UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 10-Q
_______________________________________
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2017
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:No. 333-210821
_________________________________________________
TripBorn, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________
Delaware | 27-2447426 | |||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |||||
762 Perthshire Pl | Abingdon | MD | 21009 | |||
(Address of principal executive offices) | ( |
(269) 274-7877
(Registrant’s telephone number, including area code)
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 ☒¨ 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 ☒¨ 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,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filero | Accelerated filero | |||||
Non-accelerated filer x | ||||||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)7(a)(2)(B) of the ExchangeSecurities Act. ☐¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐¨ No ☒x
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.
2 |
TRIPBORN, INC.
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 |
September 30, | March 31, | |||||||
2020 | 2020 | |||||||
ASSETS | (UNAUDITED) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 503,887 | $ | 421,909 | ||||
Investments | - | - | ||||||
Accounts receivable, net, and unbilled revenue | 30,837 | 98,960 | ||||||
Due from related parties | - | |||||||
Other current assets | 259,401 | 442,264 | ||||||
Total current assets | 794,125 | 963,133 | ||||||
Non current assets: | ||||||||
Operating lease, right-of-use assets, net | - | - | ||||||
Goodwill | - | - | ||||||
Intangible assets, net | 17,924 | 25,000 | ||||||
Property and equipment, net | 10,590 | 10,056 | ||||||
Other noncurrent assets | 27,002 | 26,366 | ||||||
TOTAL ASSETS | $ | 849,641 | $ | 1,024,555 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 309,231 | $ | 295,700 | ||||
Local duties and taxes | 5,410 | 21,748 | ||||||
Due to related parties | 1,598 | 1,602 | ||||||
Loans and convertible notes due to related parties | 695,000 | 695,000 | ||||||
Interest payable | 695,306 | 660,040 | ||||||
Salaries and benefits | 624,630 | 616,082 | ||||||
Current portion of loans and convertible notes with third parties | - | - | ||||||
Other current liabilities | 220,136 | 280,395 | ||||||
Loans due within one year with third parties | 10,417 | - | ||||||
Total current liabilities | 2,561,728 | 2,570,567 | ||||||
Long term liabilities: | ||||||||
Long term portion of operating lease liabilities | - | - | ||||||
Long term portion of loans and convertible notes | - | - | ||||||
Other non-current liabilities | 47,000 | - | ||||||
Total current and long-term liabilities | 2,608,728 | 2,570,567 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Preferred stock $.0001 par value | - | - | ||||||
Authorized shares: 10,000,000, none issued and none outstanding | ||||||||
Common stock $.0001 par value | 13,294 | 13,294 | ||||||
Authorized shares: 200,000,000 | ||||||||
Shares issued and outstanding: 132,932,159 and 132,932,159 | ||||||||
Additional paid in capital | 6,585,331 | 6,585,331 | ||||||
Accumulated deficit | (8,383,907 | ) | (8,165,386 | ) | ||||
Accumulated other comprehensive income | 26,192 | 20,749 | ||||||
TOTAL TRIPBORN, INC STOCKHOLDERS’ EQUITY / (DEFICIT) | (1,759,090 | ) | (1,546,012 | ) | ||||
Noncontrolling interest in consolidated entity (Note 1) | - | - | ||||||
Total equity (deficit) | (1,759,090 | ) | (1,546,012 | ) | ||||
TOTAL LIABILITIES AND EQUITY | $ | 849,638 | $ | 1,024,555 |
See accompanying notes to consolidated condensed financial statements.statements (unaudited).
3 |
TRIPBORN, INC.
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 | ) |
Three months ended | Six months ended | |||||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
NET REVENUES | $ | 105,534 | $ | 2,128,370 | $ | 149,127 | $ | 3,954,228 | ||||||||
COST OF REVENUES AND EXPENSES | ||||||||||||||||
Cost of revenue | 64,100 | 2,024,650 | 93,285 | 3,480,298 | ||||||||||||
Selling, general and administrative expenses | 68,760 | 611,132 | 150,853 | 1,185,217 | ||||||||||||
Legal and consulting expenses | 10,659 | 169,620 | 85,362 | 275,687 | ||||||||||||
Depreciation and amortization | 4,183 | 136,823 | 8,606 | 271,157 | ||||||||||||
147,702 | 2,942,225 | 338,106 | 5,212,359 | |||||||||||||
LOSS FROM OPERATIONS | (42,168 | ) | (813,855 | ) | (188,979 | ) | (1,258,131 | ) | ||||||||
Other income, net | 6,409 | 32,604 | 7,958 | 63,585 | ||||||||||||
Interest expense | (18,876 | ) | (86,480 | ) | (37,624 | ) | (242,146 | ) | ||||||||
Interest income | - | 39,882 | 124 | 46,086 | ||||||||||||
Equity in earnings | - | - | - | - | ||||||||||||
LOSS BEFORE INCOME TAXES | (54,635 | ) | (827,849 | ) | (218,521 | ) | (1,390,606 | ) | ||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
NET LOSS | $ | (54,635 | ) | $ | (827,849 | ) | $ | (218,521 | ) | $ | (1,390,606 | ) | ||||
Net loss attributable to noncontrolling interests | $ | - | $ | (375,339 | $ | - | $ | (574,056 | ) | |||||||
Net loss attributable to TripBorn, Inc. | $ | (54,635 | ) | $ | (452,510 | ) | $ | (218,521 | ) | $ | (816,550 | ) | ||||
NET LOSS PER COMMON SHARE | ||||||||||||||||
Basic loss per common share attributable to TripBorn, Inc. | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Diluted loss per common share attributable to TripBorn, Inc. | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic weighted-average number of common shares | 132,932,159 | 112,791,334 | 132,932,159 | 112,791,334 | ||||||||||||
Diluted weighted-average number of common shares | 132,932,159 | 113,136,703 | 132,932,159 | 113,136,703 |
See accompanying notes to consolidated condensed financial statements.statements (unaudited).
