| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). The consolidated financial statements have been prepared using the accrual basis of accounting
in accordance with Generally Accepted Accounting Principles ("GAAP") of the United States. Principles
of Consolidation The
consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiary, Sunalpha
Green Technologies Private Limited. All significant inter-company accounts and transactions are eliminated in consolidation. Use
of Estimates The
preparation of financial statements in US GAAP requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and footnotes thereto, those estimates, and assumptions affect the reported amounts assets, liabilities
and disclosure of contingent assets and liabilities and revenue. Actual results could differ significantly from those estimates.
Our
significant estimates include elements of revenue recognition, the realization of deferred tax assets, amounts that may be due
under the tax sharing agreement, 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 contingent liabilities, including taxes related to hotel occupancy.
Actual amounts may differ from these estimates. 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 a materially different impairment
charge. The Company has no impairment charge for the quarter ending June 30, 2018. Revenue
Recognition The
Company provides travel products and services to leisure and corporate travelers in India and abroad. The revenue from rendering
these services is recognized at the time when significant risk and rewards are transferred to the customer. This is generally
the case: 1) on the date of departure for vacation packages, 2) on the date of check in for hotel booking business and 3) on the
date of issuance for the sale of airline tickets. Air
Ticketing Vacation
Packages. Rail
Ticketing Money
Transfer Other
Revenue. Cost
of Revenue Cost
of revenue primarily consists of costs paid to hotel and vacation package suppliers for the acquisition of relevant services and
products for sale to customers and includes the procurement cost of hotel rooms and other services. Cost
of revenue is the amount paid or accrued against procurement of these services and products from the respective suppliers and
do not include any other operating cost to provide these services or products. Cost of revenue is recognized when incurred, which
coincides with the recognition of the corresponding revenue. Operating
Expenses Operating
expenses include costs such as advertising and business promotion costs, utilities, rent, payroll and consultants fees and charges,
which are recognized on an accrual basis. Depreciation and amortization costs are amortized over the estimated useful lives of
the assets. Cash
and Cash Equivalents The
Company maintains cash balances, which may exceed federally insured limits. The Company does not believe that this results in
any significant credit risk. Sunalpha
has twelve accounts denominated in Indian Rupees. As of June 30, 2018, and 2017, the cash balance in financial institutions in
India was USD $360,210 and $229,520, respectively. The transactions are undertaken in Indian Rupees and requires a foreign currency
translation adjustment. The Company’s cash deposits in India are not insured against loss. The Company does not believe
that this results in any significant credit risk. Receivables
and Credit Policies Accounts
receivable are stated at the amount’s management expects to collect. An allowance for doubtful accounts is recorded, as
a charge to bad debt expense, where collection is doubtful due to credit issues. These allowances together reflect the Company's
estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its
customers. The
Company performs periodic analysis of each customer’s outstanding accounts receivable balance and assesses, on an account-by-account
basis, whether the allowance for doubtful accounts needs to be adjusted based on currently available evidence such as historical
collection experience, current economic trends and changes in customer payment terms. In accordance with the Company’s policy,
if collection efforts have been pursued and all reasonable and contractually available avenues for collections exhausted, accounts
receivable would be written off as uncollectible. The Company does use estimate to use a general reserve methodology when estimating
the level of allowance for doubtful accounts because the Company believes, due to the unique circumstances of each customer and
a limited number of customers, a general reserve methodology would not provide a reasonable estimate of potentially uncollectible
accounts. 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 expense as incurred. Intangible
Assets Intangible
assets with definite useful lives are tested for impairment at least annually for their recoverability. We do not have any intangible
assets with indefinite lives. Intangible assets that have limited useful lives are amortized on a straight-line basis over their
useful lives. Impairment
of Long-lived Assets The
Company records an impairment of long-lived assets used in operations, when events or circumstances indicate that the asset might
be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than
the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically
calculated using the discounted cash flow method. Foreign
Currency Translation The
Company translates the foreign currency of its foreign subsidiary, whose functional currency is Indian rupee, into US Dollars,
the reporting currency using the year or reporting period end or average exchange rates in accordance with the requirements of
ASC subtopic 830, Foreign Currency Matters (“ASC 830”). Assets and liabilities are translated at exchange
rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented.
The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’
equity (deficit). The
value of INR against US$ and other currencies may fluctuate and is affected by, among other things, changes in India’s political
and economic conditions. Any significant revaluation of INR may materially affect the Company’s financial condition in terms
of US$ reporting. The following table outlines the currency exchange rates that were used in creating the consolidated financial
statements in this report:
June 30, 2018 June 30, 2017
Period-end spot
rate US$1=INR 68.7100 US$1=INR 64.6112
Average rate US$1=INR 66.9200 US$1=INR 64.7509 Earnings
and Loss per Share Basic
earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average
common shares outstanding for the period. Potentially dilutive common shares may consist of incremental shares issuable upon the
exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has
been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Promotion
and Advertising Expense We
incur advertising expense consisting of offline costs, including newspaper and media advertising, and online advertising expense
to promote our brands. We expense the production costs associated with advertisements in the period in which the advertisement
first takes place. We expense the costs of communicating the advertisement (e.g., newspaper, SMS or email campaign) as incurred
each time the advertisement or promotion is performed. Stock-Based
Compensation The
Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which
requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized
in the financial statements based on a determination of the fair value of the stock options over the instruments vesting period.
Options awarded to purchase shares of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles. Leases Leases
of assets where the Company has assumed substantially all the risks and rewards of ownership are classified as finance leases.
Finance leases are recognized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. Income
Taxes The
Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under
this method, the Company has determined the deferred tax assets and liabilities based on the differences between the financial
statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are
expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the
period that includes the enactment date. The
Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized.
In making such a determination, the Company considers all available evidence, including future reversals of existing taxable temporary
differences, projected future taxable income, tax-planning strategies, and results of operations. If the Company determines that
it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment
to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The
Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines
whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position
and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the amount of tax
benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Recent
Accounting Pronouncements New
Accounting Pronouncements Recently Adopted In
July 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, “Simplifying the Measurement
of Inventory”. ASU No. 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower
of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business;
less reasonably predictable costs of completion, disposal and transportation. For public business entities, the amendments in
this ASU are effective for fiscal years beginning after December 15, 2016, including interim reporting periods within those fiscal
years. The Company adopted this guidance in the first quarter of its fiscal year ended March 31, 2018 using a prospective application.
The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related
disclosures. In
March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting.” This update addresses several aspects of the accounting for share-based compensation transactions including:
(a) income tax consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c)
a policy election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess
tax impacts on the statement of cash flows. The Company adopted this guidance in the first quarter of its fiscal year ended March
31, 2018, which did not have a material impact on the consolidated financial statements and related disclosures. The amendments
requiring recognition of excess tax benefits and tax deficiencies in the income statement will be applied prospectively. The Company
does not expect the impact to be material to the consolidated results of operations; however, such determination is subject to
change based on facts and circumstances at the time when awards vest or settle. We
adopted Revenue Recognition - Revenue from Contracts with Customers (ASU 2014-09) for the fiscal year ended March 31, 2018,
which amends the guidance in former ASC 605, Revenue Recognition and found no significant impact on the revenue recognition. New
Accounting Pronouncements Not Yet Adopted In
February 2016, the FASB issued ASU No. 2016-02, "Leases” to increase transparency and comparability among organizations
by recognizing lease assets and lease liabilities on the balance sheet with a corresponding liability and disclosing key information
about leasing arrangements. For public business entities, the amendments in this ASU are effective for fiscal years beginning
after December 15, 2018, including interim reporting periods within those fiscal years. For all other entities, the amendments
in this ASU are effective for fiscal years beginning after December 15, 2019, and interim reporting periods within fiscal years
beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the impact of the adoption of this revised
guidance on its consolidated financial statements and related disclosures. In
October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory”,
which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when
the transfer occurs. For public business entities, the amendments in this ASU are effective for annual reporting periods beginning
after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted.
The amendments in this ASU should be adopted on a modified retrospective basis. The Company reviewing adoption and its impact
of this guidance on its consolidated financial statements and related disclosures. In
October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are
under Common Control”. The amendments affect reporting entities that are required to evaluate whether they should consolidate
a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change
the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting
entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related
parties that are under common control with the reporting entity. As of fiscal year, ending March 31, 2018 and 2017 we have no
variable interest entity under common control with the reporting entity. In
January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies
the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or
disposals) of assets or businesses. In
January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment".
The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment
test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying
amount. The new rules will be effective for the Company in the first quarter of 2021. Early adoption is permitted. The Company
is currently evaluating the impact of adopting this ASU on its consolidated financial statements. No
other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact
on the Company's present or future consolidated financial statements. |
