Notes to Consolidated Financial Statements
September 30, 2019
(Unaudited)
1. DESCRIPTION OF BUSINESS
TripBorn, Inc. (“TripBorn”
or the “Company”) is an eCommerce aggregator and a hospitality management company. An aggregator model is a form of
eCommerce whereby our website, www.tripborn.com
aggregates information from various travel and hospitality vendors and presents them to users
on a single platform, to ease, facilitate, coordinate and effectuate consumer travel and hospitality needs. Our eCommerce
Aggregator business segment operates through Sunalpha Green Technologies Private Limited (“Sunalpha”), a wholly owned
subsidiary. Our hospitality business segment is comprised of our 51% equity interest in our subsidiary PRAMA Hotels and
Resorts Private Limited (“PRAMA”), which was acquired on April 22, 2019, for aggregate consideration of $2,137,143.
All of the Company’s net revenues are derived from operations in India.
The unaudited consolidated financial statements
include the accounts and transactions of the Company; its subsidiaries (ownership interests as of September 30, 2019), Sunalpha
(ownership interest 100%); PRAMA (ownership interest 51%), Apodis Hotels & Resorts Limited
(“AHRL”) (ownership interest approximately 30%, derived from 51%*59.15%), IntelliStay Hotels Private Limited (“IHPL”)
(ownership interest approximately 26%, derived from 51%*59.15%*86.96%), Apodis Foods and Brands Private Limited (“AFBL”)
(ownership interest approximately 30%, derived from 51%*59.15%*100%), non-operating subsidiary Apodis Projects Private Limited
(“APPL”) (ownership interest approximately 30% derived from 51%*59.15%*100%); and an equity investee, PRAMA Canary
Wharf Hotels Private Limited (“PCW”) (ownership interest approximately 15%, derived from 51%*59.15%*50%).
The
Company exercises significant influence over PCW but does not control the investee and the Company is not the primary beneficiary
of the investee’s activities. PCW is accounted for using the equity method. All significant inter-company accounts
and transactions are eliminated in consolidation.
The
Company’s operations are moderately seasonal, with average net revenues normally higher during the Indian summer months and
national or regional holidays, than during winter months and non-holiday periods. Also certain of the Company’s managed hotel
properties are in remote hillside locations which experience their own distinct weather patterns. As the business is moderately
seasonal, results for any quarter are not necessarily indicative of the results that may be achieved for any other quarter, or
for the full fiscal year.
Acquisitions
On April 22, 2019 the Company acquired
a 51% equity interest in PRAMA for $2,137,143, consisting of $1,400,000 in cash and the issuance of 2,632,653 shares of common
stock valued at $737,143.
The acquisition of PRAMA was treated as a business combination
under U.S. GAAP. During the first quarter, we estimated the allocation of the purchase price to the assets acquired and liabilities
assumed based on estimated fair value assessments. The allocation of the purchase price is preliminary pending the completion of
various analyses and the finalization of estimates. During the measurement period, which is not to exceed one year from the acquisition
date, additional assets or liabilities may be recognized if new information is obtained about facts and circumstances that existed
as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date.
The preliminary allocation may be adjusted after obtaining additional information regarding, among other things, asset valuations,
liabilities assumed and revisions of previous estimates, and these adjustments may be significant. We have not revised the initial
purchase price allocation from the first quarter estimate.
The following reflects the net cash paid on acquisition of PRAMA
in the six month period ended September 30, 2019:
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Fair Value
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Cash paid in six month period ended September 30, 2019
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$
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1,150,000
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Net cash on opening balance sheet of PRAMA
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(178,090
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Net cash paid for 51% interest in PRAMA
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$
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971,910
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The Company recognized revenue of $1,942,177
and $3,635,915 for the three months and six months ended September 30, 2019 consolidated condensed statements of operations related
to the acquiree, respectively. The Company recognized net loss of $512,793 and $789,305 for the three months and six months ended
September 30, 2019 consolidated condensed statements of operations related to the acquiree, respectively.
The revenue for the combined entity for
the three and six months ended September 30, 2019, as though the acquisition of PRAMA had occurred on April 1, 2018 were $3,954,228,
and $4,373,526, respectively. The revenue for the combined entity for the three and six months ended September 30, 2018, as though
the acquisition of PRAMA had occurred on April 1, 2018 were $1,685,071, and $3,781,321, respectively. The net loss before
taxes for the combined entity for the three and six months ended September 30, 2019, as though the acquisition of PRAMA had occurred
on April 1, 2018 were $827,849 and $1,408,638, respectively. The net loss before taxes for the combined entity for the three and
six months ended September 30, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 were $411,389 and $833,986,
respectively.
TripBorn, Inc owns a 51% interest in PRAMA,
in turn PRAMA owns a 59.15% interest in AHRL, AHRL in turn owns an interest in IHPL. AHRL’s ownership interest in IHPL was
84.94% as of April 22, 2019, but this increased to 86.96% as of June 30, 2019 and September 30, 2019. This increase arose from
AHRL’s subscription in 308,000 shares at INR 125 per share, $548,616 in aggregate, on April 25, 2019. Accordingly, the Company
increased its equity ownership marginally but still approximated 26% (Ownership percentage 51%*59.15%*84.94% to 51%*59.15%*86.96%).
There were no material, nonrecurring pro
forma adjustments directly attributable to the PRAMA acquisition, which were reported in the pro forma revenue and statement of
operations or the consolidated condensed statement of operations.
2. LIQUIDITY AND GOING CONCERN
Management must evaluate
whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability
to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially
does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented
as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates
whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to
continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it
is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued,
and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial
doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements
are issued. Generally, to be considered probable of being effectively implemented, the plans must have been
approved before the date that the financial statements are issued.
The Company has incurred
net losses from operations since inception. The net loss for the six month period ended September 30, 2019 was $1,390,606 and the
accumulated deficit was $5,172,180 as of September 30, 2019. The cash and cash equivalents and the current portion of loans and
convertible notes due to third parties were $910,096 and $494,185, respectively, as of September 30, 2019. The Company’s
ongoing losses have had a significant negative impact on the Company’s financial position and liquidity. The Company has
also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations,
working capital and complete acquisitions.
Beginning in December
2019, after September 30, 2019, China, experienced an outbreak of a highly infectious form of a respiratory infection caused by
a novel Coronavirus. The disease caused by the novel Coronavirus was later termed Covid-19. On March 11, 2020 the World Health
Organization declared the Coronavirus outbreak a global pandemic. India reported its first Covid-19 infection in the city of Thrissur,
in the state of Kerala, India on January 30, 2020 and the first case fatality on March 10, 2020 in the state of Karnataka, India.
On March 25, 2020, India’s Prime Minister Narendra Modi announced a
21-day nationwide lockdown in response to the Covid-19 pandemic. To comply with the Indian lockdown, the Company closed all
of its hotel operations, which impacts the Hospitality segment. Also as a result of the Indian lockdown, the Indian government
temporarily suspended flights, trains and buses which impacts the e-Commerce Aggregator segment. On June 1, 2020, India partially
lifted its lockdown, however the Hospitality and e-Commerce Aggregator segments are still materially adversely impacted by Covid-19.
As of the date of filing this Form 10-Q, hotels, flights, trains and buses are operating to varying degrees by region.
The Company does not
have operations in China and the Coronavirus pandemic did not have any impact on the operations or financial results of the Company
for the three and six month periods ended September 30, 2019. Management is assessing and monitoring the potential future impact
of the pandemic and expects the impact to be materially adverse to its Indian operations, vendors, customers, lessors and employees’
health, but cannot presently estimate the degree and severity of the adverse impact. Management is in the process of implementing
various cost reduction efforts to conserve cash and liquidity, including reducing staffing levels and potentially closing certain
hotels permanently, but has not reached fixed conclusions.
The
Company will require additional capital and may also require additional financing from related or third parties in the event that
operations do not generate the expected revenues or a recurrence of Covid-19 were to cause another suspension of operations. Such
additional capital or financing may not be available on favorable terms, or at all. Due to these factors, substantial doubt exists
about the Company’s ability to continue as a going concern through September 2021, which is twelve months after the date that the financial statements are
issued. If the Company does not obtain sufficient funds when needed, the Company expects it would reduce its operating expenses
and defer vendor payments, including closure of certain operations and or disposals of assets. Because such contingency plans have
not been finalized (because the specifics would depend on the situation at the time), such actions also are not considered probable.
Because, neither receipt of future equity or loan support, nor management’s contingency plans to mitigate the risk and extend
cash resources through September 2021,
are considered probable, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern.
The financial statements
for the three and six months ended September 30, 2019, do not include any adjustment relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue
as a going concern because the events leading to the uncertainty arose after September 30, 2019.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The interim unaudited
consolidated condensed financial statements and accompanying notes have been prepared in accordance with United States generally
accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC") and include the accounts of the Company and its subsidiaries. We have condensed or omitted certain
information and disclosures normally included in financial statements presented in accordance with U.S. “GAAP”. All
intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management,
the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring
adjustments, necessary for the fair presentation of the Company’s financial position, results of operations and cash flows
for the periods and dates presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative
of the results expected for the full fiscal year or for any subsequent period primarily because of seasonal and other short-term
variations.
The accompanying condensed
consolidated balance sheet as of March 31, 2019 was derived from the audited financial statements as of that date, but does not
include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with
the consolidated financial statements and related notes included in Form 10-K for the year ended March 31, 2019.
Principles of Consolidation
The consolidated financial
statements include the accounts and transactions of the Company, its wholly owned subsidiary, Sunalpha and its subsidiary, PRAMA
which the Company owns a 51% equity interest in. PRAMA was acquired on April 22, 2019. Through PRAMA, the Company has an approximate
15% equity interest in PCW, which is accounted for under the equity method. All significant inter-company accounts and transactions
are eliminated in consolidation.
Reclassifications
The Company has recorded
reclassifications to correctly disclose items which are discussed in Note 16 Reclassifications.
As a result of the
acquisition of PRAMA, during the quarter ended June 30, 2019, the Company made a change to its segment reporting structure which
resulted in two segments 1) eCommerce Aggregator and 2) Hospitality. As a result, certain prior year amounts have been reclassified
to conform to the current year’s presentation, that is they have been classified as relating to the eCommerce Aggregator
business. The change in segment structure had no effect on previously reported total net revenues, cost of revenues and other operating
expenses, other expenses (net), net loss, basic and fully diluted earnings per share.
Otherwise, we have
not reclassified other prior-period amounts to conform to the current-period presentation. Certain columns and rows may not add
due to the use of rounded numbers.
Use of Estimates
The preparation of
financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect
the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making
judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events
as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts.
Our significant estimates
include elements of revenue recognition, the application of fair value estimates for the purchase price allocation on the acquisition
of PRAMA, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, costs to be capitalized as well as
the useful life of capitalized software and income taxes. The use of different estimates
or assumptions in determining the fair value of our goodwill, indefinite-lived and definite-lived intangible assets may result
in different values for these assets, which could result in an impairment or, in the period in which an impairment is recognized,
could result in an impairment charge. The Company has not recognized an impairment charge for the six month period ended September
30, 2019.
Revenue
Recognition
In May 2014, the Financial
Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”):
Topic 606 which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of Topic 606 is
to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration
that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle
and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required
under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration
to include in the transaction price and allocating the transaction price to each separate performance obligation, among others.
Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts.
Topic 606 was effective
as of April 1, 2018, for the Company, using either of two methods: (1) retrospective application of Topic 606 to each prior reporting
period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application
of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing
certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that
any cumulative effect for the initial application did not require an adjustment to accumulated deficit at April 1, 2018.
For revenue recognition
arrangements that we determine are within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s)
with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate
the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic
606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or
services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606,
we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised
good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective
performance obligation when (or as) the performance obligation is satisfied.
The following is a description of the Company’s
principal activities, separated by reportable segments, from which the Company generates its revenue.
eCommerce Aggregator revenues:
Air, Rail and Bus Ticketing.
Recognized on a net commission basis upon transfer of control of promised services in an amount which we are entitled to in exchange
for the service
.
Vacation Packages. Recognized
on a gross basis, upon transfer of control of promised services in an amount which we are entitled to in exchange for the service.
Other Revenue. Primarily
comprising visa processing fees, money transfer, and pre-and post-paid expenses are recognized after the services are performed.
Hospitality
Revenues:
Hospitality Services.
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Room revenue: Revenue from hotel operations where customers book rooms
and banquets/conference rooms is recognized based on the period for which the customer completes the transaction (i.e. the stayed
night occurs or a deposit cancellation provision elapses). Payment is typically received upon check-out. For room revenue, the
Company recognizes revenue over time.
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Food & beverages revenue: The Company provides food and beverages
that customer consumes as they are provided. The performance obligation is satisfied at point in time. The Company recognizes revenue
at the time of sale only.
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Management Fees from Operation & Maintenance Properties: Revenue
under management contracts is recognized on the attainment of certain financial results, primarily operating earnings, as specified
in each contract. Management fees are typically billed and paid monthly. A time-elapsed output method is used to measure progress
and provides a faithful depiction of the transfer of services to the customer as the value transferred to the customer is substantially
the same over time. Fees are variable with the uncertainty of base fees being resolved monthly and the uncertainty of incentive
fees being resolved annually. These fees are included in revenue to the extent that it is probable that a significant reversal
of cumulative revenue will not occur once the uncertainty is resolved.
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Practical expedients.
The Company has elected certain of the optional exemptions from the disclosure requirement for remaining performance obligations
for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Company
applies the practical expedient to its management fees from contracts with Operation & Maintenance Properties. These contracts
are typically long-term, and the performance obligation consists of providing hotel management services to the owner. Revenue is
recognized based upon an agreed base fee and additional revenue is recognized on the attainment of certain financial results, primarily
operating earnings, as specified in each contract. As such, fees are variable with the uncertainty of base fees being resolved
monthly and the uncertainty of incentive fees being resolved annually. These fees are included in revenue to the extent that it
is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.
The Company has elected
the practical expedient to not disclose revenue related to remaining performance obligations that are part of a contract with an
original expected duration of one year or less, and to not consider the effects of significant financing components in the transaction
price when the duration of financing is one year or less.
The Company has elected
certain of the optional exemptions from the disclosure requirement for the remaining performance obligations for specific situations
in which an entity need not estimate variable consideration.
Cost of Revenues
Cost of revenue is
the amount paid or accrued against procurement of these services and products from the respective suppliers and do not include
any other operating cost to provide these services or products. Cost of revenue is recognized when incurred, which coincides with
the recognition of the corresponding revenue.
Other operating
expenses
Other operating expenses
includes Selling, general and administrative expenses, Legal and consulting expenses and Depreciation and amortization.
Selling, general and
administrative expenses include, direct operating expenses, general and administrative expenses such as business promotion costs,
utilities, rent, payroll, which are recognized on an accrual basis.
Legal and consulting
expenses are recognized on an accrual basis.
Depreciation and amortization
costs are amortized over the estimated useful lives of the assets.
Cash and Cash
Equivalents
The Company considers
all highly liquid debt instruments with maturity of three months or less, to be cash equivalents. The Company maintains its cash
in bank accounts in the U.S. and India, which at times may not be covered by, or exceed the coverage limit of the Deposit Insurance
and Credit Guarantee Corporation of India. The Company does not believe that this results in significant credit risk. As of September
30, 2019, and March 31, 2019, the cash balance in financial institutions in India was $409,587 and $360,210, respectively.
Effect of exchange rates changes on cash presented in the
Consolidated condensed statements of cash flows (Unaudited) is presented in accordance with ASC 830 and reflects the translation
effects of cash held in Indian Rupees at the beginning and end of the period, and the effects of actual cash flows using the exchange
rates in effect at the time of the cash flows and the year end Indian Rupee to US dollar exchange rate.
Receivables
and Credit Policies
Accounts receivable
are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt
expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company's estimate
of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers.
The Company does not accrue interest on past due receivables.
The Company performs
periodic analyses of each customer’s outstanding accounts receivable balance and assesses, on an account-by-account basis,
whether the allowance for doubtful accounts needs to be adjusted based on currently available evidence such as historical collection
experience, current economic trends and changes in customer payment terms. In accordance with the Company’s policy, if collection
efforts have been pursued and all reasonable and contractually available avenues for collections exhausted, accounts receivable
would be written off as uncollectible.
Property and
Equipment
Property and equipment
are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over
the estimated useful lives of the assets. The Company charges repairs and maintenance costs that do not extend the lives of the
assets to expenses as incurred.
The Company has not
recorded an impairment to property and equipment as of September 30, 2019, but expects to record an impairment for the year ended
March 31, 2020 due to the impacts of covid-19.
Intangible Assets
Intangible assets with indefinite useful
lives consist exclusively of trademarks and are tested for impairment annually, or whenever events or indicators of impairment
occur between annual impairment tests. Management expects to use the trademarks indefinitely.
Intangible assets that have limited
useful lives are amortized on a straight-line basis over the shorter of their useful or legal lives. Intangible assets with definite
useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable.
The fair value of the trade names is
determined using a discounted cash flow analysis based on the relief-from-royalty approach. The relief-from-royalty
approach is an income approach that utilizes certain market information by reference to the amount of royalty income we could generate
if the trade names were licensed, in an arm’s length transaction, to a third party. Based on a comparison of our
trade names to the guideline transactions, including an assessment of industry conditions, the age of the trademark/trade name,
degree of consumer recognition and life cycle of the brand, a reasonable royalty rate is estimated for the trade names. The principal
factors used in the discounted cash flow analysis requiring judgment are the projected net sales, discount rate, royalty rate and
terminal value assumptions.
The Company has not recorded an impairment
to intangible assets as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the
impacts of covid-19.
Goodwill
Goodwill is assigned
to our reporting units based on the expected benefit from the synergies arising from each business combination, determined by using
certain financial metrics. The reporting units are aligned with our reporting segments. Goodwill is not amortized, but the Company
tests goodwill for impairment each year or more frequently should facts and circumstances indicate that it is more likely than
not that the fair value of a reporting unit is less than the carrying amount. As part of the impairment test, we may elect to perform
an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value
of a reporting unit, including goodwill, is less than its carrying amount, or if we elect to bypass the qualitative assessment,
we would then proceed with a quantitative assessment. The quantitative assessment involves calculating an estimated fair value
of each reporting unit based on projected future cash flows and comparing the estimated fair values of the reporting units to their
carrying amounts, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying value, including goodwill,
no impairment is recognized. However, if the carrying amount of a reporting unit, including goodwill, exceeds its fair value, an
impairment loss is recognized in an amount equal to the excess, limited to the total goodwill balance of the reporting unit.
The Company has not
recorded an impairment to goodwill as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020
due to the impacts of covid-19.
Impairment of Long-lived
Assets
The Company records
an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset
might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less
than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically
calculated using the discounted cash flow method. The Company has not recorded an impairment as of September 30, 2019, but expects
to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.
Business Combinations
When acquiring other
businesses or participating in mergers or joint ventures in which we are deemed to be the acquirer, we generally recognize identifiable
assets acquired, liabilities assumed and any noncontrolling interests at their acquisition date fair values, and separately from
any goodwill that may be required to be recognized. Goodwill, when recognizable, would be measured as the excess amount of
any consideration transferred, which is generally measured at fair value, over the acquisition date fair values of the identifiable
assets acquired and liabilities assumed.
On the date of acquisition,
the assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree are recorded at their fair values. The
acquiree's results of operations are also included in our consolidated results as of the date of acquisition. Intangible assets
that arise from contractual/legal rights or are capable of being separated are measured and recorded at fair value and amortized
over the estimated useful life.
Accounting for such
transactions requires us to make significant assumptions and estimates. These include, among others, any estimates or assumptions
that may be made for the amounts of future cash flows that will result from any identified intangible assets, the useful lives
of such intangible assets, the amount of any contingent liabilities, including contingent consideration, to record at the time
of the acquisition and the fair values of any tangible assets acquired and liabilities assumed. Although we believe any estimates
and assumptions, we make to be reasonable and appropriate at the time they are made, unanticipated events and circumstances may
arise that affect their accuracy, causing actual results to differ from those estimated by us.
Foreign Currency
Translation
The functional currency
of the Company and the currency of the primary economic environment in which it operates is the Indian Rupee. Monetary assets and
liabilities in foreign currencies are re-measured into the functional currency at the rates of exchange prevailing at the balance
sheet dates. Transactions in foreign currencies are re-measured into functional currency at the rates of exchange prevailing on
the date of the transaction. All transaction foreign exchange gains and losses are recorded in the accompanying unaudited consolidated
condensed statements of operations.
The assets and liabilities
of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting
currency, at the rate of exchange prevailing on the balance sheet dates. Revenues and expenses are translated into U.S. dollars
at average exchange rates in effect for the periods presented. Resulting translation adjustments are included in accumulated other
comprehensive income (loss) within stockholders’ equity (deficit).
