Attached files

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8-K/A - AMENDED CURRENT REPORT - TurnKey Capital, Inc.tthx_8k.htm
EX-23.1 - CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - TurnKey Capital, Inc.tthx_ex23z1.htm
EX-99.2 - INTERIM FINANCIAL STATEMENTS AND NOTES - TurnKey Capital, Inc.tthx_ex99z2.htm
EX-99.1 - AUDITED FINANCIAL STATEMENTS AND NOTES - TurnKey Capital, Inc.tthx_ex99z1.htm

 


Exhibit 99.3


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Description of Pro Forma Transactions


Turnkey Home Buyers USA, Inc. Acquisition


On July 6, 2015 (“Acquisition Date”), Train Travel Holdings, Inc., a Nevada corporation (“TTHX”) completed a Share Exchange Agreement (the “Agreement”) with Turnkey Home Buyers USA, Inc., a Florida corporation (“Turnkey”), TBG Holdings Corporation, a Florida corporation (“TBG”), each of the Turnkey shareholders (the “Shareholders”), and Train Travel Holdings, Inc., a Florida corporation (“TTH”).


Prior to the Agreement, Turnkey shareholders held 24,675,000 shares of common stock (the “Turnkey Shares”) of which 15,000,000, or 60.8%, was owned by TBG (the “TBG Shares”) whose officers and majority shareholders are Neil Swartz and Timothy Hart. TTHX total capital stock outstanding included 23,391,665 shares of common stock and 600,000 shares of preferred stock convertible into 29,100,000 shares of common stock. Beneficial ownership of 75.2% of the TTHX capital stock resided with Mr. Swartz and Mr. Hart through their control of TBG and individual ownership of 100% of the issued and outstanding preferred stock.


Pursuant to the terms of the Agreement, TBG tendered to Turnkey for cancellation 15,000,000 shares of Turnkey common stock resulting in Turnkey shareholders transferring to TTHX all of the issued and outstanding shares of capital stock of Turnkey’s shareholders which amounted to 9,675,000 shares (24,675,000 Turnkey Shares – 15,000,000 TBG Shares).


Pursuant to the terms of the Agreement, in exchange for the Turnkey shares, TTHX was to transfer 15,037,500 shares of common stock to Turnkey shareholders, but ultimately issued 15,337,500 shares.


As a result of the Share Exchange, the Turnkey shareholders own 38.9% of TTHX common stock issued and outstanding and 22.1% of the fully diluted common stock outstanding. TBG, Mr. Swartz and Mr. Hart combined own 27.0% of TTHX common stock issued and outstanding and beneficially own 58.5% of the fully diluted common stock as a result of their ownership of the outstanding preferred stock.


Due to the common control of Turnkey and TTHX, pursuant to ASC 805-50-25, “Transactions Between Entities Under Common Control” and other SEC guidance including for lack of economic substance, the Agreement was accounted for as a transfer of the carrying amounts of assets and liabilities under the predecessor value method of accounting.


Turnkey was founded in September 2014 by TBG and Robert and Joseph Blair and offers clients a full suite of services for residential and commercial real estate transactions. As part of the acquisition, TTHX will acquire Turnkey’s subsidiary, a real estate brokerage firm, to handle the sales transactions. Turnkey generates revenue in three primary ways: coaching and mentoring real estate investors to improve their returns, leasing and sales of quality turnkey rental properties, and brokerage of residential and commercial transactions.


In September 2014 Turnkey acquired the intellectual properties of Robert Blair Real Estate, which included videos, instructional books, and an established real estate investor education program. Turnkey Home Buyers USA Inc. will be run as a subsidiary of Train Travel Holdings Inc. Following the closing TTHX will have two operating divisions: (1) the new Turnkey Home Buyers real estate operations and (2) the Train Travel railroad operation, which is looking for acquisition in the excursion railroad industry.

  

The unaudited pro forma condensed consolidated financial statements do not include any adjustments regarding liabilities incurred or cost savings achieved resulting from the integration of the companies, as management is in the process of assessing what, if any, future actions are necessary. The unaudited pro forma condensed consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of the Company that would have been reported had the Agreement been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity.


The unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the historical audited and unaudited financial statements and related notes of the Company and the sections entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on April 20, 2015; (ii) the audited historical financial statements and related notes of Turnkey Home Buyers USA, Inc. as of December 31, 2014 and for the period from September 12, 2014 through December 31, 2014 and filed herewith as exhibit 99.1



1



 




Train Travel Holdings, Inc.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

For the Three and Six months Ended June 30, 2015


 

 

Three Months Ended June 30, 2015

 

 

Six Months Ended June 30, 2015

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

Turnkey Home

 

 

Pro Forma

 

 

 

 

 

Turnkey Home

 

 

Pro Forma

 

 

 

Train Travel

 

 

Buyers

 

 

Three Months

 

 

Train Travel

 

 

Buyers

 

 

Three Months

 

 

 

Holdings, Inc.

 

 

USA, Inc.

 

 

Ended

 

 

Holdings, Inc.

 

 

USA, Inc.

 

 

Ended

 

 

 

Actual

 

 

Actual

 

 

June 30, 2015

 

 

Actual

 

 

Actual

 

 

June 30, 2015

 

Income

  

                       

  

  

                       

  

  

                       

  

  

                       

  

  

                       

  

  

                       

  

Revenue

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

2,698

 

 

$

2,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

5,573

 

 

 

95,153

 

 

 

100,726

 

 

 

8,779

 

 

 

228,884

 

 

 

237,663

 

Legal and professional - related party

 

 

16,758

 

 

 

57,540

 

 

 

74,298

 

 

 

29,671

 

 

 

90,436

 

 

 

120,107

 

Legal and professional

 

 

13,267

 

 

 

-

 

 

 

13,267

 

 

 

14,367

 

 

 

-

 

 

 

14,367

 

Total operating expenses

 

 

35,598

 

 

 

152,693

 

 

 

188,291

 

 

 

52,817

 

 

 

319,320

 

 

 

372,137

 

Income before (provision) benefit from income taxes

 

 

(35,598

)

 

 

(152,693

)

 

 

(188,291

)

 

 

(52,817

)

 

 

(316,622

)

 

 

(369,439

)

(Provision) benefit from income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

$

(35,598

)

 

$

(152,693

)

 

$

(188,291

)

 

$

(52,817

)

 

$

(316,622

)

 

$

(369,439

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding - basic & diluted

 

 

23,391,665

 

 

 

 

 

 

 

23,391,665

 

 

 

23,391,665

 

 

 

 

 

 

 

23,391,665

 

Common stock issued in share exchange

 

 

 

 

 

 

15,337,500

 

 

 

15,337,500

 

 

 

 

 

 

 

15,337,500

 

 

 

15,337,500

 

Total common shares outstanding - basic & diluted

 

 

 

 

 

 

 

 

 

 

38,729,165

 

 

 

 

 

 

 

 

 

 

 

38,729,165

 

Proforma net income (loss) per common share - basic & diluted

 

 

 

 

 

 

 

 

 

$

(0.005

)

 

 

 

 

 

 

 

 

 

$

(0.010

)




See notes to unaudited pro forma condensed consolidated financial statements





2



 




Train Travel Holdings, Inc.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

For the Year Ended December 31, 2014


 

 

 

 

 

Turnkey Home

 

 

 

 

 

 

 

 

 

Buyers

 

 

 

 

 

 

Train Travel

 

 

USA, Inc.

 

 

 

 

 

 

Holdings, Inc.

 

 

For the period

 

 

Total

 

 

 

For the

 

 

September 12,

 

 

Pro Forma

 

 

 

Year

 

 

2014 (Inception)

 

 

Year

 

 

 

Ended

 

 

Through

 

 

Ended

 

 

 

December 31,

 

 

December 31,

 

 

June 30, 2015

 

 

 

2015

 

 

2015

 

 

December 31,

 

 

 

Actual

 

 

Actual

 

 

2015

 

Income

  

                        

  

  

                        

  

  

                        

  

Revenue

 

$

-

 

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

5,573

 

 

 

53,135

 

 

 

58,708

 

Legal and professional - related party

 

 

16,758

 

 

 

64,000

 

 

 

80,758

 

Legal and professional

 

 

13,267

 

 

 

-

 

 

 

13,267

 

Total operating expenses

 

 

35,598

 

 

 

117,135

 

 

 

152,733

 

Income before (provision) benefit from income taxes

 

 

(35,598

)

 

 

(117,135

)

 

 

(152,733

)

(Provision) benefit from income taxes

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

$

(35,598

)

 

$

(117,135

)

 

$

(152,733

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Common stock outstanding - basic & diluted

 

 

23,391,665

 

 

 

 

 

 

 

23,391,665

 

Common stock issued in share exchange

 

 

 

 

 

 

15,337,500

 

 

 

15,337,500

 

Total common shares outstanding - basic & diluted

 

 

 

 

 

 

 

 

 

 

38,729,165

 

Proforma net income (loss) per common share - basic & diluted

 

 

 

 

 

 

 

 

 

$

(0.004

)



See notes to unaudited pro forma condensed consolidated financial statements






3



 




Train Travel Holdings, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of June 30, 2015


 

 

 

 

 

Turnkey Home

 

 

 

 

 

 

 

 

 

Train Travel

 

 

Buyers

 

 

Share

 

 

June 30,

 

 

 

Holdings, Inc.

 

 

USA, Inc.

 

 

Exchange

 

 

2015

 

 

 

Actual

 

 

Actual

 

 

Adjustments

 

 

Proforma

 

Assets

  

                       

  

  

                       

  

  

                       

  

  

                       

  

Cash

 

$

-

 

 

$

29,347

 

 

$

-

 

 

$

29,347

 

Real estate owned

 

 

-

 

 

 

114,169

 

 

 

-

 

 

 

114,169

 

Due from related parties

 

 

-

 

 

 

231,000

 

 

 

-

 

 

 

231,000

 

Total assets

 

$

-

 

 

$

374,516

 

 

$

-

 

 

$

374,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable & accrued expenses

 

$

20,676

 

 

$

7,673

 

 

$

-

 

 

$

28,349

 

Accounts payable - related party

 

 

53,987

 

 

 

-

 

 

 

-

 

 

 

53,987

 

Advances - related party

 

 

230,460

 

 

 

-

 

 

 

-

 

 

 

230,460

 

Loan payable

 

 

2,194

 

 

 

-

 

 

 

-

 

 

 

2,194

 

Total Current Liabilities

 

 

307,317

 

 

 

7,673

 

 

 

-

 

 

 

314,990

 

Total liabilities

 

 

307,317

 

 

 

7,673

 

 

 

-

 

 

 

314,990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

600

 

 

 

-

 

 

 

-

 

 

 

600

 

Common stock

 

 

23,392

 

 

 

-

 

 

 

15,337

 

 

 

38,729

 

Additional paid-in capital

 

 

196,758

 

 

 

800,600

 

 

 

(15,337

)

 

 

982,021

 

Accumulated deficit

 

 

(528,067

)

 

 

(433,757

)

 

 

-

 

 

 

(961,824

)

Total stockholders' equity (deficit)

 

 

(307,317

)

 

 

366,843

 

 

 

-

 

 

 

59,526

 

Total liabilities and stockholders' equity (deficit)

 

$

-

 

 

$

374,516

 

 

$

-

 

 

$

374,516

 

 

 

 

(The accompanying notes are an integral part of these financial statements)





4



 



Train Travel Holdings, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of December 31, 2014


 

 

 

 

 

Turnkey Home

 

 

 

 

 

 

 

 

 

Train Travel

 

 

Buyers

 

 

Share

 

 

December 31,

 

 

 

Holdings, Inc.

 

 

USA, Inc.

 

 

Exchange

 

 

2014

 

 

 

Actual

 

 

Actual

 

 

Adjustments

 

 

Proforma

 

Assets

  

                       

  

  

                       

  

  

                       

  

  

                       

  

Cash

 

$

-

 

 

$

103,324

 

 

$

-

 

 

$

103,324

 

Real estate owned

 

 

-

 

 

 

51,363

 

 

 

-

 

 

 

51,363

 

Due from related parties

 

 

-

 

 

 

227,100

 

 

 

-

 

 

 

227,100

 

Prepaid insurance

 

 

-

 

 

 

1,328

 

 

 

-

 

 

 

1,328

 

Total assets

 

$

-

 

 

$

383,115

 

 

$

-

 

 

$

383,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable & accrued expenses

 

$

17,881

 

 

$

-

 

 

$

-

 

 

$

17,881

 

Accounts payable - related party

 

 

37,513

 

 

 

-

 

 

 

-

 

 

 

37,513

 

Advances - related party

 

 

196,912

 

 

 

-

 

 

 

-

 

 

 

196,912

 

Loan payable

 

 

2,194

 

 

 

-

 

 

 

-

 

 

 

2,194

 

Total Current Liabilities

 

 

254,500

 

 

 

-

 

 

 

-

 

 

 

254,500

 

Total liabilities

 

 

254,500

 

 

 

-

 

 

 

-

 

 

 

254,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

600

 

 

 

-

 

 

 

-

 

 

 

600

 

Common stock

 

 

23,392

 

 

 

-

 

 

 

15,337

 

 

 

38,729

 

Additional paid-in capital

 

 

196,758

 

 

 

500,250

 

 

 

(15,337

)

 

 

681,671

 

Accumulated deficit

 

 

(475,250

)

 

 

(117,135

)

 

 

-

 

 

 

(592,385

)

Total stockholders' equity (deficit)

 

 

(254,500

)

 

 

383,115

 

 

 

-

 

 

 

128,615

 

Total liabilities and stockholders' equity (deficit)

 

$

-

 

 

$

383,115

 

 

$

-

 

 

$

383,115

 



(The accompanying notes are an integral part of these financial statements)






5



 


NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1. Basis of Pro Forma Presentation


The unaudited pro forma condensed consolidated financial statements have been prepared by Train Travel Holdings, Inc. (“Train Travel” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission for the purposes of inclusion in Train Travel’s amended Form 8-K prepared and filed in connection with the Share Exchange Agreement.


Certain information and certain disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures provided herein are adequate to make the information presented not misleading.


The unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the Agreement and the following related transactions: the issuance of restricted common stock.


The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2014 and the unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2015 gives effect to the Agreement as if it occurred on January 1, 2014. The unaudited pro forma condensed consolidated statement of operations is derived from the audited historical financial statements of TTHX and Turnkey as of and for the period ended December 31, 2014 and the unaudited historical financial statements of TTHX and Turnkey as of and for the three and six months ended June 30, 2015.


The unaudited pro forma condensed consolidated financial statements are provided for informational purposes only and do not purport to be indicative of the Company’s consolidated financial position or consolidated results of operations which would actually have been obtained had such transactions been completed as of the date or for the periods presented, or of the consolidated financial position or consolidated results of operations that may be obtained in the future.


Note 2. Predecessor Values Accounting


Due to the common control of Turnkey and TTHX, pursuant to ASC 805-50-25, “Transactions Between Entities Under Common Control” and other SEC guidance including for lack of economic substance, the Agreement was accounted for as a transfer of the carrying amounts of assets and liabilities under the predecessor value method of accounting.


Financial statement presentation under the predecessor values method of accounting as a result of a business combination between entities under common control requires the receiving entity (i.e., TTHX) to report the results of operations as if both entities had always been combined. The consolidated financial statements include both entities’ full results since the inception of Turnkey on September 12, 2014.


The carry value of Turnkey assets and liabilities as of the acquisition date is as follows:


Net tangible assets acquired and liabilities assumed on July 6, 2015:


Cash and cash equivalents

 

$

13,337

 

Due from related parties

 

 

224,272

 

Real estate owned

 

 

114,273

 

Total assets acquired

 

 

353,782

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

7,673

 

Net asset value

 

 

346,109

 




6



 


Note 3. Pro Forma Net Loss Per Common Share


The pro forma basic and diluted net loss per common share is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive.






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