TurnKey Capital, Inc. - FORM 10-K

TurnKey Capital, Inc. - FORM 10-K - April 28, 2016

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TurnKey Capital, Inc. Reports

file	filename
EX-31.1 - CERTIFICATION - TurnKey Capital, Inc.	tcki_ex31z1.htm
EX-32.1 - CERTIFICATION - TurnKey Capital, Inc.	tcki_ex32z1.htm
EX-32.2 - CERTIFICATION - TurnKey Capital, Inc.	tcki_ex32z2.htm
EX-31.2 - CERTIFICATION - TurnKey Capital, Inc.	tcki_ex31z2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 333-186282

TurnKey Capital, Inc.

(Exact Name of Registrant as specified in its Charter)



Nevada		33-1225521
(State or other Jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

2929 East Commercial Blvd., PH-D,

Ft. Lauderdale, Florida 33308

(Address of Principal Executive Offices)

954-440-4678

(Registrant’s Telephone Number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes þ No ¨ (2) Yes þ No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:


Large accelerated filer	¨	Accelerated filed	¨
Non-accelerated filer	¨	Smaller reporting company	þ

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of April 15, 2016 was $2,554,110 as computed by reference to the price at which the common equity was last sold, which was $0.18 on that date.

As of April 15, 2016, the Registrant had 38,831,665 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

TABLE OF CONTENTS


PART I
Item 1.	Business	1
Item 1B.	Unresolved Staff Comments	3
Item 2.	Properties	3
Item 3.	Legal Proceedings	4
Item 4.	Mine Safety Disclosures	4

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	5
Item 6.	Selected Financial Data	6
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	12
Item 8.	Financial Statements and Supplementary Data	12
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	26
Item 9A.	Controls and Procedures	26
Item 9B.	Other Information	27

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	28
Item 11.	Executive Compensation	30
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions and Director Independence	31
Item 14.	Principal Accountant Fees and Services	33

PART IV
Item 15.	Exhibits, Financial Statement Schedules	34

SIGNATURES		35

PART I

FORWARD-LOOKING STATEMENTS

Statements made in this Annual Report about us that are not purely historical are forward-looking statements with respect to our goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions nationally and/or in the communities in which we may conduct business; changes in the interest rate environment; legislation or regulatory requirements; conditions of the securities markets; our ability to raise capital; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; or other economic, competitive, governmental, regulatory and technical factors affecting our operations, products, services and prices, among others.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Item 1. Business.

Corporate History

TurnKey Capital, Inc. (formerly Train Travel Holdings, Inc.) (“the Company,” “we,” or “us”) was incorporated under the laws of the State of Nevada under the name of Vanell, Corp. on September 7, 2012 (“Inception”). The Company changed its name to Train Travel Holdings, Inc. on March 20, 2014 and to TurnKey Capital, Inc. on January 15, 2016

On January 23, 2014, Francisco Douglas Magana (“Magana”), the former president and controlling shareholder, entered into a Common Stock Purchase Agreement with the Company and Train Travel Holdings Inc. Florida (“TTHI”) wherein Magana sold 3,000,000 shares of the Company’s common stock constituting 77.32% of the Company’s issued and outstanding shares of Common Stock to TTHI for an aggregate purchase price of $150,000. The principals of TTHI are Neil Swartz and Timothy Hart.

As part of the Common Stock Purchase Agreement, Magana tendered his letter of resignation as the President, Secretary, Treasurer, Director and member of our Board effective as of the date of the Agreement.

On January 23, 2014, in Lieu of a Special Meeting, the Board of Directors of the Company accepted the resignation of Magana and elected Neil Swartz to the positions of Director, President and CEO of the Company and Timothy Hart to the positions of Director, Secretary and CFO.

Commencing January 23, 2014, our business plan changed to the acquisition and operation of entertainment train companies, as well as managing and providing consulting services to entertainment train companies. Since January 2014 our management has spent all of its time and effort on developing our business plan, including identifying specific entertainment railroad acquisition targets, engaging in discussions with these potential targets to ascertain the potential level of interest, negotiating general terms with targets, and undertaking early stage due diligence of potential targets. As a result, we entered into non-binding letters of intent with two acquisition candidates and subsequently performed initial stage due diligence. In one case, the railroad was in such disrepair we determined the acquisition to not be feasible at the price being sought by the target. In another case, we determined the price was too high based on our due diligence and could not reach an agreement with the potential seller. We also entered into a series of agreements to operate a dinner train in Missouri which were subsequently unwound. In light of the forgoing, our management has looked to potential new lines of business in addition to pursuing our current line of business.

On July 6, 2015, the Company completed a share exchange agreement (the “Share Exchange Agreement”) with Turnkey Home Buyers USA, Inc., a Florida corporation (“Turnkey”), TBG Holdings Corporation (“TBG”), each of the Turnkey shareholders and Train Travel Holdings, Inc., a Florida corporation. The Company, Turnkey, TBG and Train Travel Holdings, Inc., a Florida corporation, are all under the common control of Neil Swartz and Tim Hart.

Pursuant to the terms of the Share Exchange Agreement, Turnkey shareholders transferred to the Company all of the issued and outstanding shares of capital stock of Turnkey’s shareholders. In exchange for the acquisition of all of the issued and outstanding shares of Turnkey, the Company issued 15,337,500 shares of its common stock to Turnkey shareholders. Prior to closing, TBG, a principal shareholder of the Company and Turnkey, tendered to Turnkey for cancellation 15,000,000 shares of Turnkey common stock.

The Company shares issued to the Turnkey shareholders were not registered and were issued in a transaction which was exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933. Each of the Turnkey shareholders were accredited investors and no underwriters or placement agents were involved.

As a result of the Share Exchange Agreement, the Turnkey shareholders owned 38.9% of the Company’s common stock and 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 the Company, pursuant to ASC 805-50-25, “Transactions Between Entities Under Common Control” and other SEC guidance including for lack of economic substance, the Share Exchange 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., the Company) 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.

Business

Founded in September 2014, Turnkey offers clients a full suite of services for residential and commercial real estate transactions. As part of the acquisition, the Company acquired Turnkey’s subsidiary, a real estate brokerage firm, to handle the sales transactions. Turnkey seeks to generate 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.

Turnkey and its existing subsidiary will be run as subsidiary companies and are planning to execute aggressive marketing campaigns and live seminars that will drive traffic to both the education and coaching programs, as well as the wholesale turnkey properties that Turnkey offers to its clients.

The Company now has two operating divisions: (1) the new Turnkey Home Buyers real estate operations and (2) the Train Travel railroad operations, which is actively pursuing acquisitions in the excursion railroad industry.

Turnkey’s Single-Family Rental home division has developed an acquisition platform that is capable of acquiring large numbers of properties across many acquisition channels in multiple markets. When identifying desirable markets, the company focuses on steady population growth, strong rental demand and a desirable level of distressed sales of homes that can be acquired below replacement cost, providing for attractive potential rental yields and capital appreciation. More specifically, the company looks to acquire single-family homes in select submarkets that are appealing to middle income families, based on its disciplined market selection criteria, such as above-average median household incomes, well-regarded school districts, proximity to employment centers and lifestyle amenities, access to transportation routes and public transit and low crime levels. Turnkey believes that homes in these areas will attract tenants with strong credit profiles, produce high occupancy/rental rates, providing for long-term property appreciation potential.

Initially, Turnkey is purchasing properties in the single-family rental home market in Florida, due to the favorable environment for investment and high rental demand, as well as yield potential. As the Company grows its portfolio, it will be better positioned to acquire properties on a much larger scale. Turnkey intends to continually evaluate potential new markets where it could invest and establish operations as opportunities emerge.

Turnkey’s educational program provides clients’ access to an all-inclusive Real Estate investing educational company. The educational and consulting company utilizes its expertise and experience to work with clients and entrepreneurs that seek to enter the real estate industry, in order to provide them with a high quality turnkey investment solution.

The Turnkey educational program offers clients direct relationships with a team of experts in different niches of real estate, allowing them to gain a competitive advantage in their real estate investing careers. Each client is assigned a personal mentor, based on their specific real estate investing goals, who will provide support through phone and email to address their most time sensitive real estate questions. The personal mentor will work with clients to analyze deals, helping to mitigate risk and maximize profitability of each potential real estate investment. Management believes three of the primary factors in real estate investing success are experience, time-tested strategies, and proven techniques - which is why Turnkey’s educational program creates a collaborative environment. By joining Turnkey educational program, clients will gain access to a fulfillment platform that allows clients to collaborate, share experiences and benefit from Turnkey’s national buying power.

Turnkey’s educational program offers clients an affordable specialized educational curriculum based on their specific goals, experience levels and time commitments. This includes creating a weekly action plan to organize and prioritize what each client needs to execute on a day to day basis as well as providing the essential documents and resources needed to complete the action plan, including training modules, step-by-step videos and downloadable implementation checklists. Clients will have access to on demand weekly training webinars, where mentors review the elements of closing deals, from fundamental lead-generation marketing campaigns, deal analysis, to available financing options, writing risk-free contracts and submitting profitable offers. These webinars are designed to help clients develop their entrepreneurial skills and master the implementation of the crucial aspects of their real estate careers. Management believes that one of the best ways for entrepreneurs to grow professionally is through case studies not only from coaches, but also from students. To foster educational growth, clients who recently completed deals will also conduct live case studies, allowing members to have a comprehensive view of the deal including, the obstacles they encountered and how challenges were overcome in the process.

Risks and Challenges

Limited Operating History. The Company was established on September 7, 2012 and has been attempting to develop unrelated businesses. We have had no operating history upon which an investor may rely. Potential investors should be aware of the difficulties the Company is likely to encounter in view of the fact that it has not yet commenced operations, including, but not limited to, competition and unanticipated costs and expenses. There can be no assurance that the Company will successfully implement its new business or other business plans.

We Need Additional Capital To Fund Our Planned Operations. The Company does not have cash reserves available to meet its basic operational requirements and will be dependent upon the sale of its common stock and, or, other financing to fund potential acquisitions as well as covering our basic overhead expenses. We expect to fund our general operations for the next 6 -12 months with the private sale of our common stock or from funding provided by our officers or affiliates. There is no assurance we can raise the capital we need or that a financing will be at terms satisfactory to us. We currently have no commitment for financing.

Web Site

We maintain a website at http://turnkeyhomebuyersusa.com/.

Employees

As of December 31, 2015, the Company had no full-time employees. The Company utilizes contract labor as needed.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The Company’s corporate headquarters are located at 2929 E. Commercial Blvd, PH-D, Fort Lauderdale, Florida 33308, which is the office of our principal shareholder. Our phone number is (954) 440-4678.

Item 3. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4. Mining Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the Over the Counter Markets Group Inc. QB tier (the “OTCQB”) under the symbol “TKCI”.

The following table shows, for the periods indicated, the high and low bid prices per share of our common stock as reported by the OTCBB quotation service. These bid prices represent prices quoted by broker-dealers on the OTCBB quotation service. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.

Calendar Quarter Ended:


	High		Low
2015
March 31	$	1.00	$	0.35
June 30	$	1.49	$	0.51
September 30	$	0.80	$	0.23
December 31	$	0.58	$	0.20


2014
March 31	$	1.45	$	1.45
June 30	$	2.86	$	2.70
September 30	$	2.91	$	2.91
December 31	$	0.98	$	0.98

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

Holders

As of April 15, 2016, there are approximately 219 stockholders of record of our common stock. A majority of our common stock are held in “street name” or by beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.

Transfer Agent

The transfer agent and registrar for our common stock is Island Stock Transfer, 15500 Roosevelt Blvd., Suite 301, Clearwater, FL 33760 and their telephone number at that location is (727) 289-0010.

Dividend Policy

We have not paid any dividends on our common stock and our Board of Directors (the “Board”) presently intends to continue a policy of retaining earnings, if any, for use in our operations. The declaration and payment of dividends in the future, of which there can be no assurance, will be determined by the Board in light of conditions then existing, including earnings, financial condition, capital requirements and other factors. The Nevada Revised Statutes prohibit us from declaring dividends where, if after giving effect to the distribution of the dividend:

We would not be able to pay our debts as they become due in the usual course of business; or

Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

Except as set forth above, there are no restrictions that currently materially limit our ability to pay dividends or which we reasonably believe are likely to limit materially the future payment of dividends on common stock.

Penny Stock

Our common stock has recently traded at less than $5.00 per share and is therefore subject to the Securities and Exchange Commission’s penny stock rules.

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect the ability of our stockholders to resell our common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

None.

Additional Information

Copies of our annual reports, quarterly reports, current reports, and any amendments to those reports, are available free of charge on the internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document, in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

Item 6. Selected Financial Data

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of TurnKey Capital, Inc. and its subsidiaries. The MD&A is provided as a supplement to, and should be read in conjunction with financial statements and the accompanying notes to the financial statements included in this Form 10-K.

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Entertainment Train Operations

Commencing January 23, 2014, our business changed to the acquisition and operation of entertainment train companies. We also intend to manage and provide consulting services to entertainment train companies. We believe that there are several entertainment train companies that may be targeted for acquisition but as of this date we do not have any letters of intent or agreements. Any acquisition will be contingent on our ability to obtain the necessary funding for such acquisition, as well as the acquisition candidate having audited financial statements. We did not generate any revenue during 2014 or 2015 from the entertainment train business.

Turnkey Operations

Founded in September 2014, and acquired by us in July 2015, Turnkey offers clients a full suite of services for residential and commercial real estate 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.

Turnkey and its existing subsidiary are run as subsidiary companies and are planning to execute aggressive marketing campaigns and live seminars that will drive traffic to both the education and coaching programs, as well as the wholesale turnkey properties that Turnkey offers to its clients. We have generated nominal revenues from the real estate business since its acquisition.

We cannot accurately predict the amount of funding or the time required to successfully implement our business plan. The actual cost and time required to achieve profitability may vary significantly depending on, among other things, the ability to acquire entertainment train operations on favorable terms, the health of our targeted real estate markets, the cost of developing, acquiring, and operating rental properties, the availability of qualified personnel and marketing and other costs associated with the planned operations. Because of this uncertainty, even if financing is available to us, we may secure insufficient funding to effectuate our business plan.

As of December 31, 2015, we had negative working capital of $196,418 and cash of $127,375. Based upon current and near term anticipated level of operations and expenditures, we believe that cash on hand is not sufficient to enable us to continue operations for the next twelve months. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order to expand the range and scope of our business operations. We will seek access to private or public equity but there is no assurance that such additional funds will be available for us to finance our operations on acceptable terms, if at all. If we are unable to raise additional capital or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

Year Ended December 31, 2015 Compared with the Year Ended December 31, 2014

Revenue

During the year ended December 31, 2015, we generated revenues of $22,138 as compared to $0 during the year ended December 31, 2014. Effective January 23, 2014, we began evaluating potential candidates for acquisition in the entertainment dinner train industry but generated no revenues in relation to this new business plan in the twelve months ended December 31, 2015 and 2014. Our Turnkey business generated revenue of 22,138 from real estate rentals and coaching.

Operating Expenses

A summary of our operating expense for the years ended December 31, 2015 and 2014 follows:


	Year Ended
	December 31,				Increase /
	2015		2014		(Decrease)
Operating expense
General and administrative	$	391,135	$	109,452	$	281,683
Sales and marketing		65,942		184,594		(118,652	)
Operations		10,200		—		10,200
Legal and professional - related party		195,431		276,113		(80,682	)
Legal and professional		33,625		—		33,625
Total operating expense	$	696,333	$	570,159	$	126,174

General and administrative ("G&A") costs include costs related to personnel, professional fees, travel and entertainment, public company costs, insurance and other office related costs. G&A costs increased during the year ended December 31, 2015 compared to the year ended December 31, 2014 due to increases in professional fees, outside services, personnel and travel as a result of increased efforts to position the Company for future growth.

Sales and marketing ("S&M") costs include costs to promote and sell our products and exclude stock compensation costs. S&M costs decreased during the year ended December 31, 2015 compared to the year ended December 31, 2014 primarily due to the absence of $179,494 of bad debt in 2014, offset by increased costs related to increasing market awareness. During 2014 we advanced $179,494 to fund the operations of a potential acquisition candidate (the Columbia Star Dinner Train) as we negotiated to purchase the train. These negotiations were subsequently aborted. We consider that it is highly unlikely that Columbia Star Dinner Train has or will have in the future, the funds to repay these advances and consequently have resereved in full against the balance of the receivable.

Legal and professional – related party costs primarily includes costs paid to affiliates for services related to the development of our planned operations in the train travel vertical for 2014 and more so for real estate related development activities in 2015

Other Income and (Expense)


	Year Ended
	December 31,
	2015			2014
Other Income and (Expense)
Loss on the sale of real estate		(3,938	)		—
Total other income and (expense)	$	(3,938	)	$	—

Other expense totaled $3,938 and $0 for the year ended December 31, 2015 and 2014, respectively

Liquidity and Capital Resources

Our capital requirements and need for working capital will depend upon numerous factors, including our ability to make accretive acquisitions, increase demand for real estate services, find, secure and monetize real estate investments and our ability to attract and retain key employees.