4 |
TRIPBORN, INC.
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 |
Three months ended | Six months ended | |||||||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||
Net loss | $ | (54,635 | ) | $ | (827,849 | ) | $ | (218,521 | ) | $ | (1,390,606 | ) | ||||
Net loss attributable to noncontrolling interests | - | (375,339 | ) | - | (574,056 | |||||||||||
Net loss attributable to TripBorn, Inc. | (54,635 | ) | (452,510 | ) | (218,521 | ) | (816,550 | ) | ||||||||
Currency translations adjustment | 7,299 | (65,141 | ) | 5,443 | (27,903 | ) | ||||||||||
Currency translation adjustment attributable to noncontrolling interests | - | (41,820 | ) | - | 5,210 | |||||||||||
Currency translation adjustment attributable to TripBorn, Inc | (7,299 | ) | (23,321 | ) | (5,443 | ) | (33,113 | ) | ||||||||
Comprehensive loss | (47,336 | ) | (892,990 | ) | (213,078 | ) | (1,418,509 | ) | ||||||||
Comprehensive loss attributable to noncontrolling interests | - | (417,159 | ) | - | (568,846 | |||||||||||
Comprehensive loss attributable to TripBorn, Inc. | $ | (47,336 | ) | $ | (475,831 | ) | $ | (213,078 | ) | $ | (849,663 | ) |
See accompanying notes to consolidated condensed financial statements.statements (unaudited).
5 |
TRIPBORN, INC.
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 |
For the three months ended September 30, 2020 | ||||||||||||||||||||||||||||||||
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, 2020 | 132,932,159 | $ | 13,294 | $ | 6,585,331 | $ | 20,749 | $ | (8,165,386 | ) | $ | (1,546,012 | ) | $ | - | $ | (1,546,012 | ) | ||||||||||||||
Other comprehensive income (loss) and exchange differences | - | - | - | 5,443 | - | 5,443 | - | 5,443 | ||||||||||||||||||||||||
Net loss | - | - | - | - | (218,521 | ) | (218,521 | ) | - | (218,521 | ) | |||||||||||||||||||||
Balance as of September 30, 2020 | 132,932,159 | $ | 13,294 | $ | 6,585,331 | $ | 26,192 | $ | (8,383,907 | ) | $ | (1,759,090 | ) | $ | - | $ | (1,759,090 | ) |
For the six months ended September 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 | 1,489,443 | 150 | 1,042,460 | - | - | 1,042,610 | - | 1,042,610 | ||||||||||||||||||||||||
Common stock issued on exercise of warrants | 1,571,430 | 157 | 15,557 | - | - | 15,714 | - | 15,714 | ||||||||||||||||||||||||
Common stock issued on conversion of debt | 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 | - | - | - | (33,113 | ) | - | (33,113 | ) | 5,210 | (27,903 | ) | |||||||||||||||||||||
Net loss | - | - | - | - | (816,550 | ) | (816,550 | ) | (574,056 | ) | (1,390,606 | ) | ||||||||||||||||||||
Balance as of September 30, 2019 | 128,346,128 | $ | 12,835 | $ | 6,170,286 | $ | 6,376 | $ | (5,172,180 | ) | $ | 1,017,317 | $ | 1,484,487 | $ | 2,501,804 |
See accompanying notes to consolidated condensed financial statements.statements (unaudited).
6 |
TRIPBORN, INC.
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 |
Six months ended September 30 | ||||||||
2020 | 2019 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (218,521 | ) | $ | (1,390,606 | ) | ||
Adjustment to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 8,606 | 266,978 | ||||||
Stock based compensation | 25,723 | 51,445 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 68,123 | (491,603 | ) | |||||
Other current assets | 157,141 | 56,359 | ||||||
Accounts payable | 13,533 | (452,491 | ||||||
Other current liabilities | (32,787 | ) | 2,324,036 | |||||
Other non-current liabilities | - | (593,914 | ) | |||||
Other non-current assets | - | 20,457 | ||||||
Net cash provided by operating activities | 21,818 | (209,339 | ) | |||||
Cash flows from investing activities | ||||||||
Net cash paid on acquisition of subsidiary | - | (971,910 | ) | |||||
Other investments | - | 32,509 | ||||||
Purchases of fixed assets | (2,065 | ) | (126,438 | ) | ||||
Net cash used in investing activities | (2,065 | ) | (1,065,839 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common stock and exercise of warrants | - | 1,058,324 | ||||||
Repayment of debt, net | - | (189,341 | ) | |||||
Proceeds from PPP loan and SBAD loans | 57,417 | - | ||||||
Net cash provided by financing activities | 57.417 | 868,983 | ) | |||||
Effect of exchange rates changes on cash | 4,808 | 86,279 | ||||||
Net change in cash | 81,978 | (319,916 | ) | |||||
Cash | ||||||||
Beginning of the period | 421,909 | 1,230,012 | ||||||
End of the period | $ | 503,887 | $ | 910,096 | ||||
Supplementary disclosure of cash flows information | ||||||||
Cash paid during the period for: | ||||||||
Interest paid | $ | - | $ | 134,351 |
See accompanying notes to consolidated condensed financial statements.statements (unaudited).
