UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2017
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 333-210821
TripBorn, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 27-2447426 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
812, Venus Atlantis Corporate Park
Near Prahalad Nagar Garden, Satellite
Ahmedabad, Gujarat, India 380 015
(Address of principal executive office) (Zip Code)
(91) 79 40191914
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x Noo No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | Accelerated filer | |||||
| Non-accelerated filer | Smaller reporting company | |||||
| Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒x
No market value has been computed based upon the fact that no active trading market existed as of the last business day of the registrant’s most recently completed second fiscal quarter.
As of August 9, 2017,13, 2018, there were outstanding 95,711,874 shares of common stock, par value $0.0001 per share.
TripBorn, Inc.
Form 10-Q
For the First Quarter Ended June 30, 2017
| Part I | Financial Information | |||||
| Item 1 | Unaudited Condensed Consolidated Financial Statements | |||||
| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
| 7 | ||||||
| 8 | ||||||
| Item 2 | ||||||
| Item 4 | ||||||
| Part II | Other Information | 22 | ||||
| Item 1 | 22 | |||||
| Item 1A | 22 | |||||
| Item 2 | ||||||
| Item 5 | ||||||
| Item 6 | 22 | |||||
| Signature | 22 | |||||
| Index to Exhibits | 23 | |||||
| 2 | ||||
PART I. FINANCIAL INFORMATION
TRIPBORN, INC.
(Unaudited)
First Quarter Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Net revenue | $ | 108,542 | $ | 94,242 | ||||
| Cost of revenue | 19,886 | 68,946 | ||||||
| Gross profit | 88,656 | 25,296 | ||||||
| Operating expenses | ||||||||
| Selling, general, and administrative expenses | 176,177 | 48,167 | ||||||
| Legal and consulting expenses | 47,623 | 76,968 | ||||||
| Income (loss) from operations | (135,144 | ) | (99,839 | ) | ||||
| Other income (expense) | ||||||||
| Depreciation and amortization | (118,904 | ) | (49,504 | ) | ||||
| Interest expense | (60,494 | ) | (34,390 | ) | ||||
| Total other income (expense) | (179,398 | ) | (83,894 | ) | ||||
| Income (loss) before income tax expense | (314,542 | ) | (183,733 | ) | ||||
| Income tax benefit (expense) | 92,000 | 53,688 | ||||||
| Net income (loss) | (222,542 | ) | $ | (130,045 | ) | |||
| Basic income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic weighted average number of shares | 80,660,849 | 76,804,914 | ||||||
| Diluted weighted average number of shares | 80,660,849 | 76,804,914 | ||||||
| First Quarter Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| Net revenue | $ | 101,783 | $ | 108,542 | ||||
| Cost of revenue | 2,637 | 19,886 | ||||||
| Gross profit | 99,146 | 88,656 | ||||||
| Operating expenses | ||||||||
| Selling, general, and administrative expenses | 240,702 | 176,177 | ||||||
| Legal and consulting expenses | 48,913 | 47,623 | ||||||
| Income (loss) from operations | (190,469 | ) | (135,144 | ) | ||||
| Other income (expense) | ||||||||
| Depreciation and amortization | (83,566 | ) | (118,904 | ) | ||||
| Interest income | 82 | |||||||
| Interest expense | (47,325 | ) | (60,494 | ) | ||||
| Total other income (expense) | (130,809 | ) | (179,398 | ) | ||||
| Income (loss) before income tax expense | (321,278 | ) | (314,542 | ) | ||||
| Income tax benefit (expense) | 67,468 | 92,000 | ||||||
| Net income (loss) | (253,810 | ) | $ | (222,542 | ) | |||
| Basic income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic weighted average number of shares | 91,287,934 | 80,660,849 | ||||||
| Diluted weighted average number of shares | 91,287,934 | 80,660,849 | ||||||
See accompanying notes to consolidated financial statements.
| 3 |
TRIPBORN, INC.
(Unaudited)
| First Quarter Ended | ||||||||
| June 30, | ||||||||
| 2017 | 2016 | |||||||
| Net income (loss) | $ | (222,542 | ) | $ | (130,045 | ) | ||
| Other comprehensive income (loss), net of tax | ||||||||
| Unrealized foreign currency translation income/(loss) | (200 | ) | 290 | |||||
| Other comprehensive income (loss), net of tax | (200 | ) | 290 | |||||
| Comprehensive loss | $ | (222,742 | ) | $ | (129,755 | ) | ||
| First Quarter Ended | ||||||||
| June 30, | ||||||||
| 2018 | 2017 | |||||||
| Net income (loss) | $ | 253,810 | $ | (222,542 | ) | |||
| Other comprehensive income (loss), net of tax | ||||||||
| Unrealized foreign currency translation income/(loss) | 3,660 | (200 | ) | |||||
| Other comprehensive income (loss), net of tax | 3,660 | (200 | ) | |||||
| Comprehensive loss | $ | (250,150 | ) | $ | (222,742 | ) | ||
See accompanying notes to consolidated financial statements.
| 4 |
TRIPBORN, INC.
| June 30, | March 31, | |||||||
| 2017 | 2017 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 983,520 | $ | 516,707 | ||||
| Accounts receivable | 250,265 | 289,089 | ||||||
| Other current assets | 307,016 | 294,203 | ||||||
| Total current assets | 1,540,801 | 1,099,999 | ||||||
| Property and equipment, net | 12,868 | 13,236 | ||||||
| Intangible assets, net | 1,443,749 | 1,563,222 | ||||||
| Deferred income taxes | 318,809 | 226,331 | ||||||
| TOTAL ASSETS | $ | 3,316,227 | $ | 2,902,788 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 122,563 | $ | 175,748 | ||||
| Other current liabilities | 602,680 | 460,314 | ||||||
| Total current liabilities | 725,243 | 636,062 | ||||||
| Long term liabilities | ||||||||
| Loans payable – related party | 0 | 0 | ||||||
| Convertible notes | 2,355,120 | 2,355,120 | ||||||
| Total current and long term liabilities | 3,080,363 | 2,991,182 | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock $.0001 par value | 0 | 0 | ||||||
| Authorized shares: 10,000,000 | ||||||||
| Common stock $.0001 par value | 8,080 | 7,898 | ||||||
| Authorized shares: 200,000,000 | ||||||||
| Shares issued and outstanding: 80,794,914 and 78,971,581 | ||||||||
| Additional paid-in capital | 1,272,310 | 725,492 | ||||||
| Accumulated other comprehensive income (loss) | 6,532 | 6,732 | ||||||
| Retained earnings (deficit) | (1,051,058 | ) | (828,516 | ) | ||||
| Total stockholders’ equity | 235,864 | (88,394 | ) | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,316,227 | $ | 2,902,788 | ||||
| June 30, | March 31, | |||||||
| 2018 | 2018 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 824,290 | $ | 1,148,741 | ||||
| Accounts receivable | 282,279 | 172,625 | ||||||
| Other current assets | 469,732 | 334,961 | ||||||
| Total current assets | 1,576,301 | 1,656,327 | ||||||
| Property and equipment, net | 11,539 | 12,159 | ||||||
| Intangible assets, net | 1,103,781 | 1,189,499 | ||||||
| Deferred income taxes | 371,797 | 348,098 | ||||||
| TOTAL ASSETS | $ | 3,063,418 | $ | 3,206,083 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 450,886 | $ | 390,201 | ||||
| Other current liabilities | 567,212 | 520,412 | ||||||
| Total current liabilities | 1,018,098 | 910,613 | ||||||
| Long term liabilities | ||||||||
| Convertible notes | 1,840,668 | 1,840,668 | ||||||
| Total current and long term liabilities | 2,858,766 | 2,751,281 | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock $.0001 par value | 0 | 0 | ||||||
| Authorized shares: 10,000,000 | ||||||||
| Common stock $.0001 par value | 9,572 | 9,572 | ||||||
| Authorized shares: 200,000,000 | ||||||||
| Shares issued and outstanding: 80,794,914 and 78,971,581 | ||||||||
| Additional paid-in capital | 2,321,818 | 2,321,818 | ||||||
| Accumulated other comprehensive income (loss) | 19,316 | 15,656 | ||||||
| Retained earnings (deficit) | (2,146,054 | ) | (1,892,244 | ) | ||||
| Total stockholders’ equity | 204,652 | 454,802 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,063,418 | $ | 3,206,083 | ||||
See accompanying notes to consolidated financial statements.
| 5 |
TRIPBORN, INC.
