The accompanying footnotes are an integral
part of these financial statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
Note 1 - Organization and Basis of Presentation
Organization and Line of Business
Token Communities Ltd.
(the “Company” or “Limited”) was organized under the laws of the State of Delaware on March 6, 2014, under
the name Pacific Media Group Enterprises, Inc. On April 7, 2017, the Company amended its Certificate of Incorporation with
the Secretary of State of Delaware, changing its name to Extract Pharmaceuticals Inc. On January 26, 2018, the Board of Directors
adopted an Amendment to its Certificate of Incorporation, changing its name to Token Communities Ltd. The Company is a development
stage company that researches and creates white paper analysis for companies regarding block chain technology.
On February 26, 2018,
the Company entered into an Acquisition and Share Exchange Agreement with Token Communities PLC (“PLC”). Under
the Agreement, the Company’s majority shareholder returned 19,266,000 common shares to treasury, and at closing 100% of the
issued and outstanding shares of PLC were acquired by the Company, for 172,800,000 newly issued common shares equal to 64% of the
Company’s outstanding common stock as of the closing date, thus making the stockholders of PLC the majority stockholders
of the Company. The transaction closed on May 18, 2018. This transaction was accounted for as a reverse acquisition under
the purchase method of accounting since PLC obtained control of Limited. Accordingly, the merger of PLC into Limited was recorded
as a recapitalization of PLC, PLC being treated as the continuing entity. The transaction was treated as a recapitalization and
not as a business combination. Limited had 116,466,000 shares outstanding prior to the merger. At the time of the merger, Limited’s
principal stockholder surrendered 19,266,000 shares, which were cancelled. After the merger the total number of Limited shares
outstanding was 270,000,000.
PLC is a Gibraltar
Financial Advisory firm which specializes in Blockchain, Artificial Intelligence and Fin-Tech investment in incubating as well
as advising and managing qualified companies in the blockchain and distributed ledger technologies arena, including smart contracts,
TGEs, DApps, and more. Advisement comprises the authoring of industry standard White Papers, technical aspects, design and implementation
of market strategies, business appraisal and more. All potential clients are vetted and Anti-Money Laundering / Know-Your-Customer
approved. The Company is also developing its own software technology with its dedicated team of developers.
The historical financial
statements presented are the financial statements of PLC. The Acquisition and Share Exchange Agreement was treated as a recapitalization
and not as a business combination; therefore, no pro forma information is disclosed. At the date of the merger, the net liabilities
of the legal acquirer, Limited, were $57,107.
The combined entities are referred to hereafter
as the “Company.”
On May 28, 2020, the Company acquired 3.5
billion iRide tokens in exchange for 80 million shares provided to iRide.io Tech Pte., Ltd., valued at $8,000, which was immediately
expensed.
On July 14, 2020, a
change in control of the Company was affected by a privately held corporation (American Software Company, controlled by 2 individuals)
acquiring 83% of the outstanding stock from other control individuals. As part of this transaction, the Company transferred the
3.5 billion iRide tokens and 1,745,406 shares of it’s common stock to American Software in exchange for all technology, software
codes and other intelligent products of the Lukki Exchange, a non-operating cyber coin exchange. Since the Lukki exchange had no
previous material revenue nor assets, the acquisition has been accounted for as an asset acquisition and due to the facts that
it has no value, and the parties to this transaction are related, the transaction has been accounted for as $(0), the value of
the tokens are $(0), and no financial statements are being provided as part of the transaction.
As a condition to the
closing of the transactions contemplated in the Asset Purchase Agreement shareholders agreed to cancel an aggregate of 174,540,600
shares of Common Stock of the Company, and the holders of the Company’s Series A, B, C, D and E warrants agreed to the cancellation
of all such warrants.
Basis of Presentation
The accompanying consolidated
financial statements (“CFS”) were prepared in conformity with accounting principles generally accepted in the United
States (“U.S. GAAP”). Limited’s functional currency is the United States Dollars (“$” or “USD”)
and Limited’s wholly-owned subsidiary, PLC’s functional currency is the Pound Sterling (“GBP”).
Going Concern
The accompanying CFS
were prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. The Company
had a stockholders’ deficit of $1,249,863 at December 31, 2020 and has incurred losses from operations since inception and
expects to continue to generate operating losses and negative cash flows for the foreseeable future. These factors raise substantial
doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon
its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient
positive cash flows from operations.
The accompanying CFS
do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification
of liabilities that might be necessary in the event the Company cannot continue as a going concern.
Foreign Currency Translation
The accounts of Limited
are maintained in USD and the accounts of PLC are maintained in GBP. The accounts of PLC are translated into USD in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830
Foreign Currency Transaction , with the GBP as the functional currency. According to Topic 830, all assets and liabilities
are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and
statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments
are reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income . Gains and
losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations
and comprehensive income (loss). The following table details the exchange rates used for the periods.
|
|
December 31,
2020
|
|
|
December 31,
2019
|
|
Period end: GBP to USD exchange rate
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
Average period: GBP to USD exchange rate
|
|
$
|
1.31
|
|
|
$
|
1.25
|
|
Note 2 – Summary of Significant Accounting Policies
Use of Estimates
The preparation
of CFS in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the CFS and the reported amounts of
revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company
bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of
assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual
results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent
there are material differences between the estimates and the actual results, future results of operations will be
affected.
Principles of Consolidation
The accompanying CFS include the accounts
of Limited and its wholly-owned Subsidiary, PLC. All significant intercompany transactions and balances were eliminated in consolidation.
Cash Equivalents
For the purpose of the statement of cash
flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities
of three months or less.
Accounts Receivable
Accounts receivable are recorded, net of
allowance for doubtful accounts and sales returns. Management reviews the composition of accounts receivable and analyzes historical
bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns
to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the
full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood
of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified.
As of December 31, 2020 and 2019, the allowance for uncollectible accounts receivable was zero, respectively.
Derivative Financial Instruments
The Company evaluates
its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its
fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.
Valuation of the derivatives by the Company requires significant estimates and assumptions for each period. For the periods ended
December 31, 2020 and June 30, 2020 respectively, the assumptions related to derivative valuation was as follows:
Estimate and assumption
|
|
December 31,
2020
|
|
June 30,
2020
|
|
|
December 31,
2019
|
|
Volatility
|
|
N/A
|
|
|
172.45
|
%
|
|
|
533.91
|
%
|
Expected remaining term
|
|
N/A
|
|
|
2 years
|
|
|
|
2.67 years
|
|
Exercise price
|
|
N/A
|
|
$
|
1.05 - $2.00
|
|
|
$
|
.07 - $2.00
|
|
Stock price
|
|
N/A
|
|
$
|
7.00
|
|
|
$
|
2.00
|
|
Dividend rate
|
|
N/A
|
|
|
0
|
%
|
|
|
0
|
%
|
Discount rate
|
|
N/A
|
|
|
0.17
|
%
|
|
|
01.60
|
%
|
For stock-based
derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative
instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative
instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash
settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of December 31,
2019, the Company’s only derivative financial instruments were outstanding warrants since the Company did not have
enough unissued authorized shares to satisfy the exercise of all the outstanding warrants. As of June 30, 2020, we
noted that the warrant holders released the Company of their obligation under the original warrants as part of the
transaction on July 14, 2020. As evidence was obtained that impacted the valuation on June 30, 2020 after the balance sheet
date that impacted the balance at June 30, 2020, the warrants were written down to zero. There were not additional warrants
issued during the period ended December 31, 2020.
Fair Value of Financial Instruments
For certain of the
Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and
advances, the carrying amounts approximate their fair values due to their short maturities.
FASB ASC Topic 820,
Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments
held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy
for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated
balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their
FVs because of the short period of time between the origination of such instruments and their expected realization and their current
market rate of interest. The three levels of valuation hierarchy are defined as follows:
|
●
|
Level
1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
|
●
|
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices
for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly
or indirectly, for substantially the full term of the financial instrument.
|
|
●
|
Level
3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.
|
The Company analyzes
all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities
from Equity, and FASB ASC Topic 815, Derivatives and Hedging.
The Company uses Level
2 inputs for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton
pricing model based on various assumptions. As of December 31, 2019, the Company’s stock price used in the Black-Scholes-Merton
pricing model was based on recent sales of the Company’s common stock to unrelated investors since there no market price
for the Company’s common stock at March 31, 2019. The Company’s derivative liabilities are adjusted to reflect FV at
each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to fair value of
derivatives.
At December 31, 2020
and June 30, 2020, the Company identified the following liabilities that are required to be presented on the balance sheet at FV:
|
|
Fair Value
|
|
|
Fair Value Measurements at
|
|
|
|
As of
|
|
|
June 30, 2020
|
|
Description
|
|
June 30,
2020
|
|
|
Using Fair
Value Hierarchy
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Derivative liability – warrants
|
|
$
|
0
|
|
|
$
|
-
|
|
|
|
0
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
0
|
|
|
$
|
-
|
|
|
$
|
0
|
|
|
$
|
-
|
|
|
|
Fair Value
|
|
|
Fair Value Measurements at
|
|
|
|
As of
|
|
|
December 31, 2020
|
|
Description
|
|
December 31,
2020
|
|
|
Using Fair
Value Hierarchy
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Derivative liability – warrants
|
|
$
|
0
|
|
|
$
|
-
|
|
|
|
0
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
0
|
|
|
$
|
-
|
|
|
$
|
0
|
|
|
$
|
-
|
|
Revenue Recognition
ASU No. 2014-09, Revenue
from Contracts with Customers (“Topic 606”), became effective for the Company on July 1, 2018. The Company’s
revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied
the “modified retrospective” transition method for open contracts for the implementation of Topic 606. As
sales are and have been primarily from advisory fees and related services, and the Company has no significant post-delivery obligations,
this did not result in a material recognition of revenue on our accompanying CFS for the cumulative impact of applying this new
standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented
in accordance with its historical accounting practices under Topic 605, Revenue Recognition.
Revenue from advisory
fees and related services are recognized under Topic 606 in a manner that reasonably reflects the delivery of
services to customers in return for expected consideration and includes the following elements:
|
●
|
executed
contract(s) with our customer(s) that we believe is legally enforceable;
|
|
●
|
identification
of performance obligation in the respective contract;
|
|
●
|
determination
of the transaction price for each performance obligation in the respective contract;
|
|
●
|
allocation
of the transaction price to each performance obligation; and
|
|
●
|
recognition
of revenue only when the Company satisfies each performance obligation.
|
These five elements, as applied to the
Company’s only revenue category, are summarized below:
|
●
|
Advisory
fees and related services – the Company charges advisory fees for a suite of one to two dozen services that include
advising on where to establish a corporation, establishing the corporation (often Gibraltar or Malta), writing white paper, setting
up website, making videos or animations describing the company and its business, engaging in public relations, and introducing
potential investors.
|
Income Taxes
The Company accounts
for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability
method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred
tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax
position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in
a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that
is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not”
test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.
Basic and Diluted Earnings (loss) Per Share
Earnings per share
is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based
on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities
are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed
to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used
to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding
during any of the periods presented in these financial statements.
Foreign Currency Transactions and Comprehensive Income
U.S. GAAP generally
requires recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities
to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component
of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional
currency of the Company’s subsidiary is the GBP. Translation gain of $21,232 at December 31, 2020 is classified as an item
of other comprehensive income in the stockholders’ deficit section of the balance sheet.
Statement of Cash Flows
Cash flows from the
Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts
related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding
balances on the balance sheets.
Recent Accounting Pronouncements
In January 2017, the
FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Clarifying the Definition
of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to
assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses.
The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The
guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively
on or after the effective date. The Company is in the process of evaluating the impact of this ASU on the Company’s CFS.
In November 2016, the
FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be
presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles
to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU 2016-18 is
effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this
ASU did not have an impact on the Company’s CFS.
In October 2016, the
FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires
the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer
occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted.
The Company is in the process of evaluating the impact of this ASU on the Company’s CFS.
In August 2016, the
FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash
Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified
in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and
annual periods beginning after December 15, 2017, with early adoption permitted. The adoption of this ASU did not have an
impact on the Company’s CFS.
In February 2016, the
FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities
on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning
after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted.
The Company is in the process of evaluating the impact of this ASU on the Company’s CFS.
In May 2014, FASB issued
ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard
that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based
approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value
of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the
nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments
and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective
for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting
periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the
standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this
ASU on October 13, 2017 and used the modified retrospective method of adoption. The adoption of this ASU did not have a material
impact on the Company’s CFS.
Management does not
believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying
CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
Risks and Uncertainties
In December 2019, a
novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated
in China and caused significant disruptions to its economy, it has now spread to several other countries and infections have been
reported globally fiscal first quarter and potentially beyond.
Because COVID-19 infections have been reported
throughout the United States, certain federal, state and local governmental authorities have issued stay-at-home orders, proclamations
and/or directives aimed at minimizing the spread of COVID-19. Additional, more restrictive proclamations and/or directives may
be issued in the future. As a result, all of our office locations have been closed effective April 1, 2020.
The ultimate impact
of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly
uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge
concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the
Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced
operations. Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse
impact on our business, financial condition and results of operations.
The measures taken
to date will impact the Company’s business for the fiscal fourth quarter and potentially beyond. Management expects that
all of its business segments, across all of its geographies, will be impacted to some degree, but the significance of the impact
of the COVID-19 outbreak on the Company’s business and the duration for which it may have an impact cannot be determined
at this time.
Management’s Evaluation of Subsequent
Events
The Company evaluates
events that have occurred after the balance sheet date of June 30, 2020, through the date which the CFS were issued. Based upon
the review, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment
or disclosure in the CFS.
NOTE 3 –
ACCRUED EXPENSES
Accrued expenses payable
consisted of the following at December 31, 2020 and June 30, 2020:
|
|
December 31,
2020
|
|
|
June 30,
2020
|
|
Director fees
|
|
$
|
236,582
|
|
|
$
|
236,582
|
|
Accrued professional services
|
|
|
31,000
|
|
|
|
|
|
Other
|
|
|
40,380
|
|
|
|
323
|
|
Total Accrued Expenses
|
|
$
|
307,962
|
|
|
$
|
236,905
|
|
Note 4 – Stockholders’
Equity
As of December 31,
2020, the authorized share capital of the Company consists of 5,000,000,000 shares of common and 20,000,000 shares of preferred
stock with $0.0001 par value. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted
to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.
Prior to the transaction
described in Note 1, the Company had 116,466,000 shares of common stock outstanding. At the time of the merger, a principal shareholder
surrendered 19,266,000 shares of common stock, which were cancelled. Also at the time of the merger, 172,800,000 shares of common
stock were issued for all of the issued and outstanding shares of PLC. The total shares outstanding at June 30, 2019 was
270,000,000. See Note 1 above.
Prior to the transaction,
the Company had 135,000,000 warrants outstanding consisting of 27,000,000 “A Warrants” each convertible into one share
of common stock at $0.074; 27,000,000 “B Warrants” each convertible into one share of common stock at an exercise price
of $0.093; 27,000,000 “C Warrants” each convertible into one share of common stock at $0.111; 27,000,000 “D
Warrants” each convertible into one share of common stock at $0.129; and 27,000,000 “E Warrants” each convertible
into one share of common stock at $0.148.
On February 19, 2019,
the Company and the holders of 81,000,000 Warrants executed an Amendment and Modification Agreement, changing the warrant exercise
prices from $0.074 to $0.148, to $1.90 for all classes of warrants it held. On the same day the Company and the holders of 43,200,000
warrants split equally between Class B, C, D and E (10,800,000 per class) executed an Amendment and Modification Agreement, changing
the warrant exercise price to a phased strike price ranging between $1.05 and $2.00. Previously the holder of 10,800,000 “A
Warrants” also entered into an amendment and modification agreement, changing the warrant strike price ranging from $1.05
to $2.00
Following the transaction
described in Note 1, last year a number of warrants which had previously been issued have been under review by the Company to ensure
their original terms and conditions were not out of synchronization with the business plans overall of the newly restructured company
going forward. One warrant holder of A Class warrants requested the original terms of his warrants be amended to accommodate the
anticipated rise in value execution of the business plan would be expected to have on the Company value. Increases in the warrant
strike price benefits the Company as increased funds are raised and placed directly in the company upon the exercise of the warrant.
Accordingly the Company consented to vary the strike price on an increasing sliding scale from $1.05 to $2.00. Following a review
post the recent share fluctuations, management and the other warrant holders agreed it is in the best interests of the Company,
stock and warrant holders that the remaining warrants are also amended to follow the precedent set in respect of the previously
amended warrant conditions. With the exception of the A Class warrants already amended as detailed above the remaining warrants
have been extended to expire on August 30, 2022. This was finalized on February 21, 2019.
The warrants were
cancelled subsequent to the year ended June 30, 2020.
On July 23, 2019,
the Company issued 80,000,000 shares as part of an acquisition whose terms were considered immaterial.
On June 30, 2020 the Company issued 277,200
shares of common stock in settlement of debt of $268,942.
On July 14, 2020, the Company issued 1,745,000,585
shares as part of the acquisition agreement described in Note 1. This resulted in an expense on the income statement in the amount
of $ 174,500.
On August 12, 2020, the Company issued
595,162 shares of common stock for services with a deemed value of $ 595,162.
Note 5 – Related Party Transactions
Amounts due to a related
party are for advances made by a company owned by an officer of the Company. The balance due of $478,804 and $261,695 as at December
31, 2020 and June 30, 2020 respectively, is presented as due to related parties in the accompanying consolidated balance sheet.
The amounts due are non-interest bearing and payable upon demand. On December 31, 2020, certain related parties forgave advances
and accrued expenses in the amount of $263,110. This resulted in a gain on forgiveness of debt on the income statement in the amount
of $263,110.
Note 6 – Commitments and Contingencies
The Company is party
to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines,
penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot
assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on
the Company’s CFS in the period in which a ruling or settlement occurs. However, based on information available to the Company’s
management to date, the Company’s management does not expect the outcome of any matter pending against the Company is likely
to have a material effect on the Company’s CFS.
On July 6, 2018 PLC
entered into a binding agreement to purchase 75% of new issued ordinary shares of i-Deal Corp Limited, which has developed a communication
platform for Publicly Listed, Private companies and investors around the globe. i-Deal Corp Limited established the i-DX communication
platform for companies and investors and has more than 2,000 diverse users. The i-DX platform has seen activity from more than
40 countries with placings of equity and debt across a broad range of industries including oil and gas, real estate, automotive,
pharmaceuticals, beverages, software, mining, alternative energy, and financial services These users include listed and private
companies, and blockchain companies; private and institutional investors; investment companies (angel investors and VCs); and P2P
lending funds. The platform is also used by intermediaries representing multiple clients to reach international investors to enlarge
their existing distribution network. i-Dx is exclusively a communication platform that matches and allows companies and potential
investors to initially contact each other. i-Deal Corp Limited and i-DX does not transact, promote, advise, make recommendations,
trade, bring about or earn commission on any financial transactions.
In order for the transaction
to become effective it was acknowledged by both parties that the Company needs to raise the required funding to finance the transaction.
Both parties agreed that the date for the first closing ($500,000) will take place by bank transfer no later than mid-March 2019.
The following payments will be 90 days later (i.e. on or before May 31, 20219) as follows: $2,250,000 by way of bank transfer and
$2,250,000 by the issue of 2,250,000 new shares of common stock of the Company. As of the date of this report the transaction had
not yet closed and the Company does not anticipate this will close.
On April 2, 2019,
the Company executed an Acquisition and Exchange Agreement with Lalit Kumar Verma and Manickam Mahalingam, who together control
100% of the common shares of ABT Auto Investments Ltd., a private English company. Pursuant to the Agreement, Messrs. Verma and
Mahalingam were to exchange 96,001 shares, representing 100% of the common shares of ABT Auto Investments Ltd for a total of 3,530,000,000
new issue treasury shares issued by the Company, representing 95% ownership of the Company. On June 20, 2019, the Company executed
a Mutual Rescission and Release Agreement, mutually rescinding the Acquisition and Exchange Agreement with Fortress Ventures LLC
represented by Lalit Kumar Verma and with ABT Investments India Pvt Ltd represented by Manickam Mahalingam. The Mutual Rescission
and Release agreement executed and became effective as of June 20, 2019. As a consequence of its execution and the rescinding of
the Share Exchange and Acquisition Agreement, the Company will not issue the 3,530,000,000 shares of common stock.