NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Business |
Organization and Business
We were incorporated on May
19, 2014 in the State of Nevada as Trimax Consulting, Inc. with an initial business plan of providing real estate consulting services
and purchasing tax liens. On March 16, 2017, Newfield Global Holdings Limited acquired 25.0 million shares of our common stock representing
96.3% of our then outstanding shares. Upon election of a new Board of Directors and appointment of new management, we altered our business
plan to provide end-to-end Human Resource services including recruitment, executive search, campus recruitment, training, and a complete
range of Human Resource outsourcing solutions to clients. On May 8, 2017, we filed an Amendment to our Articles of Incorporation changing
our name to Xinda International Corp. On February 24, 2021, we filed an Amendment to our Articles of Incorporation changing our name to
Tribal Rides International Corp. On February 23, 2022, we filed an application with the Financial Industry Regulatory Authority (“FINRA”)
to change our ticker symbol. Until that change is made, our ticker symbol remains XNDA.
We are engaged in the business
of digital transformation of transportation. The digital transportation enablement and enhancement platform provides fully automated dispatching
and bookings management built for taxi companies, limousine companies and ride-sharing service providers. The platform gives customers
an app-based experience and provides service providers a range of functions which include customer booking, accounts management, driver
tracking, real-time notifications, auto dispatching algorithms, accounting and settlements, corporate account management as well as providing
reporting and analytics. The platform has also shown to have a direct application in the B2B space in providing corporations with a more
efficient taxi chit solution to combat fraud and excessive administration costs. Our platform is presently undergoing beta testing and
we hope to launch it in the second or third quarter of this year.
2. |
Summary of Significant Accounting Policies |
Basis of Presentation
We have prepared the accompanying
unaudited financial statements in conformity with generally accepted accounting principles in the United States of America pursuant to
the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, all
adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Our Company’s year-end
is December 31.
Going Concern Considerations
The accompanying financial
statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate
continuation of our Company as a going concern. We currently are doing beta testing of our software and have minimal revenues. We have
incurred net losses and have an accumulated deficit of $1,035,098 as of March 31, 2022. The continuation of our Company as a going concern
is dependent upon our ability to raise equity or debt financing, and the attainment of profitable operations from any future business
we may acquire. There are no assurances that we will be successful in obtaining sufficient capital to continue as a going concern.
If our working capital needs are not met and we are unable to obtain adequate capital, we could be forced to cease operations.
The accompanying financial
statements do not include any adjustments that might be necessary if our Company is unable to continue as a going concern.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Internal Use Software Development
We account for costs incurred
to develop or purchase computer software for internal use in accordance with Accounting Standards Codification (“ASC”) 350-40
“Internal-Use Software” or ASC 350-50 “Website Costs”. As required by ASC 350-40, we capitalize the costs incurred
during the application development stage, which include costs to design the software configuration and interfaces, coding, installation,
and testing.
Costs incurred during the
preliminary project stage along with post-implementation stages of internal use computer software are expensed as incurred. Capitalized
development costs are amortized on a straight-line basis over a period of five years, management’s estimate of the economic life.
Costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability
of development costs requires considerable judgment by management with respect to certain external factors, including, but not limited
to, technological and economic feasibility, and estimated economic life.
Intellectual Property
We have patent and patent
pending technologies with a focus on artificial intelligence (“AI”), machine learning with optimization and Smart Deployment
algorithms. It involves anticipating demand for passengers and dispatching cars in advance – to reduce wait-time, increasing utilization
of vehicles, and decrease cost. It includes new and efficient system for tracking and charging customers with preferred rates, supply
and demand rates, and “specific” community engagement.
Patent expenses, consisting
mainly of patent filing fees, have been capitalized and are shown as an asset on our balance sheet. We amortize our Patent asset over
the remaining life of the Patent, which is approximately ten (10) years.
Fair Value of Financial Instruments
Fair value is defined as the
exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting
guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes
the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that
market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent
of our Company. Unobservable inputs are inputs that reflect our Company’s assumptions about the factors that market participants
would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
|
Level 1 |
- Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|
Level 2 |
- Other inputs that are directly or indirectly observable in the marketplace. |
|
Level 3 |
- Unobservable inputs which are supported by little or no market activity. |
As previously noted, the fair
value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value.
Fair value estimates discussed
herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2022 and December
31, 2021. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial
instruments include accounts payable and accrued liabilities, deferred revenue and related-party advances. Fair values for these items
were assumed to approximate carrying values because of their short-term nature or their status of being payable on demand.
