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

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

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

TRIPBORN, INC.

UNAUDITEDCONSOLIDATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)BALANCE SHEETS

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

TRIPBORN, INC.

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY (DEFICIT) (Unaudited)

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

TRIPBORN, INC.

CONSOLIDATED CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF CASH FLOWS (Unaudited)

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

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 Financial Statements

December 31, 2018

September 30, 2019

(Unaudited)

1. DESCRIPTION OF BUSINESS 

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. Our eCommerce 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. Our hospitality 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 subsidiaries (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 giving effect toBrands Private Limited (“AFBL”) (ownership interest approximately 30%, derived from 51%*59.15%*100%), non-operating subsidiary Apodis Projects Private Limited (“APPL”) (ownership interest approximately 30% derived from 51%*59.15%*100%); and an equity investee, PRAMA Canary Wharf Hotels Private Limited (“PCW”) (ownership interest 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.

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

For accounting purposes, Sunalpha was deemed to be the accounting acquirer in the transaction and, consequently, the transactionThe 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 the Merger. No step-up in basis or intangiblethose assets or goodwill was recorded in this transaction.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. We have not revised the initial purchase price allocation from the first quarter estimate.

The following reflects the net cash paid on acquisition of allPRAMA in the six month period ended September 30, 2019:

The Company recognized revenue of $1,942,177 and $3,635,915 for the outstandingthree months and six months ended September 30, 2019 consolidated condensed statements of operations related to the acquiree, respectively. The Company recognized net loss of $512,793 and $789,305 for the three months and six months ended September 30, 2019 consolidated condensed statements of operations related to the acquiree, respectively.

The revenue for the combined entity for the three and six months ended September 30, 2019, as though the acquisition of PRAMA had occurred on April 1, 2018 were $3,954,228, and $4,373,526, respectively. The revenue for the combined entity for the three and six months ended September 30, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 were $1,685,071, and $3,781,321, respectively.  The net loss before taxes for the combined entity for the three and six months ended September 30, 2019, as though the acquisition of PRAMA had occurred on April 1, 2018 were $827,849 and $1,408,638, respectively. The net loss before taxes for the combined entity for the three and six months ended September 30, 2018, as though the acquisition of PRAMA had occurred on April 1, 2018 were $411,389 and $833,986, 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 84.94% as of April 22, 2019, but this increased to 86.96% as of June 30, 2019 and 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 common stockoperations or the consolidated condensed statement of Sunalpha by TripBorn on December 14, 2015 is being accounted for as a reverse recapitalization.operations.

2. LIQUIDITY AND GOING CONCERN

The Company has reported net loss

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 $330,752, accumulated loss of $3,958,132 and negative cash flow from operations of $962,722management’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 for(2) it is probable that the quarter ended December 31, 2018.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 sold $150,000has incurred net losses from operations since inception. The net loss for the six month period ended September 30, 2019 was $1,390,606 and the accumulated deficit was $5,172,180 as of the Company’s common stock during the third quarter of fiscalSeptember 30, 2019.

As of December 31, 2018, we had $817,518 in The cash and cash equivalents comparedand the current portion of loans and convertible notes due to $1,155,367third parties were $910,096 and $494,185, respectively, as of September 30, 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 31, 2018. This $ 337,849 decrease11, 2020 the World Health Organization declared the Coronavirus outbreak a global pandemic. India reported its first Covid-19 infection in cash isthe 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 result21-day nationwide lockdown in operating loss generated, offset be issuanceresponse to the Covid-19 pandemic. To comply with the Indian lockdown, the Company closed all of stock duringits hotel operations, which impacts 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 decreasedHospitality segment. Also as a result of the increase in our operating losses duringIndian lockdown, the quarter.

The Company’s operationsIndian 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 subject to number of factors that can affect it operating results and financial conditions. Such factors include, but not limited to: the continuous enhancementstill materially adversely impacted by Covid-19. As of the current productsdate of filing this Form 10-Q, hotels, flights, trains and services; marketing its new services; continuebuses are operating to invest in new technologies; change in domestic and foreign regulations; the price of, and demand for, the company’s products and services and its ability to raise the capital to support its operations. varying degrees by region.

The Company does not have operations in China and the Coronavirus pandemic did not have any impact on the operations or financial results of the Company for the three and six month periods ended September 30, 2019. Management is assessing and monitoring the potential future impact of the pandemic and expects the impact to be materially adverse to its Indian operations, vendors, customers, lessors and employees’ health, but cannot presently estimate the degree and severity of the adverse impact. 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 not reached fixed conclusions.

The Company will require additional capital and may also require additional financing from related or third parties in the event 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 to continue as a going concern through September 2021, which is twelve months after the date that the financial statements are issued. If the Company does 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 September 2021, are considered probable, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern.

The financial statements for the three and six months ended September 30, 2019, do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern because the events leading to the uncertainty arose after September 30, 2019.

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”) and pursuant 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 have been prepared usinginclude all adjustments, which include only normal recurring adjustments, necessary for the accrual basis of accounting in accordance with Generally Accepted Accounting Principles ("GAAP")fair presentation of the United States.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 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.

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 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

The Company has recorded reclassifications to correctly disclose items which are discussed in Note 16 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 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 endingsix month period ended September 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, 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.

The following is a description of the Company’s principal activities, separated by reportable segments, from which the Company provides travel products and services to leisure and corporate travelers in India and abroad. The revenue from rendering these services is recognized at the time when significant risk and rewards are transferred to the customer. This is generally the case: 1) on the date of departure for vacation packages, 2) on the date of check in for hotel booking business and 3) on the date of issuance for the sale of airline tickets. 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:

CostPractical 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 DecemberSeptember 30, 2019, and March 31, 2018, and 2017,2019, the cash balance in financial institutions in India was USD $350,315$409,587 and $313,621,$360,210, respectively. The transactions are undertaken

Effect of exchange rates changes on cash presented in the Consolidated condensed statements of cash flows (Unaudited) is presented in accordance with ASC 830 and reflects the translation effects of cash held in Indian Rupees at the beginning and requires a foreign currency translation adjustment. The Company’send of the period, and the effects of actual cash depositsflows using the exchange rates in India are not insured against loss. The Company does not believe that this results in any significant credit risk. effect at the time of the cash flows and the year end Indian Rupee to US dollar exchange rate.

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.

The Company has not recorded an impairment to property and equipment as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

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.

The Company has not recorded an impairment to intangible assets as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

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.

The Company has not recorded an impairment to goodwill as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

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. The Company has not recorded an impairment as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

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 foreignfunctional currency of itsthe Company and the currency of the primary economic environment in which it operates is the Indian Rupee. Monetary assets and liabilities in foreign subsidiary, whosecurrencies are re-measured into the functional currency at the rates of exchange prevailing at the balance sheet 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 Indian rupee,other than the U.S. dollar are translated into US Dollars,U.S. dollars, the reporting currency, usingat the year or reporting period end or averagerate of exchange rates in accordance with the requirements of ASC subtopic 830, Foreign Currency Matters (“ASC 830”). Assets and liabilities are translated at exchange rates as ofprevailing on the balance sheet date.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 shareholders’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, SMSshort message service (“SMS”) or email campaign) as incurred each time the advertisement or promotion is performed.

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. Stock based compensation is recorded in Legal and Consulting expenses in our Statement of Operations.

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 carry 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 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 in Operating lease right-of-use assets, Other current liabilities, and Operating lease liabilities, due after one year, in our Consolidated Condensed Balance Sheets.

The Company has not recorded an impairment to the right the use of assets as of September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

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 six months ended September 30, 2019 and 2018, amounted to $146,840 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 September 30, 2019 and 2018, amounted to $79,582 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.

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.

Short-term Investments

Through PRAMA, the Company is contractually required under two separate customer contracts, to maintain 30 million Indian Rupees in bank deposits. These are accounted for at cost.

Equity-method Investments

Through PRAMA, the Company has 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 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 September 30, 2019, is $343,744 relating to the balance sheet date. Revenuesfair value of equity-method investments and expenses are translated at average rates$307,877 relating to the fair value of amounts due from equity-method investee, in effectaggregate $651,621. During the period April 22, 2019, through September 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 respective three and six month periods.

The valueCompany has not recorded an impairment to the equity investee as of INR against US$September 30, 2019, but expects to record an impairment for the year ended March 31, 2020 due to the impacts of covid-19.

