continued to bill Connexum for many months even after disconnecting its service, which ended up totaling nearly $580,000 of disputed fees. At the time of disconnection, there was approximately $20,000 in actual unpaid usage fees. It is remote that the Company would pay these fees. Windstream has not threatened litigation at this point and Connexum is actively working to settle the disputed amount.

NOTE 14 – INCOME TAXES

The benefit for income taxes from continued operations for the years ended January 31, 2016 and 2015 consist of the following:

	Year Ended
	January 31,
	2016			2015
Current:
Federal	$	-		$	-
State		-			-

Deferred:
Federal	$	531,744		$	1,874,193
State		140,756			496,110
		672,500			2,370,303
Valuation allowance		(672,500	)		(2,370,303	)
Provision benefit for income taxes, net	$	-		$	-

The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:

	January 31,
	2016			2015

Statutory federal income tax rate		(34	%)		(34	%)
State income taxes and other		9	%		9	%
Change in valuation allowance		34	%		34	%
Effective tax rate		-			-

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:

	January 31,
	2016				2015

Net operating loss carryforward		$	3,416,210			$	2,743,710
Valuation allowance			(3,416,210	)			(2,743,710	)
Deferred income tax asset		$	-			$	-

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Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The Company has a net operating loss carryforward of approximately $7,944,000 available to offset future taxable income through 2035. For income tax reporting purposes, the Company’s aggregate unused net operating losses are subject to limitations of Section 382 of the Internal Revenue Code, as amended. Under the Tax Reform Act of 1986, the benefits from net operating losses carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. The consolidation of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company; it is more likely than not that the benefits will not be realized.

For the years ended January 31, 2016 and 2015, the difference between the amounts of income tax expense or benefit that would result from applying the statutory rates to pretax income to the reported income tax expense of $0 is the result of the net operating loss carryforward and the related valuation allowance.

The Company anticipates it will continue to record a valuation allowance against the losses of certain jurisdictions, primarily federal and state, until such time as it is able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses by jurisdiction.

NOTE 15 – RELATED PARTY TRANSACTIONS

On December 21, 2015, the Company issued 25,000,000 Series B Preferred shares with a fair value of $415,625 and 3 Series C Preferred shares with a fair value of $3,000,000 as settlement of amounts due to the CEO totaling $438,854. As a result, the Company recorded a loss on settlement of liabilities of $2,976,771.

As of January 31, 2016 and 2015, the current CEO had accrued salaries of $0 and $136,500, respectively.

As of January 31, 2016, the Company has outstanding notes payable to Net D totaling to $1,257,250 in connection with the Company’s acquisition of Connexum and certain assets of Net D (see Note 9). 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 year ended January 31, 2016, the Company incurred total fees in connection with such services of $133,436. As of January 31, 2016, the Company has an outstanding payable to Net D of $27,942.

During the years ended January 31, 2016 and 2015, the CEO advanced the Company cash of $0 and $52,354, respectively. As of January 31, 2016 and 2015, the amount owed to the prior CEO for advances was $0 and $52,354, respectively.

Related party expenses for the years ended January 31, 2016 and 2015:

		January 31, 2016		January 31, 2015
Legal	Personal Expenses of Mars Callahan	$	-	$	102,114
Unauthorized withdrawals	Personal Expenses of John Hermansen		-		193,215
Unauthorized withdrawals	Personal Expenses of Mars Callahan		-		105,705
Related Party Expenses		$	-	$	401,034

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The above related party expenses are unauthorized withdrawal of expenses for personal expenses and past legal bills of Mars Callahan and John Hermansen.

NOTE 16 – SUBSEQUENT EVENTS

Subsequent to January 31, 2016, an aggregate of 80,390,834 common shares were issued for the conversion of debt, accrued interest and associated fees of $205,964.

Subsequent to January 31, 2016, the Company entered into an agreement to issue 9 convertible promissory notes to unrelated companies for an amount of $290,495.