Long-lived Assets
We follow ASC 360-10-15-3,
Impairment or Disposal of Long-lived Assets, which established a “primary asset” approach to determine the cash flow estimation
period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived
assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported
at the lower of carrying amount or fair value less cost to sell.
Revenue Recognition
At our inception, we adopted
ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under this guidance, operating revenue is recognized at the time
a good or service is transferred to a customer and the customer receives the service performed. Our revenue arrangements with customers
are predominantly short-term in nature involving a single performance obligation related to the delivery of the service and generally
provide for transfer of control at the time payment for the service is received.
We exclude from the measurement
of the transaction price, if applicable, all taxes imposed on and concurrent with a specific revenue-producing transaction and collected
by us from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). Sales
taxes which may be collected are not recognized as revenue but are included in accounts payable on the balance sheets as they would ultimately
be remitted to governmental authorities. No such taxes have yet been charged or collected.
We have elected the practical
expedient permitted in ASC 606-10-32-18, which allows an entity to recognize the promised amount of consideration without adjusting for
the effects of a significant financing component if the contract has a duration of one year or less. Our revenue arrangements are short-term
in nature and do not have significant financing components, therefore we have not adjusted consideration.
During the three months ended
March 31, 2022, we have reported $9 in deferred revenue on the accompanying Balance Sheet.
Debt Issued with Common Stock/Warrants
Debt issued with common stock/warrants
is accounted for under the guidelines established by ASC 470-20 – Accounting for Debt With Conversion or Other Options. We record
the relative fair value of common stock and warrants related to the issuance of debt as a debt discount or premium. The discount
or premium is subsequently amortized to interest expense over the expected term of the debt.
Income Taxes
We account for income taxes
in accordance with ASC 740 - Income Taxes, which requires us to provide a net deferred tax asset/liability equal to the expected
future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss
or tax credit carry forwards. Tax law and rate changes are reflected in income in the period such changes are enacted. We record a valuation
allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. We include interest and penalties
related to income taxes, including unrecognized tax benefits, within the provision for income taxes.
Net Loss Per Share
We compute net income (loss)
per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per
share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common
shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect
to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock
using the if-converted method. Diluted EPS excludes all potential dilutive shares if their effect is anti-dilutive. As of March 31, 2022
and 2021, we had no potentially dilutive shares.
New Accounting Pronouncements
We have reviewed all accounting
pronouncements recently issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and have determined that
they are either not applicable or are not believed to have a material impact on our present or future financial statements.
3. |
Software and Equipment, net |
Software and Equipment, net
consist of the following:
Schedule of software and equipment | |
| | |
| |
| |
March 31, 2022 | | |
December 31,
2021 | |
Software for internal use | |
$ | 92,000 | | |
$ | 44,000 | |
Equipment | |
| 3,479 | | |
| 1,224 | |
| |
| 95,479 | | |
| 45,224 | |
Less accumulated depreciation and amortization | |
| (455 | ) | |
| (222 | ) |
Total | |
$ | 95,024 | | |
$ | 45,002 | |
Beginning in the fourth quarter
of 2021, we began developing our digital transportation enablement and enhancement platform for customer use. During the three months
ended March 31, 2022, we capitalized $48,000 representing costs incurred in the application development stage, which include costs to
design and program the software configuration and interfaces, coding, installation and testing. Once the software is installed and fully
tested and we begin to use it for its intended purposes, the costs will be amortized over a five-year period, which is the expected useful
life. Additional costs to maintain the software will be expensed.
Equipment consists of two
computers.
Depreciation and amortization
of software and equipment amounted to $232 for the three-month period ended March 31, 2022. There was no comparable expense in 2021.
We have patent and patent
pending technologies with a focus on artificial intelligence (“AI”), machine learning with optimization and Smart Deployment
algorithms. The technologies involve anticipating demand for passengers and dispatching cars in advance – to reduce wait-time, increasing
utilization of vehicles, and decrease cost. It includes new and efficient system for tracking and charging customers with preferred rates,
supply and demand rates, and “specific” community engagement.
As of March 31, 2022, we owned
the following patents which have been issued and which were pending:
|
· |
U.S. Patent 9,984,574, issued May 29, 2018, claims priority to provisional application filed on Jan. 21, 2014; |
|
· |
Pending U.S. application, published as US 2018/0366004 A1, claims priority to provisional application filed on Jan. 21, 2014; |
|
· |
Pending U.S. application, unpublished, which claims priority to provisional application filed on Jan. 21, 2014; and |
|
· |
Pending U.S. application, unpublished, claims priority to three provisional applications filed on Nov. 4, 2019 |
The software platform that
underlies the patents have not created any material revenue to date and there is no assurance that any revenue will be created from the
patent technologies. As a result, we have recorded the patent asset at the cost of patent fees and other expenses incurred to produce
and file the patents. During the three-month periods ended March 31, 2022 and 2021, we recorded patent amortization expense of $126
and $128, respectively.
5. |
Related Party Transactions |
Amounts owed to related parties
consist of the following:
Schedule of amounts owed to related parties | |
| | | |
| | |
| |
March 31, 2022 | | |
December 31,
2021 | |
Joe Grimes | |
$ | 50,954 | | |
$ | 55,594 | |
Sanjay Prasad | |
| 4,807 | | |
| 4,807 | |
Don Smith | |
| 5,500 | | |
| – | |
KeptPrivate.com | |
| 16,000 | | |
| – | |
Total | |
$ | 77,261 | | |
$ | 60,761 | |
Mr. Grimes is our CEO and
Director as well as our largest shareholder. Amounts owed Mr. Grimes are for monies he had advanced our Company or monies he has paid
on our behalf.
Mr. Prasad, one of our Directors,
has made various patent filings for our Company in recent years, which amounts have been recorded in Patents, net on the accompanying
Balance Sheet. There were no amounts charged by Mr. Prasad in either of the three-month periods ended March 31, 2022 or 2021.
Mr. Smith is our CFO and
is a party to a November 17, 2021 employment agreement, as amended, with our Company under which Mr. Smith is to receive monthly cash
payments of $3,500.
The amounts charged by Mr. Smith for services for the three-month periods ended March 31, 2022 and 2021 totaled $10,500
and zero, respectively.
KeptPrivate.com is owned
by Mr. Steven Ritacco, a Director of our Company. Mr. Ritacco is our CTO and is a party to a November 17, 2021 employment agreement,
as amended, with our Company under which he is to receive monthly cash payments of $8,000.
Until such time as we implement a payroll program, Mr. Ritacco is invoicing us through his company KeptPrivate.com. His services are
currently related to the development of our digital transportation enablement and enhancement platform, which amounts are included in
Software and Equipment, net on the accompanying Balance Sheet. The amounts charged by KeptPrivate.com for services for the three-month
periods ended March 31, 2022 and 2021 totaled $24,000
and zero, respectively.
Amounts due to related parties
bear no interest, are unsecured and are repayable on demand. Imputed interest is considered insignificant.
Notes payable consists of the following:
Schedule of notes payable | |
| | | |
| | |
| |
March 31, 2022 | | |
December 31,
2021 | |
Convertible promissory note | |
$ | 290,000 | | |
$ | 290,000 | |
Less debt discount on amounts borrowed | |
| (64,088 | ) | |
| (208,287 | ) |
Promissory note | |
| 5,000 | | |
| 5,000 | |
Subtotal – non-related parties | |
| 230,912 | | |
| 86,713 | |
Less current portion | |
| (230,912 | ) | |
| (86,713 | ) |
Long-term portion | |
$ | – | | |
$ | – | |
Convertible Promissory Note
On November 10, 2021 (the
“Issue Date”), we entered into a Securities Purchase Agreement (the “SPA”) with a third party (the “Lender”),
for the purchase of a Convertible Promissory Note (the “Note”) in the principal amount of $290,000. The Note carries an original
issue discount of $29,000 along with a requirement to pay $16,550 in expenses. The total of $45,550 has been recorded as original issue
discount. As a result, we were provided $244,500 upon the Note’s execution. The Note matures on May 10, 2022, subject to a six-month
extension at our Company’s request. The Note accrues interest at 10% per annum from the Issue Date and monthly interest payments
are due at the beginning of each month. In the event the Note is extended for six months, the interest will accrue at 12% per annum and,
in the event of a default, interest will accrue at 20% per annum. The Note is secured by all of our Company’s assets.
The Note is convertible only
upon an event of default (as defined in the Note) and is then convertible, in whole or in part, into shares of our common stock at a conversion
price equal to the lesser of 90% multiplied by the lowest trading price (i) during the previous 20 trading day period ending on the Issue
Date, or (ii) during the previous 20 trading day period ending on the date of conversion of the Note (the “Conversion Price”).
The Conversion Price is subject to various adjustments, as specified in the Note. There has been no event of default to date.
While the Note is issued and
outstanding, our Company is required at all times to have authorized and reserved five times the number of shares that are actually issuable
upon full conversion of the Note (based on the Conversion Price of the Note in effect from time to time) (the “Reserved Amount”).
If, at any time we do not maintain or replenish the Reserved Amount within three business days of the request of the Lender, the principal
amount of the Note will increase by $5,000 per occurrence. If we fail to maintain our status as “DTC Eligible” for any reason,
or, if the Conversion Price is less than $0.01 at any time after the Issue Date, the principal amount of the Note will be increased by
$5,000 and the Conversion Price will be redefined to mean 50% multiplied by the Market Price (as defined in the Note), subject to adjustments
(which includes an adjustment for anti-dilutive issuances). The Note and the SPA also contain various restrictions and grant to the Lender
various rights.
Upon an Event of Default,
the Note will become immediately due and payable, and our Company will pay to the Lender the Default Sum (as defined in the Note) or the
Default Amount (as defined in the Note).
In addition to the issuance
of the Note, we were obligated to issue to the Lender, as a commitment fee, 1,320,000 shares of our common stock (the “Commitment
Shares”). Along with the issuance of the Commitment Shares, we were required to issue to the Lender a warrant to purchase 750,000
shares of our common stock (the “Warrant”). All or any part of the Warrant is immediately exercisable at $1.00 per share and
expires three years from the Issue Date. The Warrants are subject to adjustments as provided in the warrant agreement. The Warrant was
issued in November 2021 and the Commitment Shares were issued in February 2022.
At any time following the
issuance of the Commitment Shares, the Lender may deliver to our Company a reconciliation statement showing the net proceeds actually
received by the Lender from the sale of the Commitment Shares by the Lender and the shares issued upon the exercise of the Warrants (the
“Reconciliation”). If, as the date of the Reconciliation, the Lender has not realized net proceeds from the sale of the Commitment
Shares equal to at least $330,000, our Company will immediately take all required action necessary or required in order to cause the issuance
of additional shares of our common stock to the Lender in an amount sufficient such that, when sold and the net proceeds are added to
the net proceeds from previous sales of the Commitment Shares, the Lender will have received total net funds equal to $330,000.
If the Note is repaid in full
on or prior to the initial maturity date (without extension), we will have the right to redeem 660,000 shares of the Commitment Shares
for $0.25 per share. The Lender is subject to a leak-out provision for one year from the Issue Date that provides that it will not sell
shares of our common stock greater than (i) 20,000 shares, or (ii) 20% of the average trading volume of our common stock for the five
preceding trading days.
We allocated the proceeds
of the Note between the Note, the Commitment Shares and the Warrant in accordance with ASC 470-20 and recorded an additional debt discount
of $244,450 in connection with the transaction.
We are amortizing the debt
discount over the six-month term of the Note resulting in amortization of $144,199 for the three months ended March 31, 2022.
During the three-month period
ended March 31, 2022, we recorded interest expense of $7,250 which is included on the accompanying Balance Sheets in Accounts Payable
and Accrued Liabilities.
Promissory Note
On June 10, 2021, we issued
a promissory note to a non-related third party in the principal amount of $5,000. The note, which is unsecured, bears interest at 20%
per annum and was repayable December 10, 2021, six months from the date of issue. We are currently negotiating a settlement with the note
holder, but no agreement has been reached. As such, the note is currently in default. During the three months ended March 31, 2022, we
recorded interest expense of $246 which is included on the accompanying Balance Sheets in Accounts Payable and Accrued Liabilities.
Common Stock
We are authorized to issue
50,000,000 shares of our $0.0001 par value common stock and each holder is entitled to one (1) vote on all matters subject to a vote of
stockholders. In connection with our issuance of the Convertible Promissory Note described in Note 6, we were committed to issue 1,320,000
shares. The shares were issued during the three months ended March 31, 2022.
2020 Stock Incentive Plan
Effective June 20, 2020, our
Board of Directors adopted the 2020 Stock Incentive Plan (the “Plan”) authorizing a total of 2,500,000 shares of our common
stock for future issuances under the Plan. Under the Plan, the exercise price of a granted option shall not be less than 100% of the fair
market value on the date of grant (110% of the fair market value in the case of a 10% stockholder). Additionally, no option may be exercisable
more than ten (10) years after the date it is granted (no more than five (5) years in the case of a 10% stockholder).
Stock Options
On June 20, 2020, we issued
options to purchase 100,000 of our common shares to each of Messrs. Grimes, Prasad, and Ritacco, all Officers and/or Directors of our
Company. The options are exercisable at $0.01 per share which was deemed to be the fair market value at the date the options were granted.
Activity related to stock
options for the three months ended March 31, 2022 is as follows: