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

TRIPBORN, INC.

UNAUDITEDCONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

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

TRIPBORN, INC. 

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS 

(UNAUDITED)

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

TRIPBORN, INC. 

CONSOLIDATED CONDENSED STATEMENT OF EQUITY (DEFICIT)

(UNAUDITED)

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

TRIPBORN, INC. 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

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

TRIPBORN, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

See accompanying notes to unaudited condensed consolidated financial statements.

TRIPBORN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to unaudited condensed consolidated financial statements.

TRIPBORN, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY (DEFICIT)

See accompanying notes to unaudited condensed consolidated financial statements.

TRIPBORN, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to unaudited condensed consolidated financial statements.

Notes to Consolidated Condensed Financial Statements

June 30, 2019 

(UNAUDITED)

December 31, 2018

(Unaudited)

1. DESCRIPTION OF BUSINESS

Overview

TripBorn, Inc. (“TripBorn” or the “Company”) is aLast Milean eCommerce aggregator that delivers the products and services to offline consumers using a service agent network in India throughhospitality management company. An aggregator model is a form of eCommerce whereby our website, www.tripborn.com. Currently, we operate as a business to business, or B2B, Last Mile Commerce platform that serves business agents and companies based in India in providing aggregates information from various travel and financial services products for their offline customers offeringhospitality vendors and presents them to users on a single platform, to ease, facilitate, coordinate and effectuate consumer travel reservations and related travel services and products to travel agents in Indiahospitality needs. OureCommerce Aggregator business segment operates through its proprietary internet-based platform at www.tripborn.com.

Tripborn, Inc. (“Company”) was incorporated under the law of the state of Delaware in January 2010 office is located at 762 Perthshire Pl, Abingdon, MD 21009. The Company provides Online Travel Agency (OTA) and related services and selling its services to directly to Business customers. The Company primarily operates in India. Tripborn, Inc. formerly known as PinstripesNYC, Inc was operating as a shell company with nominal or no assets or operations until December 14, 2015. Tripborn Inc. was known as PinstripesNYC, Inc. until January 2016.

On December 14, 2015, PinstripesNYC, Inc. (the “Registrant”) executed and agreement and Plan of Merger (the, “Agreement”) with Sunalpha Green Technologies Private Limited (“Sunalpha”). Sunalpha registered under the Company Act of 1956, India with principle office located at 812, Venus Atlantis Corporate Park, Near Prahalad Nagar Garden, Satellite, Ahmedabad, Gujarat, India 380 015.

As a result of the Merger, Sunalpha became, 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 Registrant (Pinstripes NYC Inc.) now Tripborn Inc.Company’s net revenues are derived from operations in India.

The unaudited consolidated financial statements include the accounts and following the consummationtransactions of the MergerCompany; its wholly owned subsidiary, Sunalpha; its 51% owned subsidiary, PRAMA and giving effectan equity investee, PRAMA Canary Wharf Private Limited (“PCW”). Through PRAMA, the Company has a 29.575% 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. All significant inter-company accounts and transactions are eliminated in consolidation.

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 76,804,914 Merger Shares by its principle stockholders.2,632,653 shares of common stock valued at $737,143.

For

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, purposes, Sunalpha was deemed toand the acquired company’s results will be the accounting acquirerincluded in the accompanying financial statements from their respective dates of acquisition. Acquisition transaction costs have been recorded in selling, general and consequently, the transactionadministrative expenses as incurred.

The acquisition of PRAMA was treated as a recapitalizationbusiness combination under U.S. GAAP. During the first quarter, we estimated the allocation of the Company. Accordingly, Sunalpha’spurchase price to the assets acquired and liabilities and results of operations are the historical consolidated financial statementsassumed based on estimated fair value assessments. The allocation of the Companypurchase price is preliminary pending the completion of various analyses and Company’sthe finalization of estimates. During the measurement period, which is not to exceed one year from the acquisition date, additional assets or liabilities may be recognized if new information is obtained about facts and results of operations are consolidated with Tripborn Inc. effectivecircumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date. The preliminary allocation may be adjusted after obtaining additional information regarding, among other things, asset valuations, liabilities assumed and revisions of previous estimates, and these adjustments may be significant.

The following reflects our preliminary purchase price allocation:

The following reflects the composition and timing of consideration:

The following reflects the net cash paid on acquisition of PRAMA in the quarter ended June 30, 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 Merger. No step-up in basis or intangible assets or goodwill was recorded in this transaction. The acquisition of allPRAMA, 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 and $276,512 in net loss before income taxes of the outstanding sharesacquiree in the consolidated condensed statement of common stockoperations for the period April 22, 2019 through June 30, 2019.  The revenue and net loss before taxes for the combined entity for the quarter ended June 30, 2019, as though the acquisition of Sunalpha by TripBornPRAMA had occurred on December 14, 2015 is being accountedApril 1, 2019 was $2,259,644, and $674,729, respectively.  The revenue and net loss before taxes for the combined entity for the quarter ended June 30, 2018, as a reverse recapitalization.though the acquisition of PRAMA had occurred on April 1, 2018 was $2,096,250, and $422,597, respectively.  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

The Company has reportedincurred net loss of $330,752, accumulated loss of $3,958,132 and negative cash flowlosses from operations of $962,722 as of andsince inception. The net loss for the quarter ended December 31, 2018.June 30, 2019 was $562,755 and the accumulated deficit was $4,782,894 as of June 30, 2019. The Company’s ongoing losses have had a significant negative impact on the Company’s financial position and liquidity.

The Company’s cash requirements are primarily to fund operating losses, working capital, capital expenditures and the completion of acquisitions. Historically, the Company sold $150,000has 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 the Company will be able to borrow or sell securities in the future, which raises substantial doubt about the ability of the Company’s common stock during the third quarter of fiscal 2019.

As of December 31, 2018, we had $817,518 in cash and cash equivalents, comparedCompany to $1,155,367 as of March 31, 2018. This $ 337,849 decrease in cash is a result in operating loss generated, offset be issuance of stock during the quarter ended December 31, 2018. As of December 31, 2018, we have stockholders’ deficit of $1,254,680 compared to a deficit of $741,656 as of March 31, 2018.  Our stockholders’ deficit decreasedcontinue as a going concern. The consolidated 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 ofshould the increase in our operating losses during the quarter.Company be unable to continue as a going concern.

The Company’s operations are subject to number of factors that can affect itits operating results and financial conditions. Such factors include, but are not limited to: the continuous enhancement of the current products and services; marketing its new services; continuecontinuing to invest in new technologies; changechanges in domestic and foreign regulations; the price of, and demand for, the company’sCompany’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.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The interim unaudited consolidated condensed financial statements and related disclosuresaccompanying 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”. TheAll 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.

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 prepared usingrestated to conform to the accrual basiscurrent 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 accounting in accordance with Generally Accepted Accounting Principles ("GAAP")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 the United States.rounded numbers. 

Principles of Consolidation

The consolidated financial statements include the accounts and transactions of the Company, and its wholly owned subsidiary, Sunalpha Green Technologies Private Limited.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% equity interest in PCW, which is accounted for under the equity method. All significant inter-company accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in USconformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and footnotes thereto, thosethe accompanying notes. The Company bases its estimates on historical experience and on various other assumptions affectthat are believed to be reasonable, the reported amounts assets, liabilities and disclosureresults of contingentwhich form the basis for making judgments about the carrying values of assets and liabilitiesliabilities. Such estimates primarily relate to unsettled transactions and revenue. Actualevents as of the date of the financial statements. Accordingly, actual results couldmay differ significantly from those estimates. estimated amounts.

Our significant estimates include elements of revenue recognition, the realizationapplication of deferred tax assets, amounts that may be due underfair value estimates for the tax sharing agreement,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 contingent liabilities, including taxes related to hotel occupancy. Actual amounts may differ from these estimates.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 a materially differentan impairment charge. The Company has nonot recognized an impairment charge for the quarter ending Septemberended June 30, 2018.2019.