Subsequent to January 31, 2016, the Company assigned 7 notes with principal amounts totaling to $263,250 to one lender which resulted to the payment of prepayment penalties amounting to $84,995.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer, as of January 31, 2016, concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure for the reasons noted below.

Management's Report on Internal Control Over Financial Reporting

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that;

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; and

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

That our receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

As of January 31, 2016, management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting for that period was not effective.

Management has identified the following material weaknesses and is taking action to remedy and remove the weakness in its internal controls over financial reporting:

●

Lack of an independent board of directors, including an independent financial expert. The current board of directors is evaluating expanding the board of directors to include additional independent directors. The current board is composed of three (3) members and may be expanded to as many as seven members under the Company’s Articles of Incorporation and By-Laws.

	●	Lack of segregation of duties and adequate documentation of our internal controls.

	●	The inability of the Company to prepare and file its financial statements timely due to its limited financial and personnel resources.

	●	Lack of multiple levels of review in the Company’s financial reporting process.

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Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting identified by management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or Board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

This annual report does not include a standard internal control report by the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to current rules of the SEC that permit the Company, as a smaller reporting company, to provide only management’s report in this annual report.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors and Executive Officers

Set forth below is information regarding the Company’s current directors and executive officers. There are no family relationships between any of our directors or executive officers. The directors are elected annually by stockholders. The executive officers serve at the pleasure of the Board of Directors.

Name	Age	Title

Scott Kettle	47	Chief Executive Officer and Chief Information Officer and CEO, Chairman, President, Treasurer, and Director
Chris Hall	58	Director
Michael Selsman	78	Director and Secretary
Ryan Wyler(1)	40	Previous Chief Technology Officer, Director
Mars Callahan(2)	44	Previous CEO, Principle Accounting Officer, President, Director
John Hermansen(2)	45	Previous Chief Content Officer, Secretary, Treasurer, Director

(1)

Mr. Wyler resigned his positions with the Company on August 29, 2014.

(2)

On May 13, 2014 Mars Callahan and John Hermansen were removed from the board and fired as officers by Scott Kettle a director and majority shareholder.

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The chief executive officer and director and officer of the Company will hold office until additional members or officers are duly elected and qualified. The background and principal occupations of the officers and directors of the Company is as follows:

Scott Kettle – Chief Executive Officer, Chief Information Officer, Chairman, President

Mr. Kettle, age 47, is the founder of a series of successful family-owned and operated public companies in the telephony and telecommunications industry in the wake of the government-mandated break-up of AT&T’s monopoly some 25 years ago. Beginning with Thrifty-Tel (TTEL) in partnership with his father William Kettle, a steeply discounted provider of long-distance telephone service and pioneer of Flat Rate Communications, Kettle moved on to the wholesale sector serving as CIO for Five Star Telecom from 1994 to 1999. In 1998, Mr. Kettle founded and served as President and CEO of Tele Com Specialists, Inc. a software company. Kettle moved into the emerging DSL area, founding SpeeDsl, Inc.

Mr. Kettle’s extensive public company experience and more than twenty-five years of executive management give him the qualifications and skills to serve as a senior executive for the Gawk team

Chris Hall – Director

Chris Hall is a noted VoIP Networking Leader. Chris has been designing, deploying and operating VOIP networks since 1998 and has been in telecommunications since his initial four year entry to the industry with AT&T (Pacific Telephone) beginning in 1978. He has been a serial entrepreneur for the last twenty years, starting up or advancing many telecom companies to the point where they could be sold to larger (often public) firms.

Global deregulation of telecoms and the development of VOIP technology combined to give Chris the opportunity to apply his USC undergraduate degree in International Relations and his UCLA M.B.A. in Finance to start building wholesale international simple resale (ISR) routes in 1998, he built and operated routes under FCC Section 214 license to every region of the world - a total of 15 countries, including: Costa Rica, Jamaica, Mexico, Vietnam, China, Thailand, Philippines, Japan, India, Bangladesh, Egypt, Ghana, Netherlands, the United Kingdom and most recently Panama, Uruguay and Argentina. In most cases, he visited each of these countries personally (more than once), and became familiar with the local business practices and import/export requirements. He returned with more than just "routes" and extra passport pages as he collected children’s dolls, in native costume, from each country for his youngest daughter - giving her the best doll collection in the neighborhood.

