| GENERAL | NOTE 1 – GENERAL Organization TurnKey Capital, Inc. (the “Company,”
“we, “our”,” 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 as a result of changes in its line of business. As of September 30, 2018 and 2017, we are
a shell company as defined in Rule 12b-2 of the Exchange Act. Our wholly-owned subsidiaries are Remote Office Management,
Inc. (“ROM”), which was formed in 2016 and is discussed below, and Turnkey Home Buyers USA, Inc. which was formed in
2014 and is inactive as of September 30, 2018 and 2017.The Company does not have any paid employees however, the officers and directors
continue to work to further the Company’s business objectives. ROM Business Rom was formed to market bundled accounting
and computer/information technology (“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), (“R3 Accounting”),
and PC Lauderdale (an unrelated computer/IT company). The purpose of the agreement was to form a joint venture whereby these entities
would cross-market professional services under ROM for one stop computer/IT and accounting services. Through ROM, we generated
revenues of $60,000 and $99,500 for the nine month periods ended September 30, 2018 and 2017, respectively, from accounting services.
These services were provided to MediXall Group, Inc. (“MediXall”). MediXall is a publicly reporting company. Each of
Mr. Swartz, our President, CEO and director, and Mr. Hart, our CFO and director, is a significant stockholder of MediXall. Mr.
Swartz is MediXall’s Interim CEO and Chairman of the Board, and Mr. Hart is MediXall’s CFO and a member of MediXall’s
board of directors. In addition, TBG is a significant stockholder of MediXall. Messrs. Swartz and Hart are both officers and major
shareholders of TBG. As such, they may be deemed to be beneficial holders of the MediXall shares held by TBG. ROM was inactive
during the third quarter of 2018 and did not generate any revenue. On June 30, 2017, the Company entered into
a Strategic Alliance Agreement (the “SIC Agreement”) with Seminole Indian Company (“SIC”), a company controlled
by Chief James E. Billie and Craig Talesman. The purpose and intent of the SIC Agreement is to combine the resources and talents
of the Company 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. To date there have been no revenues pursuant to the SIC and there are no pending contracts or
agreements. Significant Accounting Policies Basis of Presentation The accompanying unaudited, condensed
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information, and the Securities and Exchange Commission
(“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However,
in the opinion of management, the accompanying interim condensed consolidated financial statements reflect all normal recurring
adjustments necessary to present fairly the Company’s consolidated financial position as of September 30, 2018 and the consolidated
results of operations and cash flows for the periods presented. The condensed consolidated results of operations for interim periods
are not necessarily indicative of the results of operations to be expected for any subsequent interim period or for the fiscal
year ended December 31, 2018. The accompanying unaudited consolidated financial statements and notes thereto should be read in
conjunction with the audited consolidated financial statements for the year ended December 31, 2017 included in the Company’s
Form 10-K, which was filed with the SEC on March 1, 2018 as amended on March 5th 2018. 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 September 30, 2018, the Company had no cash, a working capital
deficit of $586,914 and an accumulated deficit of $1,988,154 and further losses are anticipated in the development of its business,
raising substantial doubt about the Company’s 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 to continue to provide support services and advances until sufficient
capital is raised. The advances are due on demand and are non-interest bearing. 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 September 30, 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. Fair Value Measurement The Company measures fair value as the price
that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market
participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation
methodologies in measuring fair value as follows: Level 1. Valuations based on quoted prices in active markets for
identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with
Level 1 inputs. Level 2. Valuations based on quoted prices for similar assets or
liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable
or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets
or liabilities valued with Level 2 inputs. Level 3. Valuations based on inputs that are supported by little
or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities
valued with Level 3 inputs. Fair Value of Financial Instruments The carrying value of cash approximates its
fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company
is not exposed to significant interest or credit risks arising from these financial instruments. 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 loss 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. Following is the computation of basic and diluted
net loss per share for the three and nine month periods ended September 30, 2018 and 2017:
Three Months Ended Nine Months Ended
September 30, September 30,
2018 2017 2018 2017
Basic and Diluted LPS Computation
Numerator:
Loss available to common stockholders $ (63,983 ) (48,181 ) $ (295,284 ) $ (112,067 )
Denominator:
Weighted average number of common shares outstanding 42,021,013 39,216,665 40,161,720 39,216,665
Basic and diluted LPS $ — $ — $ (0.01 ) $ — 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 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 Company’s 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. Reclassifications Certain amounts in the 2017 condensed consolidated
financial statements have been reclassified to conform to the 2018 condensed consolidated financial statement presentation. |