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, provides travel products and servicesusing either of two methods: (1) retrospective application of Topic 606 to leisure and corporate travelers in India and abroad. The revenue from rendering these services iseach 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 timedate 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 significant risk and rewards are transferred(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. ThisAt contract inception, once the contract is generallydetermined to be within the case: 1) onscope of Topic 606, we evaluate the dategoods 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 departure for vacation packages, 2) on the date of check in for hotel booking business and 3) ontransaction price that is allocated to the date of issuance forrespective performance obligation when (or as) the sale of airline tickets. performance obligation is satisfied.

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. Revenue from airline tickets is recognizedRecognized on a net commission basis upon transfer of control of promised services in an amount which includes our non-refundable surcharges and feeswe are entitled to ourin exchange for the service agents.For certain airline transactions, we also receive fees from global distribution systems partners that control the computer systems through which these reservations are booked..

Vacation Packages. Revenue from vacation packages, including revenueRecognized on airline tickets sold to customers as a part of vacation packages, is accounted for on the gross basis, asupon transfer of control of promised services in an amount which we are determinedentitled to bein exchange for the primary obligor in the arrangement i.e., the risks and responsibilities are taken by us, including the responsibility for delivery of services.

Rail Ticketing. Revenue from rail ticket reservations is recognized on net basis which includes our non-refundable surcharges and fees to our service agents. We recognized revenue on gross basis for railway service setup fees, which is non-refundable and collected from our service agent at the time of agent enrollment.

Money Transfer. To our service agent we provide system connectivity using our internet platform so our service agent can perform Money Transfer services on behalf of their customers. Our internet platform facilitates connectivity between Bank and Service Agent. We recognized revenue on the net basis, we collect service charge or fees to our service agent for performing the money transfer services for their customers. Performance linked incentives from Banks or suppliers are recognized upon achievement of performance obligations and amount is billed to suppliers.   service.

Other Revenue. Revenue from other sources, primarilyPrimarily comprising net commission and fees from bus tickets booking fees, visa processing fees, money transfer, and pre-and post-paid expenses are recognized after the services are being performed.

Hospitality Revenues:

CostHospitality 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 revenue primarily consists of costs paid to hotel and vacation package suppliers for the acquisition of relevant services and products for sale to customers and includes the procurement cost of hotel rooms and other services.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.

Operating Expenses

Other operating expenses

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

Selling, general and administrative expenses include, costsdirect operating expenses, general and administrative expenses such as advertising and business promotion costs, utilities, rent, payroll, and consultants fees and charges, 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 balances in both USbank accounts in the U.S. and Indian financial institutions.  At December 31, 2018 and 2017, depositsIndia, which at US financial institutions that exceededtimes may not be covered by, or exceed the Federalcoverage limit of the Deposit Insurance Company (“FDIC”) $250,000 insured limits were balance in the bank was $453,203 and $758,380, respectively. BankCredit Guarantee Corporation of America’s credit rating is closely monitored by the Company and theIndia. The Company does not believe its uninsured deposits at Bank of America constitutes anythat this results in significant credit risk.

Sunalpha has fourteen accounts denominated in Indian Rupees. As of December 31,June 30, 2019, and 2018, and 2017, the cash balance in financial institutions in India was USD $350,315$859,189 and $313,621,$360,210, respectively. The transactions are undertaken in Indian Rupees and requires a foreign currency translation adjustment. The Company’s cash deposits in India are not insured against loss. The Company does not believe that this results in any significant credit risk. 

Receivables and Credit Policies

Accounts receivable are stated at the amount’samount 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 analysisanalyses 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. The Company does use estimate to use a general reserve methodology when estimating the level of allowance for doubtful accounts because the Company believes, due to the unique circumstances of each customer and a limited number of customers, a general reserve methodology would not provide a reasonable estimate of potentially uncollectible accounts.

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 expenseexpenses as incurred.

Intangible Assets

Intangible assets with definiteindefinite useful lives consist exclusively of trademarks and are tested for impairment at least annually, for their recoverability. We do not have any intangible assets with indefinite lives. 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 quarter ended June 30, 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 Company translates the foreign currency of its foreign subsidiary, whose functional currency is Indian rupee,financial statements into USU.S. Dollars the reporting currency using the year or reporting period end or average exchange rates in accordance with the requirements of ASC subtopic 830, Foreign Currency Matters (“ASC 830”).Matters. Assets and liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive gain (loss) within shareholders’stockholders’ equity (deficit).

Earnings and Loss per Share

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. 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 in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.

Promotion and Advertising Expense

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, SMSshort 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. During the quarter ended June 30, 2019 and June 30, 2018, $25,723 and $0 was recognized in legal and consulting expenses in the Consolidated Condensed Statements of Operations, respectively, as a result of an agreement for consulting services.

Leases

Leases of assets whereOn April 1, 2019, the Company has assumed substantiallyadopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the risksdate of initial application and rewardsnot 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 ownership are classifiedpractical expedients permitted under the transition guidance, which allowed for the carryforward 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 leases. Finance leaseslease 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 lowerpresent 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 fair value ofCompany's leases is not easily determinable, the leased assets andCompany’s applicable incremental borrowing rate is used in calculating the present value of the minimumsum 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.

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.

Foreign Currency TranslationNon Income Taxes

The Company translatesis 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 foreign currency financial statements into US Dollarsnet amounts to the respective local tax authorities on an accrual basis.

Equity-method Investments

Through PRAMA, the Company has a 29.575% 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 yearequity 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 reporting period endlosses as reported by equity-method investees, amortization of the related intangible assets, and related gains or average exchange rateslosses, 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 accordancethe 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 requirements of ASC subtopic 830-10, Foreign Currency Matters (“ASC 830-10”).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 and liabilities are translated at exchange rates as of June 30, 2019, is $346,074 relating to the balance sheet date. Revenuesfair value of equity-method investments and expenses are translated at average rates$319,725 relating to the fair value of amounts due from equity-method investee, in effectaggregate $665,799. During the period April 22, 2019, through June 30, 2019, there was no recorded impairment for the periods presented. The cumulative translation adjustment is includedequity investee. Also there was no activity in the accumulated other comprehensive gain (loss) within shareholders’ equity (deficit).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, 2019.

Related Parties

The valueCompany follows FASB ASC subtopic 850-10 for the identification of INR against US$related parties and other currencies may fluctuate and is affected by, among other things, changes in India’s political and economic conditions. Any significant revaluationdisclosure of INR may materially affectrelated party transactions. Pursuant to Section 850-10-20, the Company’s financial condition inrelated parties include: (a) affiliates of the Company (“Affiliate” means, with respect to any specified person, any other person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, as such terms of US$ reporting. The following table outlines the currency exchange rates that wereare used in creatingand construed under Rule 405 under the consolidated financial statementsSecurities Act); (b) entities for which investments in this report: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 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11, “Simplifying the Measurement of Inventory”. ASU No. 2015-11 changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business; less reasonably predictable costs of completion, disposal and transportation. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2016, including interim reporting periods within those fiscal years. The Company adopted this guidance in the first quarter of its fiscal year ended March 31, 2018, using a prospective application. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation2018-11, Leases (Topic 718):842), Targeted Improvements, which provides an additional, optional transition method with which to Employee Share-Based Payment Accounting.”adopt the new leases standard. This update addresses several aspectsadditional 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 accounting for share-based compensation transactions including: (a) income tax consequences when awards vest or are settled, (b) classification of awards as either equity or liabilities, (c) a policy election to account for forfeitures as they occur rather than on an estimated basis and (d) classification of excess tax impacts on the statement of cash flows. The Company adopted this guidance in the first quarter of its fiscal year ended March 31, 2018, whichstandard did not have a material impact onresult 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 consolidated financial statementspackage of practical expedients allowed by the standard, and related disclosures.therefore, we did not reassess: a) Whether any expired or existing contracts are or contain leases under the new definition; b) The amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement will be applied prospectively. The Company does not expect the impactlease classification for any expired or existing leases; or c) Whether previously capitalized costs continue to be material to the consolidated results of operations; however, such determination is subject to change based on facts and circumstances at the time when awards vest or settle.

We adopted Revenue Recognition - Revenue from Contracts with Customers (ASU 2014-09) for the fiscal year ended March 31, 2018, which amends the guidance in former ASC 605, Revenue Recognition and found no significant impact on the revenue recognition.

New Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, "Leases” to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet with a corresponding liability and disclosing key information about leasing arrangements. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim reporting periods within fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the impact of the adoption of this revised guidance on its consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 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. For public business entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments in this ASU should be adopted on a modified retrospective basis. The Company reviewing adoption and its impact of this guidance on its consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control”. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. As of fiscal year, ending March 31, 2018 and 2017 we have no variable interest entity under common control with the reporting entity.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted forqualify as acquisitions (or disposals) of assets or businesses.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. The CompanyManagement is currently evaluating the impact of adopting this ASU to determine its impact to the Company's financial statements but does believes it isexpected to have a minimal impact on its consolidatedthe Company’s financial statements.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 financial statements.

4. 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, 2019.

The components of lease expense during the quarter ended June 30, 2019 is included in the following table:

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

Supplemental other information related to leases were as follows:

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

5. PROPERTY AND EQUIPMENT, NET

Property and Equipment consists of the following as of December 31June 30 and March 31, 2018. The property and equipment listed below are recorded in the books of Sunalpha. 2019.

Depreciation expense for the quarters ended December 31,June 30, 2019 and June 30, 2018 was $57,822 and 2017 is $2,900 and $930,$966 respectively.

5.

6. INTANGIBLE ASSETS WITH DEFINITE LIVES

Intangible assets with definite lives consist of the following as of December 31June 30 and March 31, 2018:2019: 

Amortization expense for the quarters ended December 31,June 30, 2019 and June 30, 2018 was $76,483 and 2017 was $103,448 and $86,618,$38,319 respectively.

6. STOCK COMPENSATION

In current year 2018, company issued 478,560-common shares to an individual The Company has no impairment charge for services to be performed on the company’s behalf until June 2020 and corresponding expenses is recorded in Selling, General and Administration expense as ofdefinite lived intangible assets for the quarter ended DecemberJune 30, 2019.

Intangible assets with indefinite lives consist of the following as of June 30 and March 31, 2018. The issuance of2019: 

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 shares is being made pursuantcircumstances, they are tested for impairment based on undiscounted cash flows and, if impaired, written down to certain administrative services, advisory board services, business development services, consulting services, financial consulting services. The Board has equated the number of these shares at fair value of the services to be provided by this individual.based on either discounted cash flows or appraised values.

7. CONVERTIBLE NOTES PAYABLEAMOUNTS DUE TO AND FROM RELATED PARTIES

Related Party Convertible NotesAmounts due from related parties arising from PRAMA

Included in the amounts due from related parties balance from the consolidated balance sheet of $951,521 as of June 30, 2019, is a $14,364 non-PRAMA brought forward from the previous period, and $937,157 arising from the acquisition of PRAMA on April 22, 2019, all of which are unsecured and non-interest bearing, which are described below:

Amounts due to related parties arising from PRAMA

Included in the amounts due to related party balance from the consolidated balance sheet of $909,610 as of June 30, 2019, is a $13,828 non-PRAMA brought forward from the previous period and $895,782 of various liabilities assumed on the purchase of PRAMA on April 22, 2019 which are described below:

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. 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, 2019 amounted to $250,000. No interest has been paid on this note.

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 $34,421 with a maturation of March 21, 2020. This is included in short term borrowings as of June 30, 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 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, with no payments due in the first twelve months of the loan. 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, Pravin Rathod,

9. LOANS WITH RELATED PARTIES

Loans and borrowings with related parties are discussed below:

On December 31, 2016, the Company issued an $956,000a convertible note with maturity dateto Takniki Communications, Inc, an affiliate owned by Sachin Mandloi, our Vice President and a director, totaling $695,000. This note was issued pursuant to a Software Development Agreement dated September 23, 2016 between Takniki Communications, Inc and the Company to finance the upgrade of our Travelcord operating software.  The note has a maturation of December 31, 2019, and bears interest at the rate of ten percent payable at maturity. The principal amount of this note is convertible into 10,303,070 shares of the Company’s common stock at the noteholder’s option at maturity.

