UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,Washington, D.C. 20549

_______________________________________ 

FORM 10-Q

_______________________________________ 

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30,December 31, 2019

orOR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 333-210821

Commission file number 333-210821_________________________________________________ 

(Exact name of registrant as specified in its charter)

 _______________________________________

(269) 274-7877

(Registrant’s telephone number, including area code:code) 

+1 269 274 7877

Securities registered pursuant to Section 12(b) of the Act: None

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 o¨   No x

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 such files).  Yes o¨   No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer”,filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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 7(a)(2)(B) of the Securities Act.o¨

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

The number of the registrant’s common shares, $0.0001 par value per share, outstanding on November 25, 2019January 29, 2021 was132,932,159. 132,932,159.

Table of Contents

PART I. FINANCIAL INFORMATION (UNAUDITED)

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

See accompanying notes to consolidated condensed financial statements (unaudited).

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

TRIPBORN, INC.

CONSOLIDATED CONDENSED BALANCE SHEETSSTATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

See accompanying notes to consolidated condensed consolidated financial statements (unaudited).

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS BALANCE SHEETS

(UNAUDITED)

See accompanying notes to consolidated condensed financial statements (unaudited).

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS EQUITY (DEFICIT) (Unaudited)

(UNAUDITED)

See accompanying notes to consolidated condensed financial statements (unaudited).

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTSTATEMENTS OF EQUITY (DEFICIT)CASH FLOWS (Unaudited)

(UNAUDITED)

See accompanying notes to consolidated condensed consolidated financial statements (unaudited).

TRIPBORN, INC. 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

See accompanying notes to unaudited condensed consolidated financial statements (unaudited).

Notes to Consolidated Condensed Financial Statements

June 30,December 31, 2019

(UNAUDITED)(Unaudited)

1. DESCRIPTION OF BUSINESS

Overview

TripBorn, Inc. (“TripBorn” or the “Company”) is an eCommerce aggregator and a hospitality management company. An aggregator model is a form of eCommerce whereby our website, www.tripborn.com aggregates information from various travel and hospitality vendors and presents them to users on a single platform, to ease, facilitate, coordinate and effectuate consumer travel and hospitality needs. OureCommerce Aggregator business segment operates through Sunalpha Green Technologies Private Limited (“Sunalpha”), a wholly owned subsidiary. Ourhospitality business segment is comprised of our 51% equity interest in our subsidiary PRAMA Hotels and Resorts Private Limited (“PRAMA”), which was acquired on April 22, 2019, for aggregate consideration of $2,137,143. All of the Company’s net revenues are derived from operations in India.

The unaudited consolidated financial statements include the accounts and transactions of the Company; its wholly ownedsubsidiaries (ownership interests as of September 30, 2019), Sunalpha (ownership interest 100%); PRAMA (ownership interest 51%), Apodis Hotels & Resorts Limited (“AHRL”) (ownership interest approximately 30%, derived from 51%*59.15%), IntelliStay Hotels Private Limited (“IHPL”) (ownership interest approximately 26%, derived from 51%*59.15%*86.96%), Apodis Foods and Brands Private Limited (“AFBL”) (ownership interest approximately 30%, derived from 51%*59.15%*100%), non-operating subsidiary Sunalpha; itsApodis Projects Private Limited (“APPL”) (ownership interest approximately 30% derived from 51% owned subsidiary, PRAMA*59.15%*100%); and an equity investee, PRAMA Canary Wharf Hotels Private Limited (“PCW”). Through PRAMA, the Company has a 29.575% equity (ownership interest in PCW, a non-trading company formed to develop a potential hotel in Bengaluru, India. approximately 15%, derived from 51%*59.15%*50%).

The Company exercises significant influence over PCW but does not control the investee and the Company is not the primary beneficiary of the investee’s activities. PCW is accounted for using the equity method. All significant inter-company accounts and transactions are eliminated in consolidation.

AcquisitionsThe Company’s operations are moderately seasonal, with average net revenues normally higher during the Indian summer months and national or regional holidays, than during winter months and non-holiday periods. Also certain of the Company’s managed hotel properties are in remote hillside locations which experience their own distinct weather patterns. As the business is moderately seasonal, results for any quarter are not necessarily indicative of the results that may be achieved for any other quarter, or for the full fiscal year.

Acquisitions

On April 22, 2019 the Company acquired a 51% equity interest in PRAMA for $2,137,143, consisting of $1,400,000 in cash and the issuance of 2,632,653 shares of common stock valued at $737,143.

The Company has made acquisitions at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill due to the Company’s expectations of the synergies that will be realized by combining the businesses. These synergies include access to PRAMA’s hotel brands, customers and operations; use of the Company’s existing technology to expand sales of the acquired businesses; new operational and financial efficiencies of the acquired businesses to expand sales cost effectively for both business segments. Acquisitions will be accounted for by using the purchase method of accounting, and the acquired company’s results will be included in the accompanying financial statements from their respective dates of acquisition. Acquisition transaction costs have been recorded in selling, general and administrative expenses as incurred.$737,143 or approximately $0.28 per share.

The acquisition of PRAMA was treated as a business combination under U.S. GAAP. During the first quarter, we estimated the allocation of the purchase price to the assets acquired and liabilities assumed based on estimated fair value assessments. The allocation of the purchase price is preliminary pending the completion of various analyses and the finalization of estimates. During the measurement period, which is not to exceedwas finalized on April 22, 2020, one year from the acquisition date additional assets or liabilities may be recognized if new information is obtained about facts and circumstances that existed as ofwithout adjustment to the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date.preliminary allocation. The preliminary allocation may be adjusted after obtaining additional information regarding, among other things, asset valuations, liabilities assumedwas also not revised as of and revisions of previous estimates, and these adjustments may be significant.

The following reflects our preliminary purchase price allocation:

The following reflectsfor the composition and timing of consideration:period ended, December 31, 2019.

The following reflects the net cash paid on acquisition of PRAMA in the quarternine month period ended June 30,December 31, 2019:

Acquired intangible assets acquired are as follows:

During the quarter ended June 30, 2019, we recognized $936,788 in goodwill as the result of the acquisition of PRAMA, recorded within our Hospitality reporting segment. The revenues and earnings from PRAMA's operations that are included in the Consolidated Statement of Operations for the quarter ended June 30, 2019 is reflected in the Business segments note below.

The Company recognized $1,693,738 in revenue of $2,607,374 and $276,512 in$6,243,289 for the three months and nine months ended December 31, 2019 consolidated condensed statements of operations related to the acquiree, respectively. The Company recognized net loss before income taxes of $274,166 and $1,063,472 for the three months and nine months ended December 31, 2019 consolidated condensed statements of operations related to the acquiree, in the consolidated condensed statement of operations for the period April 22, 2019 through June 30, 2019.  respectively.

The revenue and net loss before taxes for the combined entity for the quarterthree and nine months ended June 30,December 31, 2019, as though the acquisition of PRAMA had occurred on April 1, 2019 was $2,259,644,2018 were $2,819,898, and $674,729,$7,193,424, respectively. The revenue and net loss before taxes for the combined entity for the quarterthree and nine months ended June 30,December 31, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 were $2,527,732, and $6,309,053, respectively.  The net loss before taxes for the combined entity for the three and nine months ended December 31, 2019, as though the acquisition of PRAMA had occurred on April 1, 2018 were $540,053 and $1,948,691, respectively. The net loss before taxes for the combined entity for the three and nine months ended December 31, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 were $408,523 and $825,465, respectively.

TripBorn, Inc owns a 51% interest in PRAMA, in turn PRAMA owns a 59.15% interest in AHRL, AHRL in turn owns an interest in IHPL. AHRL’s ownership interest in IHPL was $2,096,250,84.94% as of April 22, 2019, but this increased to 86.96% as of June 30, 2019 and $422,597, respectively.  September 30, 2019. This increase arose from AHRL’s subscription in 308,000 shares at INR 125 per share, $548,616 in aggregate, on April 25, 2019. Accordingly, the Company increased its equity ownership marginally but still approximated 26% (Ownership percentage 51%*59.15%*84.94% to 51%*59.15%*86.96%).

There were no material, nonrecurring pro forma adjustments directly attributable to the PRAMA acquisition, which were reported in the pro forma revenue and statement of operations or the consolidated condensed statement of operations.

2. LIQUIDITY AND GOING CONCERN

Management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.    Generally, to be considered probable of being effectively implemented, the plans must have been approved before the date that the financial statements are issued.

The Company has incurred net losses from operations since inception. The net loss for the quarternine month period ended June 30,December 31, 2019 was $562,755$1,933,267 and the accumulated deficit was $4,782,894$5,517,689 as of June 30,December 31, 2019. The cash and cash equivalents and the current portion of loans and convertible notes due to third parties were $995,665 and $485,798, respectively, as of December 31, 2019. The Company’s ongoing losses have had a significant negative impact on the Company’s financial position and liquidity. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions.

Beginning in December 2019, after September 30, 2019, China, experienced an outbreak of a highly infectious form of a respiratory infection caused by a novel Coronavirus. The disease caused by the novel Coronavirus was later termed Covid-19. On March 11, 2020 the World Health Organization declared the Coronavirus outbreak a global pandemic. India reported its first Covid-19 infection in the city of Thrissur, in the state of Kerala, India on January 30, 2020 and the first case fatality on March 10, 2020 in the state of Karnataka, India. On March 25, 2020, India’s Prime Minister Narendra Modi announced a 21-day nationwide lockdown in response to the Covid-19 pandemic. To comply with the Indian lockdown, the Company closed all of its hotel operations, which impacts the Hospitality segment. Also as a result of the Indian lockdown, the Indian government temporarily suspended flights, trains and buses which impacts the e-Commerce Aggregator segment. On June 1, 2020, India partially lifted its lockdown, however the Hospitality and e-Commerce Aggregator segments are still materially adversely impacted by Covid-19. As of the date of filing this Form 10-Q, hotels, flights, trains and buses are operating to varying degrees by region.

The Company’s cash requirements are primarily to fund operating losses, working capital, capital expendituresCompany does not have operations in China and the completionCoronavirus pandemic did not have any impact on the operations or financial results of acquisitions. Historically, the Company for the three and nine month periods ended December 31, 2019. However, the pandemic did have a material adverse effect to the Company’s Indian operations, vendors, customers, lessors and employees’ health, balance sheet, liquidity, statement of operations and future prospects for the period ended March 31, 2020 and onwards. Management is in the process of finalizing its quarterly and annual financial statements as of and for the year ended March 31, 2020 and report the degree and severity of the adverse impact in those financial statements. As of today’s date, management is in the process of implementing various cost reduction efforts to conserve cash and liquidity, including reducing staffing levels and potentially closing certain hotels permanently, but has met these cash needs by borrowings under notes, sales of shares and warrants and the cash balances acquired from subsidiary acquisitions. There can be no assurance that thenot reached fixed conclusions.

The Company will be able to borrowrequire additional capital and may also require additional financing from related or sell securitiesthird parties in the future, which raisesevent that operations do not generate the expected revenues or a recurrence of Covid-19 were to cause another suspension of operations. Such additional capital or financing may not be available on favorable terms, or at all. Due to these factors, substantial doubt exists about the Company’s ability of the Company to continue as a going concern. The consolidatedconcern through twelve months after the date that the financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result shouldare issued. If the Company be unabledoes not obtain sufficient funds when needed, the Company expects it would reduce its operating expenses and defer vendor payments, including closure of certain operations and or disposals of assets. Because such contingency plans have not been finalized (because the specifics would depend on the situation at the time), such actions also are not considered probable. Because, neither receipt of future equity or loan support, nor management’s contingency plans to mitigate the risk and extend cash resources through twelve months after the date that the financial statements are issued, are considered probable, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern.

The Company’s operations are subjectfinancial statements for the three and nine months ended December 31, 2019, do not include any adjustment relating to numberthe recoverability and classification of factorsrecorded asset amounts or the amounts and classification of liabilities that can affect its operating results and financial conditions. Such factors include, but are not limited to:might be necessary should we be unable to continue as a going concern because the continuous enhancement ofevents leading to the current products and services; marketing its new services; continuinguncertainty arose after December 31, 2019. However, management does expect to invest in new technologies; changes in domestic and foreign regulations; the pricerecord material adverse effects as of and demand for the Company’s products and services and its ability to raise the capital to support its operations.

The Company’s directors are confident that the Company will be able to issue new shares (see Subsequent Events note below), and extend the maturity date on its convertible notes which will provide the Company with sufficient funding to meet its obligations as they become due. The Company’s directors believe it is appropriate to prepare the financial statements on the going concern basis. However, in the event that the Company is not able to successfully complete the fundraising and extension referred to above, significant uncertainty would exist as to whether the Company and its subsidiaries will continue as going concerns and, therefore, whether they will realize their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial statements.period ended March 31, 2020.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim unaudited consolidated condensed financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) andpursuant to the rules and regulations of the Securities and Exchange Commission ("SEC")and include the accounts of the Company and its subsidiaries. We have condensed or omitted certain information and disclosures normally included in financial statements presented in accordance with U.S. “GAAP”. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the periods and dates presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period.period primarily because of seasonal and other short-term variations.

The accompanying condensed consolidated balance sheet as of March 31, 2019 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in Form 10-K for the year ended March 31, 2019.

As a result of the acquisition of PRAMA, during the quarter ended June 30, 2019, the Company made a change to its segment reporting structure which resulted in two segments 1) eCommerce Aggregator and 2) Hospitality. As a result, certain prior year amounts have been restated to conform to the current year’s presentation, that is they have been classified as relating to the eCommerce Aggregator business. These reclassifications had no effect on previously reported total net revenues, cost of revenues and other operating expenses, other expenses, net and net loss. Otherwise, we have not reclassified other prior-period amounts to conform to the current-period presentation. Certain columns and rows may not add due to the use of rounded numbers. 

Principles of Consolidation

The consolidated financial statements include the accounts and transactions of the Company, its wholly owned subsidiary, Sunalpha and its subsidiary, PRAMA which the Company owns a 51% equity interest in. PRAMA was acquired on April 22, 2019. Through PRAMA, the Company has a 29.575%an approximate 15% equity interest in PCW, which is accounted for under the equity method. All significant inter-company accounts and transactions are eliminated in consolidation.

Reclassifications

As a result of the acquisition of PRAMA, during the quarter ended June 30, 2019, the Company made a change to its segment reporting structure which resulted in two segments 1) eCommerce Aggregator and 2) Hospitality. As a result, certain prior year amounts have been reclassified to conform to the current year’s presentation, that is they have been classified as relating to the eCommerce Aggregator business. The change in segment structure had no effect on previously reported total net revenues, cost of revenues and other operating expenses, other expenses, net, net loss, basic and fully diluted earnings per share.

Otherwise, we have not reclassified other prior-period amounts to conform to the current-period presentation. Certain columns and rows may not add due to the use of rounded numbers.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts.

Our significant estimates include elements of revenue recognition, the application of fair value estimates for the purchase price allocation on the acquisition of PRAMA, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, costs to be capitalized as well as the useful life of capitalized software and income taxes.The use of different estimates or assumptions in determining the fair value of our goodwill, indefinite-lived and definite-lived intangible assets may result in different values for these assets, which could result in an impairment or, in the period in which an impairment is recognized, could result in an impairment charge. The Company has not recognized an impairment charge for the quarternine month period ended June 30,December 31, 2019.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”): Topic 606 which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts.

Topic 606 was effective as of April 1, 2018, for the Company, using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to accumulated deficit at April 1, 2018.

For revenue recognition arrangements that we determine are within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Our significant estimates include elements of revenue recognition, the application of fair value estimates for the purchase price allocation on the acquisition of PRAMA, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, costs to be capitalized as well as the useful life of capitalized software and income taxes. The use of different estimates or assumptions in determining the fair value of our goodwill, indefinite-lived and definite-lived intangible assets may result in different values for these assets, which could result in an impairment or, in the period in which an impairment is recognized, could result in an impairment charge. The Company has not recognized an impairment charge for the nine month period ended December 31, 2019.

The following is a description of the Company’s principal activities, separated by reportable segments, from which the Company generates its revenue.

eCommerce Aggregator revenues:

Air, Rail and Bus Ticketing. Recognized on a net commission basis upon transfer of control of promised services in an amount which we are entitled to in exchange for the service.

Vacation Packages. Recognized on a gross basis, upon transfer of control of promised services in an amount which we are entitled to in exchange for the service.

Other Revenue. Primarily comprising visa processing fees, money transfer, and pre-and post-paid expenses are recognized after the services are performed.

Hospitality Revenues:

Hospitality Services.

Practical expedients. The Company has elected certain of the optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Company applies the practical expedient to its management fees from contracts with Operation & Maintenance Properties. These contracts are typically long-term, and the performance obligation consists of providing hotel management services to the owner. Revenue is recognized based upon an agreed base fee and additional revenue is recognized on the attainment of certain financial results, primarily operating earnings, as specified in each contract. As such, fees are variable with the uncertainty of base fees being resolved monthly and the uncertainty of incentive fees being resolved annually. These fees are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

The Company has elected the practical expedient to not disclose revenue related to remaining performance obligations that are part of a contract with an original expected duration of one year or less, and to not consider the effects of significant financing components in the transaction price when the duration of financing is one year or less.

The Company has elected certain of the optional exemptions from the disclosure requirement for the remaining performance obligations for specific situations in which an entity need not estimate variable consideration.

Cost of Revenues

Cost of revenue is the amount paid or accrued against procurement of these services and products from the respective suppliers and do not include any other operating cost to provide these services or products. Cost of revenue is recognized when incurred, which coincides with the recognition of the corresponding revenue.

Other operating expenses

Other operating expenses includes Selling, general and administrative expenses, Legal and consulting expenses and Depreciation and amortization.

Selling, general and administrative expenses include, direct operating expenses, general and administrative expenses such as business promotion costs, utilities, rent, payroll, which are recognized on an accrual basis.

Legal and consulting expenses are recognized on an accrual basis.

Depreciation and amortization costs are amortized over the estimated useful lives of the assets.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with maturity of three months or less, to be cash equivalents. The Company maintains its cash in bank accounts in the U.S. and India, which at times may not be covered by, or exceed the coverage limit of the Deposit Insurance and Credit Guarantee Corporation of India. The Company does not believe that this results in significant credit risk. As of June 30,December 31, 2019, and 2018,March 31, 2019, the cash balance in financial institutions in India was $859,189$995,665 and $360,210, respectively.

Receivables and Credit Policies

Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company's estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. The Company does not accrue interest on past due receivables.

The Company performs periodic analyses of each customer’s outstanding accounts receivable balance and assesses, on an account-by-account basis, whether the allowance for doubtful accounts needs to be adjusted based on currently available evidence such as historical collection experience, current economic trends and changes in customer payment terms. In accordance with the Company’s policy, if collection efforts have been pursued and all reasonable and contractually available avenues for collections exhausted, accounts receivable would be written off as uncollectible.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the estimated useful lives of the assets. The Company charges repairs and maintenance costs that do not extend the lives of the assets to expenses as incurred.

Intangible Assets

Intangible assets with indefinite useful lives consist exclusively of trademarks and are tested for impairment annually, or whenever events or indicators of impairment occur between annual impairment tests. Management expects to use the trademarks indefinitely.

Intangible assets that have limited useful lives are amortized on a straight-line basis over the shorter of their useful or legal lives. Intangible assets with definite useful lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

The fair value of the trade names is determined using a discounted cash flow analysis based on the relief-from-royalty approach.  The relief-from-royalty approach is an income approach that utilizes certain market information by reference to the amount of royalty income we could generate if the trade names were licensed, in an arm’s length transaction, to a third party.  Based on a comparison of our trade names to the guideline transactions, including an assessment of industry conditions, the age of the trademark/trade name, degree of consumer recognition and life cycle of the brand, a reasonable royalty rate is estimated for the trade names. The principal factors used in the discounted cash flow analysis requiring judgment are the projected net sales, discount rate, royalty rate and terminal value assumptions.

Goodwill

Goodwill is assigned to our reporting units based on the expected benefit from the synergies arising from each business combination, determined by using certain financial metrics. The reporting units are aligned with our reporting segments. Goodwill is not amortized, but the Company tests goodwill for impairment each year or more frequently should facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than the carrying amount. As part of the impairment test, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit, including goodwill, is less than its carrying amount, or if we elect to bypass the qualitative assessment, we would then proceed with a quantitative assessment. The quantitative assessment involves calculating an estimated fair value of each reporting unit based on projected future cash flows and comparing the estimated fair values of the reporting units to their carrying amounts, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying value, including goodwill, no impairment is recognized. However, if the carrying amount of a reporting unit, including goodwill, exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, limited to the total goodwill balance of the reporting unit. We have not recognized any impairment on goodwill during the quarternine month period ended June 30,December 31, 2019.

Impairment of Long-lived Assets

The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. 

Business Combinations

When acquiring other businesses or participating in mergers or joint ventures in which we are deemed to be the acquirer, we generally recognize identifiable assets acquired, liabilities assumed and any noncontrolling interests at their acquisition date fair values, and separately from any goodwill that may be required to be recognized.  Goodwill, when recognizable, would be measured as the excess amount of any consideration transferred, which is generally measured at fair value, over the acquisition date fair values of the identifiable assets acquired and liabilities assumed.

On the date of acquisition, the assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree are recorded at their fair values. The acquiree's results of operations are also included in our consolidated results as of the date of acquisition. Intangible assets that arise from contractual/legal rights or are capable of being separated are measured and recorded at fair value and amortized over the estimated useful life.

Accounting for such transactions requires us to make significant assumptions and estimates. These include, among others, any estimates or assumptions that may be made for the amounts of future cash flows that will result from any identified intangible assets, the useful lives of such intangible assets, the amount of any contingent liabilities, including contingent consideration, to record at the time of the acquisition and the fair values of any tangible assets acquired and liabilities assumed. Although we believe any estimates and assumptions, we make to be reasonable and appropriate at the time they are made, unanticipated events and circumstances may arise that affect their accuracy, causing actual results to differ from those estimated by us.

Foreign Currency Translation

The functional currency of the Company translatesand the foreign currency financial statements into U.S. Dollars usingof the year or reporting period end or average exchange ratesprimary economic environment in accordance withwhich it operates is the requirements of ASC 830, Foreign Currency Matters. AssetsIndian Rupee. Monetary assets and liabilities in foreign currencies are translatedre-measured into the functional currency at the rates of exchange rates as ofprevailing at the balance sheet date.dates. Transactions in foreign currencies are re-measured into functional currency at the rates of exchange prevailing on the date of the transaction. All transaction foreign exchange gains and losses are recorded in the accompanying unaudited consolidated condensed statements of operations.

The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet dates. Revenues and expenses are translated into U.S. dollars at average exchange rates in effect for the periods presented. The cumulativeResulting translation adjustment isadjustments are included in the accumulated other comprehensive gainincome (loss) within stockholders’ equity (deficit).

Earnings and Lossloss per Shareshare

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.

Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods inThe computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. The Company has outstanding convertible debt and outstanding warrants which a net loss hashave been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.calculation of diluted net loss per share as their effect would be anti-dilutive.

Promotion and Advertising Expenseexpenses

We incur advertising expense consisting of offline costs, including newspaper and media advertising, and online advertising expense to promote our brands. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. We expense the costs of communicating the advertisement (e.g., newspaper, short message service (“SMS”) or email campaign) as incurred each time the advertisement or promotion is performed. Promotion and Advertising expense was $84,906 for the quarter ended June 30, 2019, compared to $38 for the quarter ended June 30, 2018. This increase in Promotion and Advertising expenses is due to the acquisition of PRAMA.

Stock-Based Compensation

The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options over the instruments vesting period. Options awarded to purchase shares of common stock issued to non-employees do not need to be remeasured as per ASU 2018-07 principles. DuringStock based compensation is recorded in Legal and Consulting expenses in our Statement of Operations.

In the quarteryear ended March 31, 2018, the Company issued 478,560 common shares to a non-employee consultant for services to be performed on the Company’s behalf through June 30, 20192020. The Company records the corresponding pro-rata expense in Selling, General and June 30, 2018, $25,723 and $0 was recognized in legal and consultingAdministration expenses in the Consolidated Condensed StatementsStatement of Operations respectively, as a resultand discloses an adjustment to reconcile net loss to net cash used in operating activities in the Statement of anCash flows. The services performed under the agreement forreflect administrative services, advisory board services, business development services, consulting services and financial consulting services. The number of shares offered to the non-employee consultant reflected the fair value of the services to be provided by this individual.

Leases

On April 1, 2019, the Company adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating prior periods. Results and disclosure requirements for reporting periods beginning after April 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under Topic 840.

The Company elected the package of practical expedients permitted under the transition guidance, which allowed for the carryforwardcarry forward of historical lease classification, on whether a contract was or contains a lease, and of the assessment of initial direct costs for any leases that existed prior to April 1, 2019. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of operations on a straight-line basis over the lease term.

The adoption did not impact our beginning or prior period consolidated condensed balance sheets, statement of equity / (deficit), statement of operations and statement of cash flows.

Under Topic 842, the Company determines if an arrangement is a lease and classifies that lease as either an operating or finance lease at inception. If an arrangement is a lease or contains a lease, we then determine whether the lease meets the criteria of a finance lease or an operating lease. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, only payments that are fixed and determinable at the time of commencement are considered. As the rate implicit in certain of the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments. The right-of-use asset is recognized at the amount of the lease liability with certain adjustments, if applicable. These adjustments include lease incentives, prepaid rent, and initial direct costs. We reassess if an arrangement is or contains a lease upon modification of the arrangement. At the commencement date of a lease, we recognize a lease liability for contractual fixed lease payments and a corresponding right-of-use asset representing our right to use the underlying asset during the lease term. The lease liability is measured initially as the present value of the contractual fixed lease payments during the lease term. The lease term additionally includes renewal periods only if it is reasonably certain that we will exercise the options. Contractual fixed leases payments are discounted at the rate implicit in the lease when readily determinable. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the options will be exercised.

Operating leases are included inOperating lease right-of-use assets,Other current liabilities, andOperating lease liabilities, due after one year, in our Consolidated Condensed Balance Sheets.

Employee Benefits

PRAMA has employee benefit plans in the form of statutory and welfare schemes covering statutorily eligible employees which are accounted for in accordance with ASC 715 Compensation – Retirement benefits.

Gratuity

In accordance with the Indian Payment of Gratuity Act, 1972, PRAMA provides for gratuity, a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation. The Gratuity Plan is unfunded. The current service costs for defined benefit plans are accrued in the year to which they relate. Prior service costs, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of such employees.

Provident

In accordance with Indian law, all eligible employees of the Company, are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employee and the Company, contribute monthly at a determined rate (currently twelve percent of contributory wages subject to a maximum cap). These contributions are made to the Government Provident Fund and the Company has no further obligation under Provident Fund, beyond its monthly contributions. The amount contributed for the nine months ended December 31, 2019 and 2018, amounted to $203,850 and $Nil, respectively.

Vacation

Accruals for Indian statutory vacation pay is determined at the actuarial estimate for the entire unutilized leave balance standing to the credit of the employees at the period end. The amount accrued as of December 31, 2019 and 2018, amounted to $82,247 and $Nil, respectively.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities based on the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of operations. If the Company determines that it would be able to realize our deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it  recognizes the amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Non Income Taxes

The Company is subject to India Goods and Services Tax and other local duties and non-income taxes on its transactions in India. The Company collects such taxes from customers, and pays such taxes on applicable supplies and inputs, and remits the net amounts to the respective local tax authorities on an accrual basis.

Equity-method Investments

Through PRAMA, the Company has a 29.575%an approximately 15% equity interest in PCW, a non-trading company formed to develop a potential hotel in Bengaluru, India. The Company exercises significant influence over PCW but does not control the investee and the Company is not the primary beneficiary of the investee’s activities. PCW is accounted for using the equity method.

Equity investments are accounted for using the equity-method of accounting if the investment gives us the ability to exercise significant influence, but not control, over an investee. The total of our investments in equity-method investees, including identifiable intangible assets, deferred tax liabilities and goodwill, is included within “Other noncurrent assets” on our consolidated balance sheets. Our share of the earnings or losses as reported by equity-method investees, amortization of the related intangible assets, and related gains or losses, if any, are classified as “Equity-method investment activity, net of tax” on our consolidated statements of operations. Our share of the net income or loss of our equity-method investees may in the future include operating and non-operating gains and charges, which may have a significant impact on our reported equity-method investment activity and the carrying value of those investments. We regularly evaluate these investments, which are not carried at fair value, for other-than-temporary impairment.

We record purchases, including incremental purchases, of shares in equity-method investees at cost. Reductions in our ownership percentage of an investee, including through dilution, are generally valued at fair value, with the difference between fair value and our recorded cost reflected as a gain or loss in our equity-method investment activity. In the event we no longer have the ability to exercise significant influence over an equity-method investee, we would discontinue accounting for the investment under the equity method.

Included in Other Non Current Assets as of June 30,December 31, 2019, is $346,074$343,744 relating to the fair value of equity-method investments and $319,725$454,425 relating to the fair value of amounts due from equity-method investee, in aggregate $665,799.$798,169. During the period April 22, 2019, through June 30,December 31, 2019, there was no recorded impairment for the equity investee. Also, there was no activity in the equity method investee and so no equity-method investment activity, net of tax, was recorded in our Statement of Operations for the quarter ended June 30,respective three and nine month periods.

The Company may record impairments to the fair value of equity-method investments and the fair value of amounts due from equity-method investee as of March 31, 2020, reflecting the impact of covid-19, but has not done so as of December 31, 2019, as the covid-19 pandemic was a non-adjusting post balance sheet event as of December 31, 2019.

Related Parties

The Company follows FASB ASC subtopic 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20, the Company’s related parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Recent Accounting Pronouncements

New Accounting Pronouncements Recently Adopted

On April 1, 2019 the Company adopted ASU No. 2016-2, Leases (Topic 842) (ASU 2016-2), as amended, which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provides an additional, optional transition method with which to adopt the new leases standard. This additional transition method allows for a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, rather than in the earliest period presented in the financial statements, as originally required by ASU 2016-2.

Adoption of the standard did not result in adjustment to our prior period Balance Sheets, Statements of Operations or Statements of Cash Flows. When we adopted ASU 2016-02, we applied the package of practical expedients allowed by the standard, and therefore, we did not reassess: a) Whether any expired or existing contracts are or contain leases under the new definition; b) The lease classification for any expired or existing leases; or c) Whether previously capitalized costs continue to qualify as initial direct costs.

In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount. The new rules will be effective for the Company in the first quarter of 2021. Early adoption is permitted.Management is currently evaluating this ASU to determine its impact to the Company's financial statements but does believesbelieve it isexpected to have a minimal impact on the Company’s financial statements and related disclosures.

New Accounting Pronouncements Not Yet Adopted 

No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company's present or future consolidated condensed financial statements.

4. CUSTOMER CONCENTRATION

Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. A significant portion of the Company’s Hospitality revenue has been derived from two customers, which were acquired as part of the PRAMA acquisition on April 22, 2019 and so were not present in the comparable period. For the three months and nine months ended December 31, 2019, the two largest customers accounted for 43% and 53%, respectively, of the Company's total revenue. As of December 31, 2019, one significant customer accounted for 16% of the Company’s total receivables. There were no significant revenue and receivable concentrations as of and for the periods ended December 31, 2018, or March 31, 2019. Changes in the relationship with these customers could materially and adversely affect the Company’s financial performance and going concern status.

4.5. EMPLOYEE BENEFITS

The change in benefit obligation of the gratuity and vacation statutory plans are as follows:

The components of net periodic pension costs for the gratuity and vacation statutory plans are as follows:

There were no amounts recognized in accumulated other comprehensive income.

The range of assumptions used for benefit obligations and net periodic benefit cost are as follows:

Discount rate 7.95 to 8.07% per annum

Rate of compensation increase 6% to 8% per annum

Retirement range of 58 to 65 years.

PRAMA evaluates these assumptions based on its employee demographics, budgets and industry standards.

6. LEASES

Balance sheet information related to our leases is included in the following table:

Operating lease liabilities, due within one year are included in Other current liabilities on our Consolidated Condensed Balance Sheet as of June 30,December 31, 2019.

The components of lease expense during the quarter ended June 30,and nine month period ended December 31, 2019 is included in the following table:

Lease expense is included in Cost of revenue in our Consolidated Condensed Statement of Operation for the quarterperiods ended June 30,December 31, 2019.

Supplemental other information related to leases were as follows:

The future maturities of lease liabilities as of June 30,December 31, 2019, are as indicated below:

5.The Company expects to record impairments to Operating Lease, Rightof-Use of Assets, net as of March 31, 2020, reflecting the impact of covid-19, but has not done so as of December 31, 2019, as the covid-19 pandemic was a non-adjusting post balance sheet event as of December 31, 2019.

7. PROPERTY AND EQUIPMENT, NET

Property and Equipment consists of the following as of June 30December 31 and March 31, 2019.

Depreciation expense for the quartersthree and nine months ended June 30,December 31, 2019 was $70,371 and June 30,$188,505, respectively. Depreciation expense for the three and nine months ended December 31, 2018 was $57,822$917 and $966$2,900, respectively.

The Company expects to record impairments to Property and Equipment as of March 31, 2020, reflecting the impact of covid-19, but has not done so as of December 31, 2019, as the covid-19 pandemic was a non-adjusting post balance sheet event as of December 31, 2019.

6.

8. INTANGIBLE ASSETS

Intangible assets with definite lives consist of the following as of June 30December 31 and March 31, 2019: 

Amortization expense for the quartersthree and nine months ended June 30,December 31, 2019 was $70,916 and June 30,$223,939 respectively. Amortization expense for the three and nine months ended December 31, 2018 was $76,483were $32,648 and $38,319$103,528 respectively. The Company has no impairment charge for definite lived intangible assets for the quarter ended June 30, 2019.above periods.

Intangible assets with indefinite lives consist of the following as of June 30December 31 and March 31, 2019: 

Intangible assets with indefinite lives are not amortized, they are reviewed for impairment annually, or whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In these circumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values.

The Company expects to record impairments to Intangible Assets as of March 31, 2020, reflecting the impact of covid-19, but has not done so as of December 31, 2019, as the covid-19 pandemic was a non-adjusting post balance sheet event as of December 31, 2019.

7.

9. AMOUNTS DUE TO AND FROM RELATED PARTIES

Amounts due from related parties arising

The following originally were included on PRAMA’s opening balance sheet on acquisition and have been unchanged apart from PRAMAforeign exchange differences, they are all denominated in Indian rupees, unsecured and non-interest bearing:

The balances above are denominated in Indian Rupees and the above amounts are translated into US dollars at the closing rate as of December 31, 2019. The movement from the September 30, 2019 balance to the December 31, 2019 balance relates to foreign exchange translation only, with no change in the Indian Rupee amount.

Included in the September 30, 2019 amounts due from related parties balance from the consolidated balance sheet of $951,521 as of June 30, 2019, iswas a $14,364 non-PRAMA brought forward frombalance recorded in Sunalpha, this was collected in the previous period ended December 31, 2019 and $937,157 arising fromso is no longer included in the acquisition of PRAMA on April 22,December 31, 2019 all of which are unsecured and non-interest bearing, which are described below:balance sheet.

Amounts due to related parties arising from PRAMA

Included in theThe $866,544 balance of amounts due to related party balance from the consolidated balance sheet of $909,610 as of June 30,December 31, 2019 is comprised of $864,853 of PRAMA related balances and a $13,828$1,691 non-PRAMA brought forward balance from the previous period and $895,782 of various liabilities assumed on the purchase ofperiod. The PRAMA on April 22, 2019 whichrelated balances are described below:

The above balances in Indian Rupee have not changed, with the translated amounts in U.S. dollars changing, due to changes in the closing balance sheet exchange rate.

Included in the September 30, 2019 amounts due from related parties, was a balance of $12,673 recorded in Sunalpha which was paid in the three month period ended December 31, 2019. There is a remaining balance of $1,691 as of December 31, 2019, payable to Mr. Sachin Mandloi included in Sunalpha which is a brought forward balance, which is denominated in Indian rupees and is non interest bearing.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

8.

10. LOANS WITH THIRD PARTIES

Loans and borrowings with third parties are discussed below:

On March 16, 2019 the Company obtained a $250,000 convertible note from United Techno Solutions, Inc with a maturation date of April 1, 2020 and an embedded interest rate of 8%. The note may convert into 357,143 shares of common stock at the noteholder’s option. The balance outstanding as of June 30,December 31, 2019 amounted to $250,000. No interest has been paid on this note.

On November 29, 2019 IHPL, a subsidiary of PRAMA and the Company took out a loan of 2,500,000 Indian Rupees ($35,036) from HDFC Bank Limited. The balance outstanding as of December 31, 2019 was $35,036. The loan is repaid over 36 equal installments of 87,893 Indian Rupees (approximately $1,232) with cumulative payments of interest and principal of 3,164,148 Indian Rupee (approximately $44,344) and is unsecured with maturation on December 6, 2022.

As part of the acquisition of PRAMA on April 22, 2019, the Company assumed a loan with NeoGrowth Credit Private Limited. The remaining balance as of June 30, 2019 was $34,421Limited, with a maturation of March 21, 2020. This2020, which is included in short term borrowings as of June 30,December 31, 2019. The loan has an embedded finance charge of 18% interest over an 18 month period. The loan is paid in daily installments, interest is paid in Indian Rupees and interest approximates $23 per day. The loan is callable on demand. Interest paid during the period April 22, 2019 through June 30, 2019 approximated $1,610.

As part of the acquisition of PRAMA on April 22, 2019, the Company assumed a loan with Small Industries Development Bank of India. The original principal was $969,932 (60 million Indian Rupees), on December 31, 2013, and is payable over monthly installments over 7 years, withthere are no payments due inrepayments scheduled for the first twelve months of the loan.loan, with monthly payments commencing in January 2015 and ending on December 31, 2021. The bank has the right to convert the loan into equity capital of PRAMA. The rate of interest is 15.5% per annum. The loan is secured by: a) A senior secured charge on all moveable assets located at a contract hotel in Ahmedabad, India; b) Pledged deposit of $80,828 (5 million Indian Rupees); c) mortgage of leasehold rights in the lease contract for the contract hotel in Ahmedabad, India; d) Guarantee of Prama Consultancy Services Pvt. Ltd a related party of the Company; and e) the personal guarantees of Messrs. Mahesh Gandhi and Pravin Rathod,Rathod. During the three months ended December 31, 2019, the balance on the loan decreased by $59,872 due to repayments.

9.

As part of the acquisition of PRAMA, the Company assumed an amount owing to Advance Finstock Private Limited for $71,905 as of April 22, 2019. This is an undocumented informal loan agreement. The informal arrangement incurs interest at 18% per annum. The amounts due were not collateralized. The accrued interest has not been paid as of December 31, 2019.

11. LOANS WITH RELATED PARTIES

Loans and borrowings with related parties are discussed below: