| GENERAL | NOTE 1- GENERAL Organization TurnKey Capital, Inc. (formerly Train Travel Holdings, Inc.) (TKCI, the Company, we, or us) was incorporated under the laws of the State of Nevada under the name of Vanell, Corp. on September 7, 2012 (Inception). The Company changed its name to Train Travel Holdings, Inc. on March 20, 2014 and to TurnKey Capital, Inc. on January 15, 2016. On July 6, 2015, the Company completed a share exchange agreement (the Share Exchange Agreement) with Turnkey Home Buyers USA, Inc., a Florida corporation (Turnkey), TBG Holdings Corporation (TBG), each of the Turnkey shareholders and Train Travel Holdings, Inc., a Florida corporation. The Company, Turnkey, TBG and Train Travel Holdings, Inc., a Florida corporation, are all under the common control of Neil Swartz and Timothy Hart. Pursuant to the terms of the Share Exchange Agreement, Turnkey stockholders transferred to the Company all of the issued and outstanding shares of capital stock of Turnkeys stockholders. In exchange for the acquisition of all of the issued and outstanding shares of Turnkey, the Company issued 15,337,500 shares of its common stock to Turnkey stockholders. Prior to closing, TBG, a principal stockholder of the Company and Turnkey, tendered to Turnkey for cancellation 15,000,000 shares of Turnkey common stock. The Company shares issued to the Turnkey stockholders were not registered and were issued in a transaction which was exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933. Each of the Turnkey shareholders were accredited investors and no underwriters or placement agents were involved. As a result of the Share Exchange Agreement, the Turnkey stockholders owned 38.9% of the Companys common stock and 58.5% of the fully diluted common stock as a result of their ownership of the outstanding preferred stock. Due to the common control of Turnkey and the Company, pursuant to ASC 805-50-25, Transactions Between Entities Under Common Control and other SEC guidance including for lack of economic substance, the Share Exchange Agreement was accounted for as a transfer of the carrying amounts of assets and liabilities under the predecessor value method of accounting. Financial statement presentation under the predecessor values method of accounting as a result of a business combination between entities under common control requires the receiving entity (i.e., the Company) to report the results of operations as if both entities had always been combined. The consolidated financial statements include both entities full results since the inception of Turnkey on September 12, 2014. ROM Business On September 1, 2016, the Company formed a new subsidiary, Remote Office Management, Inc. (ROM) to market bundled accounting and computer/IT services. Simultaneously, ROM entered into a professional services agreement with R3 Accounting, (an accounting firm owned by Timothy Hart, a director, secretary and CFO of the Company) and PC Lauderdale (an unrelated computer/IT company). The purpose of the agreement was to form a joint venture where by these entities would cross market professional services under ROM for one stop computer/IT and accounting services. Through ROM, we generated revenues of $30,000 and $37,500 during the three months ended March 31, 2018 and 2017, respectively, from accounting and computer/IT services. These services were provided to affiliates. On June 30, 2017, the Company, entered into a Strategic Alliance Agreement (the Agreement)
with Seminole Indian Company (SIC), a company controlled by Chief James E. Billie and Craig Talesman. The purpose
and intent of this Agreement is to combine the resources and talents of, TKCI and SIC, in order to take advantage of every opportunity
permitted by tribal sovereignty to create revenue streams in multiple areas in conjunction with operating partners that have existing
marketing and customers in place, thereby limiting the capital requirements and risk. The Company does not have any paid employees,
however the officers and directors continue to work to further the Companys business objectives. To date there have been
no revenues pursuant to this alliance and there are no pending contracts or agreements. Basis of Presentation The unaudited condensed consolidated financial statements of TurnKey Capital, Inc. as of March 31,
2018, and for the three months ended March 31, 2018 and 2017, have been prepared in accordance with generally accepted
accounting principles (GAAP) in the United States for interim financial reporting and include the
Companys wholly-owned subsidiaries, Turnkey Home Buyers USA, Inc. and Remote Office Management, Inc. Accordingly, they
do not include all of the disclosures required by GAAP for complete financial statements and should be read in conjunction
with the audited consolidated financial statements and notes thereto for the year ended December 31, 2017, as filed with the
Securities and Exchange Commission (the SEC) as part of the Companys Form 10-K on March 1, 2018 and amended
March 9, 2018. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered
necessary for a fair presentation of the interim financial information have been included. The results of operations for any
interim period are not necessarily indicative of the results of operations for the entire year. Going Concern The condensed consolidated financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the
foreseeable future. As of March 31, 2018, the Company had $14,132 of cash, a working capital deficit of $582,213 and an
accumulated deficit of $1,855,087 and further losses are anticipated in the development of its business raising substantial
doubt about the Companys ability to continue as a going concern. The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet
its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance
that these events will be satisfactorily completed. We expect TBG, a related party as discussed in Note
2, to continue to provide support services until sufficient capital is raised. Income Taxes The Company accounts for income taxes using the liability method prescribed by ASC 740 Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset the deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. Pursuant to accounting standards related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. The Company assessed its earning history, trends and estimates of future earnings and determined that the deferred tax asset could not be realized as of March 31, 2018. Accordingly, a valuation allowance was recorded against the net deferred tax asset. Revenue Recognition The Company records revenue when all of the following have occurred; (1) persuasive evidence of an arrangement exists, (2) service delivery has occurred, (3) the sales price to the customer is fixed and determinable, and (4) collectability is reasonably assured. Revenue is recognized at point of sale, with no further obligations. Loss Per Share The computation of basic loss per share (LPS) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted LPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on loss per share. Therefore, when calculating LPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the LPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). Following is the computation of basic and diluted net loss per share for the three months ended March 31, 2018 and 2017: Three Months Ended March 31, 2018 2017 Basic and Diluted LPS Computation Numerator: Loss available to common stockholders' $ (162,217 ) $ (30,409 ) Denominator: Weighted average number of common shares outstanding 39,216,665 39,216,665 Basic and diluted LPS $ - $ - Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares): Preferred stock (convertible) 29,100,000 29,100,000 Recent Accounting Pronouncements The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Companys previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit discussion. The Company believes that none of the new standards will have a significant impact on the condensed consolidated financial statements. |