(Unaudited)
| Common Stock | ||||||||||||||||||||||||
Shares | Amount | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings (deficit) | Total stockholder’s equity (deficit) | |||||||||||||||||||
| Balance at March 31, 2017 | 78,971,581 | $ | 7,898 | $ | 725,492 | $ | 6,732 | $ | (828,516 | ) | $ | (88,394 | ) | |||||||||||
| Issuance of common stock | 1,823,333 | 182 | 546,818 | 547,000 | ||||||||||||||||||||
| Other comprehensive income (loss) | (200 | ) | (200 | ) | ||||||||||||||||||||
| Net income (loss) | (222,542 | ) | (222,542 | ) | ||||||||||||||||||||
| Balance at June 30, 2017 | 80,794,914 | 8,080 | 1,272,310 | 6,532 | (1,051,058 | ) | 235,864 | |||||||||||||||||
| Common Stock | ||||||||||||||||||||||||
Shares | Amount | Additional paid-in capital | Accumulated other comprehensive income |
Retained earnings (deficit) | Total stockholder’s equity (deficit) | |||||||||||||||||||
| Balance at March 31, 2018 | 95,711,874 | $ | 9,572 | $ | 2,321,818 | $ | 15,656 | $ | (1,892,244 | ) | $ | 454,802 | ||||||||||||
| Issuance of common stock | ||||||||||||||||||||||||
| Other comprehensive income (loss) | 3,660 | 3,660 | ||||||||||||||||||||||
| Net income (loss) | (253,810 | ) | (253,810 | ) | ||||||||||||||||||||
| Balance at June 30, 2018 | 95,711,844 | $ | 9,572 | $ | 2,321,818 | $ | 19,316 | $ | (2,146,054 | ) | $ | 204,652 | ||||||||||||
See accompanying notes to consolidated financial statements.
| 6 |
TRIPBORN, INC.
(Unaudited)
First Quarter Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (222,542 | ) | $ | (130,045 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 118,904 | 49,504 | ||||||
| Other comprehensive income (loss) | (200 | ) | 290 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 38,824 | (70,533 | ) | |||||
| Other current assets | (12,813 | ) | 8,407 | |||||
| Deferred tax asset | (92,478 | ) | (54,887 | ) | ||||
| Accounts payable and accrued expenses | (53,185 | ) | 39,715 | |||||
| Other current liabilities | 142,366 | 67,714 | ||||||
| Net cash provided (used) by operating activities | (81,124 | ) | (89,835 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Change in property and equipment | 368 | (5,148 | ) | |||||
| Change in intangible assets | 569 | 7,488 | ||||||
| Net cash used in investing activities | 937 | 2,340 | ||||||
| Cash flows from financing activities: | ||||||||
| Increase in common stock | 182 | 0 | ||||||
| Change in additional paid in capital | 546,818 | 0 | ||||||
| Change in loan from shareholder | 0 | 0 | ||||||
| Change in convertible notes | 0 | 0 | ||||||
| Net cash provided (used) in financing activities | 547,000 | 0 | ||||||
| Net increase (decrease) in cash and cash equivalents | 466,813 | (87,495 | ) | |||||
| Cash and cash equivalents at beginning of period | 516,707 | 251,971 | ||||||
| Cash and cash equivalents at end of period | $ | 983,520 | $ | 164,476 | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | 0 | $ | 0 | ||||
| Income tax payments | $ | 0 | $ | 0 | ||||
| Quarter Ended June 30 | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | (253,810 | ) | $ | (222,542 | ) | ||
| Adjustment to reconcile net income (loss) to net cash | ||||||||
| provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 83,566 | 118,904 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in: | ||||||||
| Accounts receivable | (109,652 | ) | 38,824 | |||||
| Other current assets | (134,773 | ) | (12,813 | ) | ||||
| Deferred tax asset | (23,699 | ) | (92,478 | ) | ||||
| Increase (decrease) in: | ||||||||
| Accounts payable and accrued expenses | 66,477 | (53,185 | ) | |||||
| Other current liabilities | 46,800 | 142,366 | ||||||
| Net cash provided by (used in) operating activities | (325,091 | ) | (80,924 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (3,020 | ) | 368 | |||||
| Increase in intangible assets | 0 | 569 | ||||||
| Net cash used in investing activities | (3,020 | ) | 937 | |||||
| Cash flows from financing activities | ||||||||
| Increase in common stock | — | 182 | ||||||
| Increase in additional paid-in capital | — | 546,818 | ||||||
| Net cash provided by financing activities | — | 547,000 | ||||||
| Effect of exchange rates changes on cash | 3,660 | (200 | ) | |||||
| Net change in cash | (324,451 | ) | 466,813 | |||||
| Cash | ||||||||
| Beginning of the year | 1,148,741 | 516,707 | ||||||
| End of the year | $ | 824,290 | $ | 983,520 | ||||
| Supplementary disclosure of cash flows information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | — | $ | — | ||||
| Income taxes | $ | — | $ | — | ||||
See accompanying notes to consolidated financial statements.
| 7 |
June 30, 2017
(Unaudited)
1. Organization and the Nature of Business
TripBorn, Inc. (“TripBorn” or the “Company”) is a business to business online travel agency (“OTA”) that offers travel reservations and related travel services and products to travel agents in India through its proprietary internet-based platform at www.tripborn.com. TripBorn is a holding company that was incorporated in Delaware in January 2010 and operated as a shell company with nominal or no assets or operations until December 2015 when it acquired substantially all of the outstanding common stock of its operating subsidiary, Sunalpha Green Technologies Private Limited (“Sunalpha”). The Company has selected March 31 as its fiscal year end.
TripBorn was known as PinstripesNYC, Inc. until January 2016. TripBorn filed reports as PinstripesNYC, Inc. with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (“Exchange Act”) from August 2010 until it terminated its registration under the Exchange Act in May 2013.
On December 14, 2015, the Company acquired all of the outstanding shares of Sunalpha, which was incorporated under the laws of the Republic of India on November 4, 2010. The transaction was accounted for as a reverse recapitalization. Sunalpha was the acquirer for financial reporting purposes, and TripBorn was the acquired company.
2. Summary of Significant |
Accounting Policies
These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) as detailed in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”).