During this time Chris became operationally qualified on Cisco, Excel and Nuera equipment, building on top of his degree in Data Communications Engineering, as well as mastering telecom billing applications software and advanced database programs (like MS Sequel). With a staff of three people, he did most of the operational work, and sub-contracted out as required. Chris also did much of the sales, and is well known amongst the international wholesale community.

The proliferation of Competitive Local Exchange Carriers (CLEC's) made possible by the 1996 Telecom Act, the declining cost of VOIP equipment and the availability of next generation Session Border Controllers (SBC's) like Nextone and Sansay gave Chris a new challenge and opportunity in 2003 - to apply his VOIP expertise to the domestic (USA) market, this time building on his AT&T experience. This meant less travel and more stability. He built a profitable 30 million minute per month carrier with a capital investment of less than $350,000, annualized revenue reached over $3.5M from scratch in a short two year period, while still preserving his operational & sales involvement. Chris is operationally well qualified on OpenSIPS, Nextone and Sansay Session Border Controllers (aka Softswitches) and is well known to most major and minor wholesale carriers in the USA and many abroad.

Chris is a recognized VOIP industry leader, he has spoken at several trade shows and conferences such as Comptel, VON and Intelecard, and is a member of several industry associations, including Comptel, the Pacific Telecommunications Council and the West Coast Carrier Forum.

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Michael Selsman – Director and Secretary

Michael Selsman has been an executive with 20th Century-Fox, Paramount, MGM, Samuel Goldwyn, Jr., at Goldwyn Studios, and Universal. He was also a talent agent, representing Judy Garland, Marilyn Monroe, Peter Sellers, Marlene Dietrich, Henry, Jane, and Peter Fonda, Mervyn LeRoy, James Stewart, Lawrence Harvey, Rock Hudson, James Mason, James Garner, Alan Arkin, and Robert Redford, as well as authors Truman Capote and Roald Dahl, among others. He also worked with Bing Crosby Productions on "Ben Casey", "Medic", "Slattery's People" and "Hogan's Heroes".

As a film producer, he associate-produced “Gotcha,” distributed by Universal, co-developed 18 motion picture projects at MGM, facilitated production of the feature film "Dirty Little Billy,” for Columbia Pictures, and was involved in developing "Bury My Heart at Wounded Knee," by Dee Brown, 'World Without End, Amen," by Jimmy Breslin, "I, Robot," by Issac Asimov, “RFK Must Die,” and "The Fortunate Pilgrim," by Mario Puzo. He also co- or line-produced films made in Berlin, Spain, Arizona, Florida, Montana, Wyoming, Texas and Arkansas. With Orson Welles, he developed “RFK Must Die,” a film project about the assassination of Robert Kennedy. He has written screenplays for Hemdale Pictures, MGM, Robert Halmi Production, New World Pictures, and others.

He is considered an expert source on international entertainment and has been quoted in such publications as Time, Newsweek, TV Guide, and in various newspapers and books on the subjects of contracts and changing mores and social values in the media and commenting on Hollywood studio history,. He has also appeared on national and international television programs, such as ABC-TV’s “The Dark Side of Camelot,” hosted by the late Peter Jennings, “Current Affair,” on Fox-TV, “Hard Copy,” for CBS-TV, “Marilyn: Contre-Enquette Sur Une Mort Suspect,” one-hour investigative program for French TV, “The Final Day,” one-hour investigative program for London’s Channel 4, and, most recently, filmed a segment for CBS News’ “48 Hours.”

He also served US Senator Dianne Feinstein as Deputy State Finance Director for her initial Senatorial campaign. He was recently in an advisory capacity for Marianne Williamson in her campaign for the 33^rd Congressional District, and is advising Heidi Shink in her campaign for City Council, West Hollywood.

Serving for five years as Chairman of the Public Relations Committee and on the Foundation Board of Directors of St. Vincent Medical Center, Los Angeles, Selsman created and edited a quarterly, leading-edge journal, Medical-Science News.

Selsman has represented and worked with Neah Power Systems (NPWZ), where he was also a member of the Board of Directors; Buzz Technologies, Inc. (BZTG), Archer Entertainment Media Communications, Inc. (AEMC), where he also functioned as CEO; Advanced Technetix (AKYI), The Sinclair Private Fund, Signal Capital Hedge Fund, Applied DNA Sciences, Inc. (APDN), Herman Miller Workplace Resource, Inc., BKM Total Office, Investprivate.com, Alpha Spacecom, Inc. (ASPC) Creditz, Inc. (CEOA), Innovative Marketing, Inc. (INOV), Advanced Recycling (ARYC), Color Imaging, Inc.(CIMG), Electropure (ELTP), XO Communications (XOXO), Gene Cell (GCLL), Precom Technology (PMMT), Cyper Media (CYPR), Los Angeles Stars ABA franchise, Travel Dynamics (TDMN), Brilliant Digital Entertainment, Koo Koo Roo, American Technology Group, Texas Capital, Securities America, Newport West Financial, 20th Century-Fox, MGM, Donald T. Sterling Corporation, Los Angeles Clippers NBA franchise, and Fred Sands Realtors, among others.

He has guest-lectured at schools and universities such as UCLA, USC, Pepperdine, Westlake, Mount St. Mary's and Loyola, and has been quoted in Time, Newsweek, TV Guide and various books and newspapers, on contracts and changing social mores and values in the media. He has also appeared on national and European network television programs commenting on Hollywood studio history.

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Previous Officers And Directors

Mars Callahan – Previous Chief Executive Officer, President and Director

Mr. Callahan was removed as an Officer and Director of the Company for failing to disclose his Cease and Desist for securities fraud from the State of California as follows:

On January 9, 2012 The People of the State of California through the California Corporation issued a Judgment of Permanent Injunction, Civil Penalties and Ancillary Relief in Support of Stipulation Case No BC453611 in the Superior Court of California. The Injunction was issued against DEFENDANTS Big Sky Motion Pictures, L.L.C., Spring Break ’83 Production, L.L.C., Spring Break ’83 Distribution, L.L.C., Spring Break ’83, Rand Jay Chortkoff and each of them, and their officers, directors, successors in interest, agents, employees, attorneys in fact, and all persons acting in concert or participating with them, shall be and are hereby permanently enjoined from engaging in, committing, aiding and abetting, or performing directly or indirectly, by any means whatsoever, from (1) violating Corporation Code Section 25401 - offering for sale of securities by means of written or oral communications which includes any untrue statements of material fact or fails to state material facts (2) Corporation Code 25110 – offering to sell offering the sale of securities unless such security or transaction is qualified or exempted qualification (3) violating the Desist and Refrain Order issued by the Commissioner by offering and selling unqualified, non-exempt securities (4) destroying any records for a period of (3) years. Mr. Mars Callahan was the Chief Executive Officer, Director and owner of Big Sky Motion Pictures, L.L.C., Spring Break ’83 Production, L.L.C., Spring Break ’83 Distribution, L.L.C., Spring Break ’83, during which time this Permanent Injunction to be issued.

John Hermansen – Previous Chief Content Officer and Director

Mr. Hermansen was removed as an Officer and Director of the Company for failing to disclose his Cease and Desist for securities fraud from the State of Colorado as follows:

On February 15, 2011 The State of Colorado issued a Consent Cease and Desist Order concerning Poker Junkies Production LLC, Abundance Entertainment, LLC and John Hermansen Case No XY 11-CD-008. The Defendants were herby and permanently ordered to cease and desist from engaging in (1) Offering to sell or selling unregistered securities in or from the State of Colorado in violation of §11-51-301, C.R.S; (2) Offering to sell or selling any securities in or from the State of Colorado unless Respondents are in compliance with the provisions of §§ 11-51-301, 401, and 501 C.R.S. or (3) Otherwise engaging in conduct in violation of any provision of the CSA, §§11-51-101, et. Seq., C.R.S.

Audit Committee Financial Expert

The Company does not have an audit committee or a compensation committee of its board of directors. In addition, the Company’s board of directors has determined that the Company does not have an audit committee financial expert serving on the board. When the Company develops its operations, it will create an audit and a compensation committee and will seek an audit committee financial expert for its board and audit committee.

Conflicts of Interest

Members of our management are associated with other firms involved in a range of business activities. Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company. Although the officers and directors are engaged in other business activities, we anticipate they will devote an important amount of time to our affairs.

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Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to ours. Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities. Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise. Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.

Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis. A breach of this requirement will be a breach of the fiduciary duties of the officer or director. If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity. However, all directors may still individually take advantage of opportunities if we should decline to do so. Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.

Compliance with Section 16(A) Of the Exchange Act

As of January 31, 2016, the Company is aware that all filings of Form 3, 4 and 5 required of Section 16(a) of the Exchange Act of Directors, Officers or holders of 10% of the Company's prior management and board of directors have not been timely filed. Current management needs to file Form 3 and/or 5 for the issuance of common shares.

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. The Company will provide to any person, without charge and upon request, a copy of the code of ethics. Any such request must be made in writing to the Company at 5300 Melrose Avenue, Suite 42, Los Angeles, CA 90038.

ITEM 11. EXECUTIVE COMPENSATION

Executive Officers and Directors

Summary Compensation Table

The following tables set forth certain information concerning all compensation paid, earned or accrued for service by (i) our Principal Executive Officer and Principal Financial Officer and (ii) all other executive officers who earned in excess of $100,000 in the fiscal years ended January 31, 2016 and 2015, and each of the other two most highly compensated executive officers of the Company who served in such capacity at the end of the fiscal year whose total salary and bonus exceeded $100,000 (collectively, the “Named Executive Officer”):

2016 and 2015 SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compensation($)		Total ($)
Scott Kettle	2016		121,859		150,000		35,100		-		-		-		-		306,959
CEO/CFO	2015		160,000		150,000		-		-		-		-		-		310,000

Chris Hall	2016		-		-		35,100		-		-		-		-		35,100
Director	2015		-		-		-		-		-		-		-		-

Michael	2016		-		-		35,100		-		-		-		-		35,100
Selsman Secretary & Director	2015		-		-		-		-		-		-		-		-

Mars Callahan	2016		-		-		-		-		-		-		-		-
Former CEO/CFO & Director	2015		207,819		-		-		-		-		-		-		207,819

John Hermansen	2016		-		-		-		-		-		-		-		-
Previous CCO & Director	2015		193,216		-		-		-		-		-		-		193,216

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Compensation of Directors

Our current compensation policy for directors is to compensate them through options to purchase common stock or through common stock as consideration for their joining our board and/or providing continued services as a director. We do not currently provide our directors with cash compensation, although we do reimburse their expenses, with exception for a chairman of the board. No additional amounts are payable to the Company’s directors for committee participation or special assignments. There are no other arrangements pursuant to which any directors was compensated during the Company’s last completed fiscal year for any service provided except as follows:

On August 20, 2013 the Company entered into an employment agreement with Scott Kettle the Chief Executive Officer. The Fixed Annual Compensation. The Company shall pay to Employee salary ("Fixed Annual Compensation") at the rate of $240,000 per annum beginning on August 20, 2013; at the rate of $300,000 per annum beginning on August 20, 2014; and at the rate of $360,000 per annum beginning on August 20, 2015. Fixed Annual Compensation is payable to the Employee in accordance with the Company’s usual salary practices, but in no event less than once monthly.

