UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period endedDecemberMarch 31, 20182019  

Commission file number000-55798

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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☒xNo☐o

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted 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 such files).xYes¨oNo.

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):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐oNo☒x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 159,381,564251,881,235 shares as of February 11,May 10, 2019.

GH CAPITAL, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GH CAPITAL INC.

BALANCE SHEETSSTATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2019

(Unaudited) 

See accompanying notes to financial statements.

GH CAPITAL INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

See accompanying notes to financial statements.

GH CAPITAL, INC.

Statements of Changes in Stockholders’ Equity (Deficit)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2018 

(Unaudited)

CONDENSED NOTES TO FINANCIAL STATEMENTS

DecemberMarch 31, 20182019

(Unaudited)

NOTE 1 -ORGANIZATION AND NATURE OF OPERATIONS  

GH Capital Inc. (the “Company”), a Florida corporation, was formed on May 5, 2014, and commenced operations in October 2014.2014 and has a fiscal year end of September 30. The Company provided online payment processing services to consumers, primarily in Europe and provides certain consulting services to assist companies in going public.

On September 18, 2018, the Company’s management terminated the Company’s online payment processing services. As a result, the Company will shift its focus to its consulting services business. As such, the online payment processing services business activities were reclassified and reported as part of “discontinued operations”.

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Basis of Presentation

Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited condensed financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the yearsyear ended September 30, 2018 and 2017 of the Company which were included in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission on December 28, 2018.

Going Concern

These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited condensed financial statements, the Company had a net loss of $166,387$1,914,021 for the threesix months ended DecemberMarch 31, 2018.2019. The net cash used in operations was $43,786$63,630 for the threesix months ended DecemberMarch 31, 2018.2019. Additionally, the Company had an accumulated deficit of $6,557,251$8,304,885 and a stockholders’ deficit of $840,193$557,244, and a working capital deficit of $557,244 at DecemberMarch 31, 2018 and has no revenues for the three months ended December 31, 2018.2019. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issue date of this report. The Company is in the process in building its customer base and expects to generate increased revenues and the Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Although the Company has historically raised capital from sales of common stock and debt financing, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional debt in the near future, management expects that the Company will need to curtail its operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Included in these estimates are assumptions used in determining the allowance for doubtful accounts receivable, thevaluation of ROU assets and operating lease liabilities, fair value of derivative liabilities, valuation allowance for deferred tax assets and the valuation of stock issued for services or upon conversion of debt.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments and fair value measurements

FASB ASC 820 —Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on DecemberMarch 31, 2018.2019. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2- Inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3- Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash and cash equivalents, accounts receivable, loans, accounts payable, accrued expenses, and other payables approximate their fair market value based on the short-term maturity of these instruments.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company analyzes all financial and non-financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial and non-financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company accounts for the following instruments at fair value. 

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

The Company’s convertible notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at DecemberMarch 31, 2018.2019. The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities (see note 4) and revalues its derivative liability on the conversion feature at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liabilities. The fair value of derivative financial instruments, measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of DecemberMarch 31, 20182019 measured $537,794.$425,323.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

A roll forward of the level 3 derivative liabilities is as follows:

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. The Company had no cash equivalents at DecemberMarch 31, 20182019 and September 30, 2018.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of Credit Risk, Accounts Receivable and Revenues

The Company maintains its cash in financial institutions in the United States for which balances are insured up to Federal Deposit Insurance Corporation limits of $250,000 per account. The Company also maintains cash in financial institutions based in the country of Cyprus. At DecemberMarch 31, 2018,2019, bank accounts in Cyprus are insured for up to $119,000 per Bank under the regulations of the European Union. At times, cash balances may exceed the federally insured limits. The Company had no amounts that exceeded insured limits at DecemberMarch 31, 20182019 and September 30, 2018.

All of the Company’s revenues are from customers that are located outside of the United States.

The Company did not have any Accounts Receivable balance at March 31, 2019. There is one customer that accounted for 100 % of the Company’s Accounts Receivable balance at September 30, 2018. There was no comparable transaction at December 31, 2018. For the threesix months ended DecemberMarch 31, 2017, three2019, four customers accounted for approximately 96.6%100% of the total revenues (24.7%, 27.6%, 23.0% and 24.7%).