7 |
September 30, 2020
(Unaudited)
1. DESCRIPTION OF BUSINESS
TripBorn, Inc. (“TripBorn” or the “Company”) is a business to business online travel agency (“OTA”) that offers travel reservations,related travel servicesan Financial technology and products, and a payment services product to travel agents in India through its proprietary internet-based platform at www.tripborn.com. TripBorneCommerce aggregator company. An aggregator model is a holding company that was incorporated in Delaware in January 2010form of eCommerce whereby our website, www.tripborn.comaggregates 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. Our eCommerce Aggregator business segment operates through Sunalpha Green Technologies Private Limited (“Sunalpha”)., a wholly owned subsidiary which operates out of India, primarily providing services to small business or agents.
The unaudited consolidated financial statements include the accounts and transactions of the Company; its wholly owned subsidiary, Sunalpha; All significant inter-company accounts and transactions are eliminated in consolidation.
Acquisitions & Deconsolidation of PRAMA
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 of the Company valued at $737,143 or approximately $0.28 per share. The acquisition of PRAMA was treated as a business combination under U.S. GAAP. During the first quarter of year 2019. In accordance with Share Purchase Agreement that was executed by the Company with PRAMA, the Company was required to contribute approximately USD 1,330,000 equivalent to INR 10,00,00,000/- which was not subscribed by Company due to change in business conditions in India and Company realigning its India and global businesses and their direction and geographies.
Hence, On January 01, 2020, it was commercially agreed between Company and PRAMA that for a foreseeable future PRAMA shall continue to be controlled by its founders and management team in India. The Company shall neither have control nor influence over the business and operating decision of PRAMA and/or its subsidiaries companies effective from January 01, 2020. The Company has selectedexperienced significant delay to finalize and document realignment of control due to COVID-19 pandemic. The Company has signed the Realignment of Control agreement with PRAMA on August 31, 2021, with effective date of January 1, 2020, for realignment of control of PRAMA and PRAMA businesses.
As a result of Realignment of Control Agreement with PRAMA whereby the Company no longer has the power to govern the financial and operating policies of PRAMA due to the loss of power to cast its votes at meetings of the Board of Directors other than in tandem with founders and management team of PRAMA; accordingly, the Company derecognized related assets, liabilities and noncontrolling interests of PRAMA. The Company did not receive any consideration in the deconsolidation of PRAMA. The cost of investment in PRAMA was fully impaired as PRAMA has a fair value of $0 as of January 1, 2020.
2. LIQUIDITY AND GOING CONCERN
Management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved before the date that the financial statements are issued.
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The Company has incurred net losses from operations since inception. The net loss for the six-month period ended September 30, 2020 was $213,078 and the accumulated deficit was $8,383,907 as of September 30, 2020. The cash and cash equivalents and the current portion of loans and convertible notes due to third parties were $503,887 and $0, respectively, as of September 30, 2020. The Company’s ongoing losses have had a significant negative impact on the Company’s financial position and liquidity. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions.
Beginning in December 2019, after September 30, 2019, China, experienced an outbreak of a highly infectious form of a respiratory infection caused by a novel Coronavirus. The disease caused by the novel Coronavirus was later termed Covid-19. On March 11, 2020 the World Health Organization declared the Coronavirus outbreak a global pandemic. India reported its first Covid-19 infection in the city of Thrissur, in the state of Kerala, India on January 30, 2020 and the first case fatality on March 10, 2020 in the state of Karnataka, India. On March 25, 2020, India’s Prime Minister Narendra Modi announced a 21-day nationwide lockdown in response to the Covid-19 pandemic. To comply with the Indian lockdown, the Company closed all of its hotel operations, which impacts the Hospitality segment. Also as a result of the Indian lockdown, the Indian government temporarily suspended flights, trains and buses which impacts the e-Commerce Aggregator segment. On June 1, 2020, India partially lifted its lockdown, however the Hospitality and e-Commerce Aggregator segments are still materially adversely impacted by Covid-19. As of the date of filing this Form 10-Q, hotels, flights, trains and buses are operating to varying degrees by region.
Beginning in December 2019, China, experienced an outbreak of a highly infectious form of a respiratory infection caused by a novel Coronavirus. The disease caused by the novel Coronavirus was later termed Covid-19. On March 11, 2020, the World Health Organization declared the Coronavirus outbreak a global pandemic. India reported its first Covid-19 infection in the city of Thrissur, in the State of Kerala, India on January 30, 2020, and the first case fatality on March 10, 2020, in the state of Karnataka, India. On March 25, 2020, India’s Prime Minister Narendra Modi announced a 21-day nationwide lockdown in response to the Covid-19 pandemic. To comply with the Indian lockdown, the Company closed all of its hotel operations, which impacts the Hospitality segment. Also as a result of the Indian lockdown, the Indian government temporarily suspended flights, trains and buses which impacts the e-Commerce Aggregator segment. On June 1, 2020, India partially lifted its lockdown, however the Hospitality and e-Commerce Aggregator segments are still materially adversely impacted by Covid-19. As of the date of filing this Form 10-Q, hotels, flights, trains, and buses are operating to varying degrees by region.
The pandemic did have a material adverse effect to the Company’s Indian operations, vendors, customers, lessors and employees’ health, balance sheet, liquidity, statement of operations and future prospects for the year ended September 30, 2020, and onwards. As of today’s date, management is in the process of implementing various cost reduction efforts to conserve cash and liquidity, including reducing staffing levels and potentially closing certain hotels permanently, but has not reached fixed conclusions.
The Company will require additional capital and may also require additional financing from related or third parties in the event that operations do not generate the expected revenues, or a recurrence of Covid-19 were to cause another suspension of operations. Such additional capital or financing may not be available on favorable terms, or at all. Due to these factors, substantial doubt exists about the Company’s ability to continue as a going concern through twelve months after the date that the financial statements are issued. If the Company does not obtain sufficient funds when needed, the Company expects it would reduce its operating expenses and defer vendor payments, including closure of certain operations and or disposals of assets Management is working on the plan for the business restructuring to ensure the liquidity for the operations and has realigned its focus and strategy on the ecommerce business. Management has taken the steps to reduces the losses significantly by cutting the cost and manpower. Management and existing stockholder plan to support the company in its operational expenses and working capital.
The financial statements for the year ended March 31, 2020, recorded impairments to goodwill, intangible assets, fixed assets to reflect the impact of COVID-19.
The Company has incurred net losses from operations since inception. The net loss for the quarter ended September 30, 2020, was $54,635 and the accumulated deficit was $8,383,907 as its fiscal year end.of September 30, 2020. The Company’s ongoing losses have had a significant negative impact on the Company’s financial position and liquidity.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The interim unaudited consolidated condensed financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission 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.
The transactionaccompanying condensed consolidated balance sheet as of September 30, 2020, 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.
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 six-month period ended September 30, 2020.
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”).
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.
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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.
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.
Cost of Revenue
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.
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.
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.
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Effect of exchange rates changes on cash presented in the Consolidated condensed statements of cash flows (Unaudited) is presented in accordance with ASC 830 and reflects the translation effects of cash held in Indian Rupees at the beginning and requires a foreign currency translation adjustment. The Company’send of the period, and the effects of actual cash depositsflows using the exchange rates 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 receivablereceivables 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.
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.
The fair value of the Companytrade names is determined using a discounted cash flow analysis based on the relief-from-royalty approach. The relief-from-royalty approach is an income approach that utilizes certain market information by reference to concentrationsthe amount of credit risk consist primarilyroyalty 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 cashour trade names to the guideline transactions, including an assessment of industry conditions, the age of the trademark/trade name, degree of consumer recognition and cash equivalents and accounts receivable.
Impairment 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 effectsan impairment of temporary differences between tax bases oflong-lived 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 noncurrent based on the balance sheet classification of the related assets and liabilities. Deferred income tax results primarily from temporary differences related to net property and equipment for financial and income tax reporting.
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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.
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. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.
Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. The Company has outstanding convertible debt and outstanding warrants which have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.
Promotion and Advertising expenses
We incur advertising expense consisting of offline costs, including newspaper and media advertising, and online advertising expense to promote our brands. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of communicating the advertisement (e.g., newspaper, short message service (“SMS”) or email campaign) as incurred each time the advertisement or promotion is performed. Promotion and Advertising expense was $0 for the quarter ended September 30, 2020, compared to $84,906 for the quarter ended September 30, 2019. This increase in Promotion and Advertising expenses is due to the acquisition of PRAMA.
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Stock-Based Compensation
The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the Company issued 71,428,570financial 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 September 30, 2020, and September 30, 2019, $0 and $25,723 was recognized in legal and consulting expenses in the Consolidated Condensed Statements of Operations, respectively, as a result of an agreement for cash consideration of $95,500. Arna is wholly-owned by Deepak Sharma, the Company’s President and Chief Executive Officer and a director. consulting services.
Income Taxes
The Company accountedaccounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities based on the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in control transaction with Arna usingtax rates on deferred tax assets and liabilities is recognized in income in the acquisition method of accounting. Arna obtained control of 93% ofperiod that includes the outstanding shares of common stock of PinstripesNYC, Inc. in connection withenactment date.
The Company recognizes deferred tax assets to the Stock Purchase Agreement among PinstripesNYC, Inc., Arna, and Maxim Kelyfos, LLC dated December 8, 2015, and was the acquirer. This transaction resulted in (1) no identifiableextent that it believes that these assets being acquired, (2) no liabilities being assumed, (3) no goodwill being recognized and (4) no gains being recognized fromare more likely than not to be realized. In making such a bargain purchase.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of Sunalpha and are recorded usinga two-step process in which (1) it determines whether it is more likely than not that the historical cost basis. The consolidated financial statements after completiontax positions will be sustained on the basis of the December 14, 2015 transaction includetechnical merits of the assets, liabilitiesposition and results(2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the amount of operations of Sunalpha uptax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Non-Income Taxes
The Company is subject to India Goods and Services Tax and other local duties and non-income taxes on its transactions in India. The Company collects such taxes from customers, and pays such taxes on applicable supplies and inputs, and remits the net amounts to the day priorrespective local tax authorities on an accrual basis.
Related Parties
The Company follows FASB ASC subtopic 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the closing of the transaction, and the assets, liabilities and results of operationsCompany’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.
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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 amendedin the first quarter of 2021. Early adoption is permitted. Management is currently evaluating this ASU to determine its certificateimpact to the Company's financial statements but does believe it is expected to have a minimal impact on the Company’s financial statements and related disclosures.
New Accounting Pronouncements Not Yet Adopted
No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company's present or future consolidated condensed financial statements.
4. CUSTOMER CONCENTRATION
Significant customers and suppliers are those that account for greater than 10% of incorporation on January 13, 2016 to (1) increase the authorized number of shares of common stock from 100,000,000 to 200,000,000Company’s revenues and (2) change its name from PinstripesNYC. Inc. to TripBorn, Inc.
5. PROPERTY AND EQUIPMENT, NET
Property and Equipment consists of the following as of December 31September 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 |
September 30, 2020 | March 31, 2020 | |||||||
Furniture, fixtures and fittings | $ | 35,866 | $ | 33,802 | ||||
Leasehold improvements | - | - | ||||||
Plant and machinery | - | - | ||||||
Construction in process | - | - | ||||||
Total | 35,866 | 33,802 | ||||||
Accumulated depreciation | (25,276 | ) | (23,746 | ) | ||||
Fixed assets, net | $ | 10,590 | $ | 10,056 |
Depreciation expense for the quartersthree months period ended December 31, 2017September 30, 2020, and 2016 is $930,2019 was $645 and $2,309, respectively.
6. INTANGIBLE ASSETS
Intangible assets with definite lives consist of the following as of December 31September 30 and March 31, 2017:2020:
September 30, 2020 | March 31, 2020 | |||||||
Software and software access agreement | $ | 880,770 | $ | 880,770 | ||||
Customer relationships | - | - | ||||||
Total | 880,770 | 880,770 | ||||||
Accumulated amortization | (862,846 | ) | (855,770 | ) | ||||
Intangible assets with definite lives, net | $ | 17,924 | $ | 25,000 |
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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 |
Amortization expense for the quartersthree and six months ended September 30, 2020, was $3,538 and $7,046 respectively. Amortization expense for the three and six months ended September 30, 2019, was $72,362 and $148,845 respectively. The Company has no impairment charge for definite lived intangible assets for the above periods.
7. AMOUNTS DUE TO AND FROM RELATED PARTIES
The amounts due to related party balance from the consolidated balance sheet of 1,598 as of September 30, 2020. 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
The Company has received SBA disaster loan of $47,000 on May 27, 2020, which is payable after 2 years.
Economic Injury Disaster Loan
The Company received a federal Economic Injury Disaster Loan (‘EIDL’) from the SBA in May 2020, of $10,417, which is a grant and qualifies for full forgiveness and in May 2020, of $47,000 which is a loan for a period of 30 years. Interest has been accrued at 3.75% p.a. on the $47,000 of EIDL. The first installment of the loan is due in March 2022.
Interest of $217.66, accrued for the period ended June 30, 2020, is shown under current portion of long-term loan.
Loan payable as on December 31,
Years | Amount | |||
2021 | $ | 0 | ||
2022 | 2612 | |||
2023 | 2612 | |||
2024 | 2612 | |||
2025 | 2612 | |||
And thereafter | 36,552 | |||
Total loan payable | 47,000 |
9. LOANS WITH RELATED PARTIES
Loans and borrowings with related parties are discussed below:
As of | ||||||||
September 30, 2020 | March 31, 2020 | |||||||
Current liabilities: | ||||||||
Convertible note with Takniki Communications, Inc | $ | 695,000 | $ | 695,000 | ||||
$ | 695,000 | $ | 695,000 |
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On December 31, 2017 and 2016, was
Years ended March 31 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||||||||||||
Estimated amortization expense | $ | 256,946 | $ | 342,594 | $ | 342,594 | $ | 342,594 | $ | 116,644 |
10 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
The Company files its income tax returns on a fiscal year basis.
11. 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 |
The Company has outstanding convertible debt of $695,000 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 is 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 outstanding | 89,840,099 | 76,816,272 | 89,840,099 | 76,816,272 | |
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 outstanding | 89,840,099 | 76,816,272 | 89,840,099 | 76,816,272 | |
Dilutive effects of convertible debt | $(0.00) | $(0.00) | $(0.01) | $(0.01) | |
Weighted average common shares, assuming dilutive effect of convertible debt | 89,840,099 | 76,816,272 | 89,840,099 | 76,816,272 | |
Diluted net income (loss) per share of common stock | $(0.00) | $(0.00) | $(0.01) | $(0.01) |
The Company has not issued any shares or warrants during quarter ended September 30, 2020.
Quarter Ended | ||||||||
September 30, 2020 | September 30, 2019 | |||||||
Basic net loss per share: | ||||||||
Net loss attributable to TripBorn, Inc. | $ | (54,635 | ) | $ | (452,510 | ) | ||
Weighted average common shares outstanding | 132,932,159 | 112,791,334 | ||||||
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.
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12. COMMITMENTS AND CONTINGENCIES
The Company is the B2B Principal Agent of the Indian Railway Catering and Tourism Corporation, or IRCTC, which is a government entity that allows the Company to offer reservations through Indian Railways’ passenger reservation system on the Company’s webpage. Indian Railways is India’s state-owned railway, which owns and operates most of India’s rail transportation. The Company has integrated its online portal with IRCTC’s to provide a seamless booking process. Pursuant to an Application Programming Interface (API) agreement, dated October 5, 2015, the Company is required to pay a minimum annual maintenance fee of $7,500 to IRCTC. In the event the agreement is renewed, the amount based on the number of active railway agents that use the Company rail booking services on the Company’s platform will be payable annually. On September 30, 2016,2020, the Company renewed its agreement with the IRCTC and paid an annual maintenance fee of $8,600$15,733 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.
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
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13. BUSINESS SEGMENTS
Prior to deconsolidation of December 31, 2017 and 2016,PRAMA, a hospitality company, the Company has not paid any rent for this office space. was two segment company. Following, the deconsolidation of PRAMA business, 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 only eCommerce aggregation services.
The Company management currently do not separate its business in any operating segments and all net revenues are derived from transactions with third party customers, there are no inter-segment revenues. All of the net revenue is expected to pay market rate rent oncederived from operations in India, substantially all of the expenses are borne in India, with certain expenses borne in the US.
The Company measures segment performance based on loss from continuing operations. Summarized financial information concerning each of the Company's reportable segments is as follows:
Three months ended September 30, 2020 | ||||||||||||||||
eCommerce Aggregator | Hospitality | Intersegment elimination | Consolidated total | |||||||||||||
Segment results and total assets | ||||||||||||||||
Net revenue | $ | 105,534 | $ | - | $ | - | $ | 105,534 | ||||||||
Cost of revenues | (64,100 | ) | - | - | (64,100 | ) | ||||||||||
Operating expenses | (83,602 | ) | - | - | (83,602 | ) | ||||||||||
Loss from operations, before other expense, net | (42,168 | ) | - | - | (42,168 | ) | ||||||||||
Other expense, net | (12,467 | ) | - | - | (12,467 | ) | ||||||||||
Net loss | $ | (54,635 | ) | $ | - | $ | - | $ | (54,635 | ) |
Six months ended September 30, 2019 | ||||||||||||||||
eCommerce Aggregator | Hospitality | Intersegment elimination | Consolidated total | |||||||||||||
Segment results and total assets | ||||||||||||||||
Net revenue | $ | 149,127 | $ | - | $ | - | $ | 149,127 | ||||||||
Cost of revenues | (93,285 | ) | - | - | (93,285 | ) | ||||||||||
Operating expenses | (244,821 | ) | - | - | (244,821 | ) | ||||||||||
Loss from operations, before other expense, net | (188,979 | ) | - | - | (188,979 | ) | ||||||||||
Other expense, net | (29,542 | ) | - | - | (29,542 | ) | ||||||||||
Net loss | $ | (218,521 | ) | $ | - | $ | - | $ | (218,521 | ) | ||||||
Total assets | $ | 849,641 | $ | - | $ | - | $ | 849,641 |
During the quarter ended September 30, 2020, the Company is profitable.derived 100% of its revenue from eCommerce Aggregation compared to 91% and 9% of its revenue from its Hospitality and eCommerce Aggregation segments, respectively, for the quarter ended September 30, 2019.
14. SUBSEQUENT EVENTS
None.
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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 continuing operations unless otherwise noted. The Management Discussion and Analysis should be read in conjunction with the unaudited consolidated condensed financial statements and notes to the unaudited consolidated condensed financial statements.
Forward-Looking Statements
This QuarterlyAnnual Report on Form 10-Q contains “forward-looking statements”forward-looking statements within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”).1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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; anyincluded in this report, including, without limitation, statements regarding the adequacy, availabilityour financial position, business strategy and sources of capital, any statements of theother plans strategies and objectives of management for our future operations; anyoperations, are forward-looking statements. These statements concerning proposed new products, services or developments; anyinclude declarations regarding our management’s beliefs and current expectations. In some cases, you can identify forward-looking 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 wordsby terminology such as “may,” “will,” “estimate,“should,” “could”, “intend,” “continue,“consider,” “expect,” “plan,” “anticipate,” “believe,” “expect,“estimate,” “plan”“predict” or “anticipate” and“continue” or the negative of such terms or other similar words. In additioncomparable terminology. Forward-looking statements by their nature address matters that are, to any assumptions and otherdifferent degrees, uncertain. Our business has been undergoing substantial change, which has magnified such uncertainties. Readers should bear these factors and matters referred to specifically in connection with suchmind 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. In the past, actual results have differed from those suggested by forward looking statements and this may happen again. Important factors that could cause actual results or outcomes to differ materially from those containedinclude, but are not limited to, the risks discussed in forward-looking statements include those factors set forth in this Quarterly Report, particularly under the headings, “Risk Factors” and the following:
· | adverse effects on our business because of regulatory investigations, litigation, cease and desist orders or settlements; |
· | our ability to comply with the terms of our settlements; |
· | increased regulatory scrutiny and media attention; |
· | any adverse developments in existing legal proceedings or the initiation of new legal proceedings; |
· | our ability to effectively manage our regulatory and contractual compliance obligations; |
· | the adequacy of our financial resources, including our sources of liquidity and ability to sell, fund and recover advances, repay borrowings and comply with the terms of our debt agreements, including the financial and other covenants contained in them; |
· | our ability to interpret correctly and comply with liquidity, net worth and other financial and other requirements of regulators as well as those set forth in our debt and other agreements; |
· | our ability to invest available funds at adequate risk-adjusted returns; |
· | uncertainty regarding regulatory restrictions on our ability to repurchase our own stock; |
· | volatility in our stock price; |
· | our ability to contain and reduce our operating costs; |
· | our ability to successfully modify delinquent loans, manage foreclosures and sell foreclosed properties; |
· | uncertainty related to legislation, regulations, regulatory agency actions, regulatory examinations, government programs and policies, industry initiatives and evolving best servicing practices; |
· | the loss of the services of our senior managers and our ability to execute effective chief executive and chief financial officer leadership transitions; |
· | uncertainty related to general economic and market conditions, delinquency rates, home prices and disposition timelines on foreclosed properties; |
· | uncertainty related to our ability to continue to collect certain expedited payment or convenience fees and potential liability for charging such fees; |
· | uncertainty related to our reserves, valuations, provisions and anticipated realization of assets; |
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· | uncertainty related to the ability of third-party obligors and financing sources to fund servicing advances on a timely basis on loans serviced by us; |
· | uncertainty related to the ability of our technology vendors to adequately maintain and support our systems, including our servicing systems, loan originations and financial reporting systems; |
· | our ability to effectively manage our exposure to interest rate changes and foreign exchange fluctuations; |
· | our ability to meet capital requirements established by, or agreed with, regulators or counterparties; |
· | our ability to protect and maintain our technology systems and our ability to adapt such systems for future operating environments; and |
· | uncertainty related to the political or economic stability of the United States and of the foreign countries in which we have operations; and |
· | our ability to maintain positive relationships with our large shareholders and obtain their support for management proposals requiring shareholder approval. |
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 we disclaim any obligation to update or revise forward-looking statements whether because of new information, future events or otherwise.
COVID-19
COVID-19 has had an unprecedented impact on the travel industry and the Company. As the virus and efforts to contain it spread around the world, demand for Airlines, Railway and travel services have decreased significantly due to series of state wide lock-downs and travel restrictions across India. Our hospitality sector is also impacted and at our hotels occupancy dropped significantly. With COVID-19 we saw sudden, sharp declines in hotel occupancy, extending throughout the period and the current date. We experienced a record decline in our eCommerce Aggregator business and for certain periods closed all of our hotels. COVID-19 continues to constrain recovery and to have a significant negative impact on demand. COVID-19 also resulted in significantly lower new room additions than we had budgeted for 2020 and historically high levels of cancellations by group and other travelers for future periods. As a result, our revenues declined and our losses increased dramatically in 2020 compared to 2019. We continue to take measures to mitigate the negative financial and operational impacts of COVID-19 for our hotel owners and our ecommerce travel ticketing business, and we remain focused on taking care of our customer, guests and associates. We have made significant changes to our business and enhanced our liquidity position, while remaining focused on how to best position ourselves for recovery and for growth over the longer term. At the property level, we implemented plans to help our hotel owners and franchisees reduce their cash outlays and mitigate costs, and we implemented a multi-pronged platform to elevate cleanliness standards and hospitality norms for the health and safety of our guests and associates. At the corporate level, we made significant cuts in general and administrative costs and spending on capital and other investments and are continuing to develop restructuring plans to achieve cost savings specific to each of our company-operated properties. For further information about COVID-19’s impact to our business, see Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations"Operations.”
REALIGNMENT OF CONTROL
Effective January 01, 2020, the Company has entered into Realignment of control Agreement with PRAMA for realignment of control of PRAMA and subsequent reportsPRAMA businesses. As result of Realignment of Control Agreement with PRAMA whereby the Company no longer has the power to govern the financial and operating policies of PRAMA due to the loss of power to cast its votes at meetings of the Board of Directors other than in tandem with founders and management team of PRAMA; accordingly, the Company derecognized related assets, liabilities and noncontrolling interests of PRAMA. The Company did not receive any consideration in the deconsolidation of PRAMA. The cost of investment in PRAMA was fully impaired as PRAMA has a fair value of $0 as of January 1, 2020, through the current date.
Substantial doubt is deemed to exist concerning our ability to continue as a going concern
Management must evaluate whether there are conditions or events, considered in the aggregate, that we file withraise substantial doubt about the Securities and Exchange Commission (“SEC”).
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The Company has historically incurred operating losses and experienced cash outflows from those projected or assumed. Our future financial conditionoperations and has an accumulated deficit. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions.
Due to COVID-19 our business is impact to great extent and has material impact on results of the Company for the three- and six-month periods ended September 30, 2020. Management is assessing and monitoring the potential future impact of the pandemic and expects the impact to be materially adverse to its Indian operations, vendors, customers, lessors and employees’ health, but cannot presently estimate the degree and severity of the adverse impact. Management is in the process of implementing various cost reduction efforts to conserve cash and liquidity, including reducing staffing levels and restructuring of business, but has not reached fixed conclusions.
The Company will require additional capital and may also require additional financing from related or third parties in the event that operations do not generate the expected revenues, or a recurrence of Covid-19 were to cause another suspension of operations. Such additional capital or financing may not be available on favorable terms, or at all. Due to these factors, substantial doubt exists about the Company’s ability to continue as well as any forward-lookinga going concern through September 2022, which is twelve months after the date that the financial 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.
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Overview
The Company is an eCommerce aggregator. An aggregator model is a form of eCommerce whereby our website, www.tripborn.com aggregates, information on various travel and hospitality vendors and presents them on a single platform, to ease, facilitate, coordinate and effectuate consumer travel and hospitality needs. The eCommerce aggregator business functions as a Last Mile Commerce and Connectivity aggregator that issue penny stocks. Accordingly, the safe harbor for forward looking statements under the PSLRA is not currently availabledelivers product and services to us because we may be considered to be an issuer of penny stock.
The e-Commerce aggregator businesses have been materially impacted by the covid-19 pandemic. Future operations are expected to be radically different than the conditions existing as an OTA in India in February 2014.
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 acquiring Sunalpha in December 2015, we operatedmeasure our scale and growth. We calculate revenue margin as revenue as a shell company with nominal or no assets or operations. We were knownpercentage of gross bookings.
Quarter ended September 30, | Six months ended September 30, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Gross Bookings1 | $11,005,635 | $22,436,682 | $15,831,079 | $37,479,232 | ||||
Net revenues | $105,534 | $186,193 | $149,127 | $318,313 | ||||
Revenue Margin2 | 0.95% | 0.83% | 0.94% | 0.85% |
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* Revenue margin is defined as PinstripesNYC, Inc. until January 2016. We filed reportsNet revenues as PinstripesNYC, Inc. witha percentage of gross bookings.
Gross Bookings decreased for 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 referthree- and six-month period ended September 30, 2020, compared to the fiscalcomparable periods in 2019 due to COVID-19 pandemic. Money transfer revenues, where the Company receives a commission on the amount of money transferred, may be associated with travel booked, or independent of travel booked and reflects an increasing component of the total net revenues for the eCommerce Aggregator segment. Money transfer is a volatile and fast changing sector within India and is subject to high levels of volatility and seasonality.
CONSOLIDATED RESULTS OF OPERATIONS
Impact of CIVID-19
The pandemic had a material adverse impact on the Company and the Company is not profitable and is undercapitalized. There are substantial doubts over the Company’s ability to continue as a going concern.
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Acquisition and Deconsolidation of PRAMA
The acquisition of PRAMA on April 22, 2019, had a material impact on the results of operations for the year ended March 31, 2018 as fiscal 2018 and2020. Accordingly, the fiscalresults for the year ended March 31, 2017 as fiscal 2017.
Cash Requirements and Our Credit Facility
The IRCTC may terminateCompany does not maintain a credit or temporarily suspend the agreement without prior notice.borrowing facility. The Company has renewed its agreement with the IRCTC.
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 | ) |
The Company has historically incurred operating losses and experienced cash outflows from operations. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions.
If conditions in the travel and hospitality industry continue to deteriorate as result of COVID-19, or if disruptions in the capital markets take place as they did in the immediate aftermath of both the 2008 worldwide financial crisis and the events of September 11, 2001, we may be unable to fund operations on a temporary or extended basis.
Cash and cash equivalents totaled $503,887, as of September 30, 2020, a increase of $81,978 from March 31, 2017. The $805,295 increase2020, primarily reflecting reduction in cashthe accounts receivable and current assets.
Our ratio of current assets to current liabilities was driven by sales of common stock of $551,000 during the quarter endedapproximately 0.31 and 0.37, respectively for both September 30, 20172020, and $547,000 during the quarter ended June 30, 2017, which offset our year to date net loss of $610,715. As of December 31, 2017, we had stockholders’ equity of $897,340 compared to a deficit of $88,394 at March 31, 2017, which resulted2020. Our current ratio as of present is substantially different from saleshistorical results due to the impact of common stock and conversions of notes payable into common stock offset by an increase in operating losses during the quarter ended December 31, 2017.
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 |
We will require additional capital to continue to fund our operations and will look to raise funds through public and private offerings of our securities. We estimate that we will require approximately $1.0 million and $5.0 million inOur future liquidity needs are largely impacted by the next 12 and 24 months to support our continued operations.
Quarter Ended December 31, | Nine Months Ended December 31, | |||
2017 | 2016 | 2017 | 2016 | |
Gross Bookings1 | $8,361,856 | $2,394,253 | $23,585,164 | $5,581,647 |
Revenue Margin2 | 0.9% | 6.2% | 1.1% | 7.3% |
OFF BALANCE SHEET ARRANGEMENTS
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.
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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.
Management Report on Internal Control Over Financial Reporting
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.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 September 30, 2020. 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.
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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 2020 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 and six month periods as of and ended September 30, 2020, 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.
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PART II.
None.
None.
None.
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Table of Contents |
The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TRIPBORN, INC. | ||||
Date: September 30, 2021 | By: | / | ||
Deepak Sharma | ||||
Title: | President, Chief Executive Officer, Chief Financial Officer and Director (Principal Financial and Accounting Officer) |
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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 |