The loan from Mr. Mahesh Gandhi was assumed as a result of the purchase of PRAMA on April 22, 2019. The loan amounted to $320,114 and $329,323 as of April 22, 2019 and June 30, 2019, respectively. The counterparty isMr. Mahesh Gandhi, a shareholder in PRAMA. This is an informal loan agreement. The loan bears interest at the rate of 15% per annum and is callable on demand. The accrued but not paid interest on this loan included in the balance as of June 30, 2019 amounted to $9,209.

On April 16, 2019, the Company borrowed $300,000 from ARNA Global LLC, an entity owned and controlled by Mr. Sharma, its President and CEO, to partially fund the acquisition of PRAMA. During the quarter, $100,000 was re-paid to ARNA Global LLC, however $200,000 was outstanding as of June 30, 2019. On July 8, 2019, the remaining $200,000 was repaid. The loan is unsecured and bears interest at 10% per annum.

On March 7, 2019, with annual rate of 10% from ARNA GLOBAL2016, the Company issued a convertible note to Arna Global LLC, a related party wholly owned by the Company’s president.CEO and President of the Company for $956,000. The note convertsmatured on March 7, 2019, and bore interest at the rate of ten percent. The note was converted into 21,194,381 shares of common stock (the “Note Shares”).at the noteholders option on March 7, 2019.

TheOn March 8, 2016, the Company issued an $695,000a convertible note with maturity date of December 19,to Mr. Sachin Mandloi, a related party for $38,076. The note matured on March 8, 2019, with annualand bore interest at the rate of 10% from TAKNIKI COMMUNICATION, wholly owned by the Company’s Vice President.ten percent. The note convertswas converted into 10,303,070835,552 shares of common stock (the “Note Shares”).at the noteholders option on March 8, 2019.

TheOn March 8, 2016, the Company issued an $156,407a convertible note with maturity dateto Mr. Deepak Sharma, the CEO and President of the Company for $156,407. The note matured on March 7,8, 2019, with annualand bore interest at the rate of 10% from Mr. Sharma, Company’s president.ten percent. The note convertswas converted into 3,432,234 shares of common stock (the “Note Shares”).at the noteholders option on March 8, 2019.

10. STOCKHOLDERS’ EQUITY 

During the quarter ended June 30, 2019, the Company issued an aggregate of 30,441,407 of common shares by means of: a) 25,462,167 common shares through conversion of notes; b) 2,632,653 common shares relating directly to the PRAMA acquisition; c) 1,571,430 common shares when the warrant holders exercised their $0.01 warrants; and d) 775,157 common shares through a private placement. These events are described in further detail below.

In June 2019, the Company issued 25,462,167 common shares and reduced its liabilities by approximately $1,150,483 in connection with three separate related parties who converted their notes. These were non-monetary transactions.

On April 22, 2019, theCompany issued 2,632,653 common shares to the shareholders of PRAMA, at a price of $0.28 per share, as part of the PRAMA acquisition. This was a non-monetary transaction.

In June 2019, the Company issued 1,571,430 common shares when the warrant holders exercised their warrants and received approximately $15,714 in cash.

During the quarter ended June 30, 2019 the Company issued and sold 775,157 units comprising one share and warrant to purchase two share of Company’s common stock; par value $0.0001 pursuant to a private placement. The purchase price per unit was $0.70 resulting in aggregate proceeds of $542,610 to the Company. The Company issued warrants to acquire approximately 1,550,314 common shares pursuant to the 775,157 units listed above during the quarter ended June 30, 2019. These warrants shall be exercisable, in whole or in part, during the three-year term commencing from the issuance date at an exercise price of $0.01.

Warrants:

The Company issued an $38,076 convertible note with maturity datefollowing table is the summary of March 7, 2019, with annual rate of 10% from Mr. Mandloi, Company’s vice president. The note converts into 835,552 shares of common stock (the “Note Shares”).warrant activities during the period:

Aggregate intrinsic value represents the difference between the Company’s estimate of the fair value of its common shares and the exercise price of outstanding, in-the-money warrants. The Company has accrued interestis not actively traded on the Over the Counter Market. The total intrinsic value of $47,719 for related partieswarrants exercised for the quarterthree month period ended December 31, 2018.June 30, 2019 was minimal. The fair value of warrants granted during the three months ended June 30, 2019 approximated $0.23 per warrant.

11. INCOME TAX 

Non-Affiliate Party Convertible NotesUS taxes

None. 

8. RELATED PARTY TRANSACTION

On April 1, 2017, the board approved the compensation of Deepak Sharma, President of the Corporation, be fixed at USD 250,000/- per year for the next three year period beginning April 1, 2017 to year ending March 31, 2020, payments to be made in monthly installments on the last day of each month. The Company had not paid any compensation for the fiscal year ending March 31, 2018. The Company accrued the total executive compensation payable of $250,000 for the fiscal year ending March 31, 2018.

The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered with independent parties.

9. STOCKHOLDER’S EQUITY

None.

Equity Compensation Plan

On April 15, 2016, we adopted the TripBorn, Inc. 2016 Stock Incentive Plan, which authorized the issuance of 7,680,000 shares of our common stock pursuant to stock options, restricted stock, restricted stock units or other awards authorized under the terms of the plan. No awards have been issued under the plan.

10. INCOME TAX

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 

The Company files its income tax returns on a fiscal year basis.

The future effective income tax rate depends on various factors, such as the Company’s income (loss) before taxes, tax legislation and the geographic composition of pre-tax income. The Company files income tax returns in the U.S. Federal jurisdiction and various State jurisdictions. Sunalpha filesand PRAMA file tax returns in India.India and due to losses, no tax liability or net deferred tax asset is recorded. The Company is generally subject to U.S. Federal, State and local examinations by tax authorities for the past three years.

On DecemberIndian taxes

Historically, the Company has not paid Indian income taxes because of historical losses. For the period April 22, 2017,2019 to June 30, 2019, the U.S. government enacted comprehensiveCompany believes the PRAMA results of operations would not have resulted in an income tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act included a broad range of complex provisions impacting the taxation of multi-national companies. The Tax Act makes broad and complex changesliability, due to the U.S. corporate incomecalculation of a pro forma tax system and includes a Transition Toll Tax (the “Transition Tax”), which is a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries’ previously untaxed foreign earnings. The Toll Charge will be paid over an eight-year period, starting in 2018, and will not accrue interest. The Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. Generally, accountingloss for the impacts of newly enacted tax legislation is required to be completed in the period of enactment, however in response to the complexities and ambiguity surrounding the Tax Act, the SEC released Staff Accounting Bulletin No. 118 (“SAB 118”) to provide companies with relief around the initial accounting for the Tax Act. Pursuant to SAB 118, the SEC has provided a one-year measurement period for companies to analyze and finalize accounting for the Tax Act. During the one-year measurement period, SAB 118 allows companies to recognize provisional amounts when reasonable estimates can be made for the impacts resulting from the Tax Act. TripBorn will finalize accounting for the Tax Act during the one-year measurement period and any adjustments to the provisional amounts will be included in incomeavailability of prior period tax expense or benefit in the appropriate period, and disclosed if material, in accordance with guidance provided by SAB 118.losses.

While our accounting for the Tax Act is not complete, we do not believe we are subject to the Transition Tax. The Transition Tax is a tax on previously untaxed accumulated earnings and profits (“E&P”) of our foreign subsidiaries and our foreign subsidiary has historically generated operating losses. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings, if any.

The Tax Act has significant complexity and our final tax liability may materially differ from provisional estimates due to additional guidance and regulations that may be issued by the U.S. Treasury Department, the Internal Revenue Service (“IRS”) and state and local tax authorities, and for TripBorn’s finalization of the relevant calculations required by the new tax legislation.

11.12. EARNINGS AND LOSS PER SHARE

ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share.

The computation of basic earnings (loss) per share is computed by dividing earnings (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect.

A reconciliation

The Company has outstanding convertible debt of net loss and weighted average shares used in computing$945,000 which converts into 10,660,213 of the Company’s common stock, which may cause diluted earnings per share. Since the Company has only incurred losses, basic and diluted net incomeloss per share isare the same as follows:potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive.

The Company issued approximately 1,550,314 warrants during quarter ended June 30, 2019, which had minimal impact on the earning per share calculation for the quarter ended June 30, 2019.

Due to net loss, the shares of common stock underlying the convertible notes described in Note 9 were not included in the calculation of diluted net loss per share, as they would have had an antidilutive effect.

12.13. COMMITMENTS AND CONTINGENCIES

The Company is the B2B Principal Agent of the Indian Railway Catering and Tourism Corporation, or IRCTC, which is a government entity that allows the Company to offer reservations through Indian Railways’ passenger reservation system on the Company’s webpage. Indian Railways is India’s state-owned railway, which owns and operates most of India’s rail transportation. The Company has integrated its online portal with IRCTC’s to provide a seamless booking process. Pursuant to an Application Programming Interface (API)(“API”) agreement, dated October 5, 2015, the Company is required to pay a minimum annual maintenance fee of $7,500 to IRCTC. In the event the agreement is renewed, the amount based on the number of active railway agents that use the Company rail booking services on the Company’s platform will be payable annually. On September 30, 2017,2018, the Company renewed its agreement with the IRCTC and paid an annual maintenance fee of $8,600 based on the number of active railway agents it has enrolled to book rail tickets.

We leaseThrough Sunalpha, the Company currently occupies approximately 2,455 square feet of office space owned by the CEO of the Company on a rent-free basis. As of June 30, 2019 and 2018, the Company has not paid any rent. There were no significant commitments or contingencies for our principal executive officers in Ahmedabad, India. Currently, our president and director, Deepak Sharma leases this space to us at no charge.

Since March 2016, we also lease approximately 4,080 square feetPRAMA as of office space for our technology center in Bangalore, Karnataka India, for which we currently pay approximately $5,896 per month including annual maintenance charges. This lease is continued with expiration dates through December 2024. We believe these properties suit our operations and business needs and that adequate, suitable lease space will continue to be available to meet our needs. Following table describes our obligation for the next five year from the lease.

13. SUBSEQUENT EVENTSJune 30, 2019.

The Company has evaluated subsequent events through February 14,is party to certain legal proceedings that arise in the ordinary course and are incidental to its business. On the acquisition of PRAMA, on April 22, 2019, the Company assumed an interest in an arbitration claim. PRAMA made an arbitration claim of approximately $295,000 (21.2 million Indian Rupees) against Ms. Khurana Hotels and Apartments Private Limited in the Civil Court Senior Division of Amritsar, India. The claim is based on the asserted failure of Ms. Khurana Hotels and Apartments Private Limited, as lessor, to comply with the terms of the lease. As of the date on whichof this filing, the financial statements were available to be issued.arbitration proceedings are on-going.

Although litigation and arbitration are inherently uncertain, based on the information currently available, management does not believe that the currently pending arbitration will have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations.

14. BUSINESS SEGMENTS 

Prior to the acquisition of PRAMA, a hospitality company, the Company was a one segment company. Following, the acquisition of PRAMA, the Company’s chief operating decision maker changed the information he receives to manage, assess, operate the business and to allocate capital. Accordingly, the Company changed its operating segments to comprise: eCommerce aggregation services and Hospitality, respectively. The Company management reviews and evaluates the operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing financial performance. The reportable segments reflect the internal organization of the Company and are strategic businesses that offer different products and services. The Company reports financial information and evaluates its operations by revenues. Management, including the chief operating decision maker, reviews operating results solely by revenue and operating results.

All net revenues are derived from transactions with third party customers, there are no inter-segment revenues. All of the net revenue is derived from operations in India, substantially all of the expenses are borne in India, with certain expenses borne in the US.

The Company measures segment performance based on loss from continuing operations. Summarized financial information concerning each of the Company's reportable segments is as follows: