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

(Mark One)

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

For the quarterly period ended December 31, 2017

June 30, 2019

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR

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

For the transition period from                      to                     

Commission File Number:file number 333-210821


TripBorn, Inc.

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

762 Perthshire Pl,

Abingdon, MD 21009

(Address of principal executive offices)

Registrant’s telephone number, including area code)

code:

+1 269 274 7877

Securities registered pursuant to Section 12(b) of the Act: None

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 o   No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o   No x

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,”filer”, “accelerated filer,”filer”, “smaller reporting company,”company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filerAccelerated filer
    
Non-acceleratedLarge accelerated filero 
Accelerated filer
o
Non-accelerated filero  (Do not check if a smaller reporting company)  Smaller reporting companyx

  Emerging growth companyx

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)7(a)(2)(B) of the ExchangeSecurities 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


As

The number of February 7, 2018, there were outstanding 95,711,874the registrant’s common shares, of common stock,$0.0001 par value $0.0001 per share.

share, outstanding on November 25, 2019 was132,932,159.

 

1

TripBorn, Inc.
Form 10-Q
For the Third Quarter and Nine Months Ended December 31, 2017
Contents

 Page
Part IFinancial Information4
   
Part IItem 1Consolidated Condensed Financial Statements (Unaudited)Financial Information4
  
Consolidated Condensed Balance Sheets as of June 30, 2019 (Unaudited) and March 31, 20194
Consolidated Condensed Statements of Operations (Unaudited) for the Three Months Ended
June 30, 2019 and 2018 (Unaudited)
5
Consolidated Condensed Statements of Comprehensive Loss (Unaudited) for the Three Months Ended
June 30, 2019 and 2018 (Unaudited)
6
Consolidated Condensed Statements of Equity (Deficit) for the Three Months Ended June 30,
2019 and 2018 (Unaudited)
7
Consolidated Condensed Statements of Cash Flows for the Three Months Ended June 30, 2019
and 2018 (Unaudited)
8
Notes to Condensed Consolidated Financial Statements (Unaudited)9
Item 2Management’s Discussion and Analysis of Financial Condition and Results of Operations28
Item 4Controls and Procedures36
PART II.  
   
Item 1Legal ProceedingsUnaudited Condensed Consolidated Financial Statements
3
4
5
6
7
838
   
Item 216
Item 423
Part IIOther Information23
Item 123
Item 1A24
Item 22438
   
Item 52439
   
Item 62439
   
Index to Exhibits39
  
2440

 
243 
PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


TRIPBORN, INC.

UNAUDITED

CONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
  
Third Quarter Ended
December 31,
  
Nine Months Ended
December 31,
 
       
  2017  
2016
  
2017
  
2016
 
Net revenue $77,192  $148,387  $255,824  $405,189 
                 
Cost of revenue  10,903   73,271   37,776   272,876 
                 
Gross profit  66,289   75,116   218,048   132,313 
                 
Operating expenses                
     Selling, general, and administrative expenses  193,460   112,750   513,125   253,996 
     Legal and consulting expenses  53,584   56,110   151,231   206,171 
                 
Income (loss) from operations  (180,755)  (93,744)  (446,308)  (327,854)
                 
Other income (expense)                
     Depreciation and amortization  (83,469)  (51,809)  (283,016)  (153,557)
     Interest income  157   0   321   0 
     Interest expense  (52,578)  (37,068)  (122,167)  (108,526)
Total other income (expense)  (135,890)  (88,877)  (404,862)  (262,083)
                 
Income (loss) before income tax expense  (316,645)  (182,621)  (851,170)  (589,937)
     Income tax benefit (expense)  69,926   55,260   240,455   152,017 
                 
Net income (loss)
 $(246,719) $(127,361) $(610,715) $(437,920)
                 
Basic income (loss) per share $(0.00) $(0.00) $(0.01) $(0.01)
                 
Diluted income (loss) per share
 $(0.00) $(0.00) $(0.01) $(0.01)
                 
Basic weighted average number of shares  89,840,099   76,816,272   89,840,099   76,816,272 
Diluted weighted average number of shares  89,840,099   76,816,272   89,840,099   76,816,272 
BALANCE SHEETS

  June 30,  March 31, 
  2019  2019 
ASSETS (UNAUDITED)    
Current assets:      
Cash and cash equivalents $1,358,902  $1,230,012 
Accounts receivable, net, and unbilled revenue  1,275,350   178,492 
Due from related parties  951,521   14,364 
Other current assets  1,242,181   570,571 
Total current assets  4,827,954   1,993,439 
Non current assets:        
Operating lease, right-of-use assets, net  

8,335,384

   - 
Goodwill  

936,788

   - 
Intangible assets, net  2,309,043   362,717 
Property and equipment, net  1,707,019   12,247 
Other noncurrent assets  1,705,203   48,956 
TOTAL ASSETS $

19,821,391

  $2,417,359 
         
LIABILITIES AND EQUITY        
         
Current liabilities:        
Accounts payable and accrued expenses $2,094,061  $310,130 
Local duties and taxes  1,003,166   - 
Due to related parties  909,610   13,828 
Loans and convertible notes due to related parties  1,224,323   1,838,157 
Interest payable (includes $560,390 and $508,531 due to related parties, respectively)  592,988   536,073 
Salaries and benefits  459,661   - 
Loans due within one year with third parties  467,222   - 
Other current liabilities  864,045   548,141 
Total current liabilities  7,615,076   3,246,329 
         
Long term liabilities:        
Long term portion of operating lease liabilities  8,233,283   - 
Long term loans and convertible notes  371,571   250,000 
Other non-current liabilities  706,664   - 
Total current and long-term liabilities  16,926,594   3,496,329 
Commitments and contingencies (Note 13)        
         
Preferred stock $.0001 par value  -   - 
Authorized shares: 10,000,000, none issued and none outstanding        
Common stock $.0001 par value  12,763   9,719 
Authorized shares: 200,000,000        
Shares issued and outstanding: 127,631,842 and 97,190,435        
Additional paid in capital  

5,670,358

   3,227,452 
Accumulated deficit  (4,782,894)  (4,355,630)
Accumulated other comprehensive income  55,587   39,489 
TOTAL TRIPBORN, INC STOCKHOLDERS’ EQUITY / (DEFICIT)  

955,814

   (1,078,970)
Noncontrolling interest in consolidated entity (Note 1)  

1,938,983

   - 
Total equity (deficit)  

2,894,797

   (1,078,970)
TOTAL LIABILITIES AND EQUITY $

19,821,391

  $2,417,359 

See accompanying notes to condensed consolidated financial statements.statements (unaudited).

4

TRIPBORN, INC.

UNAUDITED

CONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)
  
Third Quarter Ended
December 31,
  
Nine Months Ended
December 31,
 
       
  2017  
2016
  
2017
  
2016
 
Net income (loss) $(246,719) $(127,361) $(610,715) $(437,920)
Other comprehensive income (loss), net of tax                
Unrealized foreign currency translation
income / (loss)
  (1,578)  501   (1,551)  
457
 
Other comprehensive income (loss), net of tax  (1,578)  501   (1,551)  457 
Comprehensive loss $(248,297) $(126,860) $(612,266) $(437,463)
OPERATIONS 

(UNAUDITED)

  Three months ended
June 30,
  Three months ended
June 30,
 
  2019  2018 
Net revenues $1,825,858  $95,640 
         
 Cost of revenue and expenses        
     Cost of revenue  1,432,305   59,960 
     Selling, general, and administrative expenses  597,428   168,584 
     Legal and consulting expenses  106,067   45,871 
     Depreciation and amortization  134,334   39,284 
   2,270,134   313,699 
         
Loss from operations  (444,276)  (218,059)
Other income (expense)        
     Other income  30,983   6,143 
     Interest income  6,204   82 
     Interest expense  (155,666)  (47,325)
Total other expense $(118,479) $(41,100)
         
Loss before income taxes  (562,755)  (259,159)
     Income taxes  -   - 
         
Net loss $(562,755) $(259,159)
Net loss attributable to noncontrolling interests $(135,491) $- 
Net loss attributable to TripBorn, Inc $(427,264) $(259,159)
Net loss per common share:        
     Basic loss per common share attributable to TripBorn, Inc. $(0.00) $(0.00)
     Diluted loss per common share attributable to TripBorn, Inc. $(0.00) $(0.00)
         
Weighted-average common shares outstanding:        
     Basic weighted-average number of shares  97,605,456   95,711,874 
     Diluted weighted-average number of shares  97,605,456   95,711,874 

See accompanying notes to consolidated condensed financial statements.

statements (unaudited).

TRIPBORN, INC.

UNAUDITED

CONSOLIDATED CONDENSED CONSOLIDATED BALANCE SHEETS

  December 31,  March 31, 
  2017  2017 
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $1,322,002  $516,707 
Accounts receivable  211,586   289,089 
Other current assets  473,800   294,203 
Total current assets  2,007,388   1,099,999 
         
Property and equipment, net  11,642   13,236 
Intangible assets, net  1,273,885   1,563,222 
Deferred income taxes  469,032   226,331 
TOTAL ASSETS $3,761,947  $2,902,788 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $77,129  $175,748 
Other current liabilities  932,358   460,314 
Total current liabilities  1,009,487   636,062 
         
Long term liabilities        
          Loans payable – related party  0   0 
          Convertible notes  1,855,120   2,355,120 
Total current and long term liabilities  2,864,607   2,991,182 
Stockholders’ equity (deficit):        
Preferred stock $.0001 par value  0   0 
Authorized shares: 10,000,000        
Common stock $.0001 par value  9,572   7,898 
Authorized shares: 200,000,000        
Shares issued and outstanding: 95,711,874 and 78,971,581        
Additional paid-in capital  2,321,818   725,492 
Accumulated other comprehensive income (loss)  5,181   6,732 
Retained earnings (deficit)  (1,439,231)  (828,516)
Total stockholders’ equity  897,340   (88,394)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $3,761,947  $2,902,788 
STATEMENTS OF COMPREHENSIVE LOSS 

(UNAUDITED)

  Three months ended
June 30,
  Three months ended
June 30,
 
  2019  2018 
Net loss $(562,755) $(259,159)
         
Less net loss attributable to noncontrolling interests  (135,491)  - 
         
Net loss attributable to TripBorn, Inc  (427,264)  (259,159)
         
Currency translation adjustment  37,239   1,447 

Currency translation adjustment attributable to noncontrolling

interests

  (21,141)  - 
Currency translation adjustment attributable to TripBorn, Inc $16,098  $1,447 
         
Comprehensive loss  (525,516)  (257,712)
Less comprehensive loss attributable to noncontrolling interests  (114,350)  - 
         
Comprehensive loss attributable to TripBorn, Inc $(411,166) $(257,712)

See accompanying notes to consolidated condensed financial statements.statements (unaudited).

6
TRIPBORN, INC.
UNAUDITED

CONSOLIDATED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIT)

 (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  3,660,001   366   1,097,634           1,098,000 
                         
Conversion of debt to common stock  13,080,292   1,308   498,692           500,000 
                         
Other comprehensive income (loss)              (1,551)      (1,551)
                         
Net income (loss)                  (610,715)  (610,715)
                         
Balance at December 31, 2017  95,711,874   9,572   2,321,818   5,181   (1,439,231)  897,340 

(UNAUDITED)

  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

 

  For the three months ended June 30, 2018
  Shares Common
stock
 Additional paid in
capital
 Accumulated
other
comprehensive
income
 

 

Accumulated
deficit

 TripBorn Inc
deficit
 Noncontrolling
interests
 Total deficit
  (In $ except for number of common stock)
                 
Balance as of March 31, 2018  95,711,874  $9,752  $2,321,818  $14,537  $(3,087,583) $(741,476) $-  $(741,476)
                                 
Currency translation
adjustment
  -   -   -   1,267   -   1,267   -   1,447 
                                 
Net loss  -   -   -   -   (259,159)  (259,159)  -   (259,159)
                                 
Balance as of June 30, 2018  95,711,874  $9,752  $2,321,818  $15,984  $(3,346,742) $(999,368) $-  $(999,368)

See accompanying notes to condensed consolidated financial statements.statements (unaudited).

7

TRIPBORN, INC.