The Agreement allows for Bonus of the highest bonus incentive program (hereafter “BIP”) set up by the Board. While the specific structure and trigger mechanisms for the BIP are at the sole discretion of the Board, the BIP shall afford Employee the opportunity to earn a minimum of $150,000 per year in cash bonuses through the Employee’s accomplishment of specific pre-identified reasonable milestones in the development of the Company’s business, or by exceeding the approved business plan revenue and income levels. Any payments under the BIP shall be paid annually to Employee and shall be paid no later than the end of the first quarter following the Company’s fiscal year-end. In addition to the BIP, Employee shall also be entitled to such additional bonus, if any, as may be granted by the Board (with Employee abstaining from any vote thereon) or compensation or similar committee thereof in the Board's (or such committee's) sole discretion based upon employee's performance of his Services under this Agreement.

Additional Compensation. The Employee shall be entitled to receive an annual bonus no less than Two Percent (2%) of Adjusted Gross Sales. For the purpose of this Agreement, Adjusted “Adjusted Gross Sales” shall mean Gross Sales minus all fixed costs. Further, the Employee shall be entitled to receive such additional bonus payments or incentive compensation as may be determined at any time or from time to time by the Board of Directors of the Company (or any authorized committee thereof) in its discretion, but no less than once every quarter.

Asset Sale or Merger. In the event of a sale of all of the assets or a merger in which the Company is not the surviving entity and in which the Company is valued at $50,000,000 or more, Employee will be entitled to the greater of 5 of the gross proceeds of the value of the transaction or $2,500,000 in cash to be paid upon the transaction’s closing.

The Agreement allows for standard vacation, health, participation in employee benefit plan among other things.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table lists stock ownership of our Common Stock based on 261,863,258 shares of common stock, issued and outstanding on a fully diluted basis. The information includes beneficial ownership by (i) holders of more than 5% of our Common Stock, (ii) each of our directors and executive officers and (iii) all of our directors and executive officers as a group. Except as noted below, to our knowledge, each person named in the table has sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them.

Name and Address of Owner (1)	Title of Class	Number of Shares Owned (1)	Percentage of Class

Scott Kettle c/o Gawk 5300 Melrose Avenue, Suite 42 Los Angeles, CA 90038	Common Stock Series A Preferred Stock(2) Series B Preferred Stock(3) Series C Preferred Stock(4)	83,000,000 500 25,000,000 3	31.7% 50% 50% 21.4%

Christopher Hall c/o Gawk 5300 Melrose Avenue, Suite 42 Los Angeles, CA 90038	Common Stock Series A Preferred Stock Series B Preferred B Stock Series C Preferrred Stock	9,000,000 500 25,000,000 3	3.4% 50% 50% 21.4%

Michael Selsman c/o Gawk 5300 Melrose Avenue, Suite 42 Los Angeles, CA 90038	Common Stock	4,000,000	1.5%

All Officers and Directors As a Group (3 persons)	Common Stock	96,000,000	36.7%

Blue Voodoo LLC 314 Orange View Clearwater, FL 33755	Common Stock	15,000,000	5.7%

MI1 LLC 129 Forest Crossing Court Las Vegas, NV 89148	Common Stock	15,000,000	5.7%

R&E Consultants LLC 3275 S. Jones BLVD #104 Las Vegas, NV 89146	Common Stock	15,000,000	5.7%

(1)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

(2)

There are 1,000 shares of Series A Preferred stock issued and outstanding as of January 31, 2016.

(3)

There are 50,000,000 shares of Series B Preferred stock issued and outstanding as of January 31, 2016.

(4)

There are 14 shares of Series C Preferred stock issued and outstanding as of January 31, 2016.

Changes in Control

We are not aware of any arrangements that may result in a change in control of the Company.

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DESCRIPTION OF SECURITIES

General

Common Stock

On January 7, 2016, the Company amended its Articles of Incorporation to increase the authorized shares to 1,500,000,000 shares, consisting of 1,400,000,000 shares of Common Stock, par value $0.001 per share and 100,000,000 shares of Preferred Stock, par value of $0.001 per share.

On November 14, 2013, the Company amended its articles of incorporation to increase the authorized shares to 650,000,000 shares, at $0.001 par value. There were 251,863,258 shares issued and outstanding as of January 31, 2016. The holders of our common stock are entitled to receive such dividends, if any, as may be declared by our board of directors from time to time out of legally available funds. The dividend rights of our common stock are junior to any preferential dividend rights of any outstanding shares of preferred stock. The holders of our common stock also are entitled to receive distributions upon our liquidation, dissolution or winding up of our assets that are legally available for distribution, after payment of all debt and other liabilities and distribution in full of preferential amounts, if any, to be distributed to holders of our preferred stock.

The holders of our common stock are not entitled to preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Series A Preferred Stock

On March 6, 2014 the Board of Directors approved the filing of a Certificate of Designation establishing the designations, preferences, limitation and relative rights of the Company’s Series A Preferred Stock. The Board of Directors authorized the issuance of 1,000 shares of Series A Preferred Stock. The terms of the Certificate of Designation of the Series A Preferred Stock, include the right to vote in aggregate, on all shareholder matters equal to 51% of the total vote (“Super Majority Voting Rights”). The Series A Preferred Stock will be entitle to this 51% voting right no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.

Series B Convertible Preferred Stock

The Company is authorized to issue 50,000,000 shares of series B preferred stock at a par value of $0.001. On March 11, 2016, the Company amended its Articles of Incorporation to increase the number of authorized preferred shares designated Series B Convertible Shares from 50,000,000 to 95,000,000 shares.

The Series B Convertible Preferred stock consist of Ninety Five Million (95,000,000) shares (the “Series B Stock”), with certain rights, privileges, preferences and restrictions as set forth in the Series B Preferred Stock.

Holders of the Series B Stock shall be entitled to receive dividends or other distributions with the holders of the Corporation’s Common Stock on an “as converted” basis when, as, and if declared by the Directors of the Corporation.

Each share of Series B Preferred Stock shall be convertible, at the option of the holder thereof and subject to notice requirements, at any time after six (6) months from the date of issuance, into fully paid and non-assessable shares of the Common Stock. Each Share of Series B Preferred Stock is convertible into the Common Stock of the Company on the basis of One (1) Series B Preferred Share for One and One Quarter (1.25) Common Shares (1:1.25).

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Series C Convertible Preferred Stock

The Series C Convertible Preferred Stock consists of One Hundred (100) shares (the “Series C Stock”), with certain rights, privileges, preferences and restrictions as set forth in Series C Preferred Stock Certificate of Designation.

A new series of Preferred Stock from the Corporation’s authorized shares of Preferred Stock is hereby created, designated Series C Convertible Preferred Stock, consisting of One Hundred (100) shares (the “Series C Stock”), with certain rights, privileges, preferences and restrictions as set forth in the November 12, 2013 Consent.

Holders of the Series C Stock shall be entitled to receive dividends or other distributions with the holders of the Corporation’s Common Stock on an “as converted” basis when, as, and if declared by the Directors of the Corporation.

Each share of Series C Preferred Stock shall be convertible, at the option of the holder thereof and subject to notice requirements at any time following Twelve (12) Months from the issuance of such shares of Series C Stock, into such number of fully paid and non-assessable shares of the Common Stock. For each share of Series C Stock, the holder will receive upon Conversion, $1,000,000 worth of Common Shares (the “Conversion Ratio”) of the Corporation.

Options

The Company has 9,100,000 options issued in connection with the acquisition of Webrunner, LLC.

Voting Rights

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders. However the Holders of the Series A Preferred Stock will be entitle to this 51% voting right no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future.

Dividends

Subject to preferences that may be applicable to any then-outstanding shares of Preferred Stock, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past. Further, the Company does not presently contemplate that there will be any future payment of any dividends on Common Stock.

Amendment of our Bylaws

Our bylaws may be adopted, amended or repealed by the affirmative vote of a majority of our outstanding shares. Subject to applicable law, our bylaws also may be adopted, amended or repealed by our board of directors.