Related Parties

The Company follows FASB ASC subtopic 850-10 for the identification of 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 believe it is expected 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 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 six months ended September 30, 2019, the two largest customers accounted for 55% and 61%, respectively, of the Company's total revenue. As of September 30, 2019, the two largest customers accounted for 30% of the Company’s total receivables. There were no significant revenue and receivable concentrations for the three and six months ended September 30, 2018. Changes in the relationship with these customers could materially and adversely affect the Company’s financial performance and going concern status.

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.

Assumptions used for benefit obligations and net periodic benefit cost are as follows: 

Discount rate 7.86% per annum 

Rate of compensation increase 8.0% per annum

PRAMA evaluates these assumptions based on its long-term growth plans 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 September 30, 2019.

The components of lease expense during the quarter ended and six month period ended September 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 periods ended September 30, 2019.

Supplemental other information related to leases were as follows:

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

7. PROPERTY AND EQUIPMENT, NET

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

Depreciation expense for the quartersthree and six months ended December 31,September 30, 2019 was $60,312 and $118,134, respectively. Depreciation expense for the three and six months ended September 30, 2018 was $1,982 and 2017 is $2,900 and $930,$2,948, respectively.

5.8. INTANGIBLE ASSETS WITH DEFINITE LIVES

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

Amortization expense for the quartersthree and six months ended December 31,September 30, 2019 was $72,362 and $148,845 respectively. Amortization expense for the three and six months ended September 30, 2018 were $70,884 and 2017 was $103,448 and $86,618,$109,203 respectively.

6. STOCK COMPENSATION

In current year 2018, company issued 478,560-common shares to an individual 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 of the quarter ended December 31, 2018. The issuance of these shares is being made pursuant 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.

7. CONVERTIBLE NOTES PAYABLE

Related Party Convertible Notes

The Company issued an $956,000 convertible note with maturity date of March 7, 2019, with annual rate of 10% from ARNA GLOBAL LLC, wholly owned by the Company’s president. The note converts into 21,194,381 shares of common stock (the “Note Shares”).

The Company issued an $695,000 convertible note with maturity date of December 19, 2019, with annual rate of 10% from TAKNIKI COMMUNICATION, wholly owned by the Company’s Vice President. The note converts into 10,303,070 shares of common stock (the “Note Shares”).

The Company issued an $156,407 convertible note with maturity date of March 7, 2019, with annual rate of 10% from Mr. Sharma, Company’s president. The note converts into 3,432,234 shares of common stock (the “Note Shares”).

The Company issued an $38,076 convertible note with maturity date 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”).

The Company has accrued interest of $47,719no impairment charge for related partiesdefinite lived intangible assets for the quarter ended December 31, 2018.above periods.

Non-Affiliate Party Convertible NotesIntangible assets with indefinite lives consist of the following as of September 30 and March 31, 2019: 

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 transactionsIntangible assets with indefinite lives are not necessarily indicative ofamortized, 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, 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 pursuantif impaired, written down to stock options, restricted stock, restricted stock unitsfair value based on either discounted cash flows or other awards authorized under the terms of the plan. No awards have been issued under the plan.appraised values.

9. AMOUNTS DUE TO AND FROM RELATED PARTIES

Amounts due from related parties arising from the e-Commerce Aggregator segment

In the 3 months ended September 30, 2019, the $14,364 brought forward related party balance from the previous period was paid to TripBorn Travel Technologies Pvt. Ltd, which is a company owned and controlled by Deepak Sharma, the Company’s CEO.

Amounts due from related parties arising from the Hospitality segment

The amounts due from related parties balance of $914,601 as of September 30, 2019, which arose from the acquisition of PRAMA on April 22, 2019, all of which are unsecured and non-interest bearing, which are described below:

The balances above are denominated in Indian Rupees and the above amounts are translated into US dollars at the closing rate as of September 30, 2019. The movement from the June 30, 2019 balance of $937,157 to $914,601, relates to foreign exchange translation only with no change in the Indian Rupee amount.

Amounts due to related parties arising from the e-Commerce Aggregator segment

There is a balance of $1,708 due to Sachin Mandloi, a Director of the Company for services rendered to Sunalpha.