UNAUDITED

CONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

  
Nine Months Ended
December 31,
 
  2017  2016 
Cash flows from operating activities:      
Net income (loss) $(610,715) $(437,920)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization  283,016   153,557 
Other comprehensive income (loss)  (1,551)  457 
Changes in operating assets and liabilities:        
Accounts receivable  77,503   (187,034)
Other current assets  (179,597)  (39,363)
Deferred tax asset  (242,701)  (134,552)
Accounts payable and accrued expenses  (98,619)  174,780 
Other current liabilities  472,044   206,502 
         
Net cash provided (used) by operating activities  (300,620)  (263,573)
Cash flows from investing activities:        
Change in property and equipment  (5,725)  (10,365)
Change in intangible assets  13,640   (680,275)
Net cash used in investing activities  7,915   (690,640)
Cash flows from financing activities:        
Increase in common stock  1,674   153 
Change in additional paid in capital  1,096,326   459,847 
Increase (Decrease) in loan from shareholder      (23,958)
Increase in convertible notes      842,215 
Net cash provided (used) in financing activities  1,098,000   1,278,257 
         
Net increase (decrease) in cash and cash equivalents  805,295   324,044 
Cash and cash equivalents at beginning of period  516,707   251,971 
Cash and cash equivalents at end of period $1,322,002  $576,015 
Supplemental cash flow information        
Cash paid for interest $0  $0 
Income tax payments $0  $0 
Conversion of debt to 13,080,292 shares of common stock $500,000  $0 

(UNAUDITED)

  Three Months Ended June 30 
  2019  2018 
Cash flows from operating activities      
Net loss $(562,755) $(259,159)
         
       Adjustment to reconcile net loss to net cash used in operating activities:        
       Depreciation and amortization  134,334   39,284 
       Stock based compensation  25,723   - 
         
   Changes in operating assets and liabilities:        
       Accounts receivable  (480,294)  (107,219)
       Other current assets  111,934   (268,213)
       Accounts payable  (58,634)  43,852 
       Other current liabilities  1,199,970   211,211 
       Other non-current liabilities  (257,475)    
         
       Net cash used in operating activities  112,803   (340,244)
Cash flows from investing activities        
 Net cash paid on acquisition of subsidiary  (507,093)  - 
         
 Purchases of fixed assets  (51,865)  (396)
Net cash used in investing activities  (558,958)  (396)
         
 Cash flows from financing activities        
 Proceeds from issuance of common stock and exercise of warrants  558,325   - 
 Repayment of convertible notes  (9,730)  (10,518)
 Net cash used in financing activities  548,595   (10,518)
Effect of exchange rates changes on cash  26,450   1,448 
Net change in cash  128,890   (349,710)
Cash        
Beginning of the period  1,230,012   1,155,367 
End of the period $1,358,902  $805,657 
         
Supplementary disclosure of cash flows information        
 Cash paid during the period for:        
Interest paid $92,586  $- 

See accompanying notes to unaudited condensed consolidated financial statements.statements (unaudited).

8

Notes to Consolidated Condensed Financial Statements

December 31, 2017
(Unaudited)
1.Organization and the Nature of Business

June 30, 2019 

(UNAUDITED)

1. DESCRIPTION OF BUSINESS

Overview

TripBorn, Inc. (“TripBorn” or the “Company”) is a business to business online travel agency (“OTA”) that offers travel reservations,related travel services and products,an eCommerce aggregator and a payment services product to travel agents in India through its proprietary internet-based platform at www.tripborn.com. TripBornhospitality management company. An aggregator model is a holding company that was incorporated in Delaware in January 2010form of eCommerce whereby our website, www.tripborn.com aggregates information from various travel and operated ashospitality vendors and presents them to users on 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,single platform, to ease, facilitate, coordinate and effectuate consumer travel and hospitality needs. OureCommerce Aggregator business segment operates through Sunalpha Green Technologies Private Limited (“Sunalpha”), a wholly owned subsidiary. Ourhospitality 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 wholly owned subsidiary, Sunalpha; its 51% owned subsidiary, PRAMA and an equity investee, PRAMA Canary Wharf Private Limited (“PCW”). Through PRAMA, the Company has a 29.575% 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. All significant inter-company accounts and transactions are eliminated in consolidation.

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 Company has selected March 31made acquisitions at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill due to the Company’s expectations of the synergies that will be realized by combining the businesses. These synergies include access to PRAMA’s hotel brands, customers and operations; use of the Company’s existing technology to expand sales of the acquired businesses; new operational and financial efficiencies of the acquired businesses to expand sales cost effectively for both business segments. Acquisitions will be accounted for by using the purchase method of accounting, and the acquired company’s results will be included in the accompanying financial statements from their respective dates of acquisition. Acquisition transaction costs have been recorded in selling, general and administrative expenses as incurred.

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.

The following reflects our preliminary purchase price allocation:

 Fair Value 
Net cash $642,907 
Acquired intangible assets at fair value  2,003,085 
Investment in and receivable from equity investee  665,799 
Right to use of assets  7,480,986 
Property and equipment, net  1,684,360 
Accounts receivable  616,564 
Amounts due from related parties  661,128 
Other current assets  1,353,687 
Other non-current assets  990,449 
     
Operating lease liabilities assumed  (7,641,431)
Accounts payable  (1,292,260)
Amounts due to related parties  (704,646)
Loans due within one year with third parties  (574,021)
Other current liabilities  (1,654,116)
Other non-current liabilities  (978,803)
Fair value of net assets acquired  3,253,688 
Goodwill  936,788 
Noncontrolling interests  (2,053,333)
Purchase consideration paid in cash and common stock $2,137,143 

The following reflects the composition and timing of consideration:

  Fair Value 
Cash paid on closing on April 22, 2019 $1,150,000 
Deposit paid on March 27, 2019, applied on closing on April 22, 2019  250,000 
Gross cash paid on acquisition of PRAMA  1,400,000 
Fair value of 2,632,653 common shares  

737,143

 

Total consideration for 51% interest in PRAMA

 $2,137,143 

The following reflects the net cash paid on acquisition of PRAMA in the quarter ended June 30, 2019:

  Fair Value 
Cash paid in quarter ended June 30, 2019 $1,150,000 
Net cash on opening balance sheet of PRAMA  (642,907)

Net cash paid for 51% interest in PRAMA

 $507,093 

Acquired intangible assets acquired are as follows:

   Fair value  Useful life 
Trademarks $469,204  Indefinite 
Customer relationships  1,533,881  4-15 years 
Total intangible assets $2,003,085     

During the quarter ended June 30, 2019, we recognized $936,788 in goodwill as the result of the acquisition of PRAMA, recorded within our Hospitality reporting segment. The revenues and earnings from PRAMA's operations that are included in the Consolidated Statement of Operations for the quarter ended June 30, 2019 is reflected in the Business segments note below.

The Company recognized $1,693,738 in revenue and $276,512 in net loss before income taxes of the acquiree in the consolidated condensed statement of operations for the period April 22, 2019 through June 30, 2019.  The revenue and net loss before taxes for the combined entity for the quarter ended June 30, 2019, as though the acquisition of PRAMA had occurred on April 1, 2019 was $2,259,644, and $674,729, respectively.  The revenue and net loss before taxes for the combined entity for the quarter ended June 30, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 was $2,096,250, and $422,597, respectively.  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

The Company has incurred net losses from operations since inception. The net loss for the quarter ended June 30, 2019 was $562,755 and the accumulated deficit was $4,782,894 as of June 30, 2019. The Company’s ongoing losses have had a significant negative impact on the Company’s financial position and liquidity.

The Company’s cash requirements are primarily to fund operating losses, working capital, capital expenditures and the completion of acquisitions. Historically, the Company has met these cash needs by borrowings under notes, sales of shares and warrants and the cash balances acquired from subsidiary acquisitions. There can be no assurance that the Company will be able to borrow or sell securities in the future, which raises substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern.

The Company’s operations are subject to number of factors that can affect its fiscal year end.

TripBorn was knownoperating results and financial conditions. Such factors include, but are not limited to: the continuous enhancement of the current products and services; marketing its new services; continuing to invest in new technologies; changes in domestic and foreign regulations; the price of, and demand for, the Company’s products and services and its ability to raise the capital to support its operations.

The Company’s directors are confident that the Company will be able to issue new shares (see Subsequent Events note below), and extend the maturity date on its convertible notes which will provide the Company with sufficient funding to meet its obligations as PinstripesNYC, Inc. until January 2016. TripBorn filed reportsthey become due. The Company’s directors believe it is appropriate to prepare the financial statements on the going concern basis. However, in the event that the Company is not able to successfully complete the fundraising and extension referred to above, significant uncertainty would exist as PinstripesNYC, Inc.to whether the Company and its subsidiaries will continue as going concerns and, therefore, whether they will realize their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial statements.

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”) andpursuant to the rules and regulations of the Securities and Exchange Commission under("SEC")and include the Securities Exchange Actaccounts 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 alland 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 outstanding shares of Sunalpha,Company’s management, the interim unaudited condensed consolidated financial statements include all adjustments, which was incorporated underinclude only normal recurring adjustments, necessary for the lawsfair presentation of the RepublicCompany’s financial position, results of India on November 4, 2010. 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.

The transactionaccompanying condensed consolidated balance sheet as of March 31, 2019 was accounted forderived from the audited financial statements as a reverse recapitalization. Sunalpha wasof that date, but does not include all the acquirer for financial reporting purposes,information and TripBorn was the acquired company.

2.Summary of Significant Accounting Policies
Accounting Policies
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.

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 restated to conform to the current year’s presentation, that is they have been classified as relating to the eCommerce Aggregator business. These reclassifications had no effect on previously reported total net revenues, cost of revenues and other operating expenses, other expenses, net and net loss. 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. 

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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 a 29.575% equity interest in PCW, which is accounted for under the equity method. All significant inter-company accounts and transactions are prepared on the accrual basiseliminated in consolidation.

Use of accountingEstimates

The preparation of financial statements in conformity with accounting principles generally acceptedU.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the United Statesfinancial 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 America (“US GAAP”)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 detailedof 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 quarter ended June 30, 2019.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board’sBoard (“FASB”) Accounting Standards Codificationissued ASU 2014-09, Revenue from Contracts with Customers (“ASC”Topic 606”).

Basis: Topic 606 which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of Presentation
The acquisition of all ofTopic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the outstanding shares of common stock of Sunalpha by TripBorn on December 14, 2015 was accountedconsideration that is expected to be received for asthose goods or services. Topic 606 defines a reverse recapitalization. Sunalpha wasfive-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the acquirer for financial reporting purposes, and TripBorn was the acquired company. Consequently, the assets, liabilities and results of operations thatrevenue recognition process than are reflectedrequired under existing U.S. GAAP, including identifying performance obligations in the Company’s consolidated financial statementscontract, 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 December 14, 2015method (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 are those of Sunalpha and are recorded usingprice, (iv) allocate 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 upprice to the day priorperformance 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 closingcustomer. 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 andprice that is allocated to the assets, liabilities and results of operationsrespective performance obligation when (or as) the performance obligation is satisfied.

The following is a description of the Company and SunalphaCompany’s principal activities, separated by reportable segments, from and after the closing of the transaction on December 14, 2015. All significant related party accounts and transactions betweenwhich the Company generates its revenue.

eCommerce Aggregator revenues:

Air, Rail and Sunalpha have been eliminated upon consolidation.

Revenue Recognition
The Company provides travel products and services to leisure and corporate travelers in India and abroad. The revenue from rendering these services is recognized at the time when significant risk and rewards are transferred to the customer. This is generally the case: (1) on the date of issuance for the sale of airline tickets, (2) on the date of check in for hotel booking business and (3) on the date of departure for vacation packages.
Revenue from the sale of airline tickets is recognized as an agentBus Ticketing. Recognized on a net commission earned basis whenupon transfer of control of promised services in an amount which we are entitled to in exchange for the Company does not assume any performance obligation followingservice.

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 confirmation of the issuance of an airline ticket to the customer. In instances where the Company has procured coupons for airline tickets in advance for an anticipated future demand from customersservice.

Other Revenue. Primarily comprising visa processing fees, money transfer, and assumes the risk of loss for tickets not used, the revenue from the sale of such airline tickets is accounted for on the gross basis.

Incentives from airlinespre-and post-paid expenses are recognized when the performance obligations under the incentive programs are achieved.
Revenue from hotel reservations, including commissions earned, is recognized on a net basis as an agent, on the date of check-in, when the Company does not assume any performance obligation following the issuance of a hotel confirmation voucher to the customer. Where the Company has pre-booked hotel rooms for an anticipated future demand from customers and assumes the risk for unused hotel rooms, revenue from the sale of such hotel rooms is accounted for on the gross basis. Performance linked incentives from hotel bookings are recognized as income on achievement of performance obligations.
Revenue from vacation packages, including income from airline tickets sold to customers as a part of vacation packages, is accounted for on the gross basis as the Company is determined to be the primary obligor in the arrangement i.e., the Company bears the risks and responsibilities, including the responsibility for delivery of services.

Revenue from our payment services product is recognized as an agent on a net commission earned basis, as the Company does not assume any performance obligation following the confirmation of the money transfer.

