The accompanying footnotes are an integral part
of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Organization and Basis of Presentation
Organization and Line of Business
Token Communities Ltd. (the “Company”
or “Limited”) was organized under the laws of the State of Delaware on March 6, 2014, under the name Pacific Media Group
Enterprises, Inc. On April 7, 2017, the Company amended its Certificate of Incorporation with the Secretary of State of Delaware,
changing its name to Extract Pharmaceuticals Inc. On January 26, 2018, the Board of Directors adopted an Amendment to its 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 $1,889,532 at September 30, 2021 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.
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
Period end: GBP to USD exchange rate
|
|
$
|
1.30
|
|
|
$
|
1.29
|
|
Average period: GBP to USD exchange rate
|
|
$
|
1.29
|
|
|
$
|
1.29
|
|
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 September 30, 2021 and
2020, 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 September 30, 2021 and September 30, 2020 respectively, the assumptions
related to derivative valuation was as follows:
Estimate and assumption
|
|
September 30,
2021
|
|
September 30,
2020
|
|
Volatility
|
|
N/A
|
|
|
172.45
|
%
|
Expected remaining term
|
|
N/A
|
|
|
2 years
|
|
Exercise price
|
|
N/A
|
|
$
|
1.05 - $2.00
|
|
Stock price
|
|
N/A
|
|
$
|
7.00
|
|
Dividend rate
|
|
N/A
|
|
|
0
|
%
|
Discount rate
|
|
N/A
|
|
|
0.17
|
%
|
For stock-based derivative financial instruments,
the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation
dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity,
is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or
non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance
sheet date. As of September 30, 2020, 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 September 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 September 30, 2020 after the balance sheet date that impacted
the balance at September 30, 2020, the warrants were written down to zero. There were not additional warrants issued during the period
ended September 30, 2021.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments,
including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate
their fair values due to their short maturities.
FASB ASC Topic 820, Fair Value Measurements
and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic
825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that
enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and
current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time
between the origination of such instruments and their expected realization and their current market rate of interest. The three levels
of valuation hierarchy are defined as follows:
|
●
|
Level
1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
|
●
|
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical
or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for
substantially the full term of the financial instrument.
|
|
●
|
Level
3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.
|
The Company analyzes all financial
instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and
FASB ASC Topic 815, Derivatives and Hedging.
The Company uses Level 2 inputs
for its valuation methodology for derivative liabilities as their fair values were determined by using the Black-Scholes-Merton pricing
model based on various assumptions. As of September 30, 2021, the Company’s stock price used in the Black-Scholes-Merton pricing
model was based on recent sales of the Company’s common stock to unrelated investors since there no market price for the Company’s
common stock at September 30, 2021. 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.
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 $4,979 at September 30, 2021 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 September 30, 2021, 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 September 30, 2021 and September 30, 2020:
|
|
September
30,
2021
|
|
|
September
30,
2020
|
|
Director fees
|
|
$
|
236,582
|
|
|
$
|
282,305
|
|
Accrued professional services
|
|
|
37,196
|
|
|
|
|
|
Other
|
|
|
86,960
|
|
|
|
|
|
Total Accrued Expenses
|
|
$
|
360,738
|
|
|
$
|
282,305
|
|
Note 4 – Stockholders’ Equity
As of September 30, 2021, 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 September 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 stockholder of the Company. The balance due of $1,057,454 and $312,633 as at September 30, 2021 and September 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. In the period ended June 30, 2021, certain related parties forgave advances and accrued expenses in the amount
of $262,116. This resulted in a gain on forgiveness of debt on the income statement in the amount of $262,116.
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.