Introduction
In the accompanying analysis of financial information, we sometimes use
information derived from consolidated unaudited financial data but not presented
in our financial statements prepared in accordance with
Promoters
The promoters and founders of the Company are
Forward-Looking Statements
The Company makes forward-looking statements in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report based on the beliefs and assumptions of our management and on information currently available to us. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this report, including, without limitation, statements regarding our financial position, business strategy and other plans and objectives for our future operations, are forward-looking statements. These statements include declarations regarding our management's beliefs and current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could", "intend," "consider," "expect," "plan," "anticipate," "believe," "estimate," "predict" or "continue" or the negative of such terms or other comparable terminology. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Our business has been undergoing substantial change, which has magnified such uncertainties. Readers should bear these factors in mind when considering forward-looking statements and should not place undue reliance on such statements. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially from those suggested by such statements.
Any number of risks and uncertainties could cause actual results to differ
materially from those we express in our forward-looking statements, including
the risks and uncertainties we describe below and other factors we describe from
time to time in our periodic filings with the
· the material adverse impact of the covid-19 pandemic and the associated
governmental restrictions on travel and hospitality and the extent of social
distancing and shelter in place behavior conducted by consumers;
· the safety, efficacy, distribution, cost and availability of covid-19 vaccines
and therapeutic and hospital treatments for covid-19 impacting travel and
hospitality;
· the absence of liquidity in capital markets with third parties and or related
parties;
· the adequacy of our financial resources, including our sources of liquidity,
including our ability to extend maturities on existing notes, our ability to raise equity capital at the right market terms and our ability to contain and reduce our operating costs; and
· uncertainty related to our reserves, valuations, provisions and anticipated
realization of assets.
Further information on the risks specific to our business is detailed within this report, including under "Risk Factors." Forward-looking statements speak only as of the date they were made, and we disclaim any obligation to update or revise forward-looking statements whether because of new information, future events or otherwise.
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Substantial doubt is deemed to exist concerning our ability to continue as a going concern
Management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company's ability to continue as a going concern. The mitigating effect of management's plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans must have been approved before the date that the financial statements are issued.
The Company has historically incurred operating losses and experienced cash outflows from operations and has an accumulated deficit. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions. These trends are expected to continue for the medium term. To the extent that sales of equity securities are not sufficient, the Company expects to curtail or defer discretionary expenses.
Beginning in
The Company does not have operations in
Without new equity or loan support and reductions in operating expenses, the
Company would not be able to support the current operating plan through twelve
months after the date the financial statements are issued. No assurance can be
given at this time, however, as to whether we will be able to raise new equity
or loan support and / or reduce operating expenses. In addition, because these
plans have not been finalized, receipt of additional funding is not considered
probable. If the Company does not obtain sufficient funds when needed, the
Company expects it would reduce its operating expenses and defer vendor
payments. Because such contingency plans have not been finalized (because the
specifics would depend on the situation at the time), such actions also are not
considered probable. Because, neither receipt of future equity or loan support,
nor management's contingency plans to mitigate the risk and extend cash
resources through twelve months after the date the financial statements are
issued, are considered probable, substantial doubt is deemed to exist about the
Company's ability to continue as a going concern. The financial statements for
the three and nine months ended
Owing to the effects of the pandemic, potential investors and readers of these
financial statements should not rely on the consolidated condensed statement of
operations, balance sheet, cash flow, equity / deficit and comprehensive loss as
being indicative of current trading and or liquidity and balance sheet.
Management does expect to record material adverse effects to the statement of
operations, balance sheet, comprehensive loss as of and for the periods ended
30 Table of Contents Overview
The Company is an eCommerce aggregator and a hospitality management company. An
aggregator model is a form of eCommerce whereby our website, www.tripborn.com
aggregates, information on various travel and hospitality vendors and presents
them on a single platform, to ease, facilitate, coordinate and effectuate
consumer travel and hospitality needs. The Hospitality segment is an Indian
based operator of 24 hotel properties in 18 cities with 1,230 keys under 4
brands (
The eCommerce aggregator business functions as a Last Mile Commerce and
Connectivity aggregator that delivers product and services to offline consumers
using a service agent network in
The hospitality business is comprised of our 51% equity interest in our
subsidiary, PRAMA, which was acquired on
eCommerce Aggregator business overview
We have built, advanced and secure, service-oriented technology platforms, that
integrate our sales, customer service and fulfillment operations. Our website is
hosted in the cloud and is used by our B2B customers or service agents to enable
them to sell our full suite of online travel services to their customers. Our
technology platforms are scalable and can be augmented to handle increased
traffic and complexity of products with limited additional investment, an
example of which is the high traffic generated by promotional rates offered
simultaneously by multiple travel operators and suppliers. Our website
facilitates the requirements of the growing Indian middle-class travel market,
which is characterized by lower rates of internet penetration and digital
technology, when compared to more developed countries. We have approximately
13,000 registered agents in
We have designed our customer facing websites to be user-friendly to our B2B
customer, providing our customers with extensive low-price options and
alternative routings. We continuously make improvements to our online booking
platforms to enhance the user experience by focusing on automation. Our
cloud-based platform has been designed to link to our multiple suppliers'
systems either through "direct connects" or a global distribution system
("GDS"), we use both Amadeus and Galileo, and are capable of delivering
real-time availability and pricing information for multiple options
simultaneously. Our platform is hosted by a cloud-based IBM service, which
provides a high degree of reliability, security and scalability and helps us to
maintain adequate capacity. Since commencing operations as an online travel
agent, we have steadily worked to add suppliers in order to provide additional
services and better pricing for our service agent customers. As internet
penetration in
Currently, due to the covid-19 pandemic, we are seeking to minimize operating costs to minimize cash flow losses.
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eCommerce Aggregator operating metrics
In evaluating our eCommerce Aggregator business, we use operating metrics, including gross bookings and revenue margin. Gross bookings are a measure of the total dollar volume of transactions that we process and is used by us to measure our scale and growth. We calculate revenue margin as revenue as a percentage of gross bookings. Quarter ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Gross Bookings1$23,415,924 $13,873,147 $60,895,156 $54,286,135 Net revenues$212,524 $127,001 $530,837 $307,224 Revenue Margin2 0.9% 0.9% 0.9% 0.6%
1* Gross bookings represent the total retail value of transactions booked through us, generally including taxes, fees and other charges, and are generally reduced for cancellations and refunds. Gross bookings differ from the Company's net revenues, which reflect the revenue earned by the Company.
2* Revenue margin is defined as Net revenues as a percentage of gross bookings.
Gross Bookings increased for the three and nine month period ended
Money transfer revenues, where the Company receives a commission on the amount
of money transferred, may be associated with travel booked, or independent of
travel booked and reflects an increasing component of the total net revenues for
the eCommerce Aggregator segment. Money transfer is a volatile and fast changing
sector within
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CONSOLIDATED RESULTS OF OPERATIONS
Acquisition of PRAMA
The acquisition of PRAMA on
The pro forma combined revenues and net loss before income taxes, for the
combined entity, as though the acquisition of PRAMA had occurred on
The eCommerce Aggregator segment results improved at the net revenue line, but deteriorated at the loss from operations level, but overall, compared to the PRAMA acquisition did not have a meaningful impact on the results of the Company. The eCommerce Aggregator business is not of a sufficient scale to bear the demands of being a publicly listed company with material financial reporting and internal control weaknesses.
CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES
Cash Requirements and Our Credit Facility
The Company does not maintain a credit or borrowing facility. The Company has
As of
The loans with third parties do not include financial covenants or a requirement
that the Company maintains certain financial ratios, however the loan of
The loan with
As part of the acquisition of PRAMA, the Company assumed an amount owing to
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On
The Company has historically incurred operating losses and experienced cash outflows from operations. The Company has also been historically reliant on loans from related parties, loans from third parties and sales of equity securities to fund operations, working capital and complete acquisitions. These trends are expected to continue for the medium term. The Company continues to raise funds from the sale of equity securities. To the extent that sales of equity securities are not sufficient, the Company expects to curtail or defer discretionary expenses and, or curtail or scale back future acquisitions.
If conditions in the travel and hospitality lodging industry deteriorate, or if
disruptions in the capital markets take place as they did in the immediate
aftermath of both the 2008 worldwide financial crisis and the events of
Cash and cash equivalents totaled
Our ratio of current assets to current liabilities was approximately 0.6 for
both
We do not own hotel properties, and do not plan to own hotel properties in the future. We also do not plan to invest significantly in property, plant and equipment. Our property, plant and equipment purchases tend to be ancillary in nature to the needs of our Hospitality business segment.
We monitor potential new lease and operating management contracts in the Hospitality business segment. These arrangements typically involve a level of upfront costs, which vary through negotiation with property owners. We may make, selective and opportunistic additions to our properties under management or leases to add units to our lodging business. We do not expect such upfront costs to be significant in the near future.
The current focus of management is to minimize operating expenses and limit cash
outflows for the duration of the covid-19 pandemic and associated consumer
reluctance to travel and spend until vaccines and therapeutic treatments can
abate the health consequences of covid-19. We do not know the estimated duration
of the pandemic but do not expect the pandemic to end in the short and medium
term for
We do not believe a discussion of business segment performance for the three and
nine month periods ended
We will require additional capital to continue to fund our operations and will look to raise funds through public and private offerings of our securities. Our future liquidity needs are largely impacted by the adverse impact of the Coronavirus pandemic on our operations together with legal and professional and sales, general and administrative expenses. There are no assurances that these steps will generate sufficient cash flow from operations or that we will be able to obtain sufficient financing necessary to support our working capital requirements. We can also give no assurance that additional capital financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available, we may not be able to continue our operations or execute our business plan. We expect to continue meeting part of our financing and liquidity needs primarily through related and third party borrowings and access to capital markets.
The Hospitality segment is impacted by seasonality which will be discussed in
the financial statements for the year ending
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OFF BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
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