TURNKEY CAPITAL, INC. This quarterly report on Form 10-Q and other reports filed by
Overview
We are a shell company as defined in Rule 12b-2 of the Securities Exchange Act
of 1934, as amended. Our wholly owned subsidiaries are
As of
Recent Developments COVID-19 Pandemic
On
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EGG Agreement
On
EGG is a brand new model for healthcare and wellness that brings together top physicians and wellness professionals into co-practicing communities with shared access to a full-stack technology platform - scheduling, billing, client acquisition, and telemedicine - and flexible access to beautiful office space designed to optimize both the physician and client experience. This model creates a compelling new option for re-tenanting traditional shopping centers and mixed-use space.
On
Results of Operations
Three Month Period Ended
Revenue
During the three month periods ended
Operating Expenses A summary of our operating expenses for the three month periods endedJune 30, 2020 and 2019 follows: Three Months Ended June 30, (Decrease)/ 2020 2019 Increase
General and administrative
45,000
Legal and professional 4,680 13,250 (8,570 )
Total operating expense $ 94,829 $ 58,565 $ 36,264 General and administrative ("G&A") costs include costs related to public company costs and other office related costs.
Professional fees - related party costs primarily include costs for management services provided by TBG and costs related to R3 Accounting. The increase in costs resulted due to the increase in the fees being charged by TBG.
Legal and professional expenses related to amounts incurred by the external audit firm and lawyers. During 2019, the Company incurred additional audit and legal expenses as compared to 2020.
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Six Month Period Ended
Revenue
During the six month periods ended
Operating Expenses A summary of our operating expenses for the six month periods endedJune 30, 2020 and 2019 follows: Six Months Ended June 30, Increase/ 2020 2019 Decrease
General and administrative
19,338 27,288 (7,950 )
Total operating expense $ 213,381 $ 130,412 $ 82,969 G&A costs include costs related to public company costs and other office related costs.
Professional fees - related party costs primarily include costs for management services provided by TBG and costs related to R3 Accounting. The increase in costs resulted due to the increase in the fees being charged by TBG.
Legal and professional expenses related to amounts incurred by the external audit firm and lawyers. During 2019, the Company incurred additional audit and legal expenses as compared to 2020.
Liquidity and Capital Resources
Our available working capital and capital requirements will depend upon numerous factors, including our ability to make accretive acquisitions, and our ability to attract and retain key employees.
During the six month period ended
Cash used in operating activities was
Cash provided by financing activities was
We expect TBG will continue to provide support services until sufficient capital is raised.
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Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through further related party advances and issuances of securities until we establish business activities that can generate positive cash flow. Our working capital requirements are expected to increase in line with the growth of our business.
We have minimal working capital, and we do not have any lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments and related party advances. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet short-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
Going Concern
The accompanying unaudited condensed consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As of
Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements and related disclosures in conformity with GAAP requires us to make judgments, assumptions and estimates that have a significant impact on the results that we report in our condensed consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Note 1 of the notes to condensed consolidated financial statements describes the significant accounting policies used in the preparation of the condensed consolidated financial statements. Certain of these significant accounting policies require us to make critical accounting estimates, as defined below.
A critical accounting estimate is defined as one that is both material to the presentation of our condensed consolidated financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:
· we are required to make assumptions about matters that are highly
uncertain at the time of the estimate; and
· different estimates we could reasonably have used, or changes in the
estimate that are reasonably likely to occur, would have a material
effect on our financial condition or results of operations.
Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the condensed consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our condensed consolidated financial statements are fairly stated in accordance with GAAP and present a meaningful presentation of our financial condition and results of operations.
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Our most critical accounting estimates include:
· the recognition and measurement of current and deferred income taxes,
which impact our provision for taxes.
Below, we discuss these policies further, as well as the estimates and judgments involved.
Income Taxes
The Company accounts for income taxes using the liability method prescribed by GAAP. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset the deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
Pursuant to accounting standards related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.
The Company assessed its earning history, trends and estimates of future
earnings and determined that the deferred tax asset could not be realized as of
Off-Balance Sheet Arrangements
As of
ITEM 3.
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