Earnings and loss
per share
Basic earnings (loss)
per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding
for the period. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive
and thus are excluded from the calculation.
Diluted earnings per
share gives effect to all dilutive potential common shares outstanding during the period. Potentially dilutive common shares may
consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common
stock. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities
that would have an anti-dilutive effect. The Company has outstanding convertible debt and outstanding warrants which have been
excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.
Promotion and Advertising
expenses
We incur advertising
expense consisting of offline costs, including newspaper and media advertising, and online advertising expense to promote our brands.
We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense
the costs of communicating the advertisement (e.g., newspaper, short message service (“SMS”) or email campaign) as
incurred each time the advertisement or promotion is performed.
Stock-Based Compensation
The Company accounts for stock-based awards
to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to
share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on
a determination of the fair value of the stock options over the instruments vesting period. Options awarded to purchase shares
of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles. Stock based compensation is
recorded in Legal and Consulting expenses in our Statement of Operations.
Leases
On April 1, 2019,
the Company adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing
at the date of initial application and not restating prior periods. Results and disclosure requirements for reporting periods beginning
after April 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported
in accordance with our historical accounting under Topic 840.
The Company elected
the package of practical expedients permitted under the transition guidance, which allowed for the carry forward of historical
lease classification, on whether a contract was or contains a lease, and of the assessment of initial direct costs for any leases
that existed prior to April 1, 2019. The Company also elected to combine lease and non-lease components and to keep leases with
an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements
of operations on a straight-line basis over the lease term.
The adoption did not
impact our beginning or prior period consolidated condensed balance sheets, statement of equity / (deficit), statement of operations
and statement of cash flows.
Under Topic 842, the
Company determines if an arrangement is a lease and classifies that lease as either an operating or finance lease at inception.
If an arrangement is a lease or contains a lease, we then determine whether the lease meets the criteria of a finance lease or
an operating lease. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease
payments over the lease term. For this purpose, only payments that are fixed and determinable at the time of commencement are considered.
As the rate implicit in certain of the Company's leases is not easily determinable, the Company’s applicable incremental
borrowing rate is used in calculating the present value of the sum of the lease payments. The right-of-use asset is recognized
at the amount of the lease liability with certain adjustments, if applicable. These adjustments include lease incentives, prepaid
rent, and initial direct costs. We reassess if an arrangement is or contains a lease upon modification of the arrangement. At the
commencement date of a lease, we recognize a lease liability for contractual fixed lease payments and a corresponding right-of-use
asset representing our right to use the underlying asset during the lease term. The lease liability is measured initially as the
present value of the contractual fixed lease payments during the lease term. The lease term additionally includes renewal periods
only if it is reasonably certain that we will exercise the options. Contractual fixed leases payments are discounted at the rate
implicit in the lease when readily determinable. Lease terms may include options to extend or terminate the lease when it is reasonably
certain that the options will be exercised.
Operating leases are
included in Operating lease right-of-use assets, Other current liabilities, and Operating lease liabilities, due
after one year, in our Consolidated Condensed Balance Sheets.
The Company has not
recorded an impairment to the right the use of assets as of September 30, 2019, but expects to record an impairment for the year
ended March 31, 2020 due to the impacts of covid-19.
Employee Benefits
PRAMA has employee
benefit plans in the form of statutory and welfare schemes covering statutorily eligible employees which are accounted for in accordance
with ASC 715 Compensation – Retirement benefits.
Gratuity
In accordance with the Indian Payment of Gratuity Act, 1972,
PRAMA provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The Gratuity Plan
provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount
based on the respective employee’s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are
determined by actuarial valuation. The Gratuity Plan is unfunded. The current service costs for defined benefit plans are accrued
in the year to which they relate. Prior service costs, if any, resulting from amendments to the plans are recognized and amortized
over the remaining period of service of such employees.
Provident
In accordance with
Indian law, all eligible employees of the Company, are entitled to receive benefits under the Provident Fund, a defined contribution
plan in which both the employee and the Company, contribute monthly at a determined rate (currently twelve percent of contributory
wages subject to a maximum cap). These contributions are made to the Government Provident Fund and the Company has no further obligation
under Provident Fund, beyond its monthly contributions. The amount contributed for the six months ended September 30, 2019 and
2018, amounted to $146,840 and $Nil, respectively.
Vacation
Accruals for Indian
statutory vacation pay is determined at the actuarial estimate for the entire unutilized leave balance standing to the credit of
the employees at the period end. The amount accrued as of September 30, 2019 and 2018, amounted to $79,582 and $Nil, respectively.
Income Taxes
The Company accounts
for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company
has determined the deferred tax assets and liabilities based on the differences between the financial statement and tax basis of
assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the
enactment date.
The Company recognizes
deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a
determination, the Company considers all available evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, tax-planning strategies, and results of operations. If the Company determines that it would be
able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the
deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records
uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is
more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for
those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the amount of tax benefit that
is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Non Income Taxes
The Company is subject
to India Goods and Services Tax and other local duties and non-income taxes on its transactions in India. The Company collects
such taxes from customers, and pays such taxes on applicable supplies and inputs, and remits the net amounts to the respective
local tax authorities on an accrual basis.
Short-term
Investments
Through PRAMA,
the Company is contractually required under two separate customer contracts, to maintain 30 million Indian Rupees in bank deposits.
These are accounted for at cost.
Equity-method
Investments
Through PRAMA,
the Company has an approximately 15% equity interest in PCW, a non-trading company formed to develop a potential hotel in Bengaluru,
India. The Company exercises significant influence over PCW but does not control the investee and the Company is not the primary
beneficiary of the investee’s activities. PCW is accounted for using the equity method.
Equity investments
are accounted for using the equity-method of accounting if the investment gives us the ability to exercise significant influence,
but not control, over an investee. The total of our investments in equity-method investees, including identifiable intangible assets,
deferred tax liabilities and goodwill, is included within “Other noncurrent assets” on our consolidated balance sheets.
Our share of the earnings or losses as reported by equity-method investees, amortization of the related intangible assets, and
related gains or losses, if any, are classified as “Equity-method investment activity, net of tax” on our consolidated
statements of operations. Our share of the net income or loss of our equity-method investees may in the future include operating
and non-operating gains and charges, which may have a significant impact on our reported equity-method investment activity and
the carrying value of those investments. We regularly evaluate these investments, which are not carried at fair value, for other-than-temporary
impairment.
We record purchases,
including incremental purchases, of shares in equity-method investees at cost. Reductions in our ownership percentage of an investee,
including through dilution, are generally valued at fair value, with the difference between fair value and our recorded cost reflected
as a gain or loss in our equity-method investment activity. In the event we no longer have the ability to exercise significant
influence over an equity-method investee, we would discontinue accounting for the investment under the equity method.
Included in Other
Non Current Assets as of September 30, 2019, is $343,744 relating to the fair value of equity-method investments and $307,877 relating
to the fair value of amounts due from equity-method investee, in aggregate $651,621. During the period April 22, 2019, through
September 30, 2019, there was no recorded impairment for the equity investee. Also, there was no activity in the equity method
investee and so no equity-method investment activity, net of tax, was recorded in our Statement of Operations for the respective
three and six month periods.
The Company has not
recorded an impairment to the equity investee as of September 30, 2019, but expects to record an impairment for the year ended
March 31, 2020 due to the impacts of covid-19.
Related Parties
The Company follows
FASB ASC subtopic 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20,
the Company’s related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to
any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled
by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act);
(b) entities for which investments in their equity securities would be required, absent the election of the fair value option under
the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts
for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;
(d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may
deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one
of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can
significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one
of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might
be prevented from fully pursuing its own separate interests.
Recent Accounting Pronouncements
New Accounting Pronouncements Recently Adopted
On April 1, 2019 the
Company adopted ASU No. 2016-2, Leases (Topic 842) (ASU 2016-2), as amended, which generally requires lessees
to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance
sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. In
July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provides an
additional, optional transition method with which to adopt the new leases standard. This additional transition method allows for
a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, rather than in the earliest
period presented in the financial statements, as originally required by ASU 2016-2.
Adoption of the standard
did not result in adjustment to our prior period Balance Sheets, Statements of Operations or Statements of Cash Flows. When we
adopted ASU 2016-02, we applied the package of practical expedients allowed by the standard, and therefore, we did not reassess:
a) Whether any expired or existing contracts are or contain leases under the new definition; b) The lease classification for any
expired or existing leases; or c) Whether previously capitalized costs continue to qualify as initial direct costs.
In January 2017, the
FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment".
The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment
test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying
amount. The new rules will be effective for the Company in the first quarter of 2021. Early adoption is permitted. Management
is currently evaluating this ASU to determine its impact to the Company's financial statements but does believe it is expected
to have a minimal impact on the Company’s financial statements and related disclosures.
New Accounting Pronouncements Not
Yet Adopted
No other recent accounting
pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company's present
or future consolidated condensed financial statements.
4. CUSTOMER CONCENTRATION
Significant customers and suppliers are
those that account for greater than 10% of the Company’s revenues and purchases. A significant portion of the Company’s
Hospitality revenue has been derived from two customers, which were acquired as part of the PRAMA acquisition on April 22, 2019
and so were not present in the comparable period. For the three months and six months ended September 30, 2019, the two largest
customers accounted for 55% and 61%, respectively, of the Company's total revenue. As of September 30, 2019, the two largest customers
accounted for 30% of the Company’s total receivables. There were no significant revenue and receivable concentrations for
the three and six months ended September 30, 2018. Changes in the relationship with these customers could materially and adversely
affect the Company’s financial performance and going concern status.
5. EMPLOYEE BENEFITS
The change in benefit obligation of the gratuity and vacation
statutory plans are as follows:
|
|
September 30,
2019
|
|
|
September 30,
2018
|
|
Change in Projected Benefit Obligation
|
|
|
|
|
|
|
|
|
Projected benefit obligation, beginning of period
|
|
$
|
—
|
|
|
$
|
—
|
|
Assumed on acquisition on April 22, 2019
|
|
|
157,104
|
|
|
|
—
|
|
Service cost
|
|
|
3,878
|
|
|
|
—
|
|
Interest cost
|
|
|
12,302
|
|
|
|
—
|
|
Benefits paid
|
|
|
(2,659
|
)
|
|
|
—
|
|
Foreign currency translation effect
|
|
|
(2,250
|
)
|
|
|
—
|
|
Projected Benefit Obligation, end of period
|
|
$
|
168,375
|
|
|
$
|
—
|
|
The components of net periodic pension costs for the gratuity
and vacation statutory plans are as follows:
|
|
Six months
ended
September
30, 2019
|
|
|
Six months
ended
September
30, 2018
|
|
Net Periodic Pension Cost
|
|
|
|
|
|
|
|
|
Service cost benefit earned
|
|
$
|
3,878
|
|
|
$
|
—
|
|
Interest cost on projected benefit obligation
|
|
|
12,302
|
|
|
|
—
|
|
Benefits paid
|
|
|
(2,659
|
)
|
|
|
—
|
|
Foreign currency translation effect
|
|
|
(132
|
)
|
|
|
—
|
|
Net Periodic Pension Cost
|
|
$
|
13,389
|
|
|
$
|
—
|
|
There were no amounts
recognized in accumulated other comprehensive income.
Assumptions used
for benefit obligations and net periodic benefit cost are as follows:
Discount rate 7.86%
per annum
Rate of compensation
increase 8.0% per annum
PRAMA evaluates these
assumptions based on its long-term growth plans and industry standards.
6. LEASES
Balance sheet information related to our
leases is included in the following table:
Operating leases
|
|
September 30,
2019
|
|
Operating lease right-of-use assets
|
|
$
|
9,819,947
|
|
Operating lease liabilities, due within one year
|
|
$
|
347,623
|
|
Operating lease liabilities, due after one year
|
|
|
9,698,698
|
|
Total operating lease liabilities
|
|
$
|
10,046,321
|
|
Operating lease liabilities,
due within one year are included in Other current liabilities on our Consolidated Condensed Balance Sheet as of September 30, 2019.
The components of
lease expense during the quarter ended and six month period ended September 30, 2019 is included in the following table:
|
|
Financial statement line item
|
|
3 months
ended September
30, 2019
|
|
Amortization of right-of-use assets
|
|
Cost of revenue
|
|
$
|
90,257
|
|
Interest on lease liabilities
|
|
Cost of revenue
|
|
|
314,944
|
|
Total lease expense
|
|
|
|
$
|
405,201
|
|
|
|
|
|
|
|
|
|
Financial statement line item
|
|
6 months
ended September
30, 2019
|
|
Amortization of right-of-use assets
|
|
Cost of revenue
|
|
$
|
171,561
|
|
Interest on lease liabilities
|
|
Cost of revenue
|
|
|
593,061
|
|
Total lease expense
|
|
|
|
$
|
764,622
|
|
Lease expense is included
in Cost of revenue in our Consolidated Condensed Statement of Operation for the periods ended September 30, 2019.
Supplemental other information related to leases were as follows:
Weighted Average Remaining Lease Term
|
|
|
|
|
Operating leases
|
|
14.8
|
Years
|
Weighted Average Discount Rate
|
|
|
|
|
Operating leases
|
|
14.0 %
|
The future maturities of lease liabilities
as of September 30, 2019, are as indicated below:
|
|
Operating Leases
|
|
Year ending March 31, 2021
|
|
$
|
201,125
|
|
Year ending March 31, 2022
|
|
|
366,412
|
|
Year ending March 31, 2023
|
|
|
432,450
|
|
Year ending March 31, 2024
|
|
|
497,536
|
|
Thereafter
|
|
|
8,548,798
|
|
Total lease payments
|
|
$
|
10,046,321
|
|
7. PROPERTY AND EQUIPMENT,
NET
Property and Equipment consists of
the following as of September 30 and March 31, 2019.
|
|
September 30, 2019
|
|
|
March 31, 2019
|
|
Furniture, fixtures and fittings
|
|
$
|
335,396
|
|
|
$
|
32,247
|
|
Leasehold improvements
|
|
|
830,767
|
|
|
|
-
|
|
Plant and machinery
|
|
|
563,829
|
|
|
|
-
|
|
Construction in process
|
|
|
87,547
|
|
|
|
-
|
|
Total
|
|
|
1,817,539
|
|
|
|
32,247
|
|
Accumulated depreciation
|
|
|
(138,134
|
)
|
|
|
(20,000
|
)
|
Fixed assets, net
|
|
$
|
1,679,405
|
|
|
$
|
12,247
|
|
Depreciation expense for the three
and six months ended September 30, 2019 was $60,312 and $118,134, respectively. Depreciation expense for the three and six months
ended September 30, 2018 was $1,982 and $2,948, respectively.
8. INTANGIBLE ASSETS
Intangible assets with definite lives
consist of the following as of September 30 and March 31, 2019:
|
|
September 30, 2019
|
|
|
March 31, 2019
|
|
Software and software access agreement
|
|
$
|
1,106,128
|
|
|
$
|
1,088,264
|
|
Customer relationships
|
|
|
1,513,200
|
|
|
|
-
|
|
Total
|
|
|
2,619,328
|
|
|
|
1,088,264
|
|
Accumulated amortization
|
|
|
(874,392
|
)
|
|
|
(725,547
|
)
|
Intangible assets with definite lives, net
|
|
$
|
1,744,936
|
|
|
$
|
362,717
|
|
Amortization expense
for the three and six months ended September 30, 2019 was $72,362 and $148,845 respectively. Amortization expense for the three
and six months ended September 30, 2018 were $70,884 and $109,203 respectively. The Company has no impairment charge for definite
lived intangible assets for the above periods.
Intangible assets with indefinite lives
consist of the following as of September 30 and March 31, 2019:
|
|
September 30, 2019
|
|
|
March 31, 2019
|
|
Trademarks
|
|
$
|
462,878
|
|
|
$
|
-
|
|
Accumulated amortization
|
|
|
-
|
|
|
|
-
|
|
Intangible assets with indefinite lives, net
|
|
$
|
462,878
|
|
|
$
|
-
|
|
Intangible assets
with indefinite lives are not amortized, they are reviewed for impairment annually, or whenever events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based
on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values.
9. AMOUNTS DUE TO AND FROM RELATED PARTIES
Amounts due from related parties
arising from the e-Commerce Aggregator segment
In the 3 months ended
September 30, 2019, the $14,364 brought forward related party balance from the previous period was paid to TripBorn Travel Technologies
Pvt. Ltd, which is a company owned and controlled by Deepak Sharma, the Company’s CEO.
Amounts due from related parties
arising from the Hospitality segment
The amounts due from
related parties balance of $914,601 as of September 30, 2019, which arose from the acquisition of PRAMA on April 22, 2019, all
of which are unsecured and non-interest bearing, which are described below:
Due from related parties
|
|
Description
|
|
|
September
30,
2019
|
|
Pramatech Pvt. Ltd
|
|
Shareholder in PRAMA, there are also common shareholders in PRAMA and this company
|
|
$
|
692,193
|
|
|
|
|
|
|
|
|
Mr. B. K. Ashok
|
|
Shareholder in PRAMA
|
|
|
106,165
|
|
Alchemy Food & Franchisee Solutions Pvt. Ltd
|
|
Company partly owned by the Chief Executive Officer of a subsidiary of PRAMA
|
|
|
35,439
|
|
Prime Finvest Leasing Limited
|
|
Company partly owned by a PRAMA shareholder, has common shareholders with Pramatech Pvt. Ltd above
|
|
|
35,388
|
|
Opus Restaurants Pvt. Ltd
|
|
Shareholder in PRAMA, there are also common shareholders in PRAMA and this company
|
|
|
9,909
|
|
Mr. Akbar S Khwaja
|
|
Chief Executive Officer of a subsidiary of PRAMA
|
|
|
30,553
|
|
Mr. M. V. Chetan Kumar
|
|
Shareholder in PRAMA
|
|
|
4,954
|
|
Total
|
|
|
|
$
|
914,601
|
|
The balances above
are denominated in Indian Rupees and the above amounts are translated into US dollars at the closing rate as of September 30, 2019.
The movement from the June 30, 2019 balance of $937,157 to $914,601, relates to foreign exchange translation only with no change
in the Indian Rupee amount.
Amounts due to related parties arising
from the e-Commerce Aggregator segment
There is a balance
of $1,708 due to Sachin Mandloi, a Director of the Company for services rendered to Sunalpha.
Amounts due to related parties arising
from the Hospitality segment
The amounts due from
related parties balance in the Hospitality segment arose from the acquisition of PRAMA on April 22, 2019, all of which are unsecured
and non-interest bearing, which are described below:
Due to related parties
|
|
Description
|
|
September 30,
2019
|
|
Opus Hotels & Resorts Pvt. Ltd
|
|
Shareholder in PRAMA, there are also common shareholders in PRAMA and this company
|
|
$
|
664,591
|
|
Mr. Mahesh Gandhi
|
|
Shareholder in PRAMA
|
|
|
182,751
|
|
Mr. Sobha Gandhi
|
|
Relative of Mahesh Gandhi, (shareholder above)
|
|
|
236
|
|
Navkar Pole Products Ltd
|
|
Company partly owned by a PRAMA shareholder
|
|
|
7,078
|
|
Mr. Pravin Rathod
|
|
Shareholder in PRAMA
|
|
|
16,387
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
871,043
|
|
During the 3 months ended September 30, 2019, a balance of $4,351
outstanding as of June 30, 2019, was paid to Mr. Akbar Khwaja $4,351, the Chief Executive Officer of a subsidiary of PRAMA. The
above remaining balances in Indian Rupee have not changed, with the translated amounts in U.S. dollars changing, due to changes
in the closing balance sheet exchange rate.
Transactions
involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,
free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the
related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless
such representations can be substantiated.
10. LOANS WITH THIRD PARTIES
Loans and borrowings with third parties
are discussed below:
|
|
As of
|
|
|
|
September 30, 2019
|
|
|
March 31, 2019
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Convertible note with United Techno Solutions, Inc
|
|
$
|
250,000
|
|
|
$
|
-
|
|
Current portion of long term loan with Small Industries Development Bank of India
|
|
|
221,450
|
|
|
|
-
|
|
Short term borrowing with NeoGrowth Credit Private Limited
|
|
|
22,735
|
|
|
|
-
|
|
|
|
$
|
494,185
|
|
|
$
|
-
|
|
Long term loans and convertible notes:
|
|
|
|
|
|
|
|
|
Loan with Small Industries Development Bank of India
|
|
$
|
521,991
|
|
|
$
|
-
|
|
Loan with Advance Finstock Private Limited
|
|
|
77,334
|
|
|
|
-
|
|
Convertible note with United Techno Solutions, Inc
|
|
|
-
|
|
|
|
250,000
|
|
Total
|
|
|
599,325
|
|
|
|
250,000
|
|
Less current portion of Small Industries Development Bank of India loan
|
|
|
(221,450
|
)
|
|
|
-
|
|
|
|
$
|
377,875
|
|
|
$
|
250,000
|
|
On
March 16, 2019 the Company obtained a $250,000 convertible note from United Techno Solutions, Inc with a maturation date of April
1, 2020 and an embedded interest rate of 8%. The note may convert into 357,143 shares of common stock at the noteholder’s
option. The balance outstanding as of September 30, 2019 amounted to $250,000. No interest has been paid on this note.