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Transfer Agent

Gawk’s Transfer Agent and Registrar for the common stock is V Stock Transfer LLC, 77 Spruce Street, Suite 201, Cedarhurst, NY 11516, 646-536-3179, info@vstocktransfer.com.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

During the years ended January 31, 2016 and 2015, the CEO advanced the Company cash of $0 and $52,354, respectively. In addition, during the year ended January 31, 2016 the Company repaid the CEO $52,354. As of January 31, 2016 and 2015, the amount owed to the CEO for advances was $0 and $52,354, respectively.

Related Party Expenses for the years ended January 31, 2016 and 2015:

		January 31, 2016		January 31, 2015
Legal	Personal Expenses of Mars Callahan	$	-	$	102,114
Unauthorized withdrawals	Personal Expenses of John Hermansen		-		193,215
Unauthorized withdrawals	Personal Expenses of Mars Callahan		-		105,705
Related Party Expenses		$	-	$	401,034

The above related party expenses are unauthorized withdrawal of expenses for personal expenses and past legal bills of Mars Callahan.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees. The aggregate fees billed by MaloneBailey, LLP for the audit of the Company’s annual financial statements for fiscal years ended January 31, 2016 and 2015 were approximately $36,000 and $15,000, respectively.

Audit-Related Fees. The aggregate fees billed by MaloneBailey, LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal years ended January 31, 2016 and 2015, and that are not disclosed in the paragraph captioned “Audit Fees” above, were $0 and $0, respectively.

Tax Fees. The aggregate fees billed by MaloneBailey, LLP for professional services rendered for tax compliance, tax advice and tax planning for the fiscal years ended January 31, 2016 and 2015 were $0 and $0, respectively.

All Other Fees. The aggregate fees billed by MaloneBailey, LLP for products and services, other than the services described in the paragraphs “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” above for the fiscal years ended January 31, 2016 and 2015 were $0 and $0, respectively.

The Board of Directors has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by the Public Company Accounting Oversight Board's Ethics and Independence Rules and Standards (Rule 3526, Communications with Audit Committees Concerning Independence), and has discussed with its auditors its independence from the Company. The Board of Directors has considered whether the provision of services other than audit services is compatible with maintaining auditor independence.

Based on the review and discussions referred to above, the Board of Directors approved the inclusion of the audited financial statements be included in the Company’s Annual Report on Form 10-K for its 2016 fiscal year for filing with the SEC.

The Board of Directors pre-approved all fees described above.

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PART IV

ITEM 15. EXHIBITS AND REPORTS

Exhibits

Exhibit Number		Description of Exhibits
3.1		Articles of Incorporation (1)
3.2		Amended Articles of Incorporation January 7, 2016 (3)
3.3		Amended Articles of Incorporation March 18, 2016 (3)
3.4		Bylaws (1)
10.1		Asset Purchase and Sale Agreement between Gawk Incorporated and Net D Consulting, Inc. (3)
10.2		Acquisition Agreement between Gawk Incorporated, Connexum, LLC, and Net D Consuling, Inc. (3)
14.1		Code of Ethics (2)
21.1		Subsidiaries (3)
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted Section 302 of the Sarbanes-Oxley Act of 2002. (3)
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. (3)
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Schema
101.CAL*		XBRL Taxonomy Calculation Linkbase
101.DEF*		XBRL Taxonomy Definition Linkbase
101.LAB*		XBRL Taxonomy Label Linkbase
101.PRE*		XBRL Taxonomy Presentation Linkbase

(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
(3)	Filed herein

*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of this annual report or purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURES

In accordance with 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, there unto duly authorized.

Registrant	Gawk, Inc.

Date: May 24, 2016	By:	/s/ Scott Kettle
		Scott Kettle
		Director, Chief Executive Officer (Principal Executive Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Date: May 24, 2016	By:	/s/ Scott Kettle
		Scott Kettle
		Director, Chief Executive Officer, President, Chief Financial Officer, and Treasurer (Principal Executive, Principal Financial Officer and Principal Accounting Officer)

Date: May 24, 2016	By:	/s/ Michael Selsman
		Michael Selsman
		Director and Secretary

Date: May 24, 2016	By:	/s/ Chris Hall
		Chris Hall Director

Attached files

Gawk Inc. Reports

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