Revenue from other sources, primarily comprising revenue from rail and bus ticket reservations is recognized asafter the services are performed.

Hospitality Revenues:

Hospitality Services.

·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.

·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.

·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.

Practical expedients. The Company has elected certain of the optional exemptions from rail and bus ticket reservations is recognized asthe disclosure requirement for remaining performance obligations for specific situations in which an agent on a net commission earned basis, asentity need not estimate variable consideration to recognize revenue. Accordingly, the Company does not assume anyapplies the practical expedient to its management fees from contracts with Operation & Maintenance Properties. These contracts are typically long-term, and the performance obligation following the confirmationconsists of the issuance of the ticketproviding hotel management services to the customer.

owner. Revenue is recognized net of cancellations, refunds, discountsbased upon an agreed base fee and taxes. In the event tickets are cancelled,additional revenue recognized with respect to commissions earned by the Company on such tickets is reversed and is netted against the revenue earned during the fiscal period, at the time the cancellation is made by the customer. In addition, a liability is recognized with respect to the refund due to the customers for the gross amount charged to such customers net of cancellation fees. The revenue from the sale of vacation packages and hotel reservations is recognized on the customer’s departureattainment 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 check-in dates, respectively. Cancellations, if any, dothe 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 impactoccur once the uncertainty is resolved.

The Company has elected the practical expedient to not disclose revenue recognition since revenuerelated 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 recognized uponone year or less.

The Company has elected certain of the availment of services byoptional exemptions from the customer.

disclosure requirement for the remaining performance obligations for specific situations in which an entity need not estimate variable consideration.

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.
Revenues

Cost of revenue is the amount paid or accrued to procureagainst 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.

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Operating Expenses
Operating

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, costsdirect operating expenses, general and administrative expenses such as advertising and business promotion costs, utilities, rent, payroll, and consultants fees and charges, 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.

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)highly liquid debt instruments with an original maturity at acquisition of three months or less, to be cash equivalents. The Company maintains its cash balances in both USbank accounts in the U.S. and Indian financial institutions.  At December 31, 2017 and 2016, depositsIndia, which at US financial institutions that exceededtimes may not be covered by, or exceed the Federalcoverage limit of the Deposit Insurance Company (“FDIC”) $250,000 insured limits were $758,380 and $0, respectively. BankCredit Guarantee Corporation of America’s credit rating is closely monitored by the Company and theIndia. The Company does not believe it’s uninsured deposits at Bank of America constitutes anythat this results in significant credit risk.


Sunalpha has nine accounts denominated in Indian Rupees. As of December 31, 2017June 30, 2019, and 2016,2018, the cash balance in financial institutions in India was USD $313,621$859,189 and $91,628, $360,210, 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 billedmanagement 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 customer. Customer account balances with invoices exceeding credit terms are considered delinquent. PaymentsCompany's estimate of potential losses inherent in accounts receivable are allocatedbalances, 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 specific invoices identifiedbe adjusted based on currently available evidence such as historical collection experience, current economic trends and changes in customer payment terms. In accordance with the customer’s remittance advice or,Company’s policy, if unspecified, are applied to the earliest unpaid invoices.

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.

Intangible Assets

Intangible assets with indefinite useful lives consist exclusively of trademarks and are tested for impairment at least annually. 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.

Concentration Intangible assets with definite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of Credit Risk
Financial instruments which potentially subjectan asset may not be recoverable.

The fair value of the Company to concentrations of credit risk consist primarily oftrade names is determined using a discounted 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.
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with FASB ASC 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using 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 liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company records the estimated future tax effects of temporary differences between tax bases of assets and liabilities and amounts reported on the balance sheets as well as operating loss and tax credit carryforwards. Deferred taxes are classified as current or noncurrentflow analysis based on the balance sheet classificationrelief-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 related assetstrademark/trade name, degree of consumer recognition and liabilities. Deferred income tax results primarilylife 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.

14

Goodwill

Goodwill is assigned to our reporting units based on the expected benefit from temporary differences related to net property and equipment forthe synergies arising from each business combination, determined by using certain financial and income tax reporting.


US GAAP requires the Company’s management to evaluate tax positions taken bymetrics. 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 recognize a tax liability or asset if the Company has taken an uncertain positioncircumstances 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. We have not be sustained upon examination byrecognized any impairment on goodwill during the Internal Revenue Service. quarter ended June 30, 2019.

Impairment of Long-lived Assets

The Company has concluded that asrecords an impairment of December 31, 2017 and 2016 there are no material uncertain tax positions taken or expected to be taken that would require recognition of a liability or asset or disclosurelong-lived assets used 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 anyoperations, 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. 

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 existbe required to be recognized.  Goodwill, when recognizable, would be measured as the excess amount of any consideration transferred, which could expandis generally measured at fair value, over the open period.

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 Company translates the foreign currency financial statements into USU.S. Dollars using the year or reporting period end or average exchange rates in accordance with the requirements of ASC subtopic 830-10,830, Foreign Currency Matters (“ASC 830-10”).Matters. 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’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. 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. 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.

15
3.Change in Control Transaction
On December 8, 2015,

Promotion and Advertising Expense

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. Promotion and Advertising expense was $84,906 for the quarter ended June 30, 2019, compared to $38 for the quarter ended June 30, 2018. This increase in Promotion and Advertising expenses is due to the acquisition of PRAMA.

Stock-Based Compensation

The Company issued 71,428,570accounts 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 Arna Global LLC (“Arna”)non-employees do not need to be remeasured as per ASU 2018-07 principles. During the quarter ended June 30, 2019 and June 30, 2018, $25,723 and $0 was recognized in legal and consulting expenses in the Consolidated Condensed Statements of Operations, respectively, as a result of an agreement for consulting services.

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 carryforward 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 considerationflows.

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 $95,500. Arnaa 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 wholly-owned by Deepak Sharma,not easily determinable, the Company’s Presidentapplicable 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 Chief Executive Officerinitial 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 director.corresponding right-of-use asset representing our right to use the underlying asset during the lease term. The Company accounted forlease liability is measured initially as the change in control transaction with Arna using the acquisition method of accounting. Arna obtained control of 93%present value of the outstanding shares of common stock of PinstripesNYC, Inc.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 connection with the Stock Purchase Agreement among PinstripesNYC, Inc.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 inOperating lease right-of-use assets,Other current liabilities, Arna, and Maxim Kelyfos, LLC dated December 8, 2015, and was the acquirer. This transaction resultedOperating lease liabilities, due after one year, 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.

our Consolidated Condensed Balance Sheets.

4.Acquisition of Sunalpha Green Technologies Private Limited16
On December 14, 2015,

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 acquired substantiallyhas 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 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, liabilitiesexisting taxable temporary differences, projected future taxable income, tax-planning strategies, and results of operationsoperations. If the Company determines that are reflectedit would be able to realize our deferred tax assets in the Company’s consolidated financial statements priorfuture in excess of their net recorded amount, it would make an adjustment to the December 14, 2015 transaction aredeferred 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 Sunalphatax 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 are recordedServices 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.

Equity-method Investments

Through PRAMA, the Company has a 29.575% 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 historical cost basis.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 financial statements after completionbalance sheets. Our share of the December 14, 2015 transactionearnings 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 assets, liabilitiescarrying 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 resultsour 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 operations of Sunalpha upJune 30, 2019, is $346,074 relating to the day priorfair value of equity-method investments and $319,725 relating to the closingfair value of amounts due from equity-method investee, in aggregate $665,799. During the transaction,period April 22, 2019, through June 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 assets, liabilitiesquarter ended June 30, 2019.

17

Related Parties

The Company follows FASB ASC subtopic 850-10 for the identification of related parties and resultsdisclosure of operationsrelated 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 Sunalpha from and afterconstrued under Rule 405 under the closing dateSecurities Act); (b) entities for which investments in their equity securities would be required, absent the election of the transaction.

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 believes it isexpected 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 financial statements.

18
5.Increase in Authorized Shares

4. LEASES

Balance sheet information related to our leases is included in the following table:

Operating leases June 30, 2019 
Operating lease right-of-use assets $8,335,384 
Operating lease liabilities, due within one year $285,890 
Operating lease liabilities, due after one year $8,233,283 
     Total operating lease liabilities $8,519,173 

Operating lease liabilities, due within one year are included in Other current liabilities on our Consolidated Condensed Balance Sheet as of June 30, 2019.

The Company amended its certificatecomponents of incorporation on January 13, 2016lease expense during the quarter ended June 30, 2019 is included in the following table:

  Financial statement line item   June 30, 2019 
Amortization of right-of-use assets Cost of revenue  $81,304 
Interest on lease liabilities Cost of revenue   278,117 
Total lease expense    $359,421 

Lease expense is included in Cost of revenue in our Consolidated Condensed Statement of Operation for the quarter ended June 30, 2019.

Supplemental other information related 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.

leases were as follows:

6.Weighted Average Remaining Lease TermProperty and Equipment
Operating leases14.5Years
Weighted Average Discount Rate
Operating leases14.0 

The future maturities of lease liabilities as of June 30, 2019, are as indicated below:

As of June 30, 2019 Operating Leases 
Year ending March 31, 2021 $221,174 
Year ending March 31, 2022  335,368 
Year ending March 31, 2023  402,300 
Year ending March 31, 2024  462,539 
Thereafter  7,097,792 
Total lease payments $8,519,173 

5. PROPERTY AND EQUIPMENT, NET

Property and Equipment consists of the following as of December 31June 30 and March 31, 2017. The property and equipment listed below are recorded in the books of Sunalpha.

  December 31, 2017  March 31, 2017 
Computer $13,258  $20,782 
Furniture and Fixture  4,139   4,138 
Office Equipment  6,537   5,768 
Software License  768   244 
Total  24,702   30,933 
Accumulated depreciation  (13,060)  (17,697)
Fixed assets, net $11,642  $13,236 
2019.

  June 30, 2019  March 31, 2019 
 Furniture, fixtures and fittings $295,679  $32,247 
 Leasehold improvements  867,918   - 
 Plant and machinery  554,205   - 
 Construction in process  67,039   - 
Total  1,784,841   32,247 
Accumulated depreciation  (77,822)  (20,000)
Fixed assets, net $1,707,019  $12,247 

Depreciation expense for the quarters ended December 31, 2017June 30, 2019 and 2016 is $930,June 30, 2018 was $57,822 and $2,309, respectively.

7.Intangible Assets
$966 respectively.

6. INTANGIBLE ASSETS

Intangible assets with definite lives consist of the following as of December 31June 30 and March 31, 2017:

  December 31, 2017  March 31, 2017 
API Access $132,399  $129,876 
Software  1,651,000   1,651,000 
Total  1,783,399   1,780,876 
Accumulated amortization  (509,514)  (217,654)
Intangible assets, net $1,273,885  $1,563,222 
2019: 

  June 30, 2019  March 31, 2019 
Software and software access agreement $1,107,988  $1,088,264 
Customer relationships  1,533,881   - 
Total  2,641,869   1,088,264 
Accumulated amortization  (802,030)  (725,547)
Intangible assets with definite lives, net $1,839,839  $362,717 

Amortization expense for the quarters ended June 30, 2019 and June 30, 2018 was $76,483 and $38,319 respectively. The Company has no impairment charge for definite lived intangible assets for the quarter ended June 30, 2019.

Intangible assets with indefinite lives consist of the following as of June 30 and March 31, 2019: 

  June 30, 2019  March 31, 2019 
Trademarks $469,204  $- 
Accumulated amortization  -   - 
Intangible assets with indefinite lives, net $469,204  $- 

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.

7. AMOUNTS DUE TO AND FROM RELATED PARTIES

Amounts due from related parties arising from PRAMA

Included in the amounts due from related parties balance from the consolidated balance sheet of $951,521 as of June 30, 2019, is a $14,364 non-PRAMA brought forward from the previous period, and $937,157 arising 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 June 30,
2019
 
Pramatech Pvt. Ltd Shareholder in PRAMA, there are also common shareholders in PRAMA and this company $709,145 
       
Mr. B. K. Ashok Shareholder in PRAMA  108,765 
Alchemy Food & Franchisee
Solutions Pvt. Ltd
 Company partly owned by the Chief Executive Officer of a
subsidiary of PRAMA
  36,307 
Prime Finvest Leasing
Limited
 Company partly owned by a PRAMA shareholder, has common
shareholders with Pramatech Pvt. Ltd above
  36,255 
Opus Restaurants Pvt. Ltd Shareholder in PRAMA, there are also common shareholders in
PRAMA and this company
  10,151 
Mr. Akbar S Khwaja Chief Executive Officer of a subsidiary of PRAMA  31,458 
Mr. M. V. Chetan Kumar Shareholder in PRAMA  5,076 
Total   $937,157 

Amounts due to related parties arising from PRAMA

Included in the amounts due to related party balance from the consolidated balance sheet of $909,610 as of June 30, 2019, is a $13,828 non-PRAMA brought forward from the previous period and $895,782 of various liabilities assumed on the purchase of PRAMA on April 22, 2019 which are described below:

Due to related parties Description June 30,
2019
 
Opus Hotels & Resorts
Pvt. Ltd
 Shareholder in PRAMA, there are also common shareholders in
PRAMA and this company
 $680,866 
Mr. Mahesh Gandhi Shareholder in PRAMA  187,226 
Mr. Sobha Gandhi Relative of Mahesh Gandhi, (shareholder above)  243 
Navkar Pole Products
Ltd
 Company partly owned by a PRAMA shareholder  7,251 
Mr. Pravin Rathod Shareholder in PRAMA  15,845 
Mr. Akbar Khwaja Chief Executive Officer of a subsidiary of PRAMA  4,351 
Total   $895,782 

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.

8. LOANS WITH THIRD PARTIES

Loans and borrowings with third parties are discussed below:

  As of 
  June 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  182,801   - 
Short term borrowing with NeoGrowth Credit Private Limited  34,421   - 
  $467,222  $- 
Long term loans and convertible notes:        
Long term portion of loan with Small Industries Development Bank of India $554,372  $- 
Convertible note with United Techno Solutions, Inc  -   250,000 
Less current portion of Small Industries Development Bank of India loan  (182,801)  - 
  $371,571  $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 June 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. The remaining balance as of June 30, 2019 was $34,421 with a maturation of March 21, 2020. This is included in short term borrowings as of June 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. The loan is callable on demand. Interest paid during the period April 22, 2019 through June 30, 2019 approximated $1,610.

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, 20172013 and 2016 was $86,618 and $49,500, respectively.


Estimated amortizationis payable over monthly installments over 7 years, with no payments due in the first twelve months of the loan. 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 years ended Marchcontract 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, Pravin Rathod,

9. LOANS WITH RELATED PARTIES

Loans and borrowings with related parties are discussed below:

  As of 
  June 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  329,323   - 
Promissory note with Arna Global LLC  200,000   - 
Convertible note with Mr. Deepak Sharma  -   150,515 
Convertible note with Mr. Sachin Mandloi  -   36,642 
  $1,224,323  $1,838,157 

On December 31, 2018 – 2022:


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,2016, 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 ofissued a convertible promissory note. The Travelcord software was recognized as an intangible asset at historical cost pursuantnote 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-ownedInc, an affiliate owned by Sachin Mandloi, our Vice President and a director, Sachin Mandloitotaling $695,000. This note was issued pursuant to a Software Development Agreement dated January 26, 2015.

On September 23, 2016 we entered into a software development agreement withbetween 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.
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 servicesInc and the amount collected while sellingCompany to finance the services is remitted to taxing authorities ("tax recovery charge"). Asupgrade of December 31, 2017, the Companyour Travelcord operating software.  The note has a balance with the tax authority to offset future service tax dues.
9.Related Party Transactions
i.Convertible Notes
Deepak Sharma, the Company’s President and Chief Executive Officer and a director, 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 March 7, 2019, 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 March 7, 2019, 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.  The current amount of principal and interest outstanding on this note at December 31, 2017 is $186,494.

Sachin Mandloi, the Company’s Vice President and a director, 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 March 7, 2019, 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 March 7, 2019, 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.  The current amount of principal and interest outstanding on this note at December 31, 2017 is $45,401.

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 March 7, 2019, 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 March 7, 2019, 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.  The current amount of principal and interest outstanding on this note at December 31, 2017 is $1,139,903.
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 datematuration of December 31, 2019, and bearingbears interest at athe rate of 10%.ten percent payable at maturity. The principal amount of this note is convertible into 10,303,070 shares of ourthe Company’s common stock at the noteholder’s option at maturity.  In

The loan from Mr. Mahesh Gandhi was assumed as a result of the event thatpurchase of PRAMA on April 22, 2019. The loan amounted to $320,114 and $329,323 as of April 22, 2019 and June 30, 2019, respectively. The counterparty isMr. 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 June 30, 2019 amounted to $9,209.

On April 16, 2019, the Company completesborrowed $300,000 from ARNA Global LLC, an Uplist Transaction priorentity owned and controlled by Mr. Sharma, its President and CEO, to December 31,partially fund the acquisition of PRAMA. During the quarter, $100,000 was re-paid to ARNA Global LLC, however $200,000 was outstanding as of June 30, 2019. On July 8, 2019, the outstanding principal balanceremaining $200,000 was repaid. The loan is unsecured and bears interest at 10% per annum.

On March 7, 2016, the Company issued a convertible note to Arna Global LLC, a related party wholly owned by the CEO and President of the Company for $956,000. The note will automatically convertmatured on March 7, 2019, and bore interest at the rate of ten percent. The note was converted into 10,303,07021,194,381 shares of common stock (the “Takniki Note Shares”). Ifat the Uplist Transaction does not occur prior to December 31, 2019, Takniki Communications will have thenoteholders 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 Communications 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.  The current amount of principal and interest outstanding on this note at December 31, 2017 is $766,769.


ii.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 such period as the Company’s President and Managing Director maintains a deposit at IndusInd Bank Ltd.
10.Convertible Notes
March 7, 2019.

On FebruaryMarch 8, 2016, the Company issued a convertible promissory notesnote to three accredited investors in the aggregate principal amount of $350,000 pursuant toMr. Sachin Mandloi, a related party for $38,076. The note purchase agreement of the same date. Interest accruedmatured on March 8, 2019, and bore interest at the rate of 6% per annum. In the event that the Company completed an Uplist Transaction, prior to February 8, 2019, the outstanding principal balance of theten percent. The note would automatically convertwas converted into a total of 9,156,206835,552 shares of common stock (the “February 2016 Note Shares”). If the Uplist Transaction did not occur prior to February 8, 2019,at the noteholders would have had 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 had 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 March 8, 2019.

On July 1,March 8, 2016, the Company issued a convertible promissory notesnote to an accredited investor inMr. Deepak Sharma, the aggregate principal amountCEO and President of $150,000 pursuant to the Company for $156,407. The note purchase agreement dated Februarymatured on March 8, 2016. Interest accrued2019, and bore interest at the rate of 6% per annum. In the event that the Company completed an Uplist Transaction, prior to July 1, 2019, the outstanding principal balance of theten percent. The note would automatically convertwas converted into a total of 3,924,0883,432,234 shares of common stock (the “July 2016 Note Shares”). Ifat the Uplist Transaction did not occur prior to July 1,noteholders option on March 8, 2019.

10. STOCKHOLDERS’ EQUITY 

During the quarter ended June 30, 2019, the noteholder would have hadCompany issued an aggregate of 30,441,407 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 option to receive full payment ofPRAMA acquisition; c) 1,571,430 common shares when the outstanding principal balance orwarrant holders exercised their $0.01 warrants; and d) 775,157 common shares through a private placement. These events are described in further detail below.

In June 2019, the July 2016 Note Shares, each together with accrued unpaid interest paid in cash. The noteholder also had 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,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. These were non-monetary transactions.

On April 22, 2019, theCompany issued 2,632,653 common shares to the shareholders of PRAMA, at a “saleprice of $0.28 per share, as part of the company” as such term is defined in the convertible promissory note.


On July 14, 2017,PRAMA acquisition. This was a non-monetary transaction.

In June 2019, the Company entered intoissued 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 letter agreement (the “Letter Agreement”) withprivate 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.

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
  Approximate aggregate intrinsic
value
 
Outstanding as of March 31, 2019   1,571,430  $0.01   3.0  $345,000 
Issued   1,550,314  $0.01   3.0  $340,000 
Exercised   1,571,430  $0.01   -   - 
Expired   -   -   -   - 
Outstanding as of June 30, 2019   1,550,314  $0.01   3.0  $340,000 

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 three accredited investors to amend their convertible promissory notes dated February 8, 2016 and July 1, 2016.month period ended June 30, 2019 was minimal. The Letter Agreement permitted that at any time whilefair value of warrants granted during the notes were outstanding, the notes were convertible, at the option of the investors, into shares of the Company’s common stock.  Subsequently, on July 15 and 16, 2017, the investors elected to convert an aggregate of $500,000 of convertible debt into 13,080,292 shares of the Company’s common stock. Accrued and unpaid interest of $42,372 will be paid to the investors. 


11.Income Tax
three months ended June 30, 2019 approximated $0.23 per warrant.

11. 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 deferred tax assets at December 31, 2017 and March 31, 2017 were $469,032 and $226,331, 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 filesand PRAMA file tax returns in India.India and due to losses, no tax liability or net deferred tax asset is recorded. The Company is generally subject to U.S. Federal, State and local examinations by tax authorities for the past three years.
12.New Accounting Pronouncements

i.          In May 2014,historical losses. For the period April 22, 2019 to June 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.

12. EARNINGS AND LOSS PER SHARE

ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share.

The computation of basic earnings (loss) per share is computed by dividing earnings (loss) available to common shareholders by the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in US GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), and for all other entities, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. Preliminarily, the Company plans to adopt Topic 606 using the retrospective transition method, and is continuing to evaluate the impact its pending adoption of Topic 606 will have on its consolidated financial statements.  The Company believes that its current revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASU 2014-09.  Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts.  While no significant impact is expected upon adoption of the new guidance, the Company will not be able to make that determination until the time of adoption based upon outstanding contracts at that time.



ii.          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 (9) 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 that the adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures.

iii.          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 and disclosing key information about leasing arrangements. ASU 2016-02 creates a new ASC 842 "Leases" to replace the previous ASC 840 "Leases." ASU 2016-02 affects both lessees and lessors, although for the latter the provisions are similar to the previous model, but updated to align with certain changes to the lessee model and also the new revenue recognition provisions contained in ASU 2014-09. 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 does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.
iv          In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control.” The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim reporting periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.


vIn November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU apply to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The amendments should be applied using a retrospective transition method to each period presented. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.


13.Net Income (Loss) Per Share
A reconciliation of net loss and weighted average number of outstanding common shares used in computingduring the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. 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 of $945,000 which converts into 10,660,213 of the Company’s common stock, which may cause diluted earnings per share. Since the Company has only incurred losses, basic and diluted net incomeloss per share isare the same as follows:

 
Third Quarter Ended
December 31,
 
Nine Months Ended
December 31,
 2017
 
2016
 
 
2017
 
2016
Basic net income (loss) per share:     
Net income (loss) applicable to common shares$(246,719)$(127,361) $(610,715)$(437,920)
Weighted average common shares outstanding89,840,09976,816,272 89,840,09976,816,272
Basic net income (loss) per share of common stock$(0.00)$(0.00) $(0.01)$(0.01)
      
Diluted net income (loss) per share:     
Net income (loss) applicable to common shares$(246,719)$(127,361) $(610,715)$(437,920)
Weighted average common shares outstanding89,840,09976,816,272 89,840,09976,816,272
Dilutive effects of convertible debt$(0.00)$(0.00) $(0.01)$(0.01)
Weighted average common shares, assuming
dilutive effect of convertible debt
89,840,09976,816,272 89,840,099
 
76,816,272
Diluted net income (loss) per share of common
stock
$(0.00)$(0.00) $(0.01)
 
$(0.01)

potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.

The Company issued approximately 1,550,314 warrants during quarter ended June 30, 2019, which had minimal impact on the earning per share calculation for the quarter ended June 30, 2019.

  Quarter Ended 
  June 30, 2019  June 30, 2018 
Basic net loss per share:      
       
Net loss attributable to TripBorn, Inc. $(427,264) $(259,159)
Weighted average common shares outstanding  97,605,456   95,711,874 
Basic net loss per share attributable to TripBorn Inc. common stockholders $(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

13. 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)(“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, 2016,2018, 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. The Company has subsequently renewed its agreement through October 5, 2018.

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 directorthe CEO of the Company on a rent-free basis. As of December 31, 2017June 30, 2019 and 2016,2018, the Company has not paid any rentrent. There were no significant commitments or contingencies for this office space. PRAMA as of June 30, 2019.

The Company is expectedparty to pay market rate rent oncecertain 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 $295,000 (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 profitable.


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.

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.

14. 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 has leased office spacemanagement 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 Ahmedabad, India effective from March 1, 2016 for a term of five years.deciding how to allocate resources and in assessing financial performance. The operationsreportable segments reflect the internal organization of the Company and are being undertaken from the new premises.strategic businesses that offer different products and services. The Company pays monthly rentreports 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 an amount equal to $1,260 per month pursuant toIndia, substantially all of the lease agreement.


expenses are borne in India, with certain expenses borne in the US.

The Company entered intomeasures 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 June 30, 2019 
  eCommerce
Aggregator
  Hospitality  Intersegment
elimination
  Consolidated total 
Segment results and total assets                
Net revenue $132,120  $1,693,738  $-  $1,825,858 
                 
Cost of revenues  (108,145)  (1,324,160)  -   (1,432,305)
Operating expenses  (263,871)  (573,958)      (837,829)
Loss from operations, before other
expense, net
  (239,896)  (204,380) $-   (444,276)
Other expense, net  (46,347)  (72,132)  -   (118,479)
Net loss $(286,243) $(276,512) $-  $(562,755)
Total assets $4,950,735  $17,654,185  $(2,783,529) $

19,821,391

 

During the quarter ended June 30, 2019, the Company derived approximately 93% and 7% 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 June 30, 2018.

15. SUBSEQUENT EVENTS 

In August 2019, the Company issued 714,286 units at a consulting agreement effective May 24, 2016 with LogiCore Strategies, LLC (“LogiCore”), pursuant to which Richard J. Shaw serves asprice $0.70 and received approximately $500,000. Each unit consists of one share of the Company’s Chief Financial Officer. The Company compensates LogiCorecommon stock and two warrants to purchase common stock. Each warrant can be exercised at any time prior to August 16, 2022 for Mr. Shaw’s timethe purchase of one share at an annual rateexercise price of $60,000. 





$0.01.

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.

On July 8, 2019, the remaining $100,000 due on the promissory note to ARNA Global LLC, an entity owned and controlled by Mr. Sharma, the Company’s President and CEO, was repaid.

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


Forward-Looking Statements

This Quarterly Report

Introduction

In the accompanying analysis of financial information, we sometimes use information derived from consolidated unaudited financial data but not presented in our financial statements prepared in accordance with U.S. GAAP. Certain of these data are considered “non-GAAP financial measures” under SEC rules. See the Non-GAAP Financial Measures section for the reasons we use these non-GAAP financial

measures and the reconciliations to their most directly comparable GAAP financial measures. Certain columns and rows within

the tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers. Discussions throughout this Management Discussion & Analysis (“MD&A”) are based 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’scontinuing operations unless otherwise noted. The Management Discussion and Analysis of Financial Condition and Results of Operations" and subsequent reports that we fileshould be read in conjunction with the Securitiesunaudited consolidated condensed financial statements and Exchange Commission (“SEC”).



Although we believe thatnotes to the expectations reflected in ourunaudited consolidated condensed financial statements.

Forward-Looking Statements

The Company makes 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 (the “Exchange Act”), 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 readand elsewhere in conjunction withthis report based on the beliefs and assumptions of our consolidated financialmanagement and on information currently available to us. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the notesSecurities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this Quarterly Report,report, including, without limitation, statements regarding our financial position, business strategy and other plans and objectives for our future operations, are forward-looking statements. These statements include declarations regarding our management’s beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could”, “intend,” “consider,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict” or “continue” or the negative of such terms or other comparable terminology. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Our business has been undergoing substantial change, which has magnified such uncertainties. Readers should bear these factors in mind when considering forward-looking statements and should not place undue reliance on such statements. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those suggested by such statements.

Any number of risks and uncertainties could cause actual results to differ materially from those we express in our forward-looking statements, including the risks and uncertainties we describe below and other factors we describe from time to time in our periodic filings with the SEC. We therefore caution you not to rely unduly on any forward-looking statement. Important factors that could cause actual results to differ include, but are not limited to, the risks discussed in “Risk Factors” and the audited consolidatedfollowing:

·the adequacy of our financial resources, including our sources of liquidity to fund business development activities and pursue acquisition opportunities;
·our ability to find, negotiate and close acquisition opportunities at appropriate risk-adjusted returns and market rates;
·our ability to extend, where needed maturities on existing notes;
·our ability to raise equity capital at the right market terms;
·the initiation of new legal proceedings;
·our ability to effectively manage our regulatory and contractual compliance obligations;
·our ability to contain and reduce our operating costs;
·the loss of the services of our directors and officers and senior managers;
·uncertainty related to general economic and market conditions, travel and hospitality market conditions;
·uncertainty related to our ability to integrate the operations of PRAMA, a 51% equity interest subsidiary to our eCommerce Aggregator business;
·uncertainty related to our ability to conduct future acquisitions to gain economies of scale and to leverage travel network synergistic benefits;
·credit losses sustained in the event of a failure or lack of insurance coverage from the Deposit Insurance and Credit Guarantee Corporation of India for bank balances maintained in India; and
·uncertainty related to our reserves, valuations, provisions and anticipated realization of assets.

Further information on the risks specific to our business is detailed within this report, including under “Risk Factors.” Forward-looking statements speak only as of the date they were made, and noteswe disclaim any obligation to update or revise forward-looking statements whether because of new information, future events or otherwise.

Overview 

The Company is an eCommerce aggregator and Management’s Discussiona hospitality management company. An aggregator model is a form of eCommerce whereby our website, www.tripborn.com aggregates, information on various travel and Analysishospitality vendors and presents them on a single platform, to ease, facilitate, coordinate and effectuate consumer travel and hospitality needs.The Hospitality segment is an Indian based operator of Financial Condition20 hotel properties in 16 cities with 949 keys under 7 brands as of June 30, 2019.

The eCommerce aggregator business functions as a Last Mile Commerce and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017, filed with the SEC on June 29, 2017.


Overview
We are an online travel agency, sometimes referredConnectivity aggregator that delivers product and services to as an OTA, that offers travel reservations and related travel services and products to travel agentsoffline consumers using a service agent network in India through our website, www.tripborn.com.website. Currently, we operate as a business to business, or B2B, online travel agencyLast Mile Commerce platform that serves travelbusiness agents and travel companies based in India in bookingproviding travel and financial services and products for their offline customers. Through our internet-based platform,website, our business or travel agent customersagents 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-commercefinancial services including money transfer bill payment, servicesand Micro ATM products. We serve over 4,966 travel 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 President and Chief Executive Officer and a director, formed our operating subsidiary,The eCommerce Aggregator segment operates through Sunalpha Green Technologies Private Limited under(“Sunalpha”), a wholly owned subsidiary.

The hospitality business is comprised of our 51% equity interest in our subsidiary, PRAMA, which was acquired on April 22, 2019. The hospitality business operates the laws offollowing mid-priced to budget brands in India: Mango Hotels, Mango Suites, Mango Hotels Select, Mango Suites Select, i-Stay Hotels and Apodis Collection. APODIS and IntelliStay function as umbrella brands. Our brands strive to highlight friendly service and reflects a local spin on the Republic of Indiatravel experience in 2010. Sunalpha commenced operations as an OTA in India in February 2014.


Priorenvironment that allows customers to acquiring Sunalpha in December 2015,feel welcome and at home while paying a budget price. Our focus is to anticipate guest needs and pleasantly surprise them with our customer service. Under our asset-light business model, 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.manage hotels, rather than owning them.

PRAMA was acquired not only for its asset-light hotel property management business, but also for the expectation that we plan to deliver organic growth and synergies through combining the PRAMA portfolio 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, 2018 as fiscal 2018 and the fiscal year ended March 31, 2017 as fiscal 2017.


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 continueseCommerce Aggregator platform to increase we anticipate that we will betraffic in a position to use our established platform to offer travel services and products directly to consumers.

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) commissions and incentive payments from airline suppliers for tickets booked by our travel agent customers through our distribution channels and (ii) service fees we charge our customers.

Our Services and Products
Our internet-based platform at www.tripborn.com provides participating travel agents, travel managers, arrangers and corporations with the ability to quickly search and book the services described below for their largely offline customers. Many of our arrangements with our travel service suppliers are informal and provide our counterparties with the ability to terminate or suspend the arrangements with little or no notice. Our arrangements with our travel service suppliers with respect to the terms of our sales targets, incentives, commissions and discounts often are subject to change at the discretion of our supplier and are negotiated periodically on a quarterly or yearly basis, if not more frequently. We also typically pay fees to our travel service suppliers to directly connect into their booking systems on an initial and/or ongoing basis. 
Air ticketing
Our travel agent customers can book domestic or international flights through our website. We have agreements with India’s three domestic low cost carriers. In addition, through our website, we offer our travel agents access to international air tickets to destinations worldwide as an approved agent of the International Association of Travel Agents, or IATA, and through our aggregators, which have agreed to provide us with access to their airline ticket inventory.
Our platform at www.tripborn.com allows our customers to search for available tickets based on their customers’ requirements. Our platform quickly processes the available inventory of our aggregators and suppliers and displays the results, including availability, schedules and prices. The prices displayed include the commission that our customers will earn on the ticket sales.
We typically procure tickets from our suppliers and sell them to our travel agent customers. We earn revenue by charging a markup or adding fees to the ticket price and by charging booking fees, service charges and/or payment gateway charges for using our website. We also receive revenue from our suppliers by earning incentives and/or commissions based on the volume of tickets we purchase from our suppliers. We may pre-purchase blocks of air tickets from our suppliers and hold them to resell within specified time periods. If we are not able to sell these pre-purchased tickets, we recognize a loss. We also may paycapture margin in advance for air tickets to receive a discount on purchases from our suppliers. These advance payments are credited toward future air ticket sales.
Hotel reservations
We offer access to reservations with 400,000 hotels across the world, including hotels in India through aggregators that we have directly connected into our booking system. Our platform allows our travel agent customers to meet their customers’ needs by searching for hotel availability by location and sorting search results by star ratings and price. Our search results include photos and descriptions of the hotels’ amenities. We arrange for hotel bookings for our travel agent customers by securing the booking at base rates and earn revenue by including a markup or fees on the rates billed to our travel agent customers and by charging booking fees, service charges and/or payment gateway charges for using our website. We also may earn incentives and/or commissions from our suppliers for completing bookings. In some cases, our employees may arrange for hotel bookings directly with individual hotels.both segments. In addition, we may pre-purchase blockspursue acquisition targets, for the purpose of reservations fromeffecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination to fuel scale and growth within the broad hospitality sector.

eCommerce Aggregator business overview

We have built, advanced and secure, service-oriented technology platforms, that integrate our supplierssales, customer service and holdfulfillment operations. Our website is hosted in the cloud and is used by our B2B customers or service agents to enable them to resell within specified time periods. If we are not ablesell our full suite of online travel services to sell these reservations, we recognize a loss.

Bus ticketing
Our travel agent customers can book bus tickets on our website through an aggregator that is directly connected into our booking system. Our platform consolidates ticketing for largely unorganized regional bus services for the benefit of our travel agent customers and their customers. As a value-added service, our platform allows our travel agent customersOur technology platforms are scalable and can be augmented to select specific seats by gender, which ishandle increased traffic and complexity of interest to their Indian customers.  We may also procure bus tickets offline from individual bus operators for our travel agent customers. We procure bus tickets for our travel agent customers at base rates and earn revenue by including a markup or fees on the tickets. We also earn incentives and commissions from our supplier for completing bookings.
Rail ticketing
We are a B2B Principal Agentproducts with limited additional investment, an example of the Indian Railway Catering and Tourism Corporation, or IRCTC, which is a government entity that allows us to offer reservations through Indian Railways’ passenger reservation system on our webpage. Indian Railways is India’s state-owned railway, which owns and operates most of India’s rail transportation. We have integrated our system with IRCTC’s to provide a seamless booking process for our travel agent customers. According to the 2015-2016 annual report of the Ministry of Railways, Indian Railways sold 200 million tickets in 2015-2016 and carries approximately 23 million passengers daily. Rail travel is the primary mode of transportation for Indians, particularly in rural areas.
As a Principal Agent, we enroll our travel agent customers to book rail tickets for their customers through our platform. We earn revenue by collecting enrollment fees from our travel agent customers, by collecting service charges on each seat booked and by collecting payment gateway charges on the amount of the transaction. The IRCTC determines ticket prices and the maximum amount of the service charge (currently, between approximately $0.30 and $0.60 per ticket). We also may charge our travel agent customers a fee based on the percentage of the transaction value for payment gateway charges (currently, up to two percent).
Sunalpha entered into an agreement with IRCTC for a one-year term that expired in October 2016. On September 30, 2016, Sunalpha renewed its agreement with the IRCTC. The agreement will expire on October 5, 2017 and may be renewed for an additional annual term in the discretion of the IRCTC. The IRCTC may terminate or temporarily suspend the agreement without prior notice.  The Company has renewed its agreement with the IRCTC.
Visa processing
Through third parties, we can arrange for visa processing as an ancillary service for the customers of our travel agent customers. We pay our suppliers for the service and collect fees from our travel agent customers.
Vacation packages
Our travel agent customers can search our platform for available vacation packages or submit inquiries regarding their customers’ preferences to be fulfilled by us and/or our third-party suppliers. Our call center also is available to our travel agent customers to facilitate these requests. We arrange for vacation package bookings for our travel agent customers by securing the booking at base rates and earn revenue by including a markup or fees on the rates billed to our travel agent customers and by charging booking fees, service charges and/or payment gateway charges for using our website. We also may earn incentives and/or commissions from our suppliers for completing bookings. In addition, we may create packages based on our travel agent customers’ specifications by purchasing the components of the package from our suppliers as necessary.
Pre- and post-paid services and utilities
As a value-added service, our travel agent customers may use our internet platform to make pre- and post-paid mobile payments and payments for television service and data cards on behalf of their customers. We pay our suppliers for the services and earn a commission as a percentage of the price of the services. We also pass a service charge on to our travel agent customers.
Payment services product
As a value-added service, our travel agent customers may use our internet platform to make cash transfers on behalf of their customers. We pay our suppliers for the services and earn a commission as a percentage of the price of the services. We also pass a service charge on to our travel agent customers. We originate domestic remittance transactions, which is the sendinghigh traffic generated by promotional rates offered simultaneously by multiple travel operators and suppliers. Our website facilitates the requirements of money from one consumer usingthe growing Indian middle-class travel market, which is characterized by lower rates of internet penetration and digital technology, when compared to more developed countries. We have a network of approximately 10,200 registered agents across over 200 cities in India.

We have designed our agent network within Indiacustomer facing websites to another consumer,be user-friendly to our B2B customer, providing our customers with extensive low-price options and alternative routings. We continuously make improvements to our online booking platforms to enhance the user experience by focusing on automation. Our cloud-based platform has been designed to link to our multiple suppliers’ systems either through “direct connects” or a global distribution system (“GDS”), we use both Amadeus and Galileo, and are capable of delivering real-time availability and pricing information for multiple options simultaneously. Our platform is hosted by a cloud-based IBM service, that enables consumerswhich provides a high degree of reliability, security and scalability and helps us to withdraw cash from their bank accounts.


White label solution
Through our internet platform, we provide white label travel solutions that allow our travel agent customers to use their own branded platform for customer use. Agents that take advantage of this service can offer tickets and reservations through their own branded website powered by our platform and can issue tickets that include their own logos.

Historical Operations and Outlook
maintain adequate capacity. Since commencing operations as an OTAonline travel agent in February 2014, we have grown our business by initially processing a few transactions a day to processing 3,864,275 in the quarter ended December 31, 2017. We have steadily worked to add suppliers in order to provide additional services and better pricing for our travelservice 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 ofscalable for suppliers and millionstransactions.

eCommerce Aggregator operating metrics

In evaluating our eCommerce Aggregator business, we use operating metrics, including gross bookings and revenue margin. Gross bookings are a measure of the total dollar volume of transactions that we process and is used by us to measure our scale and growth. We calculate revenue margin as revenue as a percentage of gross bookings.

 Quarter ended June 30
 20192018
   
Gross Bookings1*$15,042,550$13,720,529
Net revenues$132,120$95,640
Gross Bookings
Margin2*
0.88%0.70%

1*Gross 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. Gross bookings differ from the Company’s net revenues, which reflect the revenue earned by the Company.

2*Gross bookings margin is defined as net revenues as a percentage of gross bookings.

The increase in furtherancegross bookings is driven primarily by increases in incentives, fees, penalty income, and surcharges paid by our service agent customers. The revenue margin increased quarter over quarter by approximately 18 basis points, due to increased margin from suppliers in our offerings.

Hospitality business overview

Hospitality trends and opportunities

The Indian travel and hospitality segment is highly fragmented, with attention focused on a handful of higher end luxury brands. There has been a dearth of branded hotel chains catering to mass segments, where demand is primarily driven by approximately 650 million young travelers aged between 24 and 35, keen to travel, enabled by higher disposable income and improved transport options. With changing times, the young travelers have created demand in India’s smaller towns and hence creating a need for predictable hotel experience with affordable pricing.

In a country where access to local information and knowledge is rarely available in an online, social media driven environment, hospitality sales channels have relied on offline distribution channels, principally word-of-mouth, print, radio, television and travel agent marketing.Given the ever-growing list of options available today in India, using the right number and mix of channels to deliver a relevant and engaging customer experience in an increasingly fragmented, and often chaotic distribution landscape is pivotal. As such, hotels can no longer be complacent, relying on previous sales and distribution channels. It is incumbent upon hoteliers to effectively leverage both direct and indirect channels as part of their sales and marketing strategy to stay competitive, optimize yields, drive sales and revenue.

Hospitality business overview

We look at the number of keys (available rooms), number of properties by brand and the number of cities as a measure of our growth strategies.


geographical reach. We plan to present revenue per available room (“RevPar”), average daily rate (“ADR”) and average occupancy (“Occupancy”) in future quarterly and annual reports. We believe RevPAR, which we calculate by dividing room sales for comparable properties by room nights available for the period, measures the period-over-period change in room revenues for comparable properties. RevPAR may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue. Occupancy, which we calculate by dividing occupied rooms by total rooms available, measures the utilization of a property’s available capacity. ADR, which we calculate by dividing property room revenue by total rooms sold, measures average room price and is useful in assessing pricing levels. We plan to measure our performance on a constant Indian Rupee basis and therefore US Dollar translations may experience currency fluctuations which do not impact underlying local performance. We do not plan to calculate constant dollar statistics, for example, by applying exchange rates for the current period to the prior comparable period. We define our comparable properties as our properties that were open and operating under one of our brands since the beginning of the last full calendar year and have not, in either the current or previous year: (i) undergone significant room or public space renovations or expansions, (ii) been converted between our hotel brands, (iii) sustained substantial property damage or business interruption; or (iv) changed contractual terms.

Given the transaction occurred on April 22, 2019, we believe that consistent period on period performance will not be meaningful for a period of time and accordingly will not present the above post acquisition performance measures until they are meaningful.

We earn base management fees and in certain cases incentive management fees from the properties that we manage. In November 2015,most markets, base management typically consist of a percentage of property-level revenue, while incentive management fees typically consist of a percentage of net profit, adjusted for certain contractually agreed items.

We remain focused on doing the things that we integrateddo well; that is, selling rooms, taking care of our guests, and making sure we control costs. We provide our guests new and memorable experiences through our portfolio of brands, innovative technology, and a focus on employee training to deliver a consistent customer experience. Our brands remain strong due to our skilled management teams, dedicated associates, superior guest service with an emphasis on guest and associate satisfaction, and desirable property amenities within the Indian Railway reservation system into our online platform using complex and scalable technology tools. Previously, we provided rail ticketing through a third party supplier. Becoming a principal agent has resulted in and willbudget price range.

We, along with property owners, continue to resultinvest in our brands by means of new, refreshed, and reinvented properties, new room and public space designs, and enhanced amenities, technology offerings, and guest experiences. We address, through various means, hotels in our system that do not meet our standards. We continue to enhance the appeal of our proprietary, information-rich, and easy-to-use websites, and of our associated mobile smartphone applications, through functionality and service improvements.

OUR STRATEGY

We believe that the fast-growing travel market in in India, coupled with rising disposable income in India drive a strategic opportunity. Our objective is to capture this growth through the following strategic initiatives:

·Expand our hotels and packages offerings.Our hotels and packages offering generally yields higher margins than our air, rail ticketing and money transfer offerings, and we intend to increase this as part of the sales mix. In April 2019, we acquired PRAMA, which operates a budget hotel portfolio across India. We plan to increase the number of hotels, to increase captive demand, utilizing our last-mile-distribution network, by adopting new technologies, and a deep customer focus to create stronger brand loyalty and customer engagement experience. Our objective is to enable more hotel suppliers to be seamlessly connected to our platform with the latest technology methods which include direct connects, channel managers and direct integrations with various aggregators. We believe that we can increase our total number of transactions as internet penetration in India increases, by strengthening our distribution network, cross selling other products and service including vacation packages;

·Expand our service and product portfolio to enhance cross-selling opportunities. We believe that expanding our service and product offerings (i.e. Money transfer and Payment services) is an important means of customer acquisition as the diversity of our services and products will improve our offerings to customers, attract more customers to our platform and which allow us to cross sell higher-margin service;

·Enhance our service platforms by investing in technology.We intend to continue to invest in technology to enhance the features of our services and alignment of our platform and technology assets with business objectives which can improve visibility into business operation and profitability, ensure transparency for optimal service delivery, reducing cost, offer new services to customers, and to create efficiency across our businesses by enabling control of every transactions; and

·Pursue selective strategic partnerships and acquisitions.In addition to organic growth, we will pursue strategic partnerships and targeted acquisitions that complement our service offerings, strengthen or establish our presence, or to gain access to technology and building brands.

CONSOLIDATED RESULTS OF OPERATIONS

Acquisition of PRAMA

The acquisition of PRAMA on April 22, 2019, had a material impact on the results of operations, for the quarter ended June 30, 2019. Accordingly, the results for the period June 30, 2018, which do not include PRAMA are not comparable to the results for the quarter ended June 30, 2019, which do include the results of PRAMA, on a post-close basis. Equally, the PRAMA acquisition had a material impact on the liquidity and capital resources of the Company. The impact of the PRAMA acquisition on the post close results and the balance sheet is shown in the Company’s segmental disclosure. PRAMA’s results, scale and operations are significantly larger than the eCommerce Aggregator segment. Also, the effects of the PRAMA acquisition impacted every significant line item in the statements of operations and balance sheet.

The pro forma combined revenues and net loss before income taxes, for the combined entity, as though the acquisition of PRAMA had occurred on April 1, 2018, for the respective periods are shown in Note 1 of our Consolidated Condensed Financial Statements (unaudited).

The eCommerce Aggregator segment results improved but compared to the PRAMA acquisition did not have a meaningful impact on the results of the Company. The Company does not believe that presenting pro forma information for PRAMA, over and above what is disclosed in the segmental information above, would be meaningful at this time.

  Quarter ended
June 30,
  Quarter ended
June 30,
 
  2019  2018 
Net revenues $1,825,858  $95,640 
         
Cost of revenues and expenses  (2,270,134)  (313,699)
         
Loss from operations  (444,276)  (218,059)
         
Other expenses, net  (118,479)  (41,100)
         
Net loss $(562,755) $(259,159)
         
Net loss attributable to noncontrolling interests $(135,491) $- 
Net loss attributable to TripBorn, Inc. $(427,264) $(259,159)

Net Revenues

Net revenues increased by $1,730,218, which comprised the post close acquisition results of PRAMA for the period April 22, 2019 through June 30, 2019 of $1,693,738, which was not present in the prior period, and an increase of $36,480 for the eCommerce Aggregation business from increases in the levels of travel agents in the network and an associated increase in transaction volumes.

Cost of Revenues and Other Operating Expenses

Cost of revenues and Other operating expenses increased by $1,956,435, which comprised the post close acquisition results of PRAMA for the period April 22, 2019 through June 30, 2019 of $1,931,685, which was not present in the prior period, and an increase of $24,750 for the eCommerce Aggregation business from increases in the levels of travel agents in the network and an associated increase in transaction volumes.

Loss from Operations

Loss from operations increased by $226,217, which comprised the post close acquisition results of PRAMA for the period April 22, 2019 through June 30, 2019 of $204,380, which was not present in the prior period, and an increase in rail ticketing revenue associated with an increase in fees associated with enrolling our travel agent customers and usage feesloss from operations of $21,837 for ticketing. We have also experienced, and anticipate that we will continue to see, an increase inthe eCommerce Aggregation business, reflecting higher 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. 

Other Expenses, Net

Other expenses, associated with becoming a reporting company withnet increased by $77,379, which comprised 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 have seen an increase in bookings through our website during the first halfpost close acquisition results of fiscal 2018 but we have not seen a corresponding increase in revenue.  The increase in bookings is due to the recent expansion of our sales force and our expansion into the states of Maharashtra, Karnataka and Madya Pradesh. In an effort to gain market share, we have decreased our margins over the last three quarters, resulting in continued net losses.  We expect that it will several quarters before we are able to increase our margins.

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 payment services 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 6.7% and 7.4% in 2017 and 2018 according to the International Monetary Fund (IMF) in its latest World Economic Outlook released October 10, 2017. In a January 22, 2018 briefing, the IMF retained its GDP forecast for 2017 and 2018 and also estimated that the Indian economy would grow by 7.8% in 2019, which would make the country the world’s fastest-growing economy in 2018 and 2019.
Effective July 1, 2017 the Indian Government introduced a comprehensive, multi-stage, destination based national goods and services tax (“GST”) that combines taxes and levies by the Central and State Governments into a unified tax structure. The implementation of the GST has a significant impact on overall tax computation and compliance. We believe that the GST may have an impact on our margins.  We have implemented the necessary changes to our business processes, accounting, and information systems to fully comply with this new law. We may incur additional tax compliance costs under this new tax law.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from the information provided in our Annual Report on Form 10-K for fiscal year end March 31, 2017.
RESULTS OF OPERATIONS

The following table presents,PRAMA for the third quarter and first nine monthsperiod April 22, 2019 through June 30, 2019 of fiscal 2018 and fiscal 2017, the components of our consolidated statements of income:


  
Third Quarter Ended
December 31,
  
Nine Months Ended
December 31,
 
  2017  
2016
  
2017
  
2016
 
Net revenue $77,192  $148,387  $255,824  $405,189 
                 
Cost of revenue  10,903   73,271   37,776   272,876 
                 
Gross profit  66,289   75,116   218,048   132,313 
                 
Operating expenses                
     Selling, general, and administrative expenses  193,460   112,750   513,125   253,996 
     Legal and consulting expenses  53,584   56,110   151,231   206,171 
                 
Income (loss) from operations  (180,755)  (93,744)  (446,308)  (327,854)
                 
Other income (expense)                
     Depreciation and amortization  (83,469)  (51,809)  (283,016)  (153,557)
     Interest income  157   0   321   0 
     Interest expense  (52,578)  (37,068)  (122,167)  (108,526)
Total other income (expense)  (135,890)  (88,877)  (404,862)  (262,083)
                 
Income (loss) before income tax expense  (316,645)  (182,621)  (851,170)  (589,937)
     Income tax benefit (expense)  69,926   55,260   240,455   152,017 
                 
                 
Net income (loss)
 $(246,719) $(127,361) $(610,715) $(437,920)


During the third quarter of fiscal 2018, we continued to add new markets and add an increasing number of sales agents that offer our services, however, to gain market share we have reduced our revenue margins, resulting in a decrease in net revenue.  Our costs of revenue associated with our gross revenue products have declined and operating expenses increased as we expanded our market reach and drove the increase in net loss from operations.

THIRD QUARTER ENDED DECEMBER 31, 2017 COMPARED TO THIRD QUARTER ENDED DECEMBER 31, 2016

Revenue

Net revenues for the third quarter ended December 31, 2017 were $77,192 compared to $148,387 for the third quarter ended December 31, 2016. Net revenue for the quarter ended December 31, 2017 consisted of $11,021 from air ticketing compared to $12,754 in the prior year quarter, $0 from bus ticketing compared to ($229) in the prior year quarter, $22,190 from rail ticketing compared to $10,240 in the prior year quarter, $0 from hotel booking compared to $28 in the prior year quarter, $(5,769) from vacation packages compared to $64,462 in the prior year quarter, $6,308 from payment services compared to $4,691 in the prior year quarter, and $43,442 from incentives from our aggregators and suppliers and fees, penalty income and surcharges from our travel agent customers compared to $56,442 in the prior year quarter. The primary driver in our net revenue decline is decreases in air ticketing and vacation packages, minimaly offset by an increase in rail ticketing, payment services and in incentives from our aggregators and suppliers. The decrease in net revenues resulted from a decrease in pricing to our end user travel agent customers as our focus has been on acquiring market share through offering lower pricing than our competitors with a focus on generating gross bookings.  As described under the heading “Operating Metrics,” gross bookings increased from $2,394,253 during the quarter ended December 31, 2016 to $8,361,856 during the quarter ended December 31, 2017.  The increase in gross bookings$72,132, which was the result of increasing the number of travel agents and entering new markets, selling at reduced margins, and growth in the payment services product.

Cost of Revenues and Gross Profit

The cost of revenue for the third quarter ended December 31, 2017 was $10,903 compared to $73,271 for the prior year quarter. The cost of revenue represents fees charged by our suppliers on gross revenue products including some hotel bookings and vacation packages. The decrease in cost of revenue in the third quarter ended December 31, 2017 compared to the prior year quarter was primarily driven by decreases in the costs associated with our hotel bookings and vacation packages as our hotel bookings and vacation package revenue declined in the third quarter of fiscal 2018. 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 third quarter ended December 31, 2017 was $66,289 compared to $75,116 for the prior year quarter.  The $8,827 decrease is driven primarily by a decrease in costs to provide revenue.

Operating Expenses

Total operating expenses for the third quarter ended December 31, 2017 were $247,044 compared to $168,860 for the prior year quarter. Our operating expenses include our sales and marketing, payroll and general and administrative costs.  Total operating expenses were impacted by an increase in costs relating to headcount and an increase in sales and marketing expenses. Included in our operating expenses is $53,584 in legal and consulting expenses associated with our operating as an Exchange Act reporting company, down from $56,110 in the prior year quarter.  This decrease was the result of the prior year quarter including the expenses associated with our initial Form S-1 filing with the SEC.

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 having our shares quoted on the OTCQB Market.

NINE MONTHS ENDED DECEMBER 31, 2017 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2016

Revenue

Net revenues for the nine months ended December 31, 2017 were $255,824 compared to $405,189 for the nine months ended December 31, 2016. Net revenues for the nine months ended December 31, 2017 consisted of $50,991 from air ticketing compared to $69,117 in the prior period, $0 from bus ticketing compared to $51 in the prior period, $35,553 from rail ticketing compared to $20,098 in the prior period, $819 from hotel booking compared to $3,739 in the prior period, $20,225 from vacation packages compared to $211,991 in the prior period, $18,908 from payment services compared to $9,281not present in the prior period, and $129,328 from incentives from our aggregators and suppliers and fees, penalty income and surcharges from our travel agent customers compared to $90,913a small change of $5,247 in the eCommerce Aggregation business.

Net Loss

Net loss increased by $303,596, which comprised the post close acquisition results of PRAMA for the period April 22, 2019 through June 30, 2019 of $276,512, which was not present in the prior period. The primary drivers were decreases in air ticketing, bus ticketing, hotel bookingperiod, and vacation packages, offset by an increase in rail ticketing, payment services and in incentivesloss from our aggregators and suppliers. The deceases in net revenues result from a decrease in pricing to our end user travel agent customers as our focus continues to remain on acquiring market share through offering lower pricing than our competitors with a focus on generating gross bookings. As described under the heading “Operating Metrics,” gross bookings increased from $5,581,647 during the nine months ended December 31, 2016 to $23,585,164 during the nine months ended December 31, 2017.  The increase in gross bookings was the resultoperations of increasing the number of travel agents and entering new markets, selling at reduced margins, and growth in rail ticketing, incentives from our aggregators and suppliers and fees, penalty income and surcharges from our travel agent customers, and growth in the payment services product.


Cost of Revenues and Gross Profit

The cost of revenue$27,084 for the nine months ended December 31, 2017 was $37,776 compared to $272,876 foreCommerce Aggregation business because the prior period. The costoperating scale of revenue represents fees charged by our suppliers on gross revenue products including some hotel bookings and vacation packages. The decrease in cost of revenue from the nine months ended December 31, 2017eCommerce Aggregation business is still insufficient when compared to the prior period was primarily driven by decreases in the costs associated with our hotel bookings and vacation packages as our hotel bookings and vacation package revenue declined in the first nine months of fiscal 2018. 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 nine months ended December 31, 2017 was $218,048 compared to $132,313 for the prior period.  The $85,735 increase is driven by a decrease in costs to provide revenue.

Operating Expenses

Total operatingnon-operating expenses for the nine months ended December 31, 2017 were $664,356 compared to $460,167 for the prior period. Our operating expenses include our sales and marketing, payroll and general and administrative costs, and these costs increased as our headcount and sales and marketing costs have increased as we focus on gaining market share. Included in our operating expenses is $151,231 in legal and consulting expenses associated with our operating as an Exchange Act reporting company, down from $206,171 in the prior period.  This decrease was the result of the prior year quarter including the expenses associated with our initial Form S-1 filing with the SEC.

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 having our shares quoted on the OTCQB Market.
eCommerce Aggregation business.

CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES


As of December 31, 2017,June 30, 2019, we had $1,322,002$1,358,902 in cash and cash equivalents, compared to $516,707$1,230,012 as of March 31, 2017.2019. The $805,295 increase in cash and cash equivalents was primarily driven by sales$558,325 proceeds from the issuance of common stock and warrants, and $112,803 in cash provided by operating activities and working capital, partially offset by the $507,093 net cash used for the purchase of $551,000 during the quarter ended September 30, 2017PRAMA and $547,000 during the quarter endedother cash movements. As of June 30, 2017, which offset our year to date net loss of $610,715. As of December 31, 2017, we2019, the Company had stockholders’ equity of $897,340$2,061,528, compared to a stockholders’ deficit of $88,394 at$1,078,970 as of March 31, 2017, which resulted from sales2019. The change of common stock$3,140,498, is comprised of $2,401,181 of share issuances and $1,150,483 of note conversions, of notes payable into common stockand other, partially offset by an increasea net loss attributable to the Parent Company of $427,264. The Company has continued to raise equity in operating losses during the quarter ended December 31, 2017.


Our primary source ofperiod post June 30, 2019 to fund working capital, general and administration expenses and further potential acquisitions. The Company also plans to date has been throughimprove the sale of common stock and the sale and issuance of convertible notes.  Our long-term focus remains on deriving net cash flow from operations.

operations for both the eCommerce Aggregator and Hospitality segments.

Cash Flows: The following table is a summary of our Consolidated Statements of Cash Flows:

  Nine Months Ended 
  December 31,  December 31, 
  2017  2016 
Cash Provided by (Used in):    
Operating Activities $(300,620) $(263,573)
Investing Activities  7,915   (690,640)
Financing Activities  1,098,000   1,278,257 

  Three months ended 
  June 30,  June 30, 
  2019  2018 
Cash Provided by (Used in):        
Operating activities $112,803  $(340,244)
Investing activities $(558,958) $(396)
Financing activities $548,595  $(10,518)



Operating Activities: Net cash usedprovided by operations was $300,620$112,803 during the ninethree months ended December 31, 2017June 30, 2019 compared to a cash use from operating activities of $263,573$340,244 during the nine months ended December 31, 2016.

Year-over-yearsame period in fiscal 2018. The increase in the period to period change was $453,047 and was primarily attributable to the cash flow from the inclusion of PRAMA for this quarter, whereas, it was not present in the previous quarter. Significant changes in operating assets comprised a decrease of $480,294 from accounts receivables, a decrease of $854,398 from right to use of assets and a decrease of $280,820 in other non-current liabilities. Significant improvements in cash from operating assets and liabilities included, a change of $1,199,970 from other current liabilities and $877,743 from operating lease liabilities. The net loss was $562,755 as adjusted for non cash depreciation and amortization of $134,334 and stock based compensation of $25,723.

Investing Activities: The change in investing activities related to the net cash used by operations is has increased as operating losses have increased.


Investing Activities: Duringin acquiring the nine months51% equity interest in PRAMA of $507,093 in the quarter ended December 31, 2017, there was a cash provisionJune 30, 2019 and $51,864 of $7,915 from investing activities compared to a cash use of $690,640 during the nine months ended December 31, 2016.  These amounts represent net changes in property plant, and equipment and intangible assets.

expenditures which were substantially all in the Hospitality segment.

Financing Activities: During the ninethree months ended December 31, 2017,June 30, 2019, there was $1,098,000 of$558,325 cash provided by financing activities comparedissuances or shares and or warrants in the following categories:a) 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; and b)During the quarter ended June 30, 2019 the Company issued and sold 775,157 units comprising one share and warrant to a cash provisionpurchase two share of $1,278,257 during the nine months ended December 31, 2016.  Cash generated during the nine months ended December 31, 2017 resulted from the sale ofCompany’s common stockstock; par value $0.0001 pursuant to a private placement.


The purchase price per unit was $0.70 resulting in aggregate proceeds of $542,611 to the Company. The comparable period in 2018 arose from a $10,518 repayment of convertible notes. We presentlycurrently 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 thatOur liquidity needs are largely impacted by the acquisitions we will require approximately $1.0 millioncomplete, and $5.0 million in the next 12 and 24 months to support our continued operations.


We took the following steps during fiscal 2017 and fiscal 2018efforts to manage our liquiditysales, general and to avoid default on any material third-party obligations:

·We continue to employ “on demand” procurement processesadministrative funds, offset by planned growth in cash generation 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 ouroperating activities and the realization of 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 had a three-year term and beared interest at the rate of six percent payable at maturity. The principal amount of the note was 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.

