| GENERAL | NOTE 1 – GENERAL Organization TurnKey Capital, Inc. (“TKCI”, “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. 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 was
inactive in 2020 and 2019, and Turnkey Home Buyers USA, Inc. which was formed in 2014 and was inactive in 2020 and 2019. The Company
does not have any paid employees however, the officers and directors continue to work to further the Company’s business objectives. 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 condensed 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
condensed consolidated financial position as of March 31, 2020 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, 2020. The accompanying
unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 2019 included in the Company’s Form 10-K, which was filed with the SEC
on April 1, 2020. On August 28, 2019, the Company’s Board of Directors approved
a 1-for-100 Reverse Split. On September 13, 2019, the Company effected the Reverse Split, reducing
the number of common shares outstanding from 42,264,665 to 422,699, of which approximately 25% was controlled by related parties.
As a result of the Reverse Split, every 100 shares of issued and outstanding common stock were combined into one issued and outstanding
share of common stock, without any change in the par value per share. All prior year share amounts and per share calculations have
been retrospectively adjusted to reflect the impact of this reverse stock split and to provide data on a comparable basis. Such
restatements include calculations regarding the Company’s weighted average shares and loss per share. Subsequent Events Management has evaluated events occurring subsequent to the condensed
consolidated balance sheet date, through May 8, 2020, which is the date the condensed consolidated financial statements were issued,
determining no events require disclosure in these condensed consolidated financial statement, with the exception of the matter
described in Note 6. Going Concern The accompanying condensed consolidated financial statements have
been prepared assuming the Company will continue as a going concern. As of March 31, 2020, the Company had $88 of cash and an accumulated
deficit of $2,466,500 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 Holdings, Inc (“TBG”), a related party, to continue to provide support services and advances
until sufficient capital is raised. The advances are due on demand and are non-interest bearing. The condensed consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty. Income Taxes The Company accounts for income taxes using the liability method
prescribed by GAAP. 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, 2020. 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.
The Company had no revenue during the three months ended March 31, 2020 and 2019. 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, accounts payable, accrued liabilities
and related party advances approximates their fair values 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 of common stock 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 of common stock outstanding plus the number of common shares that would be issued assuming the exercise of all potentially
dilutive common shares of common stock 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 month periods ended March 31, 2020 and 2019:
Three Months Ended
March 31,
2019 2018
Basic and Diluted LPS Computation
Numerator:
Loss available to common stockholders' $ (118,552 ) $ (71,847 )
Denominator:
Weighted average number of common shares outstanding 422,699 422,699
Basic and diluted LPS $ (0.28 ) $ (0.17 ) 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) 291,000 291,000 Recent Accounting Pronouncements On December 18, 2019, the
Financial Accounting Standards Board issued the Accounting Standards Update 2019-12 “Income taxes (Topic 740)—Simplifying
the accounting for income taxes”. The amendments in this update simplify the accounting for income taxes by removing certain
exceptions to the general principles and also improve consistent application by clarifying and amending existing guidance, such
as franchise taxes and interim recognition of enactment of tax laws or rate changes. The amendments in this update are effective
for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted.
The Company is assessing the effects that the adoption of this accounting pronouncement may have on its condensed consolidated
financial statements. Reclassifications Certain amounts in the condensed consolidated financial statements
were reclassified to allow for consistent presentation for the years presented. |