Amounts due to related parties arising from the Hospitality segment

The amounts due from related parties balance in the Hospitality segment arose from the acquisition of PRAMA on April 22, 2019, all of which are unsecured and non-interest bearing, which are described below:

During the 3 months ended September 30, 2019, a balance of $4,351 outstanding as of June 30, 2019, was paid to Mr. Akbar Khwaja $4,351, the Chief Executive Officer of a subsidiary of PRAMA. The above remaining 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.

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.

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 September 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, with a maturation of March 21, 2020, which is included in short term borrowings as of September 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. During the three months ended September 30, 2019, the balance on the loan reduced by $11,686, net of repayments.

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, there are no repayments scheduled for the first twelve months of the 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. During the three months ended September 30, 2019, the balance on the loan increased by $38,649, net of repayments.

As part of the acquisition of PRAMA, the Company assumed an amount owing to Advance Finstock Private Limited for $71,905, $75,950 and $77,334 as of April 22, 2019, June 30, 2019 and September 30, 2019, respectively. This is an undocumented informal loan agreement. The informal arrangement incurs interest at 18% per annum. The amounts due were not collateralized. The accrued but not paid interest on this loan as of September 30, 2019 amounted to $6,558. See note 16 – Reclassifications.

11. LOANS WITH RELATED PARTIES

Loans and borrowings with related parties are discussed below:

On December 31, 2016, the Company issued a convertible note to 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. There was no movement in this note during the period.

The loan from Mr. Mahesh Gandhi was assumed as a result of the purchase of PRAMA on April 22, 2019. The loan amounted to $360,190, $369,946 and $394,211 as of April 22, 2019, June 30, 2019 and September 30, 2019, respectively. The increase of $24,264 in the three months ended September 30, 2019, reflected an increased loan from Mr. Mahesh Gandhi, offset by small closing rate exchange differences. The counterparty is Mr. 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 September 30, 2019 amounted to $15,300. See note 16 – Reclassifications.

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 ended June 30, 2019, $100,000 was re-paid and the remaining $200,000 balance was repaid on July 8, 2019. The loan was unsecured and bears interest at 10% per annum.

The convertible note to Arna Global LLC matured on March 7, 2019, bore interest at the rate of ten percent and was converted into common stock at the noteholders option. The convertible notes to Messrs. Sachin Mandloi and Deepak Sharma matured on March 8, 2019, bore interest at the rate of ten percent and were converted into common shares at the noteholders option.

12. STOCKHOLDERS’ EQUITY

During the six month period ended September 30, 2019, the Company issued an aggregate of 31,155,693 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) 1,489,443 common shares (775,157 and 714,286 discussed below) for cash proceeds of $1,042,610 ($542,610 and $500,000 discussed below) in private placements. 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. There were no cash proceeds from the conversion of the notes.

On April 22, 2019, the Company issued 2,632,653 common shares to the shareholders of PRAMA, at a price of $0.28 per share, as part of the consideration for the PRAMA acquisition.

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.

During the quarter ended September 30, 2019 the Company issued and sold 714,286 units comprising one share and warrant to purchase two shares 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 $500,000 to the Company. The Company issued warrants to acquire approximately 1,428,572 common shares pursuant to the 714,286 units listed above during the quarter ended September 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 following table is the summary of 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 is not actively traded on the Over the Counter Market. The total intrinsic value of warrants exercised for the six month period ended September 30, 2019 was minimal. The fair value of warrants granted during the six month period ended September 30, 2019 approximated $0.23 per warrant, or an intrinsic value of approximately $0.22 per warrant.

The intrinsic value of the warrants as of September 30, 2019, will not approximate the intrinsic value of the warrants at the current date due to the impact of covid-19.

13. INCOME TAX

US taxes

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 deferred tax asset, net of valuation allowance, 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 taxable losses. For the period April 22, 2017,2019 to September 30, 2019, the U.S. government enacted comprehensive tax legislation commonly referred to asCompany believes the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act included a broad rangePRAMA results of complex provisions impacting the taxation of multi-national companies. The Tax Act makes broad and complex changes to the U.S. corporateoperations would not have resulted in an income 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, accounting 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 income tax expense or benefit in the appropriate period, and disclosed if material, in accordance with guidance provided by SAB 118.

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. 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 of net loss and weighted average shares used in computing basic and diluted net income per share is as follows: