0001213900-20-028375.txt : 20201026 0001213900-20-028375.hdr.sgml : 20201026 20200925112900 ACCESSION NUMBER: 0001213900-20-028375 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 36 CONFORMED PERIOD OF REPORT: 20180930 FILED AS OF DATE: 20200925 DATE AS OF CHANGE: 20200925 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKEN COMMUNITIES LTD. CENTRAL INDEX KEY: 0001683252 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 813709511 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55688 FILM NUMBER: 201197791 BUSINESS ADDRESS: STREET 1: 136-20 38TH AVENUE, SUITE 9C CITY: FLUSHING STATE: NY ZIP: 11354 BUSINESS PHONE: 2025365191 MAIL ADDRESS: STREET 1: 136-20 38TH AVENUE, SUITE 9C CITY: FLUSHING STATE: NY ZIP: 11354 FORMER COMPANY: FORMER CONFORMED NAME: Pacific Media Group Enterprises, Inc. DATE OF NAME CHANGE: 20160829 10-Q 1 f10q0918_tokencommunities.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period ended September 30, 2018

 

Commission File No.
000-55688

 

Token Communities,  Ltd.
(Name of small business issuer in its charter)

 

Delaware   81-3709511

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

136-20 38th Avenue, Suite 9C

Flushing, NY 11354

(Address of principal executive offices)

 

(631) 397-1111

(Issuer’s telephone number)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  ☐   No ☒

 

Indicate by check mark whether the registrant has submitted electronically 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 and post such files). Yes  ☐   No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

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. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of September 23, 2020, the Company had 2,015,406,000 outstanding shares of its common stock, par value $0.0001.

 

 

 

 

 

 

Special Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, of Part I of this report include forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

 

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

 

 

 

 

TABLE OF CONTENTS

   

PART I – FINANCIAL INFORMATION    
       
Item 1. Financial Statements    
  Condensed Consolidated Balance Sheets (unaudited)   1
  Condensed Consolidated Statements of Operations (unaudited)   2
  Condensed Consolidated Statements of Stockholders’ Deficit (unaudited)   3
  Condensed Consolidated Statements of Cash Flows (unaudited)   4
  Notes to Condensed Consolidated Financial Statements (unaudited)   5-14
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   15
Item 3. Quantitative and Qualitative Disclosures about Market Risk   17
Item 4. Controls and Procedures   17
       
PART II – OTHER INFORMATION    
       
Item 1. Legal Proceedings   19
Item 1A. Risk Factors   19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   19
Item 3. Defaults Upon Senior Securities   19
Item 4. Mine Safety Disclosures   20
Item 5. Other Information   20
Item 6. Exhibits   20
Signatures   21

    

i

 

 

TOKEN COMMUNITIES LTD. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

As of September 30, 2018

 

 

   September 30,
2018
   June 30,
2018
 
      (audited) 
ASSETS        
Assets        
Current Assets:        
Cash and equivalents  $312   $312 
Accounts receivable, net   8,252    250,914 
Prepaid expenses and other current assets   9,555    17,630 
Deposits   0    171,942 
Total current assets   18,119    440,798 
           
Other assets   19,817    18,980 
TOTAL ASSETS  $37,936   $459,778 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts payable  $449,260   $427,883 
Accrued expenses   101,507    215,351 
Due to related parties   231,772    125,909 
Derivative liability   2,735,955    3,178,494 
Total current liabilities   3,518,494    3,947,637 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, $.0001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding   -      
Common stock, $.0001 par value; 300,000,000 shares authorized;270,000,000 shares issued and outstanding   27,000    27,000 
Additional paid-in capital   175,594    175,594 
Other comprehensive income   19,654    5,411 
Accumulated deficit   (3,702,806)   (3,695,864)
Total stockholders’ deficit   (3,480,558)   (3,487,859)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $37,936   $459,778 

 

The accompanying notes are an integral part of these financial statements.

 

1

 

 

TOKEN COMMUNITIES LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the three months ended September 30, 2018 and 2017

 

 

   September 30,
2018
   September 30,
2017
 
         
Revenue  $150,000        0 
           
Operating expenses:          
General and administrative expenses   539,481    0 
Research and development   60,000    0 
Total operating expenses   599,481    0 
           
Loss from operations   (449,481)   0 
           
Other income          
Change in fair value of derivative liability   442,539    0 
           
Loss before provision for income tax   (6,942)   0 
           
Provision for income tax   0    0 
           
Net loss  $(6,942)   0 
           
Comprehensive loss:          
Net loss  $(6,942)   0 
Foreign currency translation gain   0    0 
Comprehensive income (loss):  $(6,942)   0 
           
Weighted average common shares outstanding - basic and diluted   270,000,000      
           
Loss per common share - basic and diluted  $(0.00)     

 

The accompanying notes are an integral part of these financial statements.

 

2

 

 

TOKEN COMMUNITIES LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

For the Period from Inception (October 13, 2017) to September 30, 2018

 

 

   Common Stock   Additional Paid-in   Comprehensive   Accumulated   Stockholders’  
   Shares   Amount    Capital    Income    Deficit    Deficit  
                         
Inception, October 13, 2017   -   $-   $-   $-   $-   $- 
                               
Common stock issued to founders for services   168,750,000    16,875    36,396    -    -    53,271 
Common stock sold to investors   4,050,000    405    206,025    -    -    206,430 
Shares issued on recapitalization   97,200,000    9,720    (66,827)   -    -    (57,107)
Fair value of derivative liability   -    -         -    (3,338,540)   (3,338,540)
Foreign currency translation gain   -    -         5,411    -    5,411 
Net loss   -    -    -    -    (357,324)   (357,324)
                               
Balance, June 30, 2018   270,000,000   $27,000   $175,594   $5,411   $(3,695,864)  $(3,487,859)
Foreign currency translation gain   -    -         14,243    -    14,243 
Net loss   -    -    -    -    (6,942)   (6,942)
                               
Balance, September 30, 2018   270,000,000   $27,000   $175,594   $19.654   $(3,702,806)   (3,480,558)

 

The accompanying footnotes are an integral part of these financial statements.

 

3

 

 

TOKEN COMMUNITIES LTD. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three months ended September 30, 2018

 

 

   September 30,
2018
   September 30,
2017
 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net loss  $(6,942)         0 
Adjustments to reconcile net loss to net cash used in operating activities:   (442,539)     
Change in derivative liability          
Changes in operating assets and liabilities:          
Accounts receivable   242,662    0 
Prepaid expenses and other current assets   8,075    0 
Deposits   171,942    0 
Accounts payable   21,377    0 
Accrued expenses   (113,844)   0 
Net cash used in operating activities   (119,269)   0 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Payment for other assets   (837)   0 
Net cash used in investing activities   (837)   0 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Advances from related parties, net   105,863    0 
Proceeds from sale of common stock   0    0 
Net cash provided by financing activities   105,863    0 
           
Effect of exchange rate changes on cash and equivalents   14,243    0 
           
NET DECREASE IN CASH AND EQUIVALENTS   0    0 
           
CASH AND EQUIVALENTS, BEGINNING OF PERIOD   312    0 
           
CASH AND EQUIVALENTS, END OF PERIOD  $312    0 
           
CASH PAID FOR:          
Interest  $-      
Income taxes  $-      

 

The accompanying notes are an integral part of these financial statements.

 

4

 

 

TOKEN COMMUNITIES LTD. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 - Organization and Basis of Presentation

 

Organization and Line of Business

 

Token Communities Ltd. (the “Company” or “Limited”) was organized under the laws of the State of Delaware on March 6, 2014, under the name Pacific Media Group Enterprises, Inc.  On April 7, 2017, the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name to Extract Pharmaceuticals Inc. On January 26, 2018, the Board of Directors adopted an Amendment to its Articles, changing its name to Token Communities Ltd.  The Company researches and creates white paper analysis for companies regarding block chain technology, and also operates the “Lukki Exchange,” including all client lists, intellectual property related to the brand “Lukki” (see discussion in Note 6 below).

 

Token Communities PLC (“PLC”) was incorporated in Gibraltar on October 13, 2017. PLC is a Gibraltar Financial Advisory firm which specializes in Blockchain, Artificial Intelligence and Fin-Tech investment in incubating as well as advising and managing qualified companies in the blockchain and distributed ledger technologies arena, including smart contracts, TGEs, DApps, and more. Advisement comprises the authoring of industry standard White Papers, technical aspects, design and implementation of market strategies, business appraisal and more. All potential clients are vetted and Anti-Money Laundering / Know-Your-Customer approved. The Company is also developing its own software technology with its dedicated team of developers.

 

On February 26, 2018, the Company entered into an Acquisition and Share Exchange Agreement with PLC.  Under the Agreement, the Company’s majority shareholder returned 19,266,000 common shares to treasury, and at closing 100% of the issued and outstanding shares of PLC were acquired by the Company, for 172,800,000 newly issued common shares equal to 64% of the Company’s outstanding common stock as of the closing date, thus making the stockholders of PLC the majority stockholders of the Company. The transaction closed on May 18, 2018.  This transaction was accounted for as a reverse acquisition under the purchase method of accounting since PLC obtained control of Limited. Accordingly, the merger of PLC into Limited was recorded as a recapitalization of PLC, PLC being treated as the continuing entity. The transaction was treated as a recapitalization and not as a business combination. Limited had 116,466,000 shares outstanding prior to the merger. At the time of the merger, Limited’s principal stockholder surrendered 19,266,000 shares, which were cancelled.  After the merger the total number of Limited shares outstanding was 270,000,000.

 

The historical financial statements presented are the financial statements of PLC. The merger agreement was treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the date of the merger, the net liabilities of the legal acquirer, Limited, were $57,107.

 

The combined entities are referred to hereafter as the “Company.”

 

5

 

 

Basis of Presentation

 

The accompanying consolidated financial statements (“CFS”) were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Limited’s functional currency is the United States Dollars (“$” or “USD”) and Limited’s wholly-owned subsidiary, PLC’s functional currency is the Pound Sterling (“GBP”).  

 

Going Concern

 

The accompanying financial statements were prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern.  The Company had an accumulated deficitkholders’ deficit of $3,702,806 at September 30, 2018 and has incurred losses from operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or increase revenues to generates sufficient positive cash flows from operations.  

 

The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

 

Foreign Currency Translation

 

The accounts of Limited are maintained in USD and the accounts of PLC are maintained in GBP. The accounts of PLC are translated into USD in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830 Foreign Currency Transaction, with the GBP as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and comprehensive income (loss). The following table details the exchange rates used for the periods.

 

Period end: GBP to USD exchange rate  $1.3029 
Average period:  GBP to USD exchange rate  $1.3026 

 

6

 

 

Note 2 – Summary of Significant Accounting Policies

 

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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Principles of Consolidation

 

The accompanying financial statements include the accounts of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.

 

Cash Equivalents

 

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

 

Accounts Receivable

 

Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified.  As of September 30, 2018, the allowance for uncollectible accounts receivable was $250,000.

 

Derivative Financial Instruments

 

The Company evaluates its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30,2018, the Company’s only derivative financial instruments were outstanding warrants since the Company did not have enough unissued authorized shares to satisfy the exercise of all the outstanding warrants.  

 

7

 

 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate their fair values due to their short maturities.

 

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.

 

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

 

The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. As of September 30, 2018, the Company’s stock price used in the Black-Scholes-Merton pricing model was based on recent sales of the Company’s common stock to unrelated investors since there no market price for the Company’s common stock at September 30, 2018. The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to fair value of derivatives.

 

8

 

 

At September 30, 2018, the Company identified the following liabilities that are required to be presented on the balance sheet at FV:

 

   Fair Value   Fair Value Measurements at 
   As of   September 30, 2018 
  September 30,   Using Fair Value Hierarchy 
Description  2018   Level 1   Level 2   Level 3 
Derivative liability - warrants  $2,735,955   $     -    2,735,955        - 
                     
Total  $2,735,955   $-   $2,735,955   $- 

 

Revenue Recognition

 

ASU No. 2014-09Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on July 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As   sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations, this did not   result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.

 

Revenue from advisory fees and related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements:

 

executed contract(s) with our customer(s) that we believe is legally enforceable;
identification of performance obligation in the respective contract;
determination of the transaction price for each performance obligation in the respective contract;
allocation of the transaction price to each performance obligation; and
recognition of revenue only when the Company satisfies each performance obligation.

 

These five elements, as applied to the Company’s only revenue category, are summarized below:

 

Advisory fees and related services – the Company charges advisory fees for a suite of one to two dozen services that include advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting up website, making videos or animations describing the company and its business, engaging in public relations, and introducing potential investors.

 

9

 

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

Basic and Diluted Earnings (loss) Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted.  Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.

 

Foreign Currency Transactions and Comprehensive Income

 

U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s subsidiary is the GBP. Translation gain of $19,654 at September 30, 2018 is classified as an item of other comprehensive income in the stockholders’ deficit section of the balance sheet.

 

10

 

 

Statement of Cash Flows

 

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

 

Recent Accounting Pronouncements

 

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.

 

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.

 

In October 2016, the FASB issued ASU 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. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.

 

In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.

 

11

 

 

In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.  ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.  The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.   Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.  Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.  The Company adopted this ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements.

 

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

 

Management’s Evaluation of Subsequent Events

 

The Company evaluates events that have occurred after the balance sheet date of September 30, 2018, through the date which the financial statements were issued. Based upon the review, other than described in Note 6– Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

 

Note 3 – Stockholders’ Equity

 

As of September 30, 2018, the authorized share capital of the Company consists of 300,000,000 shares of common and 20,000,000 shares of preferred stock with $0.0001 par value. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

 

12

 

 

Prior to the merger transaction described in Note 1, the Company had 116,466,000 shares of common stock outstanding. At the time of the merger, a principal shareholder surrendered 19,266,000 shares of common stock, which were cancelled. Also, at the time of the merger, 172,800,000 shares of common stock were issued for all of the issued and outstanding shares of PLC.  The total shares outstanding at September 30, 2018 was 270,000,000. See Note 1 above.

 

Prior to the merger transaction, the Company had 135,000,000 warrants outstanding consisting of 27,000,000 “A Warrants” each convertible into one share of common stock at $0.074; 27,000,000 “B Warrants” each convertible into one share of common stock at an exercise price of $0.093; 27,000,000 “C  Warrants” each convertible into one share of common stock at $0.111; 27,000,000 “D Warrants” each convertible into one share of common stock at $0.129; and 27,000,000 “E Warrants” each convertible into one share of common stock at $0.148. All warrants are still outstanding as of September 30, 2018 and are exercisable at any time prior to August 30, 2019.  See Note 7.

 

Following the reverse merger last year a number of warrants which had previously been issued have been under review by the Company to ensure their original terms and conditions were not out of synchronization with the business plans overall of the newly restructured company going forward. One warrant holder of A Warrants requested the original terms of his warrants be amended to accommodate the anticipated rise in value execution of the business plan would be expected to have on the Company value. Increases in the warrant strike price benefits the Company as increased funds are raised and placed directly in the company upon the exercise of the warrant. Accordingly, the Company consented to vary the strike price on an increasing sliding scale from $1.05 to $2.00. Following a review post the recent share fluctuations management and the other warrant holders agreed it is in the best interests of the Company, stock and warrant holders that the remaining warrants are also amended to follow the precedent set in respect of the previously amended warrant conditions. With the exception of the A Class warrants already amended as detailed above the remaining warrants have been extended to expire on August 30, 2022. This was finalized on February 21, 2019.

 

Note 4 – Related Party Transactions

 

Amounts due to a related party are for advances made by a stockholder of the Company. The balance due of $231,207 at September 30, 2018, is presented as due to related parties in the accompanying consolidated balance sheet.  The amounts due are non-interest bearing and payable upon demand.

 

Note 5 – Commitments and Contingencies

 

The Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on the Company’s financial statements in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect the outcome of any matter pending against the Company is likely to have a material effect on the Company’s financial statements.

 

13

 

 

On July 6, 2018 Token Communities PLC entered into a binding agreement to purchase 75% of new issued ordinary shares of i-Deal Corp Limited, which has developed a communication platform for Publicly Listed, Private companies and investors around the globe.

 

In order for the transaction to become effective it was acknowledged by both parties that Token Communities Limited needs to raise the required funding to finance the transaction. Both parties agreed that the longstop date for the first closing ($500,000) will take place by bank transfer no later than mid-March 2019. The following payments will be due 90 days later (i.e. on or before May 31, 20219) as follows: $2,250,000 by way of bank transfer and $2,250,000 by the issue of 2,250,000 new shares in Token Communities Limited. As of the date of this release the transaction had not yet closed, and no payments were made. There is no termination agreement in place. The Company has taken the position that the agreement has lapsed. No provision has been made in these financial statements for any liability related to completion of the agreement.

 

Note 6 – Subsequent Events

 

On February 19, 2019, the Company and the holders of 81,000,000 Warrants executed an Amendment and Modification Agreement, changing the warrant exercise prices from $0.074 to $0.148, to $1.90 for all classes of warrants it held. On the same day the Company and the holders of 43,200,000 warrants split equally between Class B, C, D and E (10,800,000 per class) executed an Amendment and Modification Agreement , changing the warrant exercise price to a phased strike price ranging between $1.05 and $2.00. Previously the holder of 10,800,000 “A Warrants” also entered into an amendment and modification agreement, changing the warrant strike price ranging from $1.05 to $2.00

 

On April 2, 2019, the Company executed an Acquisition and Exchange Agreement with Lalit Kumar Verma and Manickam Mahalingam, who together controlled 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Agreement, Messrs. Verma and Mahalingam exchanged 96,001 shares, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 new issue treasury shares issued by the Company, representing 95% ownership of the Company.

 

On June 20, 2019, the Company executed a Mutual Rescission and Release Agreement, mutually rescinding the previously disclosed Acquisition and Exchange Agreement with Fortress Ventures LLC represented by Lalit Kumar Verma and with ABT Investments India Pvt Ltd represented by Manickam Mahalingam, who together control 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Acquisition and Exchange Agreement, Messrs. Verma and Mahalingam were to exchange 96,001 shares of common stock, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 newly issued shares of common stock of the Company. The Mutual Rescission and Release agreement executed and became effective as of June 20, 2019. As a consequence of its execution and the rescinding of the Share Exchange and Acquisition Agreement, the Company did not issue the 3,530,000,000 shares of common stock.

 

On July 14, 2020 the “Company” entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with American Software Capital, Inc. (“ASC”). Pursuant to the Asset Purchase Agreement, in exchange for the issuance by the Company of 1,745,406,000 shares of Common Stock of the Company plus transfer of 3,499,799,467.37149 iRide Tokens owned by the Company to ASC, the Company acquired all technology and software code (and all copies of code) related to or required to operate the “Lukki Exchange,” including all client lists, intellectual property related to the brand “Lukki” (including files of art, logos, web designs, etc.) as well as ownership of the Lukki.io website and related design codes. As a condition to the closing of the transactions contemplated in the Asset Purchase Agreement shareholders agreed to cancel an aggregate of 174,540,600 shares of Common Stock of the Company, and the holders of the Company’s Series A, B, C, D and E warrants agreed to the cancellation of all such warrants.

 

14

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Overview

 

Token Communities Ltd. (the “Company” or “Limited”) researches and creates white paper analysis for companies regarding block chain technology, and also operates the “Lukki Exchange,” including all client lists, intellectual property related to the brand “Lukki”.

 

Critical Accounting Policies

 

Our significant accounting policies are more fully described in the notes to our financial statements included herein for the period ended September 30, 2020.

 

New and Recently Adopted Accounting Pronouncements

 

Any new and recently adopted accounting pronouncements are more fully described in Note 2 to our financial statements included herein for the period ended September 30, 2018.

 

Results of Operations

 

Financial Condition and Changes in Financial Condition

 

Overall Operating Results:

 

Comparison of the Three Months Ended September 30, 2018 with the Three Months Ended September 30, 2017

 

Revenue. For the three months ended September 30, 2018, we generated revenues of $150,000 as compared to $0 for the three months ended September 20, 2017. The increase of revenue was due primarily to commencement of operations.

 

Operating Expenses. For the three months ended September 30, 2018 Operating Expenses increased to $599,481 from $0 for the three months ended September 30, 2018. The increase was mainly due to the Company’s blockchain operations.

  

General and Administrative Expenses. Our general and administrative expenses increased to $539,481 for the three months ended September 30, 2018 from $0 for the three months ended September 30, 2017. The increase was primarily a result of commencement of operations and write off of bad debts during the current period.

 

15

 

 

Other Income. For the three months ended September 30, 2018, other income was $442,539, compared to other expense of $0 for the three months ended September 30, 2017. The increase in other income was primarily due to the change in derivative liability during the period.

 

Net Loss. The Company’s net loss was $6,942 compared to $0 for the three months ended September 30, 2018 and 2017, respectively. The increase in net loss was mainly due to commencement of operations with ongoing expenses. The loss was reduced by a decrease in the derivative liability.

 

Liquidity and Capital Resources

 

We are an early stage company and have generated insufficient revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

The Company had $312 in cash as of September 30, 2018. The Company has negative working capital of approximately $3,500,375, and total stockholders’ deficit of $3,480,558 as of September 30, 2018.  As of September 30, 2018, the Company has yet to achieve profitable operations, and while the Company hopes to achieve profitable operations in the future, if not it may need to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s principal sources of liquidity have been cash provided by operating activities, as well as its ability to raise capital. The Company’s operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses, the Company may not be able to maintain profitability. The Company’s ability to continue in existence is dependent on the Company’s ability to achieve profitable operations.

 

Should we not be able to fulfill our cash needs through the increase of revenue we will need to raise money through outside investors through convertible notes, debt or similar instrument(s), including but not limited to the current outstanding convertible notes. The Company has no committed external source of funds, and there is no guarantee we would be able to raise such funds. The Company plans to pay off current liabilities through sales and increasing revenue through sales of Company services and or products, or through financing activities as mentioned above.

 

Operating Activities

 

Cash flow used in operating activities – Net cash used in operating activities was ($119,269) for the three months ended September 30, 2018 primarily as a result of commencement of operations of the Company.

   

16

 

 

Investing Activities

 

Cash flow from investing activities – Net cash used in investing activities was ($837) for the three months ended September 30, 2018 primarily as a result of purchase of other assets.

 

Financing Activities

 

Cash flow from financing activities – During the three months ended September 30, 2018, our financing activities provided cash of $105,863 primarily from commencement of operations.

 

Off Balance Sheet Arrangements

 

We do not have any significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Recent Accounting Pronouncements

 

During the three months ended September 30, 2018, there were no accounting standards and interpretations issued which are expected to have a material impact on the Company’s financial position, operations or cash flows.

  

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We have performed an evaluation under the supervision and with the participation of our management, including our President and Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2018. Based on that evaluation, our management, including our President and CEO and CFO, concluded that our disclosure controls and procedures were not effective as of September 30, 2018 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure due to the material weaknesses described below.

 

17

 

 

Based on our evaluation under the framework described above, our management concluded that we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

 

1)inadequate segregation of duties consistent with control objectives.

 

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

 

A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

Changes in Internal Control over Financial Reporting

 

During the quarter ended September 30, 2018, there were no changes in our internal control over financial reporting identified in connection with management’s evaluation of the effectiveness of our internal control over the financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

 

18

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Neither the Company nor its property is a party to any pending legal proceeding.

 

Item 1A. Risk Factors

 

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

  

Item 3. Defaults Upon Senior Securities

 

None.

 

19

 

 

Item 4. Mine Safety Disclosures

 

None.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit

Number

  Name of Exhibit
31.1   Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)
     
31.2   Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)
     
32.1   Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (1)
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
101.DEF   XBRL Taxonomy Extension Definition Linkbase
101.LAB   XBRL Taxonomy Extension Label Linkbase
101.PRE   XBRL Taxonomy Extension Presentation Linkbase

 

 

(1)Filed herewith.  In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except to the extent that the registrant specifically incorporates it by reference.

 

20

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  TOKEN COMMUNITIES LTD.
     
Dated: September 25, 2020 By: /s/ David Chen
    David Chen
    Chief Executive Officer, Director

 

Dated: September 25, 2020 By: /s/ Peter Chen
    Peter Chen
    Chief Financial Officer, Director

 

21

 

EX-31.1 2 f10q0918ex31-1_tokencommun.htm CERTIFICATION

EXHIBIT 31.1

 

CHIEF EXECUTIVE OFFICER CERTIFICATION

 

I, David Chen, certify that:

 

1.               I have reviewed this Quarterly Report on Form 10-Q of Token Communities Ltd.;

 

2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

 

4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

 5.            The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  September 25, 2020

 

 

/s/ David Chen    
David Chen    
Chief Executive Officer    
(Principal Executive Officer)    

 

 

EX-31.2 3 f10q0918ex31-2_tokencommun.htm CERTIFICATION

EXHIBIT 31.2

 

CHIEF FINANCIAL OFFICER CERTIFICATION

 

I, Peter Chen, certify that:

 

1.               I have reviewed this Quarterly Report on Form 10-Q of Token Communities Ltd.;

 

2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

 

4.               The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 

 

 5.            The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date:  September 25, 2020

 

 

/s/ Peter Chen    
Peter Chen    
Chief Financial Officer    
(Principal Financial Officer)    

 

 

EX-32.1 4 f10q0918ex32-1_tokencommun.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

The undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge, the Quarterly Report on Form 10-Q for the period ended September 30, 2018 of Token Communities Ltd. (the “Company”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in such report.

 

Very truly yours,

 

 

/s/ Peter Chen  
Peter Chen  
Chief Financial Officer  
   
   
/s/ David Chen  
David Chen  
Chief Executive Officer  
   
   
Dated: September 25, 2020  

 

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Token Communities Ltd. and will be furnished to the Securities and Exchange Commission or its staff upon request.

 

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margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 1 - Organization and Basis of Presentation </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Organization and Line of Business</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Token Communities Ltd. (the &#x201c;Company&#x201d; or &#x201c;Limited&#x201d;) was organized under the laws of the State of Delaware on March 6, 2014, under the name Pacific Media Group Enterprises, Inc. &#xa0;On April 7, 2017, the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name to Extract Pharmaceuticals Inc.&#xa0;On January 26, 2018, the Board of Directors adopted an Amendment to its Articles, changing its name to Token Communities Ltd. &#xa0;The Company researches and creates white paper analysis for companies regarding block chain technology, and also operates the &#x201c;Lukki Exchange,&#x201d; including all client lists, intellectual property related to the brand &#x201c;Lukki&#x201d; (see discussion in Note 6 below).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Token Communities PLC (&#x201c;PLC&#x201d;) was incorporated in Gibraltar on October 13, 2017. PLC is a Gibraltar Financial Advisory firm which specializes in Blockchain, Artificial Intelligence and Fin-Tech investment in incubating as well as advising and managing qualified companies in the blockchain and distributed ledger technologies arena, including smart contracts, TGEs, DApps, and more. Advisement comprises the authoring of industry standard White Papers, technical aspects, design and implementation of market strategies, business appraisal and more. All potential clients are vetted and Anti-Money Laundering / Know-Your-Customer approved. The Company is also developing its own software technology with its dedicated team of developers.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On February 26, 2018, the Company entered into an Acquisition and Share Exchange Agreement with PLC. &#xa0;Under the Agreement, the Company&#x2019;s majority shareholder returned 19,266,000 common shares to treasury, and at closing 100% of the issued and outstanding shares of PLC were acquired by the Company, for 172,800,000 newly issued common shares equal to 64% of the Company&#x2019;s outstanding common stock as of the closing date, thus making the stockholders of PLC the majority stockholders of the Company. The transaction closed on May 18, 2018. &#xa0;This transaction was accounted for as a reverse acquisition under the purchase method of accounting since PLC obtained control of Limited. Accordingly, the merger of PLC into Limited was recorded as a recapitalization of PLC, PLC being treated as the continuing entity. The transaction was treated as a recapitalization and not as a business combination. Limited had 116,466,000 shares outstanding prior to the merger. At the time of the merger, Limited&#x2019;s principal stockholder surrendered 19,266,000 shares, which were cancelled. &#xa0;After the merger the total number of Limited shares outstanding was 270,000,000.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The historical financial statements presented are the financial statements of PLC. The merger agreement was treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the date of the merger, the net liabilities of the legal acquirer, Limited, were $57,107.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The combined entities are referred to hereafter as the &#x201c;Company.&#x201d;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basis of Presentation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying consolidated financial statements (&#x201c;CFS&#x201d;) were prepared in conformity with accounting principles generally accepted in the United States (&#x201c;U.S. GAAP&#x201d;). Limited&#x2019;s functional currency is the United States Dollars (&#x201c;$&#x201d; or &#x201c;USD&#x201d;) and Limited&#x2019;s wholly-owned subsidiary, PLC&#x2019;s functional currency is the Pound Sterling (&#x201c;GBP&#x201d;). &#xa0;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Going Concern</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying financial statements were prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. <font>&#xa0;The Company had an accumulated deficitkholders&#x2019; deficit of $3,702,806 at September 30, 2018 and has incurred losses from operations.&#xa0; </font>These factors raise substantial doubt about the Company&#x2019;s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or increase revenues to generates sufficient positive cash flows from operations. &#xa0;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign Currency Translation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accounts of Limited are maintained in USD and the accounts of PLC are maintained in GBP. The accounts of PLC are translated into USD in accordance with Financial Accounting Standards Board (&#x201c;FASB&#x201d;) Accounting Standards Codification (&#x201c;ASC&#x201d;) Topic 830 <i>Foreign Currency Transaction</i>, with the GBP as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders&#x2019; equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with ASC Topic 220, <i>Comprehensive Income</i>. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and comprehensive income (loss). The following table details the exchange rates used for the periods.</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Period end: GBP to USD exchange rate</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1.3029</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Average period: &#xa0;GBP to USD exchange rate</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1.3026</td><td style="text-align: left">&#xa0;</td></tr> </table><br/> 19266000 1.00 172800000 0.64 116466000 19266000 57107 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">Period end: GBP to USD exchange rate</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1.3029</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Average period: &#xa0;GBP to USD exchange rate</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1.3026</td><td style="text-align: left">&#xa0;</td></tr> </table> 1.3029 1.3026 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 2 &#x2013;&#xa0;Summary of Significant Accounting Policies </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use of Estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company&#x2019;s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principles of Consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying financial statements include the accounts of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash Equivalents</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts Receivable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. &#xa0;As of September 30, 2018, the allowance for uncollectible accounts receivable was $250,000.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Derivative Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company evaluates its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. 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FASB ASC Topic 825, <i>Financial Instruments</i>, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. 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text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">Total</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue Recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>ASU No.&#xa0;2014-09</i>,&#xa0;<i>Revenue from Contracts with Customers </i>(&#x201c;Topic 606&#x201d;), became effective for the Company on July 1, 2018. The Company&#x2019;s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the &#x201c;modified retrospective&#x201d; transition method for open contracts for the implementation of&#xa0;<i>Topic 606. </i>As <i>&#xa0; </i>sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations, this did not <i>&#xa0; </i>result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under&#xa0;<i>Topic 605, Revenue Recognition</i>.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue from advisory fees and related services are recognized under&#xa0;<i>Topic 606</i>&#xa0;in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">executed contract(s) with our customer(s) that we believe is legally enforceable;</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">identification of performance obligation in the respective contract;</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">determination of the transaction price for each performance obligation in the respective contract;</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">allocation of the transaction price to each performance obligation; and</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">recognition of revenue only when the Company satisfies each performance obligation.</font></td> </tr></table><br/><p style="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These five elements, as applied to the Company&#x2019;s only revenue category, are summarized below:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory fees and related services &#x2013;&#xa0;the Company charges advisory fees for a suite of one to two dozen services that include advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting up website, making videos or animations describing the company and its business, engaging in public relations, and introducing potential investors<font>.</font></font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income Taxes</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company accounts for income taxes in accordance with ASC Topic 740, <i>Income Taxes</i>. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will&#xa0;not be realized. &#xa0;Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under ASC 740, a tax position is recognized as a benefit only if it is &#x201c;more likely than not&#x201d; that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#x201c;more likely than not&#x201d; test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic and Diluted Earnings (loss) Per Share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earnings per share is calculated in accordance with ASC Topic 260, <i>Earnings Per Share</i>. Basic earnings per share (&#x201c;EPS&#x201d;) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. &#xa0;Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign Currency Transactions and Comprehensive Income</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company&#x2019;s subsidiary is the GBP. Translation gain of $19,654 at September 30, 2018 is classified as an item of other comprehensive income in the stockholders&#x2019; deficit section of the balance sheet.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Statement of Cash Flows</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash flows from the Company&#x2019;s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recent Accounting Pronouncements</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2017, the FASB issued Accounting Standards Update (&#x201c;ASU&#x201d;) 2017-01, <i>Business Combinations (Topic&#xa0;805) Clarifying the Definition of a Business</i>. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December&#xa0;15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In November 2016, the FASB issued ASU&#xa0;2016-18, <i>Statement of Cash Flows (Topic 230): Restricted Cash, </i>which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. 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The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In August 2016, the FASB issued ASU&#xa0;2016-15 <i>,&#xa0;Statement of Cash Flows (Topic&#xa0;230), Classification of Certain Cash Receipts and Cash Payments</i>. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after&#xa0;December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU 2016-02, <i>Leases (Topic&#xa0;842)</i>. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December&#xa0;15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In May 2014, FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers</i>.&#xa0; ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.&#xa0; ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.&#xa0; The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.&#xa0; ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.&#xa0;&#xa0; Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.&#xa0; Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.&#xa0; The Company adopted this ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#x2019;s Evaluation of Subsequent Events</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company evaluates events that have occurred after the balance sheet date of September 30, 2018, through the date which the financial statements were issued. Based upon the review, other than described in Note 6&#x2013; Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.</font></p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use of Estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company&#x2019;s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principles of Consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying financial statements include the accounts of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash Equivalents</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts Receivable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. &#xa0;As of September 30, 2018, the allowance for uncollectible accounts receivable was $250,000.</font></p> 250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Derivative Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company evaluates its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30,2018, the Company&#x2019;s only derivative financial instruments were outstanding warrants since the Company did not have enough unissued authorized shares to satisfy the exercise of all the outstanding warrants.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair Value of Financial Instruments</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">For certain of the Company&#x2019;s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate their fair values due to their short maturities.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">FASB ASC Topic 820, <i>Fair Value Measurements and Disclosures</i>, requires disclosure of the fair value (&#x201c;FV&#x201d;) of financial instruments held by the Company. FASB ASC Topic 825, <i>Financial Instruments</i>, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</font></td> </tr></table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#x25cf;</td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, <i>Distinguishing Liabilities from Equity</i>, and FASB ASC Topic 815, <i>Derivatives and Hedging</i>.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. As of September 30, 2018, the Company&#x2019;s stock price used in the Black-Scholes-Merton pricing model was based on recent sales of the Company&#x2019;s common stock to unrelated investors since there no market price for the Company&#x2019;s common stock at September 30, 2018. 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text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>Level 3</b></font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">Derivative liability - warrants</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">Total</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue Recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>ASU No.&#xa0;2014-09</i>,&#xa0;<i>Revenue from Contracts with Customers </i>(&#x201c;Topic 606&#x201d;), became effective for the Company on July 1, 2018. The Company&#x2019;s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the &#x201c;modified retrospective&#x201d; transition method for open contracts for the implementation of&#xa0;<i>Topic 606. </i>As <i>&#xa0; </i>sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations, this did not <i>&#xa0; </i>result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. 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font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">These five elements, as applied to the Company&#x2019;s only revenue category, are summarized below:</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: left"> <td style="text-align: left; width: 0.5in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#x25cf;</font></td><td style="text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advisory fees and related services &#x2013;&#xa0;the Company charges advisory fees for a suite of one to two dozen services that include advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting up website, making videos or animations describing the company and its business, engaging in public relations, and introducing potential investors<font>.</font></font></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Income Taxes</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company accounts for income taxes in accordance with ASC Topic 740, <i>Income Taxes</i>. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will&#xa0;not be realized. &#xa0;Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under ASC 740, a tax position is recognized as a benefit only if it is &#x201c;more likely than not&#x201d; that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the &#x201c;more likely than not&#x201d; test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.</font></p> 0.50 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic and Diluted Earnings (loss) Per Share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earnings per share is calculated in accordance with ASC Topic 260, <i>Earnings Per Share</i>. Basic earnings per share (&#x201c;EPS&#x201d;) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. &#xa0;Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign Currency Transactions and Comprehensive Income</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company&#x2019;s subsidiary is the GBP. Translation gain of $19,654 at September 30, 2018 is classified as an item of other comprehensive income in the stockholders&#x2019; deficit section of the balance sheet.</font></p> 19654 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Statement of Cash Flows</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash flows from the Company&#x2019;s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recent Accounting Pronouncements</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2017, the FASB issued Accounting Standards Update (&#x201c;ASU&#x201d;) 2017-01, <i>Business Combinations (Topic&#xa0;805) Clarifying the Definition of a Business</i>. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December&#xa0;15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In November 2016, the FASB issued ASU&#xa0;2016-18, <i>Statement of Cash Flows (Topic 230): Restricted Cash, </i>which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In October 2016, the FASB issued ASU 2016-16, <i>Income Taxes (Topic&#xa0;740): Intra-Entity Transfer of Assets Other than Inventory </i>, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December&#xa0;15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In August 2016, the FASB issued ASU&#xa0;2016-15 <i>,&#xa0;Statement of Cash Flows (Topic&#xa0;230), Classification of Certain Cash Receipts and Cash Payments</i>. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after&#xa0;December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In February 2016, the FASB issued ASU 2016-02, <i>Leases (Topic&#xa0;842)</i>. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December&#xa0;15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In May 2014, FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers</i>.&#xa0; ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.&#xa0; ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.&#xa0; The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.&#xa0; ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.&#xa0;&#xa0; Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.&#xa0; Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.&#xa0; The Company adopted this ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#x2019;s Evaluation of Subsequent Events</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company evaluates events that have occurred after the balance sheet date of September 30, 2018, through the date which the financial statements were issued. Based upon the review, other than described in Note 6&#x2013; Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td> <td colspan="2" style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>Fair Value</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td> <td colspan="10" style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>Fair Value Measurements at</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td> <td colspan="2" style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>As of</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td> <td colspan="10" style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>September 30, 2018</b></font></td><td><font style="font-family: Times New Roman, Times, Serif"><b>&#xa0;</b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt; 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text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;&#xa0;&#xa0;&#xa0;-</font></td><td style="width: 1%; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 1.5pt solid; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="border-bottom: Black 1.5pt solid; text-align: right"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 1.5pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">Total</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">2,735,955</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td><td style="padding-bottom: 4pt"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td> <td style="border-bottom: Black 4pt double; text-align: left"><font style="font-family: Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 4pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif">-</font></td><td style="padding-bottom: 4pt; text-align: left"><font style="font-family: Times New Roman, Times, Serif">&#xa0;</font></td></tr> </table> 2735955 2735955 2735955 2735955 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 3 &#x2013;&#xa0;Stockholders&#x2019; Equity </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of September 30, 2018, the authorized share capital of the Company consists of 300,000,000 shares of common and 20,000,000 shares of preferred stock with $0.0001 par value. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior to the merger transaction described in Note 1, the Company had 116,466,000 shares of common stock outstanding. At the time of the merger, a principal shareholder surrendered 19,266,000 shares of common stock, which were cancelled. Also, at the time of the merger, 172,800,000 shares of common stock were issued for all of the issued and outstanding shares of PLC. &#xa0;The total shares outstanding at September 30, 2018 was 270,000,000. See Note 1 above.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior to the merger transaction, the Company had 135,000,000 warrants outstanding consisting of 27,000,000 &#x201c;A Warrants&#x201d; each convertible into one share of common stock at $0.074; 27,000,000 &#x201c;B Warrants&#x201d; each convertible into one share of common stock at an exercise price of $0.093; 27,000,000 &#x201c;C &#xa0;Warrants&#x201d; each convertible into one share of common stock at $0.111; 27,000,000 &#x201c;D Warrants&#x201d; each convertible into one share of common stock at $0.129; and 27,000,000 &#x201c;E Warrants&#x201d; each convertible into one share of common stock at $0.148. All warrants are still outstanding as of September 30, 2018 and are exercisable at any time prior to August 30, 2019. &#xa0;See Note 7.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following the reverse merger last year a number of warrants which had previously been issued have been under review by the Company to ensure their original terms and conditions were not out of synchronization with the business plans overall of the newly restructured company going forward. One warrant holder of A Warrants requested the original terms of his warrants be amended to accommodate the anticipated rise in value execution of the business plan would be expected to have on the Company value. Increases in the warrant strike price benefits the Company as increased funds are raised and placed directly in the company upon the exercise of the warrant. Accordingly, the Company consented to vary the strike price on an increasing sliding scale from $1.05 to $2.00. Following a review post the recent share fluctuations management and the other warrant holders agreed it is in the best interests of the Company, stock and warrant holders that the remaining warrants are also amended to follow the precedent set in respect of the previously amended warrant conditions. With the exception of the A Class warrants already amended as detailed above the remaining warrants have been extended to expire on August 30, 2022. This was finalized on February 21, 2019.</font></p><br/> 116466000 19266000 172800000 135000000 27000000 1 0.074 27000000 1 0.093 27000000 1 0.111 27000000 1 0.129 27000000 1 0.148 1.05 2.00 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 4 &#x2013; Related Party Transactions </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amounts due to a related party are for advances made by a stockholder of the Company. The balance due of $231,207 at September 30, 2018, is presented as due to related parties in the accompanying consolidated balance sheet. &#xa0;The amounts due are non-interest bearing and payable upon demand.</font></p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 5 &#x2013;&#xa0;Commitments and Contingencies </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on the Company&#x2019;s financial statements in the period in which a ruling or settlement occurs. However, based on information available to the Company&#x2019;s management to date, the Company&#x2019;s management does not expect the outcome of any matter pending against the Company is likely to have a material effect on the Company&#x2019;s financial statements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 6, 2018 Token Communities PLC entered into a binding agreement to purchase 75% of new issued ordinary shares of i-Deal Corp Limited, which has developed a communication platform for Publicly Listed, Private companies and investors around the globe.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In order for the transaction to become effective it was acknowledged by both parties that Token Communities Limited needs to raise the required funding to finance the transaction. Both parties agreed that the longstop date for the first closing ($500,000) will take place by bank transfer no later than mid-March 2019. The following payments will be due 90 days later (i.e. on or before May 31, 20219) as follows: $2,250,000 by way of bank transfer and $2,250,000 by the issue of 2,250,000 new shares in Token Communities Limited. As of the date of this release the transaction had not yet closed, and no payments were made. There is no termination agreement in place. The Company has taken the position that the agreement has lapsed. No provision has been made in these financial statements for any liability related to completion of the agreement.</font></p><br/> 500000 2250000 2250000 2250000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Note 6 &#x2013;&#xa0;Subsequent Events </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On February 19, 2019, the Company and the holders of 81,000,000 Warrants executed an Amendment and Modification Agreement, changing the warrant exercise prices from $0.074 to $0.148, to $1.90 for all classes of warrants it held. On the same day the Company and the holders of 43,200,000 warrants split equally between Class B, C, D and E (10,800,000 per class) executed an Amendment and Modification Agreement , changing the warrant exercise price to a phased strike price ranging between $1.05 and $2.00. Previously the holder of 10,800,000 &#x201c;A Warrants&#x201d; also entered into an amendment and modification agreement, changing the warrant strike price ranging from $1.05 to $2.00</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On April 2, 2019, the Company executed an Acquisition and Exchange Agreement with Lalit Kumar Verma and Manickam Mahalingam, who together controlled 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Agreement, Messrs. Verma and Mahalingam exchanged 96,001 shares, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 new issue treasury shares issued by the Company, representing 95% ownership of the Company.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On June 20, 2019, the Company executed a Mutual Rescission and Release Agreement, mutually rescinding the previously disclosed Acquisition and Exchange Agreement with Fortress Ventures LLC represented by Lalit Kumar Verma and with ABT Investments India Pvt Ltd represented by Manickam Mahalingam, who together control 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Acquisition and Exchange Agreement, Messrs. Verma and Mahalingam were to exchange 96,001 shares of common stock, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 newly issued shares of common stock of the Company. The Mutual Rescission and Release agreement executed and became effective as of June 20, 2019. As a consequence of its execution and the rescinding of the Share Exchange and Acquisition Agreement, the Company did not issue the 3,530,000,000 shares of common stock.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On July 14, 2020 the &#x201c;Company&#x201d; entered into an Asset Purchase Agreement (the &#x201c;Asset Purchase Agreement&#x201d;) with American Software Capital, Inc. (&#x201c;ASC&#x201d;). Pursuant to the Asset Purchase Agreement, in exchange for the issuance by the Company of 1,745,406,000 shares of Common Stock of the Company plus transfer of 3,499,799,467.37149 iRide Tokens owned by the Company to ASC, the Company acquired all technology and software code (and all copies of code) related to or required to operate the &#x201c;Lukki Exchange,&#x201d; including all client lists, intellectual property related to the brand &#x201c;Lukki&#x201d; (including files of art, logos, web designs, etc.) as well as ownership of the Lukki.io website and related design codes. As a condition to the closing of the transactions contemplated in the Asset Purchase Agreement shareholders agreed to cancel an aggregate of 174,540,600 shares of Common Stock of the Company, and the holders of the Company&#x2019;s Series A, B, C, D and E warrants agreed to the cancellation of all such warrants.</font></p><br/> 81000000 0.074 0.148 1.90 43200000 10800000 10800000 10800000 10800000 1.05 2.00 10800000 1.05 2.00 96001 3530000000 0.95 96001 3530000000 3530000000 1745406000 174540600 1.90 EX-101.SCH 6 tkcm-20180930.xsd XBRL SCHEMA FILE 001 - Statement - Consolidated Balance Sheet link:presentationLink link:definitionLink link:calculationLink 002 - Statement - Consolidated Balance Sheet (Parentheticals) link:presentationLink link:definitionLink link:calculationLink 003 - Statement - Consolidated Statement of Operations and Comprehensive Loss link:presentationLink link:definitionLink link:calculationLink 004 - Statement - Consolidated Statement of Stockholders’ Deficit link:presentationLink link:definitionLink link:calculationLink 005 - Statement - Consolidated Statement of Cash Flows link:presentationLink link:definitionLink link:calculationLink 006 - Disclosure - Organization and Basis of Presentation link:presentationLink link:definitionLink link:calculationLink 007 - Disclosure - Summary of Significant Accounting Policies link:presentationLink link:definitionLink link:calculationLink 008 - Disclosure - Stockholder’s Equity link:presentationLink link:definitionLink link:calculationLink 009 - Disclosure - Related Party Transactions link:presentationLink link:definitionLink link:calculationLink 010 - Disclosure - Commitments and Contingencies link:presentationLink link:definitionLink link:calculationLink 011 - Disclosure - Subsequent Events link:presentationLink link:definitionLink link:calculationLink 012 - Disclosure - Accounting Policies, by Policy (Policies) link:presentationLink link:definitionLink link:calculationLink 013 - Disclosure - Organization and Basis of Presentation (Tables) link:presentationLink link:definitionLink link:calculationLink 014 - Disclosure - Summary of Significant Accounting Policies (Tables) link:presentationLink link:definitionLink link:calculationLink 015 - Disclosure - Organization and Basis of Presentation (Details) link:presentationLink link:definitionLink link:calculationLink 016 - Disclosure - Organization and Basis of Presentation (Details) - Schedule of exchange rate use for the periods link:presentationLink link:definitionLink link:calculationLink 017 - Disclosure - Summary of Significant Accounting Policies (Details) link:presentationLink link:definitionLink link:calculationLink 018 - Disclosure - Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV link:presentationLink link:definitionLink link:calculationLink 019 - Disclosure - Stockholder’s Equity (Details) link:presentationLink link:definitionLink link:calculationLink 020 - Disclosure - Related Party Transactions (Details) link:presentationLink link:definitionLink link:calculationLink 021 - Disclosure - Commitments and Contingencies (Details) link:presentationLink link:definitionLink link:calculationLink 022 - Disclosure - Subsequent Events (Details) link:presentationLink link:definitionLink link:calculationLink 000 - Document - Document And Entity Information link:presentationLink link:definitionLink link:calculationLink EX-101.CAL 7 tkcm-20180930_cal.xml XBRL CALCULATION FILE EX-101.DEF 8 tkcm-20180930_def.xml XBRL DEFINITION FILE EX-101.LAB 9 tkcm-20180930_lab.xml XBRL LABEL FILE EX-101.PRE 10 tkcm-20180930_pre.xml XBRL PRESENTATION FILE XML 11 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholder’s Equity
3 Months Ended
Sep. 30, 2018
Stockholders' Equity Note [Abstract]  
Stockholders’ Equity

Note 3 – Stockholders’ Equity


As of September 30, 2018, the authorized share capital of the Company consists of 300,000,000 shares of common and 20,000,000 shares of preferred stock with $0.0001 par value. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.


Prior to the merger transaction described in Note 1, the Company had 116,466,000 shares of common stock outstanding. At the time of the merger, a principal shareholder surrendered 19,266,000 shares of common stock, which were cancelled. Also, at the time of the merger, 172,800,000 shares of common stock were issued for all of the issued and outstanding shares of PLC.  The total shares outstanding at September 30, 2018 was 270,000,000. See Note 1 above.


Prior to the merger transaction, the Company had 135,000,000 warrants outstanding consisting of 27,000,000 “A Warrants” each convertible into one share of common stock at $0.074; 27,000,000 “B Warrants” each convertible into one share of common stock at an exercise price of $0.093; 27,000,000 “C  Warrants” each convertible into one share of common stock at $0.111; 27,000,000 “D Warrants” each convertible into one share of common stock at $0.129; and 27,000,000 “E Warrants” each convertible into one share of common stock at $0.148. All warrants are still outstanding as of September 30, 2018 and are exercisable at any time prior to August 30, 2019.  See Note 7.


Following the reverse merger last year a number of warrants which had previously been issued have been under review by the Company to ensure their original terms and conditions were not out of synchronization with the business plans overall of the newly restructured company going forward. One warrant holder of A Warrants requested the original terms of his warrants be amended to accommodate the anticipated rise in value execution of the business plan would be expected to have on the Company value. Increases in the warrant strike price benefits the Company as increased funds are raised and placed directly in the company upon the exercise of the warrant. Accordingly, the Company consented to vary the strike price on an increasing sliding scale from $1.05 to $2.00. Following a review post the recent share fluctuations management and the other warrant holders agreed it is in the best interests of the Company, stock and warrant holders that the remaining warrants are also amended to follow the precedent set in respect of the previously amended warrant conditions. With the exception of the A Class warrants already amended as detailed above the remaining warrants have been extended to expire on August 30, 2022. This was finalized on February 21, 2019.


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Summary of Significant Accounting Policies
3 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies


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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


Principles of Consolidation


The accompanying financial statements include the accounts of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.


Cash Equivalents


For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.


Accounts Receivable


Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified.  As of September 30, 2018, the allowance for uncollectible accounts receivable was $250,000.


Derivative Financial Instruments


The Company evaluates its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30,2018, the Company’s only derivative financial instruments were outstanding warrants since the Company did not have enough unissued authorized shares to satisfy the exercise of all the outstanding warrants.  


Fair Value of Financial Instruments


For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate their fair values due to their short maturities.


FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:


Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.


The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. As of September 30, 2018, the Company’s stock price used in the Black-Scholes-Merton pricing model was based on recent sales of the Company’s common stock to unrelated investors since there no market price for the Company’s common stock at September 30, 2018. The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to fair value of derivatives.


At September 30, 2018, the Company identified the following liabilities that are required to be presented on the balance sheet at FV:


   Fair Value   Fair Value Measurements at 
   As of   September 30, 2018 
  September 30,   Using Fair Value Hierarchy 
Description  2018   Level 1   Level 2   Level 3 
Derivative liability - warrants  $2,735,955   $     -    2,735,955        - 
                     
Total  $2,735,955   $-   $2,735,955   $- 

Revenue Recognition


ASU No. 2014-09Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on July 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As   sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations, this did not   result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.


Revenue from advisory fees and related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements:


executed contract(s) with our customer(s) that we believe is legally enforceable;

identification of performance obligation in the respective contract;

determination of the transaction price for each performance obligation in the respective contract;

allocation of the transaction price to each performance obligation; and

recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s only revenue category, are summarized below:


Advisory fees and related services – the Company charges advisory fees for a suite of one to two dozen services that include advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting up website, making videos or animations describing the company and its business, engaging in public relations, and introducing potential investors.

Income Taxes


The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.


Basic and Diluted Earnings (loss) Per Share


Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted.  Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.


Foreign Currency Transactions and Comprehensive Income


U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s subsidiary is the GBP. Translation gain of $19,654 at September 30, 2018 is classified as an item of other comprehensive income in the stockholders’ deficit section of the balance sheet.


Statement of Cash Flows


Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.


Recent Accounting Pronouncements


In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.


In October 2016, the FASB issued ASU 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. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.


In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.  ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.  The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.   Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.  Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.  The Company adopted this ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements.


Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.


Management’s Evaluation of Subsequent Events


The Company evaluates events that have occurred after the balance sheet date of September 30, 2018, through the date which the financial statements were issued. Based upon the review, other than described in Note 6– Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.


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Organization and Basis of Presentation
3 Months Ended
Sep. 30, 2018
Organization, consolidation and presentation of financial statements [Abstract]  
Organization and Basis of Presentation

Note 1 - Organization and Basis of Presentation


Organization and Line of Business


Token Communities Ltd. (the “Company” or “Limited”) was organized under the laws of the State of Delaware on March 6, 2014, under the name Pacific Media Group Enterprises, Inc.  On April 7, 2017, the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name to Extract Pharmaceuticals Inc. On January 26, 2018, the Board of Directors adopted an Amendment to its Articles, changing its name to Token Communities Ltd.  The Company researches and creates white paper analysis for companies regarding block chain technology, and also operates the “Lukki Exchange,” including all client lists, intellectual property related to the brand “Lukki” (see discussion in Note 6 below).


Token Communities PLC (“PLC”) was incorporated in Gibraltar on October 13, 2017. PLC is a Gibraltar Financial Advisory firm which specializes in Blockchain, Artificial Intelligence and Fin-Tech investment in incubating as well as advising and managing qualified companies in the blockchain and distributed ledger technologies arena, including smart contracts, TGEs, DApps, and more. Advisement comprises the authoring of industry standard White Papers, technical aspects, design and implementation of market strategies, business appraisal and more. All potential clients are vetted and Anti-Money Laundering / Know-Your-Customer approved. The Company is also developing its own software technology with its dedicated team of developers.


On February 26, 2018, the Company entered into an Acquisition and Share Exchange Agreement with PLC.  Under the Agreement, the Company’s majority shareholder returned 19,266,000 common shares to treasury, and at closing 100% of the issued and outstanding shares of PLC were acquired by the Company, for 172,800,000 newly issued common shares equal to 64% of the Company’s outstanding common stock as of the closing date, thus making the stockholders of PLC the majority stockholders of the Company. The transaction closed on May 18, 2018.  This transaction was accounted for as a reverse acquisition under the purchase method of accounting since PLC obtained control of Limited. Accordingly, the merger of PLC into Limited was recorded as a recapitalization of PLC, PLC being treated as the continuing entity. The transaction was treated as a recapitalization and not as a business combination. Limited had 116,466,000 shares outstanding prior to the merger. At the time of the merger, Limited’s principal stockholder surrendered 19,266,000 shares, which were cancelled.  After the merger the total number of Limited shares outstanding was 270,000,000.


The historical financial statements presented are the financial statements of PLC. The merger agreement was treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the date of the merger, the net liabilities of the legal acquirer, Limited, were $57,107.


The combined entities are referred to hereafter as the “Company.”


Basis of Presentation


The accompanying consolidated financial statements (“CFS”) were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Limited’s functional currency is the United States Dollars (“$” or “USD”) and Limited’s wholly-owned subsidiary, PLC’s functional currency is the Pound Sterling (“GBP”).  


Going Concern


The accompanying financial statements were prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern.  The Company had an accumulated deficitkholders’ deficit of $3,702,806 at September 30, 2018 and has incurred losses from operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or increase revenues to generates sufficient positive cash flows from operations.  


The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.


Foreign Currency Translation


The accounts of Limited are maintained in USD and the accounts of PLC are maintained in GBP. The accounts of PLC are translated into USD in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830 Foreign Currency Transaction, with the GBP as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and comprehensive income (loss). The following table details the exchange rates used for the periods.


Period end: GBP to USD exchange rate  $1.3029 
Average period:  GBP to USD exchange rate  $1.3026 

XML 14 R6.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statement of Cash Flows - USD ($)
3 Months Ended
Sep. 30, 2018
Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (6,942) $ 0
Adjustments to reconcile net loss to net cash used in operating activities:    
Change in derivative liability (442,539)
Changes in operating assets and liabilities:    
Accounts receivable 242,662 0
Prepaid expenses and other current assets 8,075 0
Deposits 171,942 0
Accounts payable 21,377 0
Accrued expenses (113,844) 0
Net cash used in operating activities (119,269) 0
CASH FLOWS FROM INVESTING ACTIVITIES:    
Payment for other assets (837) 0
Net cash used in investing activities (837) 0
CASH FLOWS FROM FINANCING ACTIVITIES:    
Advances from related parties, net 105,863 0
Proceeds from sale of common stock 0 0
Net cash provided by financing activities 105,863 0
Effect of exchange rate changes on cash and equivalents 14,243 0
NET DECREASE IN CASH AND EQUIVALENTS 0 0
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 312 0
CASH AND EQUIVALENTS, END OF PERIOD 312 $ 0
CASH PAID FOR:    
Interest  
Income taxes  
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statement of Stockholders’ Deficit - USD ($)
Common Stock
Additional Paid-in Capital
Comprehensive Income
Accumulated Deficit
Total
Balance, at Oct. 12, 2017
Balance, (in Shares) at Oct. 12, 2017        
Common stock issued to founders for services $ 16,875 36,396 53,271
Common stock issued to founders for services (in Shares) 168,750,000        
Common stock sold to investors $ 405 206,025 206,430
Common stock sold to investors (in Shares) 4,050,000        
Shares issued on recapitalization $ 9,720 (66,827) (57,107)
Shares issued on recapitalization (in Shares) 97,200,000        
Fair value of derivative liability   (3,338,540) (3,338,540)
Foreign currency translation gain   5,411 5,411
Net loss (357,324) (357,324)
Balance, at Jun. 30, 2018 $ 27,000 175,594 5,411 (3,695,864) (3,487,859)
Balance, (in Shares) at Jun. 30, 2018 270,000,000        
Foreign currency translation gain   14,243 14,243
Net loss (6,942) (6,942)
Balance, at Sep. 30, 2018 $ 27,000 $ 175,594 $ 19.654 $ (3,702,806) $ (3,480,558)
Balance, (in Shares) at Sep. 30, 2018 270,000,000        
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statement of Operations and Comprehensive Loss - USD ($)
3 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Income Statement [Abstract]    
Revenue $ 150,000 $ 0
Operating expenses:    
General and administrative expenses 539,481 0
Research and development 60,000 0
Total operating expenses 599,481 0
Loss from operations (449,481) 0
Other income    
Change in fair value of derivative liability 442,539 0
Loss before provision for income tax (6,942) 0
Provision for income tax 0 0
Net loss (6,942) 0
Comprehensive loss:    
Net loss (6,942) 0
Foreign currency translation gain 0 0
Comprehensive income (loss): $ (6,942) $ 0
Weighted average common shares outstanding - basic and diluted (in Shares) 270,000,000  
Loss per common share - basic and diluted (in Dollars per share) $ 0.00  
XML 17 R3.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Balance Sheet (Parentheticals) - $ / shares
Sep. 30, 2018
Jun. 30, 2018
Statement of Financial Position [Abstract]    
Preferred stock par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 20,000,000 20,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 270,000,000 270,000,000
Common stock, shares outstanding 270,000,000 270,000,000
XML 18 R2.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Balance Sheet - USD ($)
Sep. 30, 2018
Jun. 30, 2018
Current Assets:    
Cash and equivalents $ 312 $ 312
Accounts receivable, net 8,252 250,914
Prepaid expenses and other current assets 9,555 17,630
Deposits 0 171,942
Total current assets 18,119 440,798
Other assets 19,817 18,980
TOTAL ASSETS 37,936 459,778
Current Liabilities:    
Accounts payable 449,260 427,883
Accrued expenses 101,507 215,351
Due to related parties 231,772 125,909
Derivative liability 2,735,955 3,178,494
Total current liabilities 3,518,494 3,947,637
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT    
Preferred stock, $.0001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding  
Common stock, $.0001 par value; 300,000,000 shares authorized;270,000,000 shares issued and outstanding 27,000 27,000
Additional paid-in capital 175,594 175,594
Other comprehensive income 19,654 5,411
Accumulated deficit (3,702,806) (3,695,864)
Total stockholders’ deficit (3,480,558) (3,487,859)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 37,936 $ 459,778
XML 19 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events (Details) - $ / shares
1 Months Ended
Jul. 14, 2020
Jun. 20, 2019
Feb. 19, 2019
Apr. 02, 2019
Sep. 30, 2018
Feb. 26, 2018
Subsequent Events (Details) [Line Items]            
Percentage of ownership of the company           100.00%
Number of shares of common stock cancel   3,530,000,000        
Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     81,000,000      
Warrant exercise price (in Dollars per share)     $ 0.074      
Number of warrants split by class     43,200,000      
Number of shares exchange by Lalit Kumar Verma and Manickam Mahalingam   96,001   96,001    
Number of treasury stock issued by the company       3,530,000,000    
Percentage of ownership of the company       95.00%    
Number of shares of common stock isssued by the Company 1,745,406,000 3,530,000,000        
Number of shares of common stock cancel 174,540,600          
B Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     10,800,000      
C Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     10,800,000      
D Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     10,800,000      
E Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     10,800,000      
A Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Number of warrants hold by holder     10,800,000      
Minimum [Member]            
Subsequent Events (Details) [Line Items]            
Strike price (in Dollars per share)         $ 1.05  
Minimum [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Warrant exercise price increased (in Dollars per share)     $ 0.148      
Strike price (in Dollars per share)     1.05      
Minimum [Member] | A Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Strike price (in Dollars per share)     1.05      
Maximum [Member]            
Subsequent Events (Details) [Line Items]            
Strike price (in Dollars per share)         $ 2.00  
Maximum [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Warrant exercise price (in Dollars per share)     1.90      
Warrant exercise price increased (in Dollars per share)     1.90      
Strike price (in Dollars per share)     2.00      
Maximum [Member] | A Warrants [Member] | Subsequent Event [Member]            
Subsequent Events (Details) [Line Items]            
Strike price (in Dollars per share)     $ 2.00      
XML 20 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies (Details) - USD ($)
3 Months Ended
Jul. 06, 2018
Sep. 30, 2018
Commitments and Contingencies (Details) [Line Items]    
Amount of funding to finance the transaction   $ 57,107
Token Communities Limited [Member]    
Commitments and Contingencies (Details) [Line Items]    
Number of new shares issued (in Shares) 2,250,000  
At The First Closing [Member]    
Commitments and Contingencies (Details) [Line Items]    
Amount of funding to finance the transaction $ 500,000  
Bank Transfer [Member]    
Commitments and Contingencies (Details) [Line Items]    
Amount of funding to finance the transaction 2,250,000  
Issuance of New Shares [Member]    
Commitments and Contingencies (Details) [Line Items]    
Amount of funding to finance the transaction $ 2,250,000  
XML 21 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details) - USD ($)
Sep. 30, 2018
Jun. 30, 2018
Related Party Transactions [Abstract]    
Due to related parties $ 231,772 $ 125,909
XML 22 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Stockholder’s Equity (Details) - $ / shares
Sep. 30, 2018
Jun. 30, 2018
Stockholder’s Equity (Details) [Line Items]    
Common stock, shares authorized 300,000,000 300,000,000
Preferred stock, shares authorized 20,000,000 20,000,000
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Number of shares of common stock outstanding 270,000,000 270,000,000
Number of shares of common stock of principal shareholder surrender 19,266,000  
Number of shares of common stock issued 270,000,000 270,000,000
Minimum [Member]    
Stockholder’s Equity (Details) [Line Items]    
Strike price (in Dollars per share) $ 1.05  
Maximum [Member]    
Stockholder’s Equity (Details) [Line Items]    
Strike price (in Dollars per share) $ 2.00  
A Warrants [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of warrants outstanding 27,000,000  
Number of share of common stock convertible by each warrant 1  
Convertible price of warrant (in Dollars per share) $ 0.074  
B Warrants [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of warrants outstanding 27,000,000  
Number of share of common stock convertible by each warrant 1  
Convertible price of warrant (in Dollars per share) $ 0.093  
C Warrants [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of warrants outstanding 27,000,000  
Number of share of common stock convertible by each warrant 1  
Convertible price of warrant (in Dollars per share) $ 0.111  
D Warrants [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of warrants outstanding 27,000,000  
Number of share of common stock convertible by each warrant 1  
Convertible price of warrant (in Dollars per share) $ 0.129  
E Warrants [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of warrants outstanding 27,000,000  
Number of share of common stock convertible by each warrant 1  
Convertible price of warrant (in Dollars per share) $ 0.148  
PLC [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of shares of common stock issued 172,800,000  
Prior To The Merger Transaction [Member]    
Stockholder’s Equity (Details) [Line Items]    
Number of shares of common stock outstanding 116,466,000  
Number of warrants outstanding 135,000,000  
XML 23 R1.htm IDEA: XBRL DOCUMENT v3.20.2
Document And Entity Information - shares
3 Months Ended
Sep. 30, 2018
Sep. 23, 2020
Document Information Line Items    
Entity Registrant Name TOKEN COMMUNITIES LTD.  
Document Type 10-Q  
Current Fiscal Year End Date --06-30  
Entity Common Stock, Shares Outstanding   2,015,406,000
Amendment Flag false  
Entity Central Index Key 0001683252  
Entity Current Reporting Status No  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Incorporation, State or Country Code DE  
Entity Interactive Data Current No  
Entity Tax Identification Number 81-3709511  
XML 24 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV
Sep. 30, 2018
USD ($)
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability $ 2,735,955
Warrant [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability 2,735,955
Fair Value, Inputs, Level 1 [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability
Fair Value, Inputs, Level 1 [Member] | Warrant [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability
Fair Value, Inputs, Level 2 [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability 2,735,955
Fair Value, Inputs, Level 2 [Member] | Warrant [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability 2,735,955
Fair Value, Inputs, Level 3 [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability
Fair Value, Inputs, Level 3 [Member] | Warrant [Member]  
Summary of Significant Accounting Policies (Details) - Schedule of the following liabilities that are required to be presented on the balance sheet at FV [Line Items]  
Derivative liability
XML 25 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Details)
3 Months Ended
Sep. 30, 2018
USD ($)
Accounting Policies [Abstract]  
Accounts Receivable, Allowance for Credit Loss $ 250,000
largest amount of tax benefit Percentage 50.00%
Other comprehensive income $ 19,654
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Basis of Presentation (Details) - Schedule of exchange rate use for the periods
Sep. 30, 2018
Schedule of exchange rate use for the periods [Abstract]  
Period end: GBP to USD exchange rate 1.3029
Average period: GBP to USD exchange rate 1.3026
XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Basis of Presentation (Details) - USD ($)
1 Months Ended 3 Months Ended
Feb. 26, 2018
Sep. 30, 2018
Jun. 30, 2018
Organization and Basis of Presentation (Details) [Line Items]      
Common shares to treasury 19,266,000    
Common stock of ownership percentage 100.00%    
PLC acquired 172,800,000    
Business combination shares outstanding   116,466,000  
Principal of stockholder   19,266,000  
Common stock, shares outstanding   270,000,000 270,000,000
Net liabilities of legal acquirer (in Dollars)   $ 57,107  
Accumulated deficitkholders’ deficit (in Dollars)   $ (3,702,806) $ (3,695,864)
PLC [Member]      
Organization and Basis of Presentation (Details) [Line Items]      
Common stock of ownership percentage 64.00%    
XML 28 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Schedule of the following liabilities that are required to be presented on the balance sheet at FV
   Fair Value   Fair Value Measurements at 
   As of   September 30, 2018 
  September 30,   Using Fair Value Hierarchy 
Description  2018   Level 1   Level 2   Level 3 
Derivative liability - warrants  $2,735,955   $     -    2,735,955        - 
                     
Total  $2,735,955   $-   $2,735,955   $- 
XML 29 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Organization and Basis of Presentation (Tables)
3 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Schedule of exchange rate use for the periods
Period end: GBP to USD exchange rate  $1.3029 
Average period:  GBP to USD exchange rate  $1.3026 
XML 30 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Accounting Policies, by Policy (Policies)
3 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Use of Estimates

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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation

Principles of Consolidation


The accompanying financial statements include the accounts of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.

Cash Equivalents

Cash Equivalents


For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable

Accounts Receivable


Accounts receivable are recorded, net of allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified.  As of September 30, 2018, the allowance for uncollectible accounts receivable was $250,000.

Derivative Financial Instruments

Derivative Financial Instruments


The Company evaluates its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30,2018, the Company’s only derivative financial instruments were outstanding warrants since the Company did not have enough unissued authorized shares to satisfy the exercise of all the outstanding warrants.

Fair Value of Financial Instruments

Fair Value of Financial Instruments


For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate their fair values due to their short maturities.


FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:


Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.


The Company uses Level 2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing model based on various assumptions. As of September 30, 2018, the Company’s stock price used in the Black-Scholes-Merton pricing model was based on recent sales of the Company’s common stock to unrelated investors since there no market price for the Company’s common stock at September 30, 2018. The Company’s derivative liabilities are adjusted to reflect FV at each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to fair value of derivatives.


At September 30, 2018, the Company identified the following liabilities that are required to be presented on the balance sheet at FV:


   Fair Value   Fair Value Measurements at 
   As of   September 30, 2018 
  September 30,   Using Fair Value Hierarchy 
Description  2018   Level 1   Level 2   Level 3 
Derivative liability - warrants  $2,735,955   $     -    2,735,955        - 
                     
Total  $2,735,955   $-   $2,735,955   $- 
Revenue Recognition

Revenue Recognition


ASU No. 2014-09Revenue from Contracts with Customers (“Topic 606”), became effective for the Company on July 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As   sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations, this did not   result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new standard. The Company made no adjustments to its previously reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under Topic 605, Revenue Recognition.


Revenue from advisory fees and related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of services to customers in return for expected consideration and includes the following elements:


executed contract(s) with our customer(s) that we believe is legally enforceable;

identification of performance obligation in the respective contract;

determination of the transaction price for each performance obligation in the respective contract;

allocation of the transaction price to each performance obligation; and

recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to the Company’s only revenue category, are summarized below:


Advisory fees and related services – the Company charges advisory fees for a suite of one to two dozen services that include advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting up website, making videos or animations describing the company and its business, engaging in public relations, and introducing potential investors.
Income Taxes

Income Taxes


The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Basic and Diluted Earnings (loss) Per Share

Basic and Diluted Earnings (loss) Per Share


Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted.  Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.

Foreign Currency Transactions and Comprehensive Income

Foreign Currency Transactions and Comprehensive Income


U.S. GAAP generally requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s subsidiary is the GBP. Translation gain of $19,654 at September 30, 2018 is classified as an item of other comprehensive income in the stockholders’ deficit section of the balance sheet.

Statement of Cash Flows

Statement of Cash Flows


Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Recent Accounting Pronouncements

Recent Accounting Pronouncements


In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.


In October 2016, the FASB issued ASU 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. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an impact on the Company’s financial statements.


In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this ASU on the Company’s financial statements.


In May 2014, FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.  ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.  The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.   Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.  Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.  The Company adopted this ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material impact on the Company’s financial statements.


Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.


Management’s Evaluation of Subsequent Events


The Company evaluates events that have occurred after the balance sheet date of September 30, 2018, through the date which the financial statements were issued. Based upon the review, other than described in Note 6– Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

XML 31 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events
3 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

Note 6 – Subsequent Events


On February 19, 2019, the Company and the holders of 81,000,000 Warrants executed an Amendment and Modification Agreement, changing the warrant exercise prices from $0.074 to $0.148, to $1.90 for all classes of warrants it held. On the same day the Company and the holders of 43,200,000 warrants split equally between Class B, C, D and E (10,800,000 per class) executed an Amendment and Modification Agreement , changing the warrant exercise price to a phased strike price ranging between $1.05 and $2.00. Previously the holder of 10,800,000 “A Warrants” also entered into an amendment and modification agreement, changing the warrant strike price ranging from $1.05 to $2.00


On April 2, 2019, the Company executed an Acquisition and Exchange Agreement with Lalit Kumar Verma and Manickam Mahalingam, who together controlled 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Agreement, Messrs. Verma and Mahalingam exchanged 96,001 shares, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 new issue treasury shares issued by the Company, representing 95% ownership of the Company.


On June 20, 2019, the Company executed a Mutual Rescission and Release Agreement, mutually rescinding the previously disclosed Acquisition and Exchange Agreement with Fortress Ventures LLC represented by Lalit Kumar Verma and with ABT Investments India Pvt Ltd represented by Manickam Mahalingam, who together control 100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Acquisition and Exchange Agreement, Messrs. Verma and Mahalingam were to exchange 96,001 shares of common stock, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000 newly issued shares of common stock of the Company. The Mutual Rescission and Release agreement executed and became effective as of June 20, 2019. As a consequence of its execution and the rescinding of the Share Exchange and Acquisition Agreement, the Company did not issue the 3,530,000,000 shares of common stock.


On July 14, 2020 the “Company” entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with American Software Capital, Inc. (“ASC”). Pursuant to the Asset Purchase Agreement, in exchange for the issuance by the Company of 1,745,406,000 shares of Common Stock of the Company plus transfer of 3,499,799,467.37149 iRide Tokens owned by the Company to ASC, the Company acquired all technology and software code (and all copies of code) related to or required to operate the “Lukki Exchange,” including all client lists, intellectual property related to the brand “Lukki” (including files of art, logos, web designs, etc.) as well as ownership of the Lukki.io website and related design codes. As a condition to the closing of the transactions contemplated in the Asset Purchase Agreement shareholders agreed to cancel an aggregate of 174,540,600 shares of Common Stock of the Company, and the holders of the Company’s Series A, B, C, D and E warrants agreed to the cancellation of all such warrants.


XML 32 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies
3 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 5 – Commitments and Contingencies


The Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on the Company’s financial statements in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect the outcome of any matter pending against the Company is likely to have a material effect on the Company’s financial statements.


On July 6, 2018 Token Communities PLC entered into a binding agreement to purchase 75% of new issued ordinary shares of i-Deal Corp Limited, which has developed a communication platform for Publicly Listed, Private companies and investors around the globe.


In order for the transaction to become effective it was acknowledged by both parties that Token Communities Limited needs to raise the required funding to finance the transaction. Both parties agreed that the longstop date for the first closing ($500,000) will take place by bank transfer no later than mid-March 2019. The following payments will be due 90 days later (i.e. on or before May 31, 20219) as follows: $2,250,000 by way of bank transfer and $2,250,000 by the issue of 2,250,000 new shares in Token Communities Limited. As of the date of this release the transaction had not yet closed, and no payments were made. There is no termination agreement in place. The Company has taken the position that the agreement has lapsed. No provision has been made in these financial statements for any liability related to completion of the agreement.


XML 33 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
3 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4 – Related Party Transactions


Amounts due to a related party are for advances made by a stockholder of the Company. The balance due of $231,207 at September 30, 2018, is presented as due to related parties in the accompanying consolidated balance sheet.  The amounts due are non-interest bearing and payable upon demand.


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