For the six months ended March 31, 2018, three payment processing customers accounted for approximately 96.9% of the total revenues from discontinued operations (39.9%(31.7%, 8.2%12.2% and 48.5%53.0% from a related party). There was no comparable transaction during and one related party customer accounted for 100% of the three months ended December 31, 2018.consulting revenue.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets of $3,000$20,000 and $7,250 at DecemberMarch 31, 20182019 and September 31,30, 2018, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses may include prepayments in cash and equity instruments for consulting, public relations and business advisory services, and accounting fees which are being amortized over the terms of their respective agreements.

Impairment of Long-lived Assets

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Derivative Liabilities  

The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC 815-10-05-4 and 815-40.  This accounting treatment requires that the carrying amount of any embedded conversion options be recorded at fair value at issuance and marked-to-market at each balance sheet date.  In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise and repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date, and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”), which requires revenue to be recognized in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 beginning October 1, 2018. There are two sources of recognized revenue. These comprise (1) payment processing services related to online money transfer transactions for diversified online merchants with a target market in Europe and (2) consulting for business development. For the consulting services, included in continuing operations, revenue is recognized when the Company satisfies the performance obligation based on the consulting agreement. In the payment processing segment, which is included in loss from discontinued operations, revenues consisted of fees generated through the electronic processing of payment transactions and related services, and was recognized as revenue during the period the transactions were processed or when the related services were performed. Merchants may be charged for these processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. Merchant customers were generally charged a flat fee plus percentage per transaction, while others may also be charged miscellaneous fees, including fees for chargebacks or returns, monthly minimums, and other miscellaneous services.

Revenues also included any up-front fees for the work involved in implementing the basic functionality required to provide electronic payment processing services to a customer. Revenue from such implementation fees was recognized over the term of the related service contract. The Company’s revenue was comprised of monthly recurring services provided to customers, for whom charges are contracted for over a specified period of time. Payments received from customers that are related to future periods are recorded as deferred revenue until the service is provided. As of March 31, 2019, the Company had $33,601 of deferred revenue recorded.

Cost of Revenues

Cost of revenues, if any, relates to the Company’s consulting service business.

Stock-Based Compensation 

Stock-based compensation is accounted for based on the requirements of ASC 718, Share-Based Payment, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments non-employees, compensation expense is determined at the measurement date defined as the earlier of; a) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or; b) the date at which the counterparty'scounterparty’s performance is complete. 

The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

DecemberMarch 31, 20182019

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(continued)

Research and Development

Research and development costs are expensed as incurred. 

Loss per Common Share and Common Share Equivalent 

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At December 31, 2018, the Company has 42,936,507 and 50,000 potentially dilutive securities outstanding, related to the convertible promissory notes and outstanding stock warrants, respectively, At December 31, 2017, the Company has 548,885 potentially dilutive securities outstanding related to the convertible promissory notes. Those potentially dilutive common stock equivalentsThere were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss during the three months ended December 31, 2018 and 2017. In addition, there were 39,960,798198,612,705 shares reserved for issuance related to convertible note agreements.agreements as of March 31, 2019.

The following potentially dilutive equity securities outstanding as of March 31, 2019 and as of September 30, 2018 were not included in the computation of dilutive loss per common share because the effect would have been anti-dilutive:

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign Currency Transactions

The reporting and functional currency of the Company is the U.S. dollar. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Recently Issued Accounting Standards 

From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”).

In February 2016,July 2017, the FASB issued ASU 2016-02, “LeasesNo. 2017-11Earnings Per Share (Topic 842)” whereby lessees will need260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815) (“ASU 2017-11”), which changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. ASU 2017-11 also clarifies existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, ASU 2017-11 requires entities that present earnings per share (EPS) in accordance with ASC Topic 260 to recognize almost all leases on their balance sheetthe effect of the down round feature when it is triggered. That effect is treated as a rightdividend and as a reduction of use of asset and a lease liability. This guidanceincome available to common shareholders in basic EPS.  For the Company, ASU 2017-11 is effective for fiscal years, and interim and annual reportingperiods within those fiscal years, beginning after December 15, 2018. The Company does not anticipatewill adopt this ASU to have a material impact on its financial statements on Januaryfor their next fiscal year beginning October 1, 2019. 