Basis of Presentation
The acquisition of all of the outstanding shares of common stock of Sunalpha by TripBorn on December 14, 2015 was accounted for as a reverse recapitalization. Sunalpha was the acquirer for financial reporting purposes, and TripBorn was the acquired company. Consequently, the assets, liabilities and results of operations that are reflected in the Company’s consolidated financial statements prior to the December 14, 2015 transaction are those of Sunalpha and are recorded using the historical cost basis. The consolidated financial statements after completion of the December 14, 2015 transaction include the assets, liabilities and results of operations of Sunalpha up to the day prior to the closing of the transaction, and the assets, liabilities and results of operations of the Company and Sunalpha from and after the closing of the transaction on December 14, 2015. All significant related party accounts and transactions between the Company and Sunalpha have been eliminated upon consolidation.
Revenue Recognition
In May 2014, the FASB issued guidance on revenue from contracts with customers that superseded most current revenue recognition guidance, including industry-specific guidance. The Company provides travel products andunderlying principle of the guidance is to recognize revenue to depict the transfer of goods or services to leisurecustomers at an amount to which the company expects to be entitled in exchange for those goods or services. The new guidance requires an evaluation of revenue arrangements with customers following a five-step approach: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and corporate travelers in India and abroad. The(5) recognize revenue from rendering thesewhen (or as) the company satisfies each performance obligation. Revenues are recognized when control of the promised services is recognized at the time when significant risk and rewards are transferred to the customer. This is generallycustomers in an amount that reflects the case: (1)expected consideration in exchange for those services. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the services. Other major provisions of the guidance include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the provisions of this guidance effective January 1, 2018 as required under the guidance. The adoption of this guidance did not have any material impact on the date of departure for vacation packages, (2) on the date of check in for hotel booking business and (3) on the date of issuance for the sale of airline tickets.Company’s consolidated condensed financial statements.
| 8 |
Cost of Revenue
Cost of revenue primarily consists of costs paid to hotel and vacation package suppliers for the acquisition of relevant services and products for sale to customers and includes the procurement cost of hotel rooms and other services.
Cost of revenue is the amount paid or accrued to procure 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.
Operating Expenses
Operating expenses include costs such as advertising and business promotion costs, utilities, rent, payroll and consultants fees and charges, which are recognized on an accrual basis. Depreciation and amortization costs are amortized over the estimated useful lives of the assets.
Use of Estimates
The preparation of financial statements in US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could differ significantly from those estimates. The estimates underlying the Company’s Financial Statements relate to, accruals for travel transactions, valuation of accounts receivable, useful life of long-lived assets and income taxes.
Cash and Cash Equivalents
The Company considers all highly-liquid investments (including money market funds) with an original maturity at acquisition of three months or less to be cash equivalents. The Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in any significant credit risk.
Sunalpha has ninetwelve accounts denominated in Indian Rupees. As of June 30, 20172018 and 2016,2017, the cash balance in financial institutions in India was USD $229,520$360,210 and $155,886,$229,520, respectively. The transactions are undertaken in Indian Rupees and requires a foreign currency translation adjustment. The Company’s cash deposits in India are not insured against loss. The Company does not believe that this results in any significant credit risk.
Receivables and Credit Policies
Accounts receivable are uncollateralized customer obligations due under normal trade terms which generally range from 24 hours to seven to ten days from the time and date of transaction. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices exceeding credit terms are considered delinquent. Payments of accounts receivable are allocated to specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.
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.
Intangible Assets
Intangible assets with indefinite useful lives are tested for impairment at least annually. Intangible assets that have limited useful lives are amortized on a straight line basis over the shorter of their useful or legal lives.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
The Company maintains its cash in bank deposit accounts, which are not insured. The Company has not experienced any losses in such accounts. The Company believes that it is not exposed to any significant credit risk related to its cash holdings.
| 9 |
Income Taxes
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled. TripBorn, Inc. was incorporated in the State of Delaware and is subject to Federal income tax in the United States of America. Sunalpha was incorporated under the laws of the Republic of India and has no operating profit for current tax liabilities. The Indian corporate income tax rate is 30% for domestic companies.
The Company accounts for income taxes underin accordance with ASC 740, “Income Taxes”, which requires the Company to use the asset and liability method in accordance with FASB ASC 740, Accountingof accounting for Income Taxes. Deferred tax assetsincome taxes. Under the asset and liabilitiesliability method, deferred income taxes are recognized for the future tax consequences attributableof temporary differences by applying enacted statutory tax rates applicable to thefuture years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured usingcarry forwards. Under this accounting standard, the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilitiesincome taxes of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 clarifies the accounting for uncertainty in tax positions. This interpretation requires that an entity recognizes in its financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, bybased on the Internal Revenue Service.technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company has concludedelected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of income and comprehensive income. No significant uncertainty in tax positions relating to income taxes have been incurred during the quarters ended June 30, 2018 and 2017.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act included a broad range of complex provisions impacting the taxation of multi-national companies. The Tax Act makes broad and complex changes to the U.S. corporate income tax system and includes a Transition Toll Tax (the “Transition Tax”), which is a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries’ previously untaxed foreign earnings. Since the Company’s foreign subsidiary has historically realized net losses, we believe that asthe Company is not subject to the Transition Tax.
The Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of March10.5% for tax years beginning after December 31, 2017 and 2016 there(increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. We are no material uncertain tax positions taken or expected to be taken that would require recognitionstill evaluating the impacts of a liability or asset or disclosure in the financial statements. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Company’s management believes that the Company’s income tax returns for the last three years remain subject to examination based on normal statutory periods subject to audits, notwithstanding any events or circumstances that may exist which could expand the open period.
Foreign Currency Translation
The Company translates the foreign currency financial statements into US Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of ASC subtopic 830-10, Foreign Currency Matters (“ASC 830-10”). Assets and liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’ equity (deficit).
| June 30, 2017 | ||
| Period-end spot rate | US$1=INR 68.7100 | US$1=INR 64.6112 |
| Average rate | US$1=INR 66.9200 | US$1=INR 64.7509 |
3. Change in Control Transaction
On December 8, 2015, the Company issued 71,428,570 shares of common stock to Arna Global LLC (“Arna”) for cash consideration of $95,500. Arna is wholly-owned by the Company’s President and director, Deepak Sharma. The Company accounted for the change in control transaction with Arna using the acquisition method of accounting. Arna obtained control of 93% of the outstanding shares of common stock of PinstripesNYC, Inc. in connection with the Stock Purchase Agreement among PinstripesNYC, Inc., Arna, and Maxim Kelyfos, LLC dated December 8, 2015, and was the acquirer. This transaction resulted in (1) no identifiable assets being acquired, (2) no liabilities being assumed, (3) no goodwill being recognized and (4) no gains being recognized from a bargain purchase.
| 10 |
4. Acquisition of Sunalpha Green Technologies Private Limited
On December 14, 2015, the Company acquired substantially all of the outstanding shares of Sunalpha which was incorporated under the laws of the Republic of India in November 2010. The transaction was accounted for as a reverse recapitalization. Sunalpha was the acquirer for financial reporting purposes, and TripBorn was the acquired company. Consequently, the assets, liabilities and results of operations that are reflected in the Company’s consolidated financial statements prior to the December 14, 2015 transaction are those of Sunalpha and are recorded using the historical cost basis. The consolidated financial statements after completion of the December 14, 2015 transaction include the assets, liabilities and results of operations of Sunalpha up to the day prior to the closing of the transaction, and the assets, liabilities and results of operations of the Company and Sunalpha from and after the closing date of the transaction.
5. Increase in Authorized Shares
The Company amended its certificate of incorporation on January 13, 2016 to (1) increase the authorized number of shares of common stock from 100,000,000 to 200,000,000 and (2) change its name from PinstripesNYC. Inc. to TripBorn, Inc.
6. Property and Equipment
Property and Equipment consists of the following as of June 30 and March 31, 2017.2018. The property and equipment listed below are recorded in the books of Sunalpha.
| June 30, 2017 | March 31, 2017 | |||||||
| Computer | $ | 21,551 | $ | 20,782 | ||||
| Furniture and Fixture | 4,138 | 4,138 | ||||||
| Office Equipment | 6,538 | 5,768 | ||||||
| Software License | 768 | 244 | ||||||
| Total | 32,995 | 30,933 | ||||||
| Accumulated depreciation | (20,127 | ) | (17,697 | ) | ||||
| Fixed assets, net | $ | 12,868 | $ | 13,236 | ||||
| June 30, 2018 | March 31, 2018 | |||||||
| Computer | $ | 13,443 | $ | 13,443 | ||||
| Furniture and Fixture | 5,864 | 5,468 | ||||||
| Office Equipment | 6,537 | 6,537 | ||||||
| Software License | 768 | 768 | ||||||
| Total | 26,612 | 26,216 | ||||||
| Accumulated depreciation | (15,073 | ) | (14,057 | ) | ||||
| Fixed assets, net | $ | 11,539 | $ | 12,159 | ||||
Depreciation expense for the quarters ended June 30, 2018 and 2017 is $1,016 and 2016 is $1,604, and $1,645, respectively.
7. Intangible Assets
Intangible assets consist of the following as of June 30 and March 31, 2017:
| June 30, 2017 | March 31, 2017 | |||||||
| API Access | $ | 130,850 | $ | 129,876 | ||||
| Software | 1,651,000 | 1,651,000 | ||||||
| Total | 1,781,850 | 1,780,876 | ||||||
| Accumulated amortization | (338,101 | ) | (217,654 | ) | ||||
| Intangible assets, net | $ | 1,443,749 | $ | 1,021,226 | ||||
| June 30, 2018 | March 31, 2018 | |||||||
| API Access | $ | 133,763 | $ | 133,763 | ||||
| Software | 1,651,000 | 1,651,000 | ||||||
| Total | 1,784,763 | 1,784,763 | ||||||
| Accumulated amortization | (680,982 | ) | (595,264 | ) | ||||
| Intangible assets, net | $ | 1,103,781 | $ | 1,189,499 | ||||
Amortization expense for the quarters ended June 30, 2018 and 2017 was $82,550 and 2016 was $117,300, and $47,859, respectively.
| Years ended March 31 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
| Estimated amortization expense | $ | 256,946 | $ | 342,594 | $ | 342,594 | $ | 342,594 | $ | 116,644 | ||||||||||
Intangible assets consist of Application Programming Interface (API) access with major travel companies and a customized online transaction platform called Travelcord for use on the Company’s website, www.tripborn.com. Application Programming Interface components are used to send/receive/retrieve various data to and from supplier systems for tickets availability, pricing, aggregation and booking information. The API specifies how software components or applications should interact with each other using graphical user interfaces (GUI). These components are automated software components or set of routines, protocols and tools for building and communicating various software applications.
Following the Company’s acquisition of Sunalpha, the Company acquired ownership and development rights to the Travelcord software from Arna for a fee of $956,000 pursuant to a Software Agreement dated December 16, 2015. The Company paid the $956,000 fee to Arna in the form of a convertible promissory note. The Travelcord software was recognized as an intangible asset at historical cost pursuant to ASC 350-40 Intangibles – Goodwill and Other, Internal Use Software, and no goodwill was recognized. Arna acquired the Travelcord software from Takniki Communications, which is wholly-owned by our Vice President and director, Sachin Mandloi pursuant to a Software Development Agreement, dated January 26, 2015.
On September 23, 2016, we entered into a software development agreement with Takniki Communications to further develop and enhance our online transaction platform, Travelcord. Pursuant to this software development agreement, we agreed to pay a fee of $695,000 upon delivery of enhanced software, which occurred on December 31, 2016. The Company paid for the software development by issuing a convertible promissory note in the principal amount of $695,000 to Takniki Communications.
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8. Tax Recovery Charges
The Company, through its internet-based platform, facilitates the purchase of travel products and services from third party travel service providers. The Company incurs service taxes at specified rates on the services it acquires from the travel service providers. The Company charges service taxes at specified rates on sales of travel and travel related products to clients. The net difference of the amount paid while acquiring services and the amount collected while selling the services is remitted to taxing authorities ("tax recovery charge"). As of June 30, 2017,2018, the Company has a balance with the tax authority to offset future service tax dues.
9. Related Party Transactions
| Convertible Notes |
Mr. Sharma loaned the Company $156,407, which is evidenced by a convertible promissory note, dated March 8, 2016, which bears interest at an annual rate of 10%. The principal amount together with accrued and unpaid interest thereon becomes due and payable on March 7, 2019. In the event that the Company completes an underwritten public offering of its common stock in connection with a listing on a national securities exchange (an “Uplist Transaction”) prior to the March 7, 2019 maturity date, the outstanding principal balance of the note will automatically convert into 3,432,234 shares of common stock (the “Sharma Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, Mr. Sharma will have the option to receive full payment of the outstanding principal balance or the Sharma Note Shares, each together with accrued unpaid interest paid in cash. Mr. Sharma also will have the option to receive full payment of the outstanding principal or the Sharma Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
Mr. Mandloi loaned the Company $38,076, which is evidenced by a convertible promissory note, dated March 8, 2016, which bears interest at an annual rate of 10%. The principal amount together with accrued and unpaid interest thereon becomes due and payable on March 7, 2019. In the event that the Company completes an Uplist Transaction prior to the March 7, 2019 maturity date, the outstanding principal balance of the note will automatically convert into 835,552 shares of common stock (the “Mandloi Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, Mr. Mandloi will have the option to receive full payment of the outstanding principal balance or the Mandloi Note Shares, each together with accrued unpaid interest paid in cash. Mr. Mandloi also will have the option to receive full payment of the outstanding principal or the Mandloi Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
In connection with the Software Agreement described in Note 7 above, Arna, wholly owned by the Company’s president, loaned the Company $956,000, which is evidenced by a convertible promissory note, dated March 8, 2016, which bears interest at an annual rate of 10%. The principal amount together with accrued and unpaid interest thereon becomes due and payable on March 7, 2019. In the event that the Company completes an Uplist Transaction prior to the March 7, 2019 maturity date, the outstanding principal balance of the note will automatically convert into 21,194,381 shares of common stock (the “Arna Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, Arna will have the option to receive full payment of the outstanding principal balance or the Arna Note Shares, each together with accrued unpaid interest paid in cash. Arna also will have the option to receive full payment of the outstanding principal or the Arna Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
On September 23, 2016, we entered into a software development agreement with Takniki Communications to further develop and enhance our online transaction platform, Travelcord. Pursuant to this software development agreement, we agreed to pay a fee of $695,000 upon delivery of enhanced software, which occurred on December 31, 2016. The Company paid for the software development by issuing a convertible promissory note in the principal amount of $695,000 to Takniki Communications with a maturity date of December 31, 2019, and bearing interest at a rate of 10%. The principal amount of this note is convertible into 10,303,070 shares of our common stock at the noteholder’s option at maturity. In the event that the Company completes an Uplist Transaction prior to the December 31, 2019 maturity date, the outstanding principal balance of the note will automatically convert into 10,303,070 shares of common stock (the “Takniki Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, Takniki will have the option to receive full payment of the outstanding principal balance or the Takniki Note Shares, each together with accrued unpaid interest paid in cash. Takniki also will have the option to receive full payment of the outstanding principal or the Takniki Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
| iii. | Guarantee |
Deposits of the Company’s President and Managing Director with IndusInd Bank Ltd. serve as collateral for a guarantee in the amount of $50,000 in favor of the International Air Transport Association (“IATA”) on behalf of Sunalpha. IndusInd Bank Ltd. will pay the guaranteed amount for claims through September 30, 2017.
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10. Convertible Notes
On February 8, 2016, the Company issued convertible promissory notes to three accredited investors in the aggregate principal amount of $350,000 pursuant to a note purchase agreement of the same date. Interest will accrue at the rate of 6% per annum. In the event that the Company completes an Uplist Transaction, prior to the February 8, 2019 maturity date, the outstanding principal balance of the note will automatically convert into a total of 9,156,206 shares of common stock (the “February 2016 Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, the noteholders will have the option to receive full payment of the outstanding principal balance or the February 2016 Note Shares, each together with accrued unpaid interest paid in cash. The noteholders also will have the option to receive full payment of the outstanding principal or the February 2016 Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
On July 1, 2016, the Company issued convertible promissory notes to an accredited investor in the aggregate principal amount of $150,000 pursuant to a note purchase agreement dated February 8, 2016. Interest will accrue at the rate of 6% per annum. In the event that the Company completes an Uplist Transaction, prior to the July 1, 2019 maturity date, the outstanding principal balance of the note will automatically convert into a total of 3,924,088 shares of common stock (the “July 2016 Note Shares”). If the Uplist Transaction does not occur prior to the maturity date, the noteholder will have the option to receive full payment of the outstanding principal balance or the July 2016 Note Shares, each together with accrued unpaid interest paid in cash. The noteholder also will have the option to receive full payment of the outstanding principal or the July 2016 Note Shares, each together with accrued unpaid interest paid in cash, in connection with a “sale of the company” as such term is defined in the convertible promissory note.
11. Income Tax
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 deferred tax assets at June 30, 20172018 and March 31, 20172018 were $318,809$371,797 and $226,331,$348,098, respectively.
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 files tax returns in India. The Company is generally subject to U.S. Federal, State and local examinations by tax authorities for the past three years.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act included a broad range of complex provisions impacting the taxation of multi-national companies. The Tax Act makes broad and complex changes to the U.S. corporate income tax system and includes a Transition Toll Tax (the “Transition Tax”), which is a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries’ previously untaxed foreign earnings. The Toll Charge will be paid over an eight-year period, starting in 2018, and will not accrue interest. The Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. Generally, accounting for the impacts of newly enacted tax legislation is required to be completed in the period of enactment, however in response to the complexities and ambiguity surrounding the Tax Act, the SEC released Staff Accounting Bulletin No. 118 (“SAB 118”) to provide companies with relief around the initial accounting for the Tax Act. Pursuant to SAB 118, the SEC has provided a one-year measurement period for companies to analyze and finalize accounting for the Tax Act. During the one-year measurement period, SAB 118 allows companies to recognize provisional amounts when reasonable estimates can be made for the impacts resulting from the Tax Act. TripBorn will finalize accounting for the Tax Act during the one-year measurement period, and any adjustments to the provisional amounts will be included in income tax expense or benefit in the appropriate period, and disclosed if material, in accordance with guidance provided by SAB 118.
While our accounting for the Tax Act is not complete, we do not believe we are subject to the Transition Tax. The Transition Tax is a tax on previously untaxed accumulated earnings and profits (“E&P”) of our foreign subsidiaries and our foreign subsidiary has historically generated operating losses. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings, if any.
The Tax Act has significant complexity and our final tax liability may materially differ from provisional estimates due to additional guidance and regulations that may be issued by the U.S. Treasury Department, the Internal Revenue Service (“IRS”) and state and local tax authorities, and for TripBorn’s finalization of the relevant calculations required by the new tax legislation.
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TripBorn continues to analyze the provisions of the Tax Act which are effective after December 30, 2017, including but not limited to certain global intangible low-tax income (“GILTI”) from foreign operations.
Under GAAP, companies are allowed to make an accounting policy election to either treat taxes resulting from GILTI as a current-period expense when they are incurred or factor such amounts into the measurement of deferred taxes. The Company has not completed its analysis of the effects of the GILTI provisions and will further consider the accounting policy election within the measurement period as provided under SAB 118.
12. New Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
New Accounting Pronouncements Recently Adopted
As disclosed in Revenue Recognition above, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) effective April 1, 2018 using the retrospective transition method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from US GAAP. The core principle of the new accounting standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on the Company’s financial position, results of operations and cash flows or related disclosures. As such, prior period financial statements were not recast.
New Accounting Pronouncements Not Yet Adopted
In February 2016, the FASB issued ASU No. 2016-02, "Leases” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet with a corresponding liability and disclosing key information about leasing arrangements. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim reporting periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is evaluating the impact of the adoption of this revised guidance on its consolidated financial statements and related disclosures.
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows”. The amendments provide guidance on the following eight specific cash flow issues: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Business Combination; (4)Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned; (6) Life Insurance Policies; (7) Distributions Received from Equity Method Investees; (8) Beneficial Interests in Securitization Transactions; and Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim reporting periods within fiscal years beginning after December 15, 2019. The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory”, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. For public business entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The amendments in this ASU should be adopted on a modified retrospective basis. The Company does not expect that adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
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In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Basically, these amendments provide a screen to determine when a set is not a business. If the screen is not met, the amendments in this ASU first, require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second, remove the evaluation of whether a market participant could replace missing elements. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company does not expect that adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets” to clarify the scope of Subtopic 610-20 and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company does not expect that adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.
In May 2017, the FASB issued ASU 2017-09, “Scope of Modification Accounting”, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not expect that adoption of this guidance will have a material impact on itsunaudited condensed consolidated financial statements and related disclosures.
13. Net Income (Loss) Per Share
A reconciliation of net loss and weighted average shares used in computing basic and diluted net income per share is as follows:
| First Quarter Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| Basic net income (loss) per share: | ||||||||
| Net income (loss) applicable to common shares | $ | (253,810 | ) | $ | (222,542 | ) | ||
| Weighted average common shares outstanding | 91,287,934 | 80,660,849 | ||||||
| Basic net income (loss) per share of common stock | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted net income (loss) per share: | ||||||||
| Net income (loss) applicable to common shares | $ | (253,810 | ) | $ | (222,542 | ) | ||
| Weighted average common shares outstanding | 91,287,934 | 80,660,849 | ||||||
| Dilutive effects of convertible debt | - | - | ||||||
| Weighted average common shares, assuming dilutive effect of convertible debt | 91,287,934 | 80,660,849 | ||||||
| Diluted net income (loss) per share of common stock | $ | (0.00 | ) | $ | (0.00 | ) | ||
| 15 |
| First Quarter Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Basic net income (loss) per share: | ||||||||
| Net income (loss) applicable to common shares | $ | (222,542 | ) | $ | (130,045 | ) | ||
| Weighted average common shares outstanding | 80,660,849 | 76,804,914 | ||||||
| Basic net income (loss) per share of common stock | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted net income (loss) per share: | ||||||||
| Net income (loss) applicable to common shares | $ | (222,542 | ) | $ | (130,045 | ) | ||
| Weighted average common shares outstanding | 80,660,849 | 76,804,914 | ||||||
| Dilutive effects of convertible debt | - | - | ||||||
Weighted average common shares, assuming dilutive effect of convertible debt | 80,660,849 | 76,804,914 | ||||||
| Diluted net income (loss) per share of common stock | $ | (0.00 | ) | $ | (0.00 | ) | ||
Due to net loss, the shares of common stock underlying the convertible notes described in Notes 9 and 10 were not included in the calculation of diluted net loss per share, as they would have had an antidilutive effect.
14. Commitments
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, 2016,2017, 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.
Until December 8, 2015, the Company shared office space with Maxim Group LLC. The majority member of Maxim Group LLC is the sole stockholder of Maxim Kelyfos, LLC, which owned 93% of the Company’s common stock outstanding prior to the acquisition of Sunalpha by the Company.
Through Sunalpha, the Company currently occupies approximately 2,455 square feet of office space in Ahmedabad, India, owned by a director of the Company on a rent-freerent free basis. As of June 30, 20172018 and 2016,2017, the Company has not paid any rent for this office space.rent. The Company is expected to pay market rate rent once the Company is profitable.
The Company has leased office space in Ahmedabad, India effective from March 1, 2016 for a term of five years. The operations of the Company are being undertaken from the new premises. The Company will pay approximately $1,260 per month pursuant to the lease agreement.
The Company entered into a consulting agreement effective May 24, 2016 with LogiCore Strategies, LLC (“LogiCore”), pursuant to which Richard J. Shaw serves as the Company’s Chief Financial Officer. The Company compensates LogiCore for Mr. Shaw’s time at an annual rate of $60,000.
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Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: any projections of earnings, revenues or other financial items; any statements regarding the adequacy, availability and sources of capital, any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in forward-looking statements include those factors set forth in this Quarterly Report, particularly under the headings, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations" and subsequent reports that we file with the Securities and Exchange Commission.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this prospectus. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.
Notwithstanding the above, Section 21E of the Securities Exchange Act of 1934, as amended, expressly states that the safe harbor for forward looking statements under the PSLRA does not apply to companies that issue penny stocks. Accordingly, the safe harbor for forward looking statements under the PSLRA is not currently available to us because we may be considered to be an issuer of penny stock.
The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K filed on June 29, 2017.
Overview
We are an online travel agency, sometimes referred to as an OTA, that offers travel reservations and related travel services and products to travel agents in India through our website, www.tripborn.com. Currently, we operate as a business to business, or B2B, online travel agency that serves travel agents and travel companies based in India in booking travel services and products for their customers. Through our internet-based platform, our travel agent customers can search and book domestic and international air tickets, hotels, vacation packages, rail tickets and bus tickets, as well as ancillary travel-related services, and e-commerce money transfer products. We serve over 3,557 travel6,534 agents in the Indian states of Gujarat, Maharashtra, Rajasthan, Karnataka and Madya Pradesh. At this time, approximately 85% of our travel agent customers are based in Gujarat, primarily in and around the city of Ahmedabad.
We are a holding company incorporated in Delaware in 2010. Deepak Sharma, our Presidentpresident and director, formed our operating subsidiary, Sunalpha Green Technologies Private Limited, under the laws of the Republic of India in 2010. Sunalpha commenced operations as an OTA in India in February 2014.
Prior to acquiring Sunalpha in December 2015, we operated as a shell company with nominal or no assets or operations. We were known as PinstripesNYC, Inc. until January 2016. We filed reports as PinstripesNYC, Inc. with the SEC under the Exchange Act from August 2010 until we terminated our registration under the Exchange Act in May 2013. Our fiscal year ends on March 31. We refer to the fiscal year ended March 31, 20172019 as fiscal 20172019 and the fiscal year ended March 31, 20162018 as fiscal 2016.
We manage our OTA business through Travelcord, our proprietary internet-based online transaction platform. Through our website,www.tripborn.com, we offer a wide inventory of travel services and products to travel agents who serve the growing middle class of largely offline travelers in semi-urban and rural regions of India. Through our proprietary technology, we consolidate and provide our travel agent customers with access to travel bookings and hotel reservations that otherwise would be costly and time-consuming to obtain for their customers in an often-fragmented marketplace. While some of our more established competitors have focused on selling directly to consumers in urban areas, our travel agent partners tend to be small, brick and mortar establishments that serve travelers who rely on more personalized transactions for their travel booking needs due to language barriers and lack of access to the internet or credit cards. We have grown our operations through referrals and a focus on addressing our travel agent customers’ needs through technology. As internet penetration in India continues to increase, we anticipate that we will be in a position to use our established platform to offer travel services and products directly to consumers.
| 17 |
We generate revenue through our ticketing business, which includes rail ticketing, bus ticketing and air ticketing, and our hotel reservations and vacation and business packages business. We also generate revenue by providing online payment services and access to visa processing services.
In our ticketing business, our main sources of revenue are (i)(1) commissions and incentive payments from airline suppliers for tickets booked by our travel agent customers through our distribution channels and (ii)(2) service fees we charge our customers.
Historical Operations and Outlook
Since commencing operations as an OTA in February 2014, we have grown our business by initially processing a few transactions a day to processing approximately 3,0006,000 transactions per day in June 2017.2018. In our quarterfiscal year ended June 30, 2017,March 31, 2018 we processed 231,2331,035,206 transactions and 416.9 million searches werehave been performed on our platform. Flight searchesplatform compared to 373,651 and 7.6 million as of March 31, 2017. During fiscal 2018, we experienced increased traffic on our website have grown from a few per daydue to our efforts in February 2014 to over 6,000 flight searches per day in June 2017.marketing and branding. Our travel agent customers log in nearly 1,1502,701 times per day, and spend more than 20 minutes on the platform daily.up from 1,300 at March 31, 2017. We have steadily worked to add suppliers in order to provide additional services and better pricing for our travel agent customers. In the development stages, we have relied on user feedback to enhance our core technology. As internet penetration in India continues to increase, we anticipate that we will be in a position to use our established platform to offer travel services and related services directly to consumers. We believe our online platform is capable of managing hundreds of suppliers and millions of transactions in furtherance of our growth strategies.
In November 2015, we integrated the Indian Railway reservation system into our online platform using complex and scalable technology tools. Previously, we provided rail ticketing through a third partythird-party supplier. Becoming a principalprinciple agent has resulted in and will continue to result in an increase in rail ticketing revenue associated with an increase in fees associated with enrolling our travel agent customers and usage fees for ticketing. We have also experienced, and anticipate that we will continue to see, an increase in selling, general and administrative expenses associated with hiring additional personnel and expanding our marketing activities in connection with the expanded rail ticketing services as well as an increase in legal and consulting expenses associated with becoming a reporting company with the SEC.
Assuming we are successful in enrolling new travel agents while retaining our existing travel agents, we anticipate that we will achieve sustainable and predictable cash flow and revenue growth, year-over-year. However, there is no assurance that we will be successful in implementing our business model and achieving our operational and financial objectives.
We expect to see an increase in bookings through our website and a corresponding increase in revenue in fiscal 20182019 due to the recent expansion of our sales force and our expansion into the states of Maharashtra, Karnataka and Madya Pradesh. In fiscal 2018,2019 we expect to expand into other neighboring states in India.