·We issued a convertible note to Takniki Communications, an affiliate owned by Sachin Mandloi, our Vice 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’s common stock is now quoted on the OTCQB Market.
improvements. 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

BUSINESS SEGMENTS

The following discussion presents an analysis of operating results of our business, we use operating metrics, including gross bookingsreportable nosiness segments: eCommerce Aggregator 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 December 31,Nine Months Ended December 31,
 2017201620172016
     
Gross Bookings1
$8,361,856$2,394,253$23,585,164$5,581,647
     
Revenue Margin2
0.9%6.2%1.1%7.3%


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 bookingsHospitality, for the first quarter and nine months ended December 31, 2017 were driven by increases in air, bus, and rail ticketing, payment services, and incentives offset by decreases in hotel and vacation packages.  Revenue margin has declined quarter over quarter and year to dateJune 30, 2019 compared to the prior yearfirst quarter ended June 30, 2018. See Note 11 for other information about each segment, including revenues and a reconciliation of segment profits to net income.

eCOMMERCE AGGREGATOR RESULTS OF OPERATIONS

  Quarter ended
June 30,
  Quarter ended
June 30,
 
  2019  2018 
Net revenues $132,120  $95,640 
         
Cost of revenues and Other operating expenses  (372,016)  (313,699)
         
Loss from operations  (239,896)  (218,059)
         
Other expenses, net  (46,347)  (41,100)
         
Net loss $(286,243) $(259,159)
         
Segment net loss attributable to TripBorn Inc. $(286,243) $(259,159)
Segment net loss attributable to noncontrolling interests $-  $- 

Net Revenues

Net revenues increased by $36,480 reflecting increases in the levels of travel agents in the network and an associated increase in transaction volumes.

Cost of Revenues and Other Operating Expenses

Cost of revenues and Other operating expenses increased by $58,317 reflecting higher sales, general and administrative expenses and higher legal and consulting expenses.

Loss from Operations

Loss from operations increased by $21,837, reflecting higher sales, general and administrative expenses.

Other Expenses, net

Other expenses, net increased by $5,247.

Net Loss

Net loss increased by $27,084 primarily due to price pressurehigher sales, general and administrative expenses.

HOSPITALITY RESULTS OF OPERATIONS

The quarter ended June 30, 2019 was largely impacted by the acquisition of PRAMA and the associated establishment of our Hospitality segment, which was not present in the comparable period, therefore all comparisons to the prior period are not meaningful. The results of the hospitality segment are only reflected for the period April 22, 2019 through June 30, 2019.

  Quarter ended
June 30,
  Quarter ended
June 30,
 
  2019  2018 
Net revenues $1,693,738  $- 
         
Cost of revenues and Other operating expenses  (1,898,118)  - 
         
Loss from operations  (204,380)  - 
         
Other expense, net  (72,132)  - 
         
Net loss $(276,512) $- 
         
Segment net loss attributable to TripBorn Inc. $(141,021) $- 
Segment net loss attributable to noncontrolling interests $(135,491) $- 

Changes in “Net Revenues”, “Cost of revenues and Other Operating Expenses”, “Gross Profit”, “Loss from Operations”, “Other Expenses, Net”, and “Net Loss” are wholly attributable to the purchase of PRAMA on air ticketing, low margin railApril 22, 2019, and bus ticketing, and payment services outpacing higher margin vacation packages and incentives.  The Company has been focused on growing it’s market share by offering lower pricing than its competitors offer, which has resulted in a decline in it’s revenue margin.



the associated consolidation of PRAMA for the period April 22, 2019 through June 30, 2019.

OFF BALANCE SHEET ARRANGEMENTS


As of December 31, 2017, we had

The Company has no off-balance sheet arrangements.


arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. 

ITEM 4. CONTROLS AND PROCEDURES


Management’s Report on Disclosure Controls and Procedures


We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) areinclude controls and procedures designed with the objective of ensuringto ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 as amended, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’sSecurities and Exchange Commission’s rules and forms. Disclosure controlsforms, and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Chief Executive Officerprincipal executive officer and Chief Financial Officer,our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and Chief Financial Officer, based on their evaluation of TripBorn’sour principal financial officer, evaluated our company’s disclosure controls and procedures as of December 31, 2017, havethe end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that TripBorn’sas of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures are effective as of that date.


Changes inwere not effective.

Management Report on Internal Control Over Financial Reporting


As a newly public company, we have not yet been required

Management is responsible for establishing and maintaining adequate internal control over the Company's financial reporting. In order to provide a reportevaluate the effectiveness of management’s assessment regarding internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Our management, with the participation of our principal executive officer and principal financial officer have conducted an assessment, including testing, using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") (2013). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of June 30, 2019. The ineffectiveness of the Company's internal control over financial reporting was due to the following material weaknesses, which are indicative of many small companies with small staff:

(i)inadequate segregation of duties consistent with control objectives;
(ii)lack of multiple levels of supervision and review; and
(iii)lack of adequate U.S. GAAP and SEC financial reporting knowledge to identify, account for and disclose financial reporting issues on a timely basis; and
(iv)an inability to report financial statements in a timely manner.

We believe that the weaknesses identified above have not had any material effect on our financial results. We are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the current fiscal year, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management's Remediation Plan

The weaknesses and their related risks are not uncommon in a company of our size because of the limitations in the size and number of staff. Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible. However, we are committed to maintaining a strong internal control environment and implementing measures designed to help ensure that control deficiencies contributing to the material weakness are remediated as soon as possible. We continue to implement our remediation plan for the previously reported material weakness in internal control over financial reporting, described in Part II, Item 9A of our 2019 Form 10-K, which includes steps to increase dedicated personnel, improve reporting processes, and enhance related supporting technology.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. We will consider the material weakness remediated after the applicable controls operate for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.

Management believes that despite our material weaknesses set forth above, our financial statements for the three month period ended June 30, 2019 are fairly stated, in all material respects, in accordance with U.S. GAAP. Because of the time needed to implement these steps and test the applicable controls in operation, management does not anticipate that the material weaknesses will be fully remediated by March 31, 2020.

Change in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Share-based compensation

See Note 3 of our Consolidated Condensed Financial Statements (unaudited) for more information.

New Accounting Standards

See Note 3 of our Consolidated Condensed Financial Statements (unaudited) for our adoption of new accounting standards.

PART II.


ITEM 1. LEGAL PROCEEDINGS


None.
ITEM 1A. RISK FACTORS

Our operationsPRAMA, on April 22, 2019, the Company assumed an interest in an arbitration claim. PRAMA made an arbitration claim of approximately $295,000 (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 by PRAMA 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.

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 results are subject to various risks and uncertainties, including those described in Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended March 31, 2017, which could adversely affect our business, financial condition,position, liquidity or results of operations, cash flows, and the trading price of our common stock. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2017 other than as set forth below.


The Indian government’s implementation of a new indirect tax regime may adversely affect our business and financial performance.

The Government of India has rolled out a comprehensive national goods and services tax, or GST, law that combines taxes and levies by the Central and State Governments into a unified tax structure with an effective date of July 1, 2017. The implementation of GST has significant impact on overall tax computation and compliance. We have implemented necessary changes to our business processes, accounting and IT systems in compliance with GST law. However, some of our suppliers are still in process of making necessary changes to their pricing strategies, product designs and IT systems, which may pose additional challenges to us in the near term. We will also likely incur additional tax compliance costs under the new tax law.


operations.

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

None.

During the quarter ended June 30, 2019, the Company issued an aggregate of 30,441,407 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) 775,157 common shares through a private placement. These events are described in further detail below.

On April 22, 2019, theCompany issued 2,632,653 common shares to the shareholders of PRAMA, at a price of $0.70 per share, as part of the purchase of a 51% equity interest in PRAMA. This was a non-monetary transaction.These issuances were made pursuant to the exemption from registration contained in Regulation S under the Securities Act for sales solely to non-US investors outside of the United States.

On June 10, 2019, the Company issued and sold 357,143 units comprising one share and a warrant to purchase two shares of the 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 $250,000 to the Company. The Company issued approximately 714,286 warrants pursuant to the 357,143 units listed above. 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. These issuances were made pursuant to the exemption from registration contained in Regulation D under the Securities Act for sales solely to accredited investors.

On June 27, 2019, the Company issued and sold 60,871 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 $42,610 to the Company. The Company issued approximately 121,742 warrants pursuant to the 60,871 units listed above. 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.This issuance was made pursuant to the exemption from registration contained in Regulation S under the Securities Act for sales solely to non-US investors outside of the United States.

On June 30, 2019, the Company issued and sold 357,143 units comprising one share and a warrant to purchase two shares of the 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 $250,000 to the Company. The Company issued approximately 714,286 warrants pursuant to the 357,143 units listed above. 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. These issuances were made pursuant to the exemption from registration contained in Regulation D under the Securities Act for sales solely to accredited investors.

On June 30, 2019, the Company issued 1,571,430 common shares when the warrant holders exercised their warrants and received approximately $15,714 in cash.These issuances were made pursuant to the exemption from registration contained in Regulation D under the Securities Act for sales solely to accredited investors.

On June 30, 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. These were non-monetary transactions.These issuances were made pursuant to the exemption from registration contained in Regulation D under the Securities Act for sales solely to accredited investors.

ITEM 5. OTHER INFORMATION

None.


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 equity interest was acquired from the stockholders of PRAMA. PRAMA is engaged in the business of owning and promoting businesses for operating and managing hotels and food and beverage services in India and nearby markets located in the Indian subcontinent. As previously disclosed, 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. The completion of the acquisition should have been reported on a Current Report on Form 8-K, under Item 2.01

(Completion of Acquisition or Disposition of Assets).

The audit of PRAMA is not complete and the Company did not file the financials of PRAMA within 75 days from its acquisition, as required under rule 8-04 of Regulation S-X. However, the Company will file such financial statements on a Form 8-K as soon as the audit is completed.

ITEM 6. EXHIBITS

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.



Signature


INDEX OF EXHIBITS

NumberExhibit Description

Exhibit 2.1  

SHARE TRANSFER AGREEMENT DATED APRIL 22, 2019 BETWEEN THE COMPANY, PRAMA AND THE SELLERS PARTY THERETO. PREVIOUSLY FILED AS EXHIBIT 2.1 TO THE COMPANY’S CURRENT REPORT ON FORM 8-K FILED ON APRIL 25, 2019 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 3.1   

CERTIFICATE OF INCORPORATION OF THE COMPANY. PREVIOUSLY FILED AS EXHIBIT 3.1 TO THE COMPANY’S REGISTRATION STATEMENT ON FORM S-1 FILED ON APRIL 18, 2016 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 3.2   

CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF THE COMPANY. PREVIOUSLY FILED AS EXHIBIT 3.2 TO THE COMPANY’S REGISTRATION STATEMENT ON FORM S-1 FILED ON APRIL 18, 2016 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 3.3  

AMENDED AND RESTATED BYLAWS OF THE COMPANY. PREVIOUSLY FILED AS EXHIBIT 3.3 TO THE COMPANY’S REGISTRATION STATEMENT ON FORM S-1 FILED ON APRIL 18, 2016 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 4.1  

DEMAND PROMISSORY NOTE DATED APRIL 22, 2019 BETWEEN THE COMPANY AND ARNA. PREVIOUSLY FILED AS EXHIBIT 4.1 TO THE COMPANY’S CURRENT REPORT ON FORM 8-K FILED ON APRIL 25, 2019 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 4.2   

FORM OF CONVERTIBLE NOTES AMENDMENT. PREVIOUSLY FILED AS EXHIBIT 4.2 TO THE COMPANY’S CURRENT REPORT ON FORM 8-K FILED ON APRIL 25, 2019 AND INCORPORATED BY REFERENCE HEREIN.

Exhibit 31.1   

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 31.2   

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1   

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2   

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 101.1

THE FOLLOWING FINANCIAL STATEMENTS FROM THE COMPANY’S QUARTERLY REPORT ON

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2019, FORMATTED IN INLINE XBRL: (I)

CONSOLIDATED CONDENSED BALANCE SHEET; (II) CONSOLIDATED CONDENSED

STATEMENTS OF OPERATIONS; (III) CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS; (IV) CONSOLIDATED CONDENSED STATEMENTS OF EQUITY (DEFICIT); (V) CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS; AND (VI) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  February 12, 2018TripBorn, Inc.
TRIPBORN, INC.
   
Date: November 25, 2019 By:

/s/ RICHARD J. SHAW S /    Deepak Sharma 

 Name:Richard J. ShawDeepak Sharma
 Title:

President, Chief FinancialExecutive Officer and Director (Principal Financial

and Accounting Officer)

40

 
Index to Exhibits

Exhibit
Number
 Description
31.1 
    
31.2 
    
32.1 
    
32.2 
    
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
24