As
part of the acquisition of PRAMA on April 22, 2019, the Company assumed a loan with NeoGrowth Credit Private Limited, with a maturation
of March 21, 2020, which is included in short term borrowings as of September 30, 2019. The loan has an embedded finance charge
of 18% interest over an 18 month period. The loan is paid in daily installments, interest is paid in Indian Rupees and approximates
$23 per day. During the three months ended September 30, 2019, the balance on the loan reduced by $11,686, net of repayments.
As
part of the acquisition of PRAMA on April 22, 2019, the Company assumed a loan with Small Industries Development Bank of India.
The original principal was $969,932 (60 million Indian Rupees), on December 31, 2013, there are no repayments scheduled for the
first twelve months of the loan, with monthly payments commencing in January 2015 and ending on December 31, 2021. The bank has
the right to convert the loan into equity capital of PRAMA. The rate of interest is 15.5% per annum. The loan is secured by: a)
A senior secured charge on all moveable assets located at a contract hotel in Ahmedabad, India; b) Pledged deposit of $80,828 (5
million Indian Rupees); c) mortgage of leasehold rights in the lease contract for the contract hotel in Ahmedabad, India; d) Guarantee
of Prama Consultancy Services Pvt. Ltd a related party of the Company; and e) the personal guarantees of Messrs. Mahesh Gandhi
and Pravin Rathod. During the three months ended September 30, 2019, the balance on the loan increased by $38,649, net of repayments.
As
part of the acquisition of PRAMA, the Company assumed an amount owing to Advance Finstock Private Limited for $71,905, $75,950
and $77,334 as of April 22, 2019, June 30, 2019 and September 30, 2019, respectively. This is an undocumented informal loan agreement.
The informal arrangement incurs interest at 18% per annum. The amounts due were not collateralized. The accrued but not paid interest
on this loan as of September 30, 2019 amounted to $6,558. See note 16 – Reclassifications.
11. LOANS WITH RELATED PARTIES
Loans and borrowings with related parties
are discussed below:
|
|
As of
|
|
|
|
September 30, 2019
|
|
|
March 31, 2019
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Convertible note with Takniki Communications, Inc
|
|
$
|
695,000
|
|
|
$
|
695,000
|
|
Convertible note with Arna Global LLC
|
|
|
-
|
|
|
|
956,000
|
|
Loan with Mr. Mahesh Ghandi
|
|
|
394,211
|
|
|
|
-
|
|
Promissory note with Arna Global LLC
|
|
|
-
|
|
|
|
-
|
|
Convertible note with Mr. Deepak Sharma
|
|
|
-
|
|
|
|
150,515
|
|
Convertible note with Mr. Sachin Mandloi
|
|
|
-
|
|
|
|
36,642
|
|
|
|
$
|
1,089,211
|
|
|
$
|
1,838,157
|
|
On
December 31, 2016, the Company issued a convertible note to Takniki Communications, Inc, an affiliate owned by Sachin Mandloi,
our Vice President and a director, totaling $695,000. This note was issued pursuant to a Software Development Agreement dated September
23, 2016 between Takniki Communications, Inc and the Company to finance the upgrade of our Travelcord operating software.
The note has a maturation of December 31, 2019, and bears interest at the rate of ten percent payable at maturity. The principal
amount of this note is convertible into 10,303,070 shares of the Company’s common stock at the noteholder’s option
at maturity. There was no movement in this note during the period.
The
loan from Mr. Mahesh Gandhi was assumed as a result of the purchase of PRAMA on April 22, 2019. The loan amounted to $360,190,
$369,946 and $394,211 as of April 22, 2019, June 30, 2019 and September 30, 2019, respectively. The increase of $24,264 in the
three months ended September 30, 2019, reflected an increased loan from Mr. Mahesh Gandhi, offset by small closing rate exchange
differences. The counterparty is Mr. Mahesh Gandhi, a shareholder in PRAMA. This is an informal loan agreement. The loan bears
interest at the rate of 15% per annum and is callable on demand. The accrued but not paid interest on this loan included in the
balance as of September 30, 2019 amounted to $15,300. See note 16 – Reclassifications.
On
April 16, 2019, the Company borrowed $300,000 from ARNA Global LLC, an entity owned and controlled by Mr. Sharma, its President
and CEO, to partially fund the acquisition of PRAMA. During the quarter ended June 30, 2019, $100,000 was re-paid and the remaining
$200,000 balance was repaid on July 8, 2019. The loan was unsecured and bears interest at 10% per annum.
The
convertible note to Arna Global LLC matured on March 7, 2019, bore interest at the rate of ten percent and was converted into common
stock at the noteholders option. The convertible notes to Messrs. Sachin Mandloi and Deepak Sharma matured on March 8, 2019, bore
interest at the rate of ten percent and were converted into common shares at the noteholders option.
12. STOCKHOLDERS’ EQUITY
During
the six month period ended September 30, 2019, the Company issued an aggregate of 31,155,693 of common shares by means of: a) 25,462,167
common shares through conversion of notes; b) 2,632,653 common shares relating directly to the PRAMA acquisition; c) 1,571,430
common shares when the warrant holders exercised their $0.01 warrants; and d) 1,489,443 common shares (775,157 and 714,286 discussed
below) for cash proceeds of $1,042,610 ($542,610 and $500,000 discussed below) in private placements. These events are described
in further detail below.
In
June 2019, the Company issued 25,462,167 common shares and reduced its liabilities by approximately $1,150,483 in connection with
three separate related parties who converted their notes. There were no cash proceeds from the conversion of the notes.
On
April 22, 2019, the Company issued 2,632,653 common shares to the shareholders of PRAMA, at a price of $0.28 per share,
as part of the consideration for the PRAMA acquisition.
In
June 2019, the Company issued 1,571,430 common shares when the warrant holders exercised their warrants and received approximately
$15,714 in cash.
During the quarter
ended June 30, 2019 the Company issued and sold 775,157 units comprising one share and warrant to purchase two share of Company’s
common stock; par value $0.0001 pursuant to a private placement. The purchase price per unit was $0.70 resulting in aggregate proceeds
of $542,610 to the Company. The Company issued warrants to acquire approximately 1,550,314 common shares pursuant to the 775,157
units listed above during the quarter ended June 30, 2019. These warrants shall be exercisable, in whole or in part, during the
three-year term commencing from the issuance date at an exercise price of $0.01.
During the quarter
ended September 30, 2019 the Company issued and sold 714,286 units comprising one share and warrant to purchase two shares of Company’s
common stock; par value $0.0001 pursuant to a private placement. The purchase price per unit was $0.70 resulting in aggregate proceeds
of $500,000 to the Company. The Company issued warrants to acquire approximately 1,428,572 common shares pursuant to the 714,286
units listed above during the quarter ended September 30, 2019. These warrants shall be exercisable, in whole or in part, during
the three-year term commencing from the issuance date at an exercise price of $0.01.
Warrants:
The following table is the summary of warrant
activities during the period:
Warrants
|
|
Number
of shares
|
|
|
Weighted average
exercise price
|
|
|
Weighted average remaining
contractual life in months
|
|
|
Approximate aggregate intrinsic
value
|
|
Outstanding as of March 31, 2019
|
|
|
1,571,430
|
|
|
$
|
0.01
|
|
|
|
3.0
|
|
|
$
|
345,000
|
|
Issued
|
|
|
2,978,886
|
|
|
$
|
0.01
|
|
|
|
36.0
|
|
|
$
|
655,000
|
|
Exercised
|
|
|
(1,571,430
|
)
|
|
$
|
0.01
|
|
|
|
-
|
|
|
|
-
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding as of September 30, 2019
|
|
|
2,978,886
|
|
|
$
|
0.01
|
|
|
|
35.5
|
|
|
$
|
655,000
|
|
Aggregate intrinsic
value represents the difference between the Company’s estimate of the fair value of its common shares and the exercise price
of outstanding, in-the-money warrants. The Company is not actively traded on the Over the Counter Market. The total intrinsic value
of warrants exercised for the six month period ended September 30, 2019 was minimal. The fair value of warrants granted during
the six month period ended September 30, 2019 approximated $0.23 per warrant, or an intrinsic value of approximately $0.22 per
warrant.
The intrinsic value
of the warrants as of September 30, 2019, will not approximate the intrinsic value of the warrants at the current date due to the
impact of covid-19.
13. INCOME TAX
US taxes
Deferred income taxes
reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
The Company files
its income tax returns on a fiscal year basis.
The future effective
income tax rate depends on various factors, such as the Company’s income (loss) before taxes, tax legislation and the geographic
composition of pre-tax income. The Company files income tax returns in the U.S. Federal jurisdiction and various State jurisdictions.
Sunalpha and PRAMA file tax returns in India and due to losses, no tax liability or deferred tax asset, net of valuation allowance,
is recorded. The Company is generally subject to U.S. Federal, State and local examinations by tax authorities for the past three
years.
Indian taxes
Historically, the
Company has not paid Indian income taxes because of taxable losses. For the period April 22, 2019 to September 30, 2019, the Company
believes the PRAMA results of operations would not have resulted in an income tax liability, due to the calculation of a pro forma
tax loss for the period and the availability of prior period tax losses.
14. COMMITMENTS AND CONTINGENCIES
The Company is the B2B Principal Agent
of the Indian Railway Catering and Tourism Corporation, or IRCTC, which is a government entity that allows the Company to offer
reservations through Indian Railways’ passenger reservation system on the Company’s webpage. Indian Railways is India’s
state-owned railway, which owns and operates most of India’s rail transportation. The Company has integrated its online portal
with IRCTC’s to provide a seamless booking process. Pursuant to an Application Programming Interface (“API”)
agreement, dated October 5, 2015, the Company is required to pay a minimum annual maintenance fee of $7,500 to IRCTC. In the event
the agreement is renewed, the amount based on the number of active railway agents that use the Company rail booking services on
the Company’s platform will be payable annually. [On September 30, 2018, the Company renewed its agreement with the IRCTC
and paid an annual maintenance fee of $8,600 based on the number of active railway agents it has enrolled to book rail tickets.]
Through Sunalpha, the Company currently
occupies approximately 2,455 square feet of office space owned by the CEO of the Company on a rent-free basis.
The
Company is party to certain legal proceedings that arise in the ordinary course and are incidental to its business. On the acquisition
of PRAMA, on April 22, 2019, the Company assumed an interest in an arbitration claim. PRAMA made an arbitration claim of approximately
$300,000 (21.2 million Indian Rupees) against Ms. Khurana Hotels and Apartments Private Limited in the Civil Court Senior Division
of Amritsar, India. The claim is based on the asserted failure of Ms. Khurana Hotels and Apartments Private Limited, as lessor,
to comply with the terms of the lease. As of the date of this filing, the arbitration proceedings are on-going. Otherwise, there
were no significant commitments or contingencies for PRAMA as of September 30, 2019.
Although
litigation and arbitration are inherently uncertain, based on the information currently available, management does not believe
that the currently pending arbitration will have a material adverse effect on the Company’s consolidated financial position,
liquidity or results of operations.
15. BUSINESS SEGMENTS
Prior to the acquisition
of PRAMA, a hospitality company, the Company was a one segment company. Following, the acquisition of PRAMA, the Company’s
chief operating decision maker changed the information he receives to manage, assess, operate the business and to allocate capital.
Accordingly, the Company changed its operating segments to comprise: eCommerce aggregation services and Hospitality, respectively.
The Company management reviews and evaluates the operating segments, as defined, are components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing financial performance. The reportable segments reflect the internal organization of the Company and
are strategic businesses that offer different products and services. The Company reports financial information and evaluates its
operations by revenues. Management, including the chief operating decision maker, reviews operating results solely by revenue and
operating results.
All net revenues are
derived from transactions with third party customers, there are no inter-segment revenues. All of the net revenue is derived from
operations in India, substantially all of the expenses are borne in India, with certain expenses borne in the US. The Company measures
segment performance based on loss from continuing operations. Summarized financial information concerning each of the Company's
reportable segments is as follows:
|
|
Three months ended September 30, 2019
|
|
|
|
eCommerce Aggregator
|
|
|
Hospitality
|
|
|
Intersegment
elimination
|
|
|
Consolidated total
|
|
Segment results and total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
186,193
|
|
|
$
|
1,942,177
|
|
|
$
|
-
|
|
|
$
|
2,128,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
(152,890
|
)
|
|
|
(1,871,760
|
)
|
|
|
-
|
|
|
|
(2,024,650
|
)
|
Operating expenses
|
|
|
(330,285
|
)
|
|
|
(587,290
|
)
|
|
|
|
|
|
|
(917,575
|
)
|
Loss from operations, before other expense, net
|
|
|
(296,982
|
)
|
|
|
(516,873
|
)
|
|
$
|
-
|
|
|
|
(813,855
|
)
|
Other expense, net
|
|
|
(18,073
|
)
|
|
|
4,079
|
|
|
|
-
|
|
|
|
(13,994
|
)
|
Net loss
|
|
$
|
(315,055
|
)
|
|
$
|
(512,794
|
)
|
|
$
|
-
|
|
|
$
|
(827,849
|
)
|
|
|
Six months ended September 30, 2019
|
|
|
|
eCommerce Aggregator
|
|
|
Hospitality
|
|
|
Intersegment
elimination
|
|
|
Consolidated total
|
|
Segment results and total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
318,313
|
|
|
$
|
3,635,915
|
|
|
$
|
-
|
|
|
$
|
3,954,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
(261,035
|
)
|
|
|
(3,219,263
|
)
|
|
|
-
|
|
|
|
(3,480,298
|
)
|
Operating expenses
|
|
|
(594,156
|
)
|
|
|
(1,137,905
|
)
|
|
|
|
|
|
|
(1,732,061
|
)
|
Loss from operations, before other expense, net
|
|
|
(536,878
|
)
|
|
|
(721,253
|
)
|
|
$
|
-
|
|
|
|
(1,258,131
|
)
|
Other expense, net
|
|
|
(64,420
|
)
|
|
|
(68,055
|
)
|
|
|
-
|
|
|
|
(132,475
|
)
|
Net loss
|
|
$
|
(601,298
|
)
|
|
$
|
(789,308
|
)
|
|
$
|
-
|
|
|
$
|
(1,390,606
|
)
|
Total assets
|
|
$
|
3,905,559
|
|
|
$
|
13,942,958
|
|
|
$
|
3,256,620
|
|
|
$
|
21,105,137
|
|
During the quarter
ended September 30, 2019, the Company derived approximately 91% and 9% of its revenue from its Hospitality and eCommerce Aggregation
segments, respectively, compared to 100% of its business from its eCommerce Aggregation segment solely, for the quarter ended September
30, 2018.
During the six month
period ended September 30, 2019, the Company derived approximately 91% and 9% of its revenue from its Hospitality and eCommerce
Aggregation segments, respectively, compared to 100% of its business from its eCommerce Aggregation segment solely, for the six
month period ended September 30, 2018.
16. RE-CLASSIFICATIONS AND RE-STATEMENTS
Re-classifications
The Company previously
disclosed $693,263, of accrued salaries in “Accounts payable and accrued expenses” as of June 30, 2019 but has decided
to reclassify these accruals in “Salaries and benefits” for the consolidated condensed balance sheet as of September
30, 2019 to be consistent with management’s analysis of the business.
The Company previously
disclosed $13,828 of amounts due to Sachin Mandloi, a Director of the Company in due to related parties, but has decided to reclassify
this to Salary payable to related parties in the consolidated condensed balance sheet as of June 30, 2019 to be consistent with
the September 30, 2019 classification.
The Company previously
allocated net loss and comprehensive loss to the Parent and non-controlling interests on a 51% to 49% allocation based on the Parent’s
equity interest in the PRAMA legal entity in accordance with GAAP. The Company has decided to allocate net loss and comprehensive
income to the Parent and non-controlling interests in proportion to the economic interest in the PRAMA group, which differs from
the above 51% to 49% allocation. Explicitly, the Parent’s economic interest in AHRL, IHPL, AFBL is approximately 30%, 26%,
and 30%, respectively. This causes the net loss and other comprehensive income for the non-controlling interest to rise, and the
corresponding net loss and other comprehensive income for the Parent to fall for the period.
Re-statements
The Company previously
disclosed $23,343 of rent expense associated with PRAMA in Selling, general and administrative expenses instead of Cost of revenues
for the consolidated condensed statement of operations for the three months ended June 30, 2019.
The Company previously
disclosed $75,950 due to Advance Finstock Private Limited as part of Other non-current liabilities as of June 30, 2019 but has
decided to reclassify this balance to “Long term loans and convertible notes” in the consolidated condensed balance
sheet as of September 30, 2019 to improve the disclosure of this matter. There is no formal loan agreement for this arrangement.
The Company previously
disclosed $33,354 and $7,269, $40,623 in aggregate, due to Mr. Mahesh Ghandi, a related party, as part of Other non-current liabilities
and Other current liabilities, as of June 30, 2019, respectively, but has corrected this error by reclassifying the amounts to
“Loans and convertible notes due to related parties” within current liabilities in the consolidated condensed balance
sheet as of September 30, 2019. The $33,354 reflects the informal loan and the $7,269 reflects accrued interest as of June 30,
2019. There is no formal loan agreement for this arrangement.
The Company previously
disclosed $464,817 and $2,330 in cash and cash equivalents and other non-current assets, as of June 30, 2019, respectively, but
has corrected this error by reclassifying the amounts to “Investments” within current assets in the consolidated condensed
balance sheet as of September 30, 2019. The $464,817 is a deposit at a bank with a maturation beyond 90 days from June 30, 2019,
the deposit was assumed on the purchase of PRAMA and so this also changed the net cash paid on acquisition of subsidiary by $464,817.
The re-classifications
and re-statements are being made in accordance with ASC 250, “Accounting Changes and Error Corrections.” The disclosure
provision of ASC 250 requires that a company that corrects an error to disclose that its previously issued financial statements
have been restated, a description of the nature of the error, the effect of the correction on each financial statement line item
and any per share amount affected for each prior period presented, and the cumulative effect on retained earnings (deficit) in
the statement of financial position as of the beginning of each period presented.
There was no impact
on basic and diluted earnings per share and cumulative effect on accumulated deficit in the balance sheet for the prior periods.
The effect of the reclassifications and restatements did not have an impact on the balance sheet as of March 31, 2019, or basic
and diluted earnings per share for the three month period ended June 30, 2019.
The effect of the
reclassifications / restatements did have an impact on the consolidated condensed statement of operations, consolidated condensed
balance sheet, consolidated condensed statement of cash flows, consolidated condensed statement of equity (deficit) and consolidated
condensed statement of comprehensive loss as of and for the three months ended June 30, 2019, as described below:
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
Three month period ended June 30, 2019
|
|
As previously
presented
|
|
|
Reclassification
/ Restatement
|
|
|
Reclassified /
Restated
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
1,825,858
|
|
|
$
|
-
|
|
|
$
|
1,825,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
1,432,305
|
|
|
|
23,343
|
|
|
|
1,455,648
|
|
|
Rent
|
|
Selling, general, and administrative expenses
|
|
|
597,428
|
|
|
|
(23,343
|
)
|
|
|
574,085
|
|
|
Rent
|
|
Legal and consulting expenses
|
|
|
106,067
|
|
|
|
-
|
|
|
|
106,067
|
|
|
|
Depreciation and amortization
|
|
|
134,334
|
|
|
|
-
|
|
|
|
134,334
|
|
|
|
|
|
|
2,270,134
|
|
|
|
-
|
|
|
|
2,270,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(444,276
|
)
|
|
|
-
|
|
|
|
(444,276
|
)
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
30,983
|
|
|
|
-
|
|
|
|
30,983
|
|
|
|
Interest income
|
|
|
6,204
|
|
|
|
-
|
|
|
|
6,204
|
|
|
|
Interest expense
|
|
|
(155,666
|
)
|
|
|
-
|
|
|
|
(155,666
|
)
|
|
|
Total other expense
|
|
|
(118,479
|
)
|
|
|
-
|
|
|
|
(118,479
|
)
|
|
|
Loss before income taxes
|
|
|
(562,755
|
)
|
|
|
-
|
|
|
|
(562,755
|
)
|
|
|
Income taxes
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
Net loss
|
|
|
(562,755
|
)
|
|
|
-
|
|
|
|
(562,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
|
|
(135,491
|
)
|
|
|
(63,225
|
)
|
|
|
(198,716
|
)
|
|
Allocation non controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to TripBorn, Inc
|
|
|
(427,264
|
)
|
|
|
63,225
|
|
|
|
(364,039
|
)
|
|
Allocation non controlling interest
|
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE
LOSS (UNAUDITED)
Three month period ended June 30, 2019
|
|
As previously
presented
|
|
|
Reclassification
/ Restatement
|
|
|
Reclassified /
Restated
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(562,755
|
)
|
|
$
|
-
|
|
|
$
|
(562,755
|
)
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
|
|
(135,491
|
)
|
|
|
(63,225
|
)
|
|
|
(198,716
|
)
|
|
|
Allocation non controlling interest
|
|
Net loss attributable to TripBorn, Inc.
|
|
|
(427,264
|
)
|
|
|
63,225
|
|
|
|
(364,039
|
)
|
|
|
Allocation non controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translations adjustment
|
|
|
37,239
|
|
|
|
-
|
|
|
|
37,239
|
|
|
|
|
|
Currency translation adjustment attributable to noncontrolling
interests
|
|
|
21,141
|
|
|
|
25,889
|
|
|
|
47,030
|
|
|
|
Allocation non controlling interest
|
|
Currency translation adjustment attributable to TripBorn, Inc
|
|
|
16,098
|
|
|
|
(25,889
|
)
|
|
|
(9,792
|
)
|
|
|
Allocation non controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
|
|
|
(525,516
|
)
|
|
|
-
|
|
|
|
(525,516
|
)
|
|
|
|
|
Comprehensive loss attributable to noncontrolling interests
|
|
|
(114,350
|
)
|
|
|
(37,336
|
)
|
|
|
(151,686
|
)
|
|
|
Allocation non controlling interest
|
|
Comprehensive loss attributable to TripBorn, Inc.
|
|
|
(411,166
|
)
|
|
|
37,336
|
|
|
|
(373,830
|
)
|
|
|
Allocation non controlling interest
|
|
CONSOLIDATED CONDENSED STATEMENT OF
EQUITY (DEFICIT) (UNAUDITED) (AS PREVIOUSLY PRESENTED)
|
|
For the three months ended June 30, 2019
|
|
|
|
Shares
|
|
|
Common
stock
|
|
|
Additional paid in
capital
|
|
|
Accumulated
other
comprehensive
income
|
|
|
Accumulated
deficit
|
|
|
TripBorn Inc
stockholders’
equity
(deficit)
|
|
|
Noncontrolling
interest
|
|
|
Total equity /
(deficit)
|
|
|
|
(In $ except for number of common stock)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2019
|
|
|
97,190,435
|
|
|
$
|
9,719
|
|
|
$
|
3,227,452
|
|
|
$
|
39,489
|
|
|
$
|
(4,355,630
|
)
|
|
$
|
(1,078,970
|
)
|
|
$
|
-
|
|
|
$
|
(1,078,970
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued on
purchase of subsidiary
|
|
|
2,632,653
|
|
|
|
263
|
|
|
|
736,880
|
|
|
|
-
|
|
|
|
-
|
|
|
|
737,143
|
|
|
|
-
|
|
|
|
737,143
|
|
Common stock and
warrants issued for cash
consideration
|
|
|
775,157
|
|
|
|
78
|
|
|
|
542,532
|
|
|
|
-
|
|
|
|
-
|
|
|
|
542,610
|
|
|
|
-
|
|
|
|
542,610
|
|
Common stock issued on
exercise of warrants
|
|
|
1,571,430
|
|
|
|
157
|
|
|
|
15,557
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,714
|
|
|
|
-
|
|
|
|
15,714
|
|
Common stock issued on
conversion of debt
|
|
|
25,462,167
|
|
|
|
2,546
|
|
|
|
1,147,937
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,150,483
|
|
|
|
-
|
|
|
|
1,150,483
|
|
Noncontrolling interests
arising on acquisition of
subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,053,333
|
|
|
|
2,053,333
|
|
Currency translation
adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,098
|
|
|
|
-
|
|
|
|
16,098
|
|
|
|
21,141
|
|
|
|
37,239
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(427,264
|
)
|
|
|
(427,264
|
)
|
|
|
(135,491
|
)
|
|
|
(562,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2019
|
|
|
127,631,842
|
|
|
$
|
12,763
|
|
|
$
|
5,670,358
|
|
|
$
|
55,587
|
|
|
$
|
(4,782,894
|
)
|
|
$
|
955,814
|
|
|
$
|
1,938,983
|
|
|
$
|
2,894,797
|
|
CONSOLIDATED CONDENSED STATEMENT OF EQUITY
(DEFICIT) (UNAUDITED) (RECLASSIFICATION)
|
|
For the three months ended June 30, 2019
|
|
|
|
Shares
|
|
|
Common
stock
|
|
|
Additional paid in
capital
|
|
|
Accumulated
other
comprehensive
income
|
|
|
Accumulated
deficit
|
|
|
TripBorn Inc
stockholders’
equity
(deficit)
|
|
|
Noncontrolling
interest
|
|
|
Total equity /
(deficit)
|
|
|
|
(In $ except for number of common stock)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued on
purchase of subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common stock and
warrants issued for cash
consideration
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common stock issued on
exercise of warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common stock issued on
conversion of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Noncontrolling interests
arising on acquisition of
subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Currency translation
adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(25,889
|
)
|
|
|
-
|
|
|
|
(25,889
|
)
|
|
|
25,889
|
|
|
|
-
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
63,225
|
|
|
|
63,225
|
|
|
|
(63,225
|
)
|
|
|
-
|
|
Balance as of June 30, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(25,889
|
)
|
|
$
|
63,225
|
|
|
$
|
37,336
|
|
|
$
|
(37,336
|
)
|
|
$
|
-
|
|
CONSOLIDATED CONDENSED STATEMENT OF EQUITY
(DEFICIT) (UNAUDITED) (RECLASSIFIED)
|
|
For the three months ended June 30, 2019
|
|
|
|
Shares
|
|
|
Common
stock
|
|
|
Additional paid in
capital
|
|
|
Accumulated
other
comprehensive
income
|
|
|
Accumulated
deficit
|
|
|
TripBorn Inc
stockholders’
equity
(deficit)
|
|
|
Noncontrolling
interest
|
|
|
Total equity /
(deficit)
|
|
|
|
(In $ except for number of common stock)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2019
|
|
|
97,190,435
|
|
|
$
|
9,719
|
|
|
$
|
3,227,452
|
|
|
$
|
39,489
|
|
|
$
|
(4,355,630
|
)
|
|
$
|
(1,078,970
|
)
|
|
$
|
-
|
|
|
$
|
(1,078,970
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued on
purchase of subsidiary
|
|
|
2,632,653
|
|
|
|
263
|
|
|
|
736,880
|
|
|
|
-
|
|
|
|
-
|
|
|
|
737,143
|
|
|
|
-
|
|
|
|
737,143
|
|
Common stock and
warrants issued for cash
consideration
|
|
|
775,157
|
|
|
|
78
|
|
|
|
542,532
|
|
|
|
-
|
|
|
|
-
|
|
|
|
542,610
|
|
|
|
-
|
|
|
|
542,610
|
|
Common stock issued on
exercise of warrants
|
|
|
1,571,430
|
|
|
|
157
|
|
|
|
15,557
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,714
|
|
|
|
-
|
|
|
|
15,714
|
|
Common stock issued on
conversion of debt
|
|
|
25,462,167
|
|
|
|
2,546
|
|
|
|
1,147,937
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,150,483
|
|
|
|
-
|
|
|
|
1,150,483
|
|
Noncontrolling interests
arising on acquisition of
subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,053,333
|
|
|
|
2,053,333
|
|
Currency translation
adjustment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(9,792
|
)
|
|
|
-
|
|
|
|
(9,792
|
)
|
|
|
47,030
|
|
|
|
37,239
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(364,039
|
)
|
|
|
(364,039
|
)
|
|
|
(198,716
|
)
|
|
|
(562,755
|
)
|
Balance as of June 30, 2019
|
|
|
127,631,842
|
|
|
$
|
12,763
|
|
|
$
|
5,670,358
|
|
|
$
|
29,697
|
|
|
$
|
(4,719,669
|
)
|
|
$
|
993,149
|
|
|
$
|
1,901,648
|
|
|
$
|
2,894,797
|
|
CONSOLIDATED CONDENSED STATEMENT OF RECLASSIFIED
CASH FLOWS (UNAUDITED)
Three month period ended June 30, 2019
|
|
As previously
presented
|
|
|
Reclassification
/ Restatement
|
|
|
Reclassified /
Restated
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(562,755
|
)
|
|
$
|
-
|
|
|
$
|
(562,755
|
)
|
|
|
Adjustment to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
134,334
|
|
|
|
-
|
|
|
|
134,334
|
|
|
|
Stock based compensation
|
|
|
25,723
|
|
|
|
-
|
|
|
|
25,723
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(480,294
|
)
|
|
|
-
|
|
|
|
(480,294
|
)
|
|
|
Other current assets
|
|
|
111,934
|
|
|
|
-
|
|
|
|
111,934
|
|
|
|
Accounts payable
|
|
|
(58,634
|
)
|
|
|
(693,263
|
)
|
|
|
(751,897
|
)
|
|
Accrued salary
|
Other current liabilities
|
|
|
1,199,970
|
|
|
|
725,814
|
|
|
|
1,925,784
|
|
|
Accrued salary and Mr Mahesh Ghandi impact
|
Other non-current liabilities
|
|
|
(257,475
|
)
|
|
|
(32,551
|
)
|
|
|
(290,026
|
)
|
|
Mr. Mahesh Ghandi
|
Net cash provided by operating activities
|
|
|
112,803
|
|
|
|
-
|
|
|
|
112,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash paid on acquisition of subsidiary
|
|
|
(507,093
|
)
|
|
|
(464,817
|
)
|
|
|
(971,910
|
)
|
|
Bank deposits
|
Purchases of fixed assets
|
|
|
(51,865
|
)
|
|
|
-
|
|
|
|
(51,865
|
)
|
|
|
Net cash used in investing activities
|
|
|
(558,958
|
)
|
|
|
(464,817
|
)
|
|
|
(1,023,775
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock and exercise of warrants
|
|
|
(558,958
|
)
|
|
|
-
|
|
|
|
(558,958
|
)
|
|
|
Repayment of convertible notes
|
|
|
(9,730
|
)
|
|
|
-
|
|
|
|
(9,730
|
)
|
|
|
Net cash used in financing activities
|
|
|
548,595
|
|
|
|
-
|
|
|
|
548,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates changes on cash
|
|
|
26,450
|
|
|
|
-
|
|
|
|
26,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
|
|
|
128,890
|
|
|
|
(464,817
|
)
|
|
|
(335,927
|
)
|
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of the period
|
|
|
1,230,012
|
|
|
|
-
|
|
|
|
1,230,012
|
|
|
|
End of the period
|
|
$
|
1,358,902
|
|
|
$
|
(464,817
|
)
|
|
$
|
894,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplementary disclosure of interest paid
|
|
$
|
92,586
|
|
|
$
|
-
|
|
|
$
|
92,586
|
|
|
|
CONSOLIDATED CONDENSED
RECLASSIFIED BALANCE SHEET (UNAUDITED)
Three month period ended June 30, 2019
|
|
As previously
presented
|
|
|
Reclassification
|
|
|
Reclassified /
Restated
|
|
|
Description
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,358,902
|
|
|
$
|
(464,817
|
)
|
|
$
|
894,085
|
|
|
Reclassification of cash, non current investments to fixed deposits
|
Accounts receivable, net, and unbilled revenue
|
|
|
1,275,350
|
|
|
|
-
|
|
|
|
1,275,350
|
|
|
|
Due from related parties
|
|
|
951,521
|
|
|
|
-
|
|
|
|
951,521
|
|
|
|
Investments
|
|
|
-
|
|
|
|
467,147
|
|
|
|
467,147
|
|
|
Reclassification of cash, non current investments to fixed deposits
|
Other current assets
|
|
|
1,242,181
|
|
|
|
-
|
|
|
|
1,242,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
4,827,954
|
|
|
|
2,330
|
|
|
|
4,830,284
|
|
|
|
Non current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease, right-of-use assets, net
|
|
|
8,335,384
|
|
|
|
-
|
|
|
|
8,335,384
|
|
|
|
Goodwill
|
|
|
936,788
|
|
|
|
-
|
|
|
|
936,788
|
|
|
|
Intangible assets, net
|
|
|
2,309,043
|
|
|
|
-
|
|
|
|
2,309,043
|
|
|
|
Property and equipment, net
|
|
|
1,707,019
|
|
|
|
-
|
|
|
|
1,707,019
|
|
|
|
Other noncurrent assets
|
|
|
1,705,203
|
|
|
|
(2,330
|
)
|
|
|
1,702,873
|
|
|
Reclassification of cash, non current investments to fixed deposits
|
TOTAL ASSETS
|
|
$
|
19,821,391
|
|
|
$
|
-
|
|
|
$
|
19,821,391
|
|
|
|
Three month period ended June 30, 2019
|
|
As previously
presented
|
|
|
Reclassification
|
|
|
Reclassified /
Restated
|
|
|
Description
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
2,094,061
|
|
|
$
|
(693,263
|
)
|
|
$
|
1,400,798
|
|
|
Accrued salary
|
Local duties and taxes
|
|
|
1,003,166
|
|
|
|
-
|
|
|
|
1,003,166
|
|
|
|
Due to related parties
|
|
|
909,610
|
|
|
|
(13,828
|
)
|
|
|
895,782
|
|
|
To Salary payable
|
Loans and convertible notes due to related parties
|
|
|
1,224,323
|
|
|
|
40,623
|
|
|
|
1,264,946
|
|
|
Mr. Mahesh Ghandi
|
Interest payable (includes $560,390 due to related party)
|
|
|
592,988
|
|
|
|
-
|
|
|
|
592,988
|
|
|
|
Salaries and benefits (includes $430,030 due to related party)
|
|
|
459,661
|
|
|
|
707,091
|
|
|
|
1,166,752
|
|
|
Accrued salary
|
Loans due within one year with third parties
|
|
|
467,222
|
|
|
|
-
|
|
|
|
467,222
|
|
|
|
Other current liabilities
|
|
|
864,045
|
|
|
|
(7,269
|
)
|
|
|
856,776
|
|
|
Mr. Mahesh Ghandi
|
Total current liabilities
|
|
|
7,615,076
|
|
|
|
33,354
|
|
|
|
7,648,430
|
|
|
|
Long term portion of operating lease liabilities
|
|
|
8,233,283
|
|
|
|
-
|
|
|
|
8,233,283
|
|
|
|
Long term loans and convertible notes
|
|
|
371,571
|
|
|
|
75,950
|
|
|
|
447,521
|
|
|
Advance Finstock Private Limited
|
Other non-current liabilities
|
|
|
706,664
|
|
|
|
(109,304
|
)
|
|
|
597,360
|
|
|
Advance Finstock Private Limited and Mr Mahesh Ghandi
|
Total current and long-term liabilities
|
|
|
16,926,594
|
|
|
|
-
|
|
|
|
16,926,594
|
|
|
|
Commitments and contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Preferred stock $.0001 par value
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Common stock $.0001 par value
|
|
|
12,763
|
|
|
|
-
|
|
|
|
12,763
|
|
|
|
Additional paid in capital
|
|
|
5,670,358
|
|
|
|
-
|
|
|
|
5,670,358
|
|
|
|
Accumulated deficit
|
|
|
(4,782,894
|
)
|
|
|
63,225
|
|
|
|
(4,719,669
|
)
|
|
Allocation non controlling interest
|
Accumulated other comprehensive income
|
|
|
55,587
|
|
|
|
(25,890
|
)
|
|
|
29,697
|
|
|
Allocation non controlling interest
|
TOTAL TRIPBORN, INC STOCKHOLDERS’ EQUITY /
(DEFICIT)
|
|
|
955,814
|
|
|
|
37,335
|
|
|
|
993,149
|
|
|
|
Nonc Noncontrolling interest in consolidated entity
|
|
|
1,938,983
|
|
|
|
(37,335
|
)
|
|
|
1,901,648
|
|
|
Allocation non controlling interest
|
Total equity (deficit)
|
|
|
2,894,797
|
|
|
|
-
|
|
|
|
2,894,797
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
19,821,391
|
|
|
$
|
-
|
|
|
$
|
19,821,391
|
|
|
|
CONDENSED PURCHASE PRICE ALLOCATION ON
ACQUISITION OF PRAMA (UNAUDITED)
As of April 22, 2019
|
|
As previously presented
|
|
Reclassification
/ Restatement
|
|
|
Reclassified /
Restated
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
Purchase Price allocation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
|
|
$
|
642,907
|
|
|
$
|
(464,817
|
)
|
|
$
|
178,090
|
|
|
Fixed deposits
|
Acquired intangible assets at fair value
|
|
|
2,003,085
|
|
|
|
-
|
|
|
|
2,003,085
|
|
|
|
Investment in and receivable from equity investee
|
|
|
665,799
|
|
|
|
-
|
|
|
|
665,799
|
|
|
|
Investment in fixed deposits
|
|
|
-
|
|
|
|
467,047
|
|
|
|
467,047
|
|
|
Fixed deposits
|
Right to use of assets
|
|
|
7,480,986
|
|
|
|
-
|
|
|
|
7,480,986
|
|
|
|
Property and equipment, net
|
|
|
1,684,360
|
|
|
|
-
|
|
|
|
1,684,360
|
|
|
|
Accounts receivable
|
|
|
616,564
|
|
|
|
-
|
|
|
|
616,564
|
|
|
|
Amounts due from related parties
|
|
|
661,128
|
|
|
|
-
|
|
|
|
661,128
|
|
|
|
Other current assets
|
|
|
1,353,687
|
|
|
|
-
|
|
|
|
1,353,687
|
|
|
|
Other non-current assets
|
|
|
990,449
|
|
|
|
(2,230
|
)
|
|
|
988,219
|
|
|
Fixed deposits
|
Operating lease liabilities assumed
|
|
|
(7,641,431
|
)
|
|
|
-
|
|
|
|
(7,641,431
|
)
|
|
|
Accounts payable
|
|
|
(1,292,260
|
)
|
|
|
200,515
|
|
|
|
(1,091,745
|
)
|
|
Accrued salary
|
Amounts due to related parties
|
|
|
(704,646
|
)
|
|
|
(40,623
|
)
|
|
|
(745,269
|
)
|
|
Mr. Mahesh Ghandi
|
Loans due within one year with third parties
|
|
|
(574,021
|
)
|
|
|
-
|
|
|
|
(574,021
|
)
|
|
|
Other current liabilities
|
|
|
(1,654,116
|
)
|
|
|
(193,246
|
)
|
|
|
(1,847,362
|
)
|
|
Advance Finstock Private Limited and Mr. Mahesh Ghandi
|
Other non-current liabilities
|
|
|
(978,803
|
)
|
|
|
33,354
|
|
|
|
(945,449
|
)
|
|
Mr. Mahesh Ghandi
|
Fair value of net assets acquired
|
|
|
3,253,688
|
|
|
|
-
|
|
|
|
3,253,688
|
|
|
|
Goodwill
|
|
|
936,788
|
|
|
|
-
|
|
|
|
936,788
|
|
|
|
Noncontrolling interests
|
|
|
(2,053,333
|
)
|
|
|
-
|
|
|
|
(2,053,333
|
)
|
|
|
Purchase consideration paid in cash and common
stock
|
|
$
|
2,137,143
|
|
|
$
|
-
|
|
|
$
|
2,137,143
|
|
|
|
17. SUBSEQUENT EVENTS
In
October 2019 the Company issued 535,718 units at a price $0.70 and received approximately $375,000. Each unit consists of one share
of the Company’s common stock and two warrants to purchase common stock. Each warrant can be exercised at any time prior
to October 10, 2022 for the purchase of one share at an exercise price of $0.01.
In
October 2019, the Company issued 4,050,313 shares for the warrants that were outstanding and received approximately $40,503.
The loan due to Takniki Communications, Inc, a related party
for $695,000 as of September 30, 2019, with maturation December 31, 2019 was extended with no formal maturity date, the note was
not converted into share capital. Takniki Communications, Inc is an entity controlled by the Company’s Director, Mr. Sachin
Mandloi.
On March 26, 2020, the
Company re-paid United Techno Solutions, Inc., $250,000, representing the repayment of principal on the $250,000 loan note which
was originally extended on March 16, 2019. The accrued interest has not currently been re-paid.
The loan with NeoGrowth
Credit Private Limited with $22,735 owing as of September 30, 2019 and maturation of March 21, 2020 was repaid in March 2020.
See
Note 2 Liquidity and Going concern for a discussion of the Coronavirus pandemic which is a non adjusting post balance sheet event
for the three and six months ended and as of September 30, 2019, financial statements.