India remains a largely unbanked country with cash transactions typical. The Indian government’s decision to demonetize their two largest bank notes in circulation on November 8, 2016 caused a disruption throughout India’s economy, slowing growth and forcing customers to focus on day to day expenses. This move slowed India’s GDP during the fourth quarter of fiscal 2017 to 6.1% causing India to lose its status as being the world’s fastest growing economy. During the first quarter of fiscal year 2018, India’s GDP grew by 6.1%. Growth in some of our travel products slowed during the quarter, while our money transfer product grew during this period. We believe that the slowdown in growth will be short lived as the impacts of re-monetization have begun to be felt and GDP growth is projected to be 7.2%7.3% and 7.5% in 20172018 and 2018.
EffectiveIndia’s biggest indirect tax reform in the form of Goods and Services Tax (GST) was completed and a comprehensive dual GST was introduced in India on July 1, 2017 the Indian Government introduced a comprehensive, multi-stage, destination based national goods and services tax (“GST”) that combines taxes and levies2017.These reforms were approved by the Central and State Governments into a unified tax structure. The implementationParliament after they were introduced as part of the Money Bill. Following the passage of the GST has a significant impact on overall tax computation and compliance. We believe thatActs, the GST mayCouncil decided the rates for the Goods and Services to be taxed under the GST regime. GST is considered to be the biggest tax reform in India since independence. It will help realize the goal of “One Nation-One Tax-One Market.” GST is expected to benefit all the stakeholders – industry, government and consumer.
The GST for travel industry and hotels also comes with its share of adverse impacts in short to medium term, were final prices for customers will increase.
Tripborn looks at GST for hotels and tourism as a mixture of simpler, smoother rules and seemingly higher costs & compliance. The process to claim and avail ITC (input tax credit) is simple and clear. Earlier, adjusting the tax paid on inputs against the output was complex and error-prone. This is believed to have an impact on our margins. Webecome easy with GST. Also, under GST, tourists have implementeda clearer idea about the necessary changes to our business processes, accounting,tax they are paying, and information systems to fully comply with this new law. We may incur additional tax compliance costs under this new tax law.we believe in the longer run that GST will help Tripborn grow faster and efficiently.
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RESULTS OF OPERATIONS
During the first quarter of fiscal year 2018,2019, we continued to add new markets and add an increasing number of sales agents that offer our services. These changes drove an increase in our net revenues. Our costs of revenue and operating expenses increased as we expanded our market reach and drove the increase in net loss from operations.
First Quarter Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| Net revenue | $ | 108,542 | $ | 94,242 | ||||
| Cost of revenue | 19,886 | 68,946 | ||||||
| Gross profit | 88,656 | 25,296 | ||||||
| Operating expenses | ||||||||
| Selling, general, and administrative expenses | 176,177 | 48,167 | ||||||
| Legal and consulting expenses | 47,623 | 76,968 | ||||||
| Income (loss) from operations | (135,144 | ) | (99,839 | ) | ||||
| Other income (expense) | ||||||||
| Depreciation and amortization | (118,904 | ) | (49,504 | ) | ||||
| Interest expense | (60,494 | ) | (34,390 | ) | ||||
| Total other income (expense) | (179,398 | ) | (83,894 | ) | ||||
| Income (loss) before income tax expense | $ | (314,542 | ) | $ | (183,733 | ) | ||
| Income tax benefit | 92,000 | 53,688 | ||||||
| Net income (loss) | (222,542 | ) | $ | (130,045 | ) | |||
| Basic income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic weighted average number of shares | 80,660,849 | 76,804,914 | ||||||
| Diluted weighted average number of shares | 80,660,849 | 76,804,914 | ||||||
| First Quarter Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| Net revenue | $ | 101,783 | $ | 108,542 | ||||
| Cost of revenue | 2,637 | 19,886 | ||||||
| Gross profit | 99,146 | 88,656 | ||||||
| Operating expenses | ||||||||
| Selling, general, and administrative expenses | 240,702 | 176,177 | ||||||
| Legal and consulting expenses | 48,913 | 47,623 | ||||||
| Income (loss) from operations | (190,469 | ) | (135,144 | ) | ||||
| Other income (expense) | ||||||||
| Depreciation and amortization | (83,566 | ) | (118,904 | ) | ||||
| Interest income | 82 | |||||||
| Interest expense | (47,325 | ) | (60,494 | ) | ||||
| Total other income (expense) | (130,809 | ) | (179,398 | ) | ||||
| Income (loss) before income tax expense | $ | (321,278 | ) | $ | (314,542 | ) | ||
| Income tax benefit | 67,468 | 92,000 | ||||||
| Net income (loss) | (253,810 | ) | $ | (222,542 | ) | |||
| Basic income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted income (loss) per share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic weighted average number of shares | 91,287,934 | 80,660,849 | ||||||
| Diluted weighted average number of shares | 91,287,934 | 80,660,849 | ||||||
Revenue
Net revenues for the first quarter ended June 30, 20172018 were $108,461$101,783 compared to $94,242$108,542 for the first quarter ended June 30, 2016.2017. Revenue for the quarter ended June 30, 20172018 consisted of $21,900$8,224 from air ticketing compared to $27,392$21,900 in the prior year quarter, $0 from bus ticketing compared to $280$0 in the prior year quarter, $8,896$4,297 from rail ticketing compared to $820$8,896 in the prior year quarter, $819$0 from hotel booking compared to $1,474$819 in the prior year quarter, $18,873$2,728 from vacation packages compared to $46,686$18,873 in the prior year quarter, $6,638$6,143 from payment services compared to $1,871$6,638 in the prior year quarter, and $51,335$80,391 from incentives from our aggregators and suppliers and fees, penalty income and surcharges from our travel agent customers compared to $15,719$51,416 in the prior year. Revenue declined by $6,759 in the current year quarter compared to the prior year quarter. The primary driver was the increase in incentives from our aggregators and suppliers, which was fueled by an increase in the number of transaction that were processed. RevenueThis increase was also impactedoffset by the revenue growth fromdeclines in air and rail ticketing, hotel booking, vacation packages, and payment services which resulted from our expansion efforts into new markets and the hiring of additional sales and marketing personnel. The decrease in revenue from air ticketing, bus ticketing, hotel booking, and vacation packagesdeclines resulted from increased competition infor these products.
Cost of Revenues and Gross Profit
The cost of revenue for the first quarter ended June 30, 20172019 was $19,886$2,637 compared to $68,946$19,886 for the prior year quarter. The cost of revenue represents fees charged by our suppliers. The decrease in cost of revenue from the first quarter ended June 30, 20172018 compared to the prior year quarter was primarily driven by the increase in incentives from our aggregators and suppliers as no costs are associated with these incentives. The cost of revenue was also impacted by decreases in the costs associated with our vacation packages as our vacation package revenue declined in the quarter ended June 30, 2017 compared to the prior year quarter. We are continuing to manage our cost of revenue by optimizing pricing from our suppliers and aggregators to increase our profitability and by implementing pricing algorithms and profitability calculations.
Gross profit from revenues for the first quarter ended June 30, 20172018 was $88,656$99,146 compared to $25,296$88,656 for the prior year quarter. The $63,278$10,490 increase is driven primarily by a decrease in costs to provide revenue.
Operating Expenses
Total operating expenses for the first quarter ended June 30, 20172018 were $223,800$289,615 compared to $125,123$223,800 for the prior year quarter. Our operating expenses include our sales and marketing, payroll and general and administrative costs, and the increase in these costs was driven by our increased headcount as we ramp up our operations. Included in our operating expenses is $47,623$48,913 in legal and consulting expenses associated with our operating as an Exchange Act reporting company, down from $76,968even with $47,623 in the prior year quarter. This decrease was the result of the prior year quarter including the expenses associated our initial Form S-1 filing with the SEC.
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We expect our sales and marketing expenses to increase as we continue to grow the business and hire experienced personnel to support our growing business and operations. Our general and administrative expenses are expected to continue to increase as we incur expenses associated with being an Exchange Act reporting company and applying to havedeveloping an active trading market for our shares quotedstock on the OTCQB Market.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2017,2018, we had $983,520$824,290 in cash and cash equivalents, compared to $516,707$1,148,741 as of March 31, 2017.2018. The $466,813 increase$324,451 decrease in cash was driven by salesour operating loss and a use of common stock of $547,000 during the quarter ended June 30, 2017, which offset our net loss of $222,542.working capital. As of June 30, 2017,2018, we had stockholders’ equity of $235,864$204,652 compared to a deficitstockholder’s equity of $88,394$454,802 at March 31, 2017,2018, which resulted from sales of common stock offset by an increase in operating losses during the quarter ended June 30, 2017.
Our primary source of working capital to date has been through the sale of common stock and the sale and issuance of convertible notes. Our focus remains on deriving net cash flow from operations.
Cash Flows:
The following table is a summary of our Consolidated Statements of Cash Flows:| Three Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2017 | 2016 | |||||||
| Cash Provided by (Used in): | ||||||||
| Operating Activities | $ | (81,124 | ) | $ | (89,835 | ) | ||
| Investing Activities | 937 | 2,340 | ||||||
| Financing Activities | 547,000 | 0 | ||||||
| Three Months Ended | ||||||||
| June 30, | June 30, | |||||||
| 2018 | 2017 | |||||||
| Cash Provided by (Used in): | ||||||||
| Operating Activities | $ | (325,091 | ) | $ | (80,924 | ) | ||
| Investing Activities | (3,020 | ) | 937 | |||||
| Financing Activities | 0 | 547,000 | ||||||
Operating Activities:
Net cash used by operations wasThe year-over-year decreaseincrease in cash used by operations is primarily the result of an increase in operating losses that were partially offset by positiveplus negative changes in net working capital (defined as current assets less current liabilities).
Investing Activities:
During the three months ended June 30,Financing Activities
: During the three months ended June 30,We presently do not have a senior credit or revolving credit facility and do not expect to obtain one in the foreseeable future.
We will require additional capital to continue to fund our operations and will look to raise funds through public and private offerings of our securities. We estimate that we will require approximately $1.0$3.0 million and $5.0 million in the next 12 and 24 months to support our continued operations.
We took the following steps during fiscal years 2017 and 2018 to manage our liquidity and to avoid default on any material third-party obligations:
·We continue to employ “on demand” procurement processes for travel products that we sell to our customers. We also continue our attempts to collect customer payments promptly based on their payment terms, which has helped us manage our working capital needs.
·We raised $150,000 in the first quarter of fiscal 2017 pursuant to the Company’s issuance of a convertible note. The note hashad a three-year term and bearsaccrued interest at the rate of six percent payable at maturity. The principal amount of the note iswas convertible into shares of the Company’s common stock at the noteholder’s option at maturity. This note was converted into 3,924,088 shares of common stock on July 15 and 16, 2017.
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·We issued a convertible note to Takniki Communications, an affiliate owned by Mr.Sachin Mandloi, our vice presidentVice President and a director, totaling $695,000 in the third quarter of fiscal 2017. This note was issued pursuant to a Software Development Agreement dated September 23, 2016 between Takniki Communications and the Company to finance the upgrade of our Travelcord operating software. The note has a three-year term and bears interest at the rate of ten percent payable at maturity. The principal amount of this note is convertible into shares of the Company’s common stock at the noteholder’s option at maturity.
·We sold $460,000 of the Company’s common stock during the third quarter of fiscal 2017 and another $190,000 during the fourth quarter of fiscal 2017.
·We sold $547,000 of the Company’s common stock during the first quarter of fiscal 2018 and another $551,000 during the second quarter of fiscal 2018.
·The Company is working with a market maker to apply to have ourCompany’s common stock is now quoted on the OTCQB Market; however, there can be no assurance that our application for quotation will be approved.Market.
There are no assurances that these steps will generate sufficient cash flow from operations or that we will be able to obtain sufficient financing necessary to support our working capital requirements. We can also give no assurance that additional capital financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available, we may not be able to continue our operations or execute our business plan.
OPERATING METRICS
In evaluating our business, we use operating metrics, including gross bookings and revenue margin. Gross bookings is a measure of total dollar volume of transactions that we process. This metric is an operating metric used by management, the investor community, and analysts who follow the travel industry to measure our market share and to measure our scale and growth. We calculate revenue margin as revenue as a percentage of gross bookings.
| Quarter Ended June 30, | ||
| 2017 | 2016 | |
Gross Bookings1 | $8,903,079 | $1,252,995 |
Revenue Margin2 | 1.2% | 7.5% |
| Quarter Ended June 30, | ||
| 2018 | 2017 | |
| Gross Bookings1 | $13,720,529 | $8,903,079 |
| Revenue Margin2 | 0.7% | 1.2% |
1Gross bookings represent the total retail value of transactions booked through us, generally including taxes, fees and other charges, and are generally reduced for cancellations and refunds.
2Revenue margin is defined as revenue as a percentage of gross bookings
The increase in gross bookings is driven primarily by increases in air ticketing, rail ticketing,incentives, fees, penalty income, and vacation packages while revenuesurcharges paid by our travel agent customers. Revenue margin declined quarter over quarter due to price pressure on air ticketing and low margin rail ticketing outpacing higher margin vacation and hotel package offerings.
OFF BALANCE SHEET ARRANGEMENTS
As of June 30, 2017,2018, we had no off-balance sheet arrangements.
Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Act of 1934, as amended, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer, based on their evaluation of TripBorn’s disclosure controls and procedures as of June 30, 2017,2018, have concluded that TripBorn’s disclosure controls and procedures are effective as of that date.
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2018, there were no changes in TripBorn’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, TripBorn’s internal control over financial reporting.
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None.
There have been no material changes from the risk factors as previously disclosed in our business and financial performance.
None
None
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August | 13, 2018 | TripBorn, Inc. | ||||
| By: | /s/ RICHARD J. SHAW | |||||
| Richard J. Shaw | ||||||
| Treasurer and Chief Financial Officer (Principal Financial | ||||||
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Exhibit Number | Description | ||
| 31 | .1 | ||
| 31 | .2 | ||
| 32 | .1 | ||
| 32 | .2 | ||
| 10 | .1 | ||
| 101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| 101 | .INS | XBRL Instance Document | |
| 101 | .LAB | XBRL Taxonomy Extension Label Linkbase | |
| 101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase | |
| 101 | .SCH | XBRL Taxonomy Extension Schema Linkbase | |
| 101 | .DEF | XBRL Taxonomy Extension Definition Linkbase | |
| Exhibit Number | Description | ||
| 31 | .1 | Certification of TripBorn, Inc. Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31 | .2 | Certification of TripBorn, Inc. Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32 | .1 | Certification of TripBorn, Inc. Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32 | .2 | Certification of TripBorn, Inc. Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| 101 | .INS | XBRL Instance Document | |
| 101 | .LAB | XBRL Taxonomy Extension Label Linkbase | |
| 101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase | |
| 101 | .SCH | XBRL Taxonomy Extension Schema Linkbase | |
| 101 | .DEF | XBRL Taxonomy Extension Definition Linkbase | |
* Indicates a management contract or compensatory plan, contract or arrangement.
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