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting,which simplifies several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of the stock-based compensation guidance in ASC 718 to include share-based payment transactions for acquiring goods2019 and services from non-employees. ASU No. 2018-07 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but entities may not adopt prior to adopting the new revenue recognition guidance in ASC 606. The Company has assessedwill be evaluating the impact that adopting this new accounting guidance will have on itsin the financial statements and footnote disclosures and believes such impact will not be material.

statements.

In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s financial statements.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02,Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The updated guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is evaluating the impact of this standard upon its adoption on October 1, 2019.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 3 –RELATED PARTY TRANSACTIONS  

On March 30, 2015, the Company entered into a services contract with Global Humax Cyprus Ltd. (“Cyprus”), a company owned by the Company’s chief executive officer. Under the terms of the contract, the Company will provide services to Cyprus for a period of two years from the date of the agreement. Additionally, the Company earns fees from the processing of payment transactions and related services from Cyprus. For the threesix months ended DecemberMarch 31, 20182019 and 2017,2018, aggregate revenues from discontinued operations – related party amount to $0 and $3,411$6,364 respectively.

During fiscal year 2015, Cyprus paid various general and administrative expenses on behalf of the Company in the amount of $3,173. These advances are non-interest bearing and are due on demand. At DecemberMarch 31, 20182019 and September 30, 2018, the Company owed Cyprus $3,173 and $3,173, respectively.for both periods.

During fiscal year 2015, the Company’s Chief Executive Officer advanced $10 to the Company for working capital purpose. The advance is non-interest bearing and payable on demand. At DecemberMarch 31, 20182019 and September 30, 2018, the Company owed its Chief Executive Officer $10 and $10, respectively.

During fiscal year 2018, the Company’s Attorney who is a director of the Company advanced $1,070 to the Company for working capital purpose. The advance is non-interest bearing and payable on demand. At DecemberMarch 31, 20182019 and September 30, 2018, the Company owed its Attorney $1,070 and $0,$1,070, respectively.

During the threesix months ended DecemberMarch 31, 20182019 and 2017,2018, the Company paid cash compensation to a designated member of its board of directors in the amount of $3,000$7,000 and $3,500,$7,500, respectively, in connection with a written agreement with the director. Additionally, the Company made prepayments of $20,000 to this director as his retainer fees for various consulting agreements for services he will provide for the Company’s clients which was included in prepaid expense and other current assets in the accompanying balance sheet at March 31, 2019.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 4–4 –CONVERTIBLE NOTES PAYABLE

Convertible note payable dated October 10, 2017

On October 10, 2017, the Company issued a 12% Convertible Promissory Note for principal borrowings of $160,000 to a non-related party. The 12% convertible promissory note and all accrued interest are due on July 10, 2018. The Company received proceeds of $143,250 in cash which is net of offering costs of $16,750, recorded as a discount. The note is unsecured and bears interest at the rate of 12% per annum from the issuance date thereof until the note is paid. The note holder shall have the right to convert beginning on the date which is following the issuance date the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price equal to a price which is the lower of $0.65 per share or 55% of the lowest trading price of the Company’s common stock during the 25 trading days immediately preceding the conversion date. At any time during the period beginning on the issue date and ending on the date which is 90 days following the issue date, the Borrower shall have the right, exercisable on not less than 3 trading days prior written notice to the holder of the Note to prepay the outstanding Note (principal and accrued interest), in full by making a payment to the Holder of an amount in cash equal to 130%, multiplied by the sum of then outstanding principal amount of the Note plus accrued and unpaid interest on the unpaid principal amount of the Note plus default interest, if any. During the first 180 days following the date of the note, the Company has the right to prepay the principal and accrued but unpaid interest due under the note, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium of 140%. After this initial 180-day period, the Company does not have a right to prepay the note. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 24% per annum from the due date thereof until the same is paid.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 4–CONVERTIBLE NOTES PAYABLE (continued)

The conversion price, however, is subject to full ratchet anti-dilution in the event that the Company issues any securities at a per share price lower than the conversion price then in effect. The Note contains representations, warranties, and events of default, beneficial ownership limitations, and other provisions that are customary of similar instruments.

On April 26, 2018 the Company issued 25,000 shares of common stock to the noteholder with a contractual conversion price of $0.04 to convert $0 principal amount with $501 of accrued and unpaid interest and $500 conversion fee, totaling $1,001.

On May 25, 2018 the Company issued 50,000 shares of common stock to the noteholder with a contractual conversion price of $0.03 to convert $0 principal amount with $902 of accrued and unpaid interest and $500 conversion fee, totaling $1,402.

On June 12, 2018 the Company issued 110,000 shares of common stock to the noteholder with a contractual conversion price of $0.03 to convert $0 principal amount with $2,585 of accrued and unpaid interest and $500 conversion fee, totaling $3,085.

On July 10, 2018, the Company failed to make the repayment of the outstanding principal and interest at the maturity date which causes the default interest rate of 24% to become effective.

On August 21,In September 2018, the Company issued 150,000 shares of common stock to the noteholder with a contractual conversion price of $0.02 to convert $0 principal amount with $2,056 of accrued and unpaid interest and $500 conversion fee, totaling $2,556.

On September 7, 2018 the Company issued 100,000 shares of common stock to the noteholder with a contractual conversion price ofwas below $0.01 to convert $0 principal amount with $544 of accrued and unpaid interest and $500 conversion fee, totaling $1,044.

On September 28, 2018 the Company issued 180,000 shares of common stock to the noteholder with a contractual conversion price of $0.0048 to convert $0 principal amount with $364 of accrued and unpaid interest and $500 conversion fee, totaling $864. The conversion price falling below $0.01which triggered clause 1.4(g) of the promissory note which allows for the principal amount of the note to increase by $15,000. Per the noteholder, this $15,000 will be added to the principal at the end of the note, allowing the Company to convert out of the original principal and interest first, however, for accounting purposes the $15,000 was added to the principal on September 25, 2018. In addition, the variable conversion price shall be redefined to mean 40% multiplied by the market price (or a 60% discount).

Between October 10, 2018 and December 27,

During the fiscal year ended September 30, 2018, the Company issued an aggregate of 5,600,000615,000 shares of common stock to the noteholder with a contractual conversion price of $0.002ranging from $0.01 to $0.04 to convert $0 principal amount with $12,848$6,951 of accrued and unpaid interest and $3,000 conversion fee, totaling $12,848.$9,951.

During the six months ended March 31, 2019, the Company issued an aggregate of 78,564,200 shares of common stock to the noteholder with a contractual conversion price ranging from $0.002 to $0.003 to convert $100,109 principal amount with $33,896 of accrued and unpaid interest and $7,000, totaling $141,005.

As of March 31, 2019, the note had outstanding principal and accrued interest of $74,891 and $433, respectively, and accrued conversion fee of $0.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

DecemberMarch 31, 20182019

(Unaudited)

NOTE 4–4 –CONVERTIBLE NOTES PAYABLE (continued)(CONTINUED)

As of December 31,

Convertible note payable dated February 20, 2018 the principal balance of this note is $175,000 and accrued interest of $16,176.

In February 2018, under a Securities Purchase Agreement, the Company issued a 10% Convertible Promissory Note for principal borrowings of up to $180,000 and received initial proceeds of $60,000. In June 2018, theThe Company received additional proceeds of $20,000 in June 2018 and $50,000 in March 2019 (“Third tranche”) which resulted to a total of $80,000$130,000 proceeds. The 10% convertible promissory notes and all accrued interest are due in twelve months from the effective date of each tranche. The notes are unsecured and bears interest at the rate of 10% per annum from the issuance date thereof until the notes are paid. The note holder shall have the right to convert beginning on the issuance date, the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price to a price which is 65% of the lowest trading price of the Company’s common stock during the 25 prior trading days to the conversion date subject to increases in the discount rate based on certain future events. If at any time while this note is outstanding, the conversion price is equal to or lower than $0.15, then an additional 15% discount shall be added into the conversion price resulting in a discount rate of 50%.

During the first 90 days following the date of this note, the Company has the right to prepay the principal and accrued but unpaid interest due under this note, together with any other amounts that the Company may owe the holder under the terms of this note, at a premium ranging from 135% to 145% as defined in the note agreement. After this initial 90-day period, the Company does not have a right to prepay the note. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of 15% per annum from the due date thereof until the same is paid. The conversion price, however, is subject to full ratchet anti-dilution in the event that the Company issues any securities at a per share price lower than the conversion price then in effect.

The

During fiscal 2018, the Company paid an original issuance discount of $8,000 and related loan fees of $3,500 in connection with this note payable and during the six months ended March 31, 2019, the Company paid additional original issuance discount of $5,000 and related loan fees of $2,000 for the Third tranche which isare being amortized over the term of the note. The Note contains representations, warranties, events of default, beneficial ownership limitations, piggyback registration rights and other provisions that are customary of similar instruments.

OnDuring fiscal 2018, the Company granted the note holder of 50,000 warrants and during the six months ended March 31, 2019, the Company granted an additional 125,000 warrants in connection with the issuance of this note. The warrants had a term of 5 years from the date of grant and was exercisable at an exercise price of $0.40. During fiscal 2018, the Company accounted for the 50,000 warrants by using the relative fair value method and recorded debt discount from the relative fair value of the warrants of $6,206 using a simple binomial lattice model. During six months ended March 31, 2019, the Company accounted for the 125,000 warrants by using the relative fair value method and recorded debt discount from the relative fair value of the warrants of $2,265 using a simple binomial lattice model.

During the fiscal year ended September 5,30, 2018, the Company issued 270,000 shares of common stock to the noteholder with a contractual conversion price of $0.01 to convert $3,023 principal amount with $0 of accrued and unpaid interest and $500 conversion fee, totaling $3,523.

Between October 4, 2018 and December 21, 2018,During the six months ended March 31, 2019, the Company the Company issued an aggregate of 9,124,00068,398,371 shares of common stock to the noteholder with a contractual conversion price ofranging from $0.001 and $0.002 to convert $18,836$73,314 principal amount with $0$4,874 of accrued and unpaid interest and $1,500$8,500 conversion fee, totaling $20,336.$86,688.

As of DecemberMarch 31, 2018,2019, the principal balancenote had $53,662 and $1,786 of this note is $58,140outstanding principal and accrued interest, of $5,926.respectively.

The Company evaluated whether or not the above two convertible promissory notes contains embedded conversion features, which meet the definition of derivatives under ASC 815 and related interpretations. The Company determined that the terms of the notes discussed above contains conversion terms, primarily those resulting in an indeterminable number of shares being issued upon conversion which causes the embedded conversion option to be bifurcated and accounted for as derivative liability at fair value.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 4–CONVERTIBLE NOTES PAYABLE (continued)

In connection with the issuance of these notes during fiscal year 2018, on the initial measurement date of the notes, the fair values of the embedded conversion option of $423,778 was recorded as derivative liabilities of which $218,234 was charged to current period operations as initial derivative expense, and $205,544 was recorded as a debt discount which will be amortized into interest expense over the term of the note. In connection with the issuance of these notes during the six months ended March 31, 2019, on the initial measurement date of the notes, the fair values of the embedded conversion option of $342,368 was recorded as derivative liabilities of which $301,633 was charged to current period operations as initial derivative expense, and $40,735 was recorded as a debt discount which will be amortized into interest expense over the term of the note. Upon conversions during the threesix months ended DecemberMarch 31, 2018,2019, the respective derivative liability was marked to fair value at the conversion, and then a related fair value amount of $55,188$209,379 relating to the portion of debt converted was reclassified to other income or expense as part of gain or loss on debt extinguishment. Additionally, the Company recorded loss on debt extinguishment of $131,826$1,917,530 during the threesix months ended DecemberMarch 31, 20182019 in connection with the conversion of notes. notes resulting in a net loss on extinguishment of debt of $1,708,151 for the six months ended March 31, 2019 as reflected in the accompanying unaudited statements of operations.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

NOTE 4 –CONVERTIBLE NOTES PAYABLE (CONTINUED)

At the end of each reporting period, the Company revalues the embedded conversion option derivative liabilities. In connection with the revaluation, the Company recorded a gain from change in fair value of conversion option liability of $297,646 for the six months ended March 31, 2019 and loss from change in fair value of conversion option liability of $3,002 and $202,094$689,364 for the threesix months ended DecemberMarch 31, 2018, and 2017, respectively (see Note 2).

Convertible note payable dated June 14, 2018

In June 2018, under a Securities Purchase Agreement, the Company issued a 10% Convertible Promissory Note for principal borrowings of up to $58,000. The 10% convertible promissory note and all accrued interest are due in June 2019. The note is unsecured and bears interest at the rate of 10% per annum from the issuance date thereof until the notes are paid. The note holder has the right to convert beginning 180 days following the issuance date, the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price equal to 61% of the average of the lowest two trading prices of the Company’s common stock during the 20 trading days immediately preceding the conversion date. During the first 30 to 180 days following the date of the note, the Company has the right to prepay the principal and accrued but unpaid interest due under these notes, together with any other amounts that the Company may owe the holder under the terms of these notes, at a premium ranging from 115% to 140% as defined in the note agreements. After this initial 180-day period, the Company does not have a right to prepay the note. The Company paid original issuance cost and related loan fees of $3,000 in connection with this note payable which is being amortized over the term of the note. The Company granted the note holder 50,000 warrants in connection with the issuance of this note. The warrants had a term of 5 years from the date of grant and was exercisable at an exercise price of $0.40.

Between December 26, 2018 and DecemberDuring the six months ended March 31, 2018,2019, the Company issued an aggregatefully converted the remaining outstanding principal and interest of 9,980,676$58,000 and $2,900, respectively, into 23,480,646 shares of common stock tostock. As of March 31, 2019, the noteholder with a contractual conversion price of $0.003 to convert $30,425note had no outstanding principal amount with $0 ofand accrued and unpaid interest, totaling $30,425.interest.

During fiscal 2018, the Company accounted for the warrants by using the relative fair value method and recorded debt discount from the relative fair value of the warrants of $6,206 using a simple binomial lattice model. The Company has accounted for this convertible promissory note as stock settled debt under ASC 480 and in June 2018, the Company recorded an original debt premium liability of $37,082 and a charge to interest expense of $37,082. Upon conversions during the three monthsin fiscal year ended December 31,September 30, 2018, Put Premium of $19,452 was reclassified to additional paid-in capital. Upon conversions during the six months ended March 31, 2019, Put Premium of $17,630 was reclassified to additional paid-in capital.

Convertible note payable dated February 14, 2019

In February 2019, under a Securities Purchase Agreement, the Company issued a 10% Convertible Promissory Note for principal borrowings of up to $63,000. The 10% convertible promissory note and all accrued interest are due in February 2020. The note is unsecured and bears interest at the rate of 10% per annum from the issuance date thereof until the notes are paid. The note holder has the right to convert beginning 180 days following the issuance date, the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price equal to 61% of the average of the lowest two trading prices of the Company’s common stock during the 15 trading days immediately preceding the conversion date. During the first 30 to 180 days following the date of the note, the Company has the right to prepay the principal and accrued but unpaid interest due under these notes, together with any other amounts that the Company may owe the holder under the terms of these notes, at a premium ranging from 115% to 140% as defined in the note agreements. After this initial 180-day period, the Company does not have a right to prepay the note. The Company paid original issuance cost and related loan fees of $3,000 in connection with this note payable which is being amortized over the term of the note. As of DecemberMarch 31, 2018,2019, the principal balance of this note was $27,575had $63,000 and $630 outstanding principal and accrued interest.

The Company has accounted for this convertible promissory note as stock settled debt under ASC 480 and in February 2019, the Company recorded an original debt premium liability of $40,279 and a charge to interest expense of $3,160.$40,279.

For the threesix months ended DecemberMarch 31, 2019 and 2018, and 2017,the total amortization expense of debt discounts related to all convertible promissory notes amounted to $23,901were $38,577 and $53,333 which has been amortized$113,916, charged to interest expense on the accompanying statements of operations. 

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

DecemberMarch 31, 20182019

(Unaudited)

NOTE 4–4 –CONVERTIBLE NOTES PAYABLE (continued)(CONTINUED)

During the three months ended DecemberMarch 31, 20182019 the fair value of the derivative liabilities were estimated using the Binomial option pricing method with the following assumptions:

At DecemberMarch 31, 20182019 and September 30, 2018, the components of convertible promissory notes, net consisted of the following:

NOTE 5 –STOCKHOLDERS’ DEFICIT

Shares Authorized

The Company has 500,000,000 shares authorized of which 490,000,000 are common stock, par value $0.0001 and 10,000,000 are preferred stock, par value of $0.0001.

Preferred Stock

The Company has 10,000,000 shares of preferred stock authorized. Preferred stock may be issued in one or more series. The Company’s board of directors is authorized to issue the shares of preferred stock in such series and to fix from time to time before issuance thereof the number of shares to be included in any such series and the designation, powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of such series. NoAt March 31, 2019 and September 30, 2018, there were no shares of preferred stock have been issued as of December 31, 2018 and September 30, 2018.an outstanding.

Common Stock

Between October 4, 2018 and December

During the six months ended March 31, 2018,2019, the Company issued an aggregate of 24,704,676170,443,217 shares of the Company’s common stock to note holders with contractual conversion prices ranging from $0.002 to $0.003 to convert $49,261$231,423 in principal amount with $12,848$41,670 of accrued and unpaid interest and $1,500$15,500 of conversion fees, totaling $63,609.$288,593. The shares were valued at their fair value for notes with bifurcated embedded derivatives and at recorded debt value for notes treated as stock settled debt of $195,435$2,206,123 using, as applicable, the closing quoted trading price of the Company’s common stock on the date of grantsconversion dates ranging from $0.01 to $0.03 per common share.share which resulted in a loss on debt extinguishment of $1,917,530. Related embedded conversion option derivative liabilities of $209,379 from these note conversions were recorded as a gain on debt extinguishment resulting in a net loss on extinguishment of debt of $1,708,151 for the six months ended March 31, 2019.

At March 31, 2019 and September 30, 2018, the Company had 232,290,035 and 61,846,818 shares of common stock issued and outstanding, respectively.

Warrants

The Company granted a note holder 175,000 warrants in connection with the June 2018 SPA (see Note 4). The warrants had a term of 5 years from the date of grant and was exercisable at an exercise price of $0.40. At March 31, 2019 and September 30, 2018, the Company had 175,000 warrants issued and outstanding.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

DecemberMarch 31, 20182019

(Unaudited)

NOTE 6 – DISCONTINUED OPERATIONS

The remaining assets and liabilities of discontinued operations are presented in the balance sheets under the caption “Assets of discontinued operations” and “Liabilities of discontinued operations” which relates to the operations of the online payment processing services. The carrying amounts of the major classes of these assets and liabilities as of DecemberMarch 31, 20182019 and September 30, 2018 are summarized as follows:

The following table sets forth for three and six months ended DecemberMarch 31, 20182019 and 2017,2018, indicated selected financial data of the Company’s discontinued operations of its online payment processing services.

GH CAPITAL, INC.

CONDENSED NOTES TO FINANCIAL STATEMENTS

December 31, 2018

(Unaudited)

NOTE 7 –COMMITMENTS AND CONTINGENCIES

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

NOTE 8 –SUBSEQUENT EVENTS

Between January 3, 2019 and February 7,Subsequent to March 31, 2019, the Company issued an aggregate of 72,830,07019,591,200 shares of the Company’s common stock to note holders with contractual conversion prices ranging from $0.001 to $0.005$0.002 to convert $73,244$39,650 in principal amount with $20,571$1,072 of accrued and unpaid interest and $5,000$1,000 of conversion fees, totaling $98,815.$41,722. The shares were valued at their fair value of $568,331$155,521 using the closing quoted trading price of the Company’s common stock on the date of grants ranging fromat $0.01 to $0.02 per common share.share resulting in a loss on debt extinguishment of $113,798.

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

Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results

This quarterly report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations and prospects. The Securities and Exchange Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This quarterly report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. Factors that could cause our actual results of operations and financial condition to differ materially are set forth in the “Risk Factors” section of our annual report on Form 10-K for the fiscal year ended September 30, 2018, as filed with the SEC on December 28, 2018.

We caution that these factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report on Form 10-Q.

Business Overview

We were incorporated on May 5, 2014 in the State of Florida and commenced operations in October 2014. We provided online payment processing services to consumers, primarily in Europe and provide certain consulting services to assist companies in going public.

On September 18, 2018, our management terminated our online payment processing services. As a result, we will shift our focus to our consulting services business. As such, the online payment processing services business activities were reclassified and reported as part of “discontinued operations”.

We did not generateDuring the six months ended March 31, 2019 and 2018 we generated $104,400 and $11,199 of revenues from continuing operations, during the three months ended December 31, 2018including revenues from related parties of $0 and 2017.$11,199, respectively.

Plan of Operations

The Company’s strategy is to focus on its consulting services for business development to assist companies in going public.

Critical Accounting Policies and Estimates

While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management’s discussion and analysis.  

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Included in these estimates are assumptions used in determining the allowance for doubtful accounts receivable, thevaluation of ROU assets and operating lease liabilities, fair value of derivative liabilities, valuation allowance for deferred tax assets and the valuation of stock issued for services or upon conversion of debt.

Derivative Liabilities

The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with FASB ASC 815-10-05-4 and 815-40.  This accounting treatment requires that the carrying amount of any embedded conversion options be recorded at fair value at issuance and marked-to-market at each balance sheet date.  In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise and repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date, and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”), which requires revenue to be recognized in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 beginning October 1, 2018. For the consulting services, revenue is recognized when the Company satisfies the performance obligation based on the consulting agreement. Payments received from customers that are related to future periods are recorded as deferred revenue until the service is provided. As of March 31, 2019, the Company had $33,601 of deferred revenue recorded.

Stock-Based Compensation

Stock-based compensation is accounted for based on the requirements of ASC 718, Share-Based Payment, which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The Financial Accounting Standards Board (“FASB”) also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC Topic 505-50, for share-based payments non-employees, compensation expense is determined at the measurement date defined as the earlier ofof; a) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached oror; b) the date at which the counterparty’s performance is complete.

The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date.

Recently Issued Accounting Standards 

From time to time, the FASB or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of an Accounting Standards Update (“ASU”).

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” whereby lessees will need to recognize almost all leases on their balance sheet as a right of use of asset and a lease liability. This guidance is effective for interim and annual reporting beginning after December 15, 2018. The Company does not anticipate this ASU to have a material impact on its financial statements on January 1, 2019. 

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting,which simplifies several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of the stock-based compensation guidance in ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU No. 2018-07 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but entities may not adopt prior to adopting the new revenue recognition guidance in ASC 606. The Company has assessed the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures and believes such impact will not be material.

In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectivenessResults of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s financial statements.Operations

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.Revenues

ResultsFor the six months ended March 31, 2019, we generated revenue of Operations

Revenues$104,400 as compared to $11,199 for the six months ended March 31, 2018, an increase of $93,201 or 832%. The revenue generated in 2019 was mainly due a contract related to consulting services for business development services during six months ended March 31, 2019.

For the three months ended DecemberMarch 31, 2019, we generated revenue of $104,400 as compared to related party revenue of $11,199 for the three months ended March 31, 2018, a total increase of $93,201 or 832%. The revenue generated in 2019 was mainly due to various contract related to consulting services for business development services during the three months ended March 31, 2019.

Cost of Revenues

For the three and 2017,six months ended March 31, 2019 and 2018, we did not generate revenues orincurred cost of revenues of $62,500 and $0, respectively, from continuing operations.operations which relates to consulting fees paid for our business development services.

On September 18, 2018, our management terminated our online payment processing services. As a result, we will shift our focus to our consulting services business. As such, the online payment processing services business activities were reclassified and reported as part of “discontinued operations” (see below).

Operating Expenses

For the threesix months ended DecemberMarch 31, 2018,2019, we incurred $43,489$122,970 in operating expenses as compared to $81,437$145,562 for the six months ended March 31, 2018, a decrease of $22,592 or 16%. For the three months ended March 31, 2019, we incurred $79,481 in operating expenses as compared to $64,125 for the three months ended DecemberMarch 31, 2017, a decrease2018, an increase of $37,948$15,356 or 46.6%24%. Operating expenses consisted of the following:

Operating expenses increasedduring the six months ended March 31, 2019 decreased primarily due to the following:

 Operating expenses during the three months ended March 31, 2019 increased primarily due to the following:

Operating loss from operations from continuing operations

For the threesix months ended DecemberMarch 31, 2018,2019, we incurred a loss from operations of $43,489$81,070 as compared to $81,437$134,363 for the threesix months ended DecemberMarch 31, 2017,2018, a decrease of $37,948$53,293 or 46.6%40%. The decrease was resulting from the discussion above.

Discontinued Operations

The remaining assets and liabilities of discontinued operations are presented in the balance sheets under the caption “Assets of discontinued operations” and “Liabilities of discontinued operations” which relate to the operations of the online payment processing services. The carrying amounts of the major classes of these assets and liabilities as of DecemberMarch 31, 20182019 and 2017September 30, 2018 are summarized as follows:

The following table sets forth for three and six months ended DecemberMarch 31, 20182019 and 2017,2018, indicated selected financial data of the Company’s discontinued operations of its online payment processing services.