During the year ended December 31, 2015, because of our operating losses, we did not generate positive operating cash flows. As of December 31, 2015 we had an accumulated deficit of $1,270,518, cash on hand of $127,375 and negative working capital of $196,418. As a result, we have significant short-term cash needs. These needs historically have been satisfied through proceeds from the sales of our securities and related party advances. We are expecting to reduce the need for such short term financing as we build our revenues by growing our business. (See "Plan of Operating and Funding" below). In order to repay our obligations in full or in part when due, we will be required to raise capital from other sources. There is no assurance, however, that we will be successful in these efforts.

During 2015, we received $200,000 in the form of a short term advance payable.

Cash used in operating activities was $659,559 for the year ended December 31, 2015 (primarily as a result of the net loss), as compared to $23,955 provided during the year ended December 31, 2014.

Cash provided by investing activities was $51,363 for year ended December 31, 2015, as compared to $220,857 used during the year ended December 31, 2014.

Cash provided by financing activities was $632,247 (primarily from sale of common stock and short term advances), during the year ended December 31, 2015, as compared to $196,902 during the year ended December 31, 2014.

Plan of Operating and Funding

We expect that working capital requirements will continue to be funded through further related party advances and further issuances of securities until our business activities 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, nor do we have 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. 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

As a result of our net loss from operations, net cash used in operations and deficit accumulated as of December 31, 2015, our ability to continue as a going concern is in substantial doubt. Our ability to continue as a going concern is subject to the ability of the Company to generate profits from operations and/or obtaining the necessary funding from outside sources. Management’s plan to address the Company’s ability to continue as a going concern includes (i) obtaining funding from private placement sources; (ii) obtaining additional funding from the sale of the Company’s securities; and (iii) obtaining loans from shareholders as necessary, (iv) acquiring existing entertainment trains to generate cash flow from operations. Although management believes that it will be able to obtain the necessary funding and acquisitions to allow the Company to remain a going concern, and to pursue its’ growth and acquisition strategy through the methods discussed above, there can be no assurances that such methods will prove successful.

Contractual Obligations

None.

Off-Balance Sheet Arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that have a significant impact on the results that we report in our 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 A of the Notes to Financial Statements describes the significant accounting policies used in the preparation of the 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 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 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 financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

Our most critical accounting estimates include:

the recognition and measurement of current and deferred income taxes, which impact our provision for taxes

Fair value measurements

Below, we discuss these policies further, as well as the estimates and judgments involved.

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current period and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

When accounting for Uncertainty in Income Taxes, first, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company’s utilization of U.S. Federal net operating losses will be limited in accordance to Section 381 rules. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices for identical assets and liabilities traded in active exchange markets, such as the national stock exchanges.

Level 2 — Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.

Level 3 — Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data.

The Company has various processes and controls in place to ensure that fair value is reasonably estimated. Where market information is not available to support internal valuations, independent reviews of the valuations are performed and any material exposures are evaluated.

Recently Issued Accounting Pronouncements

See “NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” to our Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 8. Financial and Supplementary Data.


	Page

Report of Independent Registered Public Accounting Firm	13

Consolidated Balance Sheets as of December 31, 2015 and 2014	14

Consolidated Statements of Operations for the Years Ended December 31, 2015 and 2014	15

Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2015 and 2014	16

Consolidated Statements of Cash Flows for the Years Ended December 31, 2015 and 2014	17

Notes to Consolidated Financial Statements	18

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of TurnKey Capital, Inc.

We have audited the accompanying balance sheets of TurnKey Capital, Inc. (the “Company”) as of December 31, 2015 and 2014, and the related statements of operations, changes in stockholders’ equity, and cash flows for the years ended December 31, 2015 and 2014. TurnKey Capital, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of TurnKey Capital, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years ended December 31, 2015 and 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant amount of accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note A. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Baum & Company PA

Miami Beach, FL

April 19, 2016

TurnKey Capital, Inc.

(formerly Train Travel Holdings, Inc.)

Consolidated Balance Sheets


	December 31,
	2015			2014
Assets
Current Assets
Cash	$	127,375		$	103,324
Real estate owned		—			51,363
Due from related parties		207,437			227,100
Prepaid insurance		—			1,328
Total current assets		334,812			383,115
Total assets	$	334,812		$	383,115

Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Accounts payable & accrued expenses	$	35,127		$	17,881
Accounts payable - related party		70,249			37,513
Advances payable		200,000			—
Advances - related party		225,854			199,106
Total Current Liabilities		531,230			254,500

Stockholders' Equity (Deficit)
Preferred stock, $0.001 par value, 1,000,000 shares authorized; 600,000 shares issued and outstanding at December 31, 2015 and 2014.		600			600
Common stock, $0.001 par value, 75,000,000 shares authorized; 38,831,665 and 38,729,165 shares issued and outstanding at December 31, 2015 and 2014, respectively.		38,832			38,729
Additional paid-in capital		1,034,668			681,671
Accumulated deficit		(1,270,518	)		(592,385	)
Total stockholders' equity (deficit)		(196,418	)		128,615
Total liabilities and stockholders' equity (deficit)	$	334,812		$	383,115

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

TurnKey Capital, Inc.

(formerly Train Travel Holdings, Inc.)

Consolidated Statements of Operations

For the Years Ended December 31, 2015 and 2014


	2015			2014
Income
Revenue	$	22,138		$	—

Expenses
General and administrative		391,135			109,452
Sales and marketing		65,942			184,594
Operations		10,200			—
Legal and professional - related party		195,431			276,113
Legal and professional		33,625			—
Total operating expenses		696,333			570,159
Loss from operations		(674,195	)		(570,159	)

Other Income and (Expense)
Loss on the sale of real estate		(3,938	)		—
Total non-operating income (expense)		(3,938	)		—
Earnings before income taxes		(678,133	)		(570,159	)
Provision for income taxes		—			—
Net loss	$	(678,133	)	$	(570,159	)

Net (loss) per common share basic	$	(0.02	)	$	(0.01	)

Weighted average common shares outstanding basic		38,733,761			38,729,165

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

TurnKey Capital, Inc.

(formerly Train Travel Holdings, Inc.)

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

For the Years Ended December 31, 2015 and 2014


	Preferred Stock				Common Stock				Additional						Total
	$0.001 Par Value				$0.001 Par Value				Paid-in			Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance at December 31, 2013		—	$	—		19,400,000	$	19,400	$	2,800		$	(22,226	)	$	(26	)

Issuance of preferred stock for services ($0.006 per share)		600,000		600		—		—		174,000			—			174,600
Issuance of shares of common stock in settlement of non-interest bearing advances-related party ($0.006 per share)		—		—		3,991,665		3,992		19,958			—			23,950
Turnkey Home Buyers USA, Inc. purchase						15,337,500		15,337		484,913			(117,135	)		383,115
Net loss		—		—		—		—		—			(453,024	)		(453,024	)
Balance at December 31, 2014		600,000		600		38,729,165		38,729		681,671			(592,385	)		128,615

Sale of common stock in Turnkey Home Buyers USA, Inc.										353,100						353,100
Issuances for prior years investments						102,500		103		(103	)					—
Net loss		—		—		—		—		—			(678,133	)		(678,133	)
Balance at September 30, 2015		600,000	$	600		38,831,665	$	38,832	$	1,034,668		$	(1,270,518	)	$	(196,418	)

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

TurnKey Capital, Inc.

(formerly Train Travel Holdings, Inc.)

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2015 and 2014


	2015			2014
Cash flows from operating activities:
Net loss	$	(678,133	)	$	(570,159	)
Adjustments to reconcile net loss to net cash provided (used in) operating activities:
Share based compensation expense		—			174,600
Write off of bad debt		—			179,494
Changes in assets and liabilities:
(Increase) decrease in other receivables		—			178
(Increase) decrease in other prepaid expenses		1,328			672
Increase (decrease) in accounts payable and accrued expenses		17,246			17,881
Increase (decrease) in related party payable					221,289
Net cash provided by (used) in operating activities		(659,559	)		23,955

Cash flows from investing activities:
Loan to Columbia Star Dinner Train		—			(169,494	)
Proceeds from real estate sales		114,374			—
Additions to real estate		(63,011	)		(51,363	)
Net cash provided by (used) in investing activities		51,363			(220,857	)

Cash flows from financing activities:
Bank overdraft		—			(10	)
Proceeds from the advances payable		200,000			—
Proceeds from the sale of common stock		353,100			—
Due to related parties - other costs		79,147			196,912
Payments of credit line		—			—
Net cash provided by (Used) in financing activities		632,247			196,902

Increase (decrease) in cash		24,051			—
Cash and cash equivalents at beginning of period		103,324			—
Cash and cash equivalents at end of period	$	127,375		$	—

Supplemental disclosures of cash flow information
Cash paid during the year for:
Taxes paid	$	—		$	—
Interest paid	$	—		$	—

Non-cash operating activities:
Settlement of related party advances for 3,991,665 shares of common stock	$	—		$	23,950

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

TURNKEY CAPITAL, INC.

(formerly Train Travel Holdings, Inc.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

NOTE 1- ORGANIZATION AND GOING CONCERN

Organization and Description of Business

TurnKey Capital, Inc. (formerly Train Travel Holdings, Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on September 7, 2012 (“Inception”).

From Inception in 2012 through December 2013, our business operations were limited primarily to the development of a business plan to provide consulting services to commercial growers of coffee in El Salvador, the completion of private placements for the offer and sale of our common stock, discussing the offers of consulting services with potential customers, and the signing of the service agreement with Finca La Esmeralda, a private El-Salvadorian company. We discontinued our coffee business on January 23, 2014.

Commencing January 23, 2014, our business plan changed to the acquisition and operation of entertainment train companies, as well as managing and providing consulting services to entertainment train companies. Since January 2014 our management has spent all of its time and effort on developing our business plan, including identifying specific entertainment railroad acquisition targets, engaging in discussions with these potential targets to ascertain the potential level of interest, negotiating general terms with targets, and undertaking early stage due diligence of potential targets. As a result, we entered into non-binding letters of intent with two acquisition candidates and subsequently performed initial stage due diligence. In one case, the railroad was in such disrepair we determined the acquisition was not feasible at the price being sought by the target. In another case, we determined the price was too high based on our due diligence and could not reach an agreement with the potential seller. We also entered into a series of agreements to operate a dinner train in Missouri which were subsequently unwound. In light of the forgoing, our management has looked to potential new lines of business in addition to pursuing our current line of business.

On July 6, 2015, the Company completed a share exchange agreement (“the Agreement”) with Turnkey Home Buyers USA, Inc., a Florida corporation (“Turnkey”), TBG Holdings Corporation (“TBG”), each of the Turnkey shareholders and Train Travel Holdings, Inc., a Florida corporation. the Company, Turnkey, TBG and Train Travel Holdings, Inc., a Florida corporation, are all under the common control of Neil Swartz and Tim Hart.

Pursuant to the terms of the Agreement, Turnkey shareholders transferred to the Company all of the issued and outstanding shares of capital stock of Turnkey’s shareholders. In exchange for the acquisition of 100% of Turnkey issued and outstanding shares, the Company issued 15,337,500 shares of its common stock to Turnkey shareholders. Prior to closing, TBG, a principal shareholder of the Company and Turnkey, tendered to Turnkey for cancellation 15,000,000 shares of Turnkey common stock.

The Company shares issued to the Turnkey shareholders were not registered and were issued in a transaction which was exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933. Each of the Turnkey shareholders were accredited and no underwriters or placement agents were involved.

As a result of the Agreement, the Turnkey shareholders owned 38.9% of the Company common stock and 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 the Company, 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., the Company) 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 as follows:


	December 31, 2014
	The Company			Turnkey
	Per Form 10-K			Home Buyers			Combined
	Previously issued			USA, Inc.
Assets
Current 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 current assets		—			383,115			383,115
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		199,106			—			199,106
Total Current Liabilities		254,500			—			254,500

Stockholders' Equity (Deficit)
Preferred stock, $0.001 par value, 1,000,000 shares authorized; 600,000 shares issued and outstanding at December 31, 2014		600			—			600
Common stock, $0.001 par value, 75,000,000 shares authorized;38,831,665 and 38,729,165 shares issued and outstanding at December 31, 2014		23,392			15,337			38,729
Additional paid-in capital		196,758			484,913			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


	For the period ended December 31, 2014
	The Company			Turnkey
	Per Form 10-K			Home Buyers			Combined
	Previously issued			USA, Inc.
Income
Revenue	$	—		$	—		$	—
Expenses
General and administrative		56,317			53,135			109,452
Sales and marketing		184,594						184,594
Legal and professional - related party		212,113			64,000			276,113
Total operating expenses		453,024			117,135			570,159
Loss from operations		(453,024	)		(117,135	)		(570,159	)
Provision for income taxes		—			—			—
Net loss	$	(453,024	)	$	(117,135	)	$	(570,159	)

Founded in September 2014, Turnkey offers clients a full suite of services for residential and commercial real estate transactions. As part of the acquisition, the Company 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. Prior to September 2014, Turnkey’s current management team has been mentoring real estate investors for over 20 years, generating millions of dollars in educational revenue, while providing quality wholesale properties for sale or rent. Turnkey and its existing subsidiary, will be run as subsidiary companies and are planning to execute aggressive marketing campaigns and live seminars that will drive traffic to both the education and coaching programs, as well as the wholesale turnkey properties the Turnkey offers to its clients.

Change of Control

On January 23, 2014, Mr. Francisco Douglas Magana (“Magana”), our then president and controlling shareholder, entered into a Common Stock Purchase Agreement (the “Agreement”) with the Company and Train Travel Holdings Inc. (“Travel Train Holdings Florida”) wherein Magana sold 15,000,000 shares of the Company’s common stock constituting 77.32% of the Company’s issued and outstanding shares of common stock to Travel Train Holdings Florida for an aggregate purchase price of $150,000. The principals of Travel Train Holdings Florida are Neil Swartz and Timothy Hart.

As part of the Agreement, Magana tendered his letter of resignation as the President, Secretary, Treasurer, Director and member of the Company Board effective as of the date of the Agreement.

On January 23, 2014, in Lieu of a Special Meeting the Board of Directors of the Company, we accepted the resignation of Magana and elected Neil Swartz to the positions of Director, President and CEO of the Company and Timothy Hart to the positions of Director, Secretary and CFO.

Going Concern

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of December 31, 2015, the Company had $127,375 of cash and has an accumulated deficit of $1,270,518 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that these events will be satisfactorily completed.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Turnkey Home Buyers USA, Inc. All intercompany transactions and balances have been eliminated in consolidation. The results of our subsidiary are consolidated with the Company’s based on guidance from the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 810, “Consolidation” (“ASC 810”).

Accounting estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Fair Value Measurement

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts payable, accrued liabilities and related party advances approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Revenue Recognition

We anticipate earning income from the operations of residential real estate properties classified as real estate owned. Revenue is recognized when all of the following criteria were met: persuasive evidence of an arrangement existed, services had been provided, all significant contractual obligations had been satisfied, and collection was reasonably assured.

Real Estate Owned and Held-For-Sale

Real estate owned, shown net of accumulated depreciation and impairment charges, is comprised of real property acquired for cash or through partial or full settlement of mortgage debt. Real estate acquired is recorded at its estimated fair value at the time of acquisition.

We allocate the purchase price of our operating properties to land and building and to any other identified intangible assets or liabilities. We finalize our purchase price allocation on these assets within one year of the acquisition date.

Real estate assets are depreciated using the straight-line method over their estimated useful lives. Ordinary repairs and maintenance which are not reimbursed by the tenants are expensed as incurred. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their estimated useful life.

Our properties are individually reviewed for impairment each quarter, if events or circumstances change indicating that the carrying amount of the assets may not be recoverable. We recognize impairment if the undiscounted estimated cash flows to be generated by the assets are less than the carrying amount of those assets. Measurement of impairment is based upon the estimated fair value of the asset. In the evaluation of a property for impairment, many factors are considered, including estimated current and expected operating cash flows from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of such real estate owned in the ordinary course of business. Impairment charges may be necessary in the event discount rates, capitalization rates, lease-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property.

Real estate is classified as held-for-sale when management commits to a plan of sale, the asset is available for immediate sale, there is an active program to locate a buyer, and it is probable the sale will be completed within one year. Real estate assets that are expected to be disposed of are valued, on an individual asset basis, at the lower of their carrying amount or their fair value less costs to sell.

We recognize sales of real estate properties upon closing. Payments received from purchasers prior to closing are recorded as deposits. Gain on real estate sold is recognized using the full accrual method when the collectability of the sale price is reasonably assured and we are not obligated to perform significant activities after the sale. Gain may be deferred in whole or in part until collectability of the sales price is reasonably assured and the earnings process is complete.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 during the years ended December 31, 2015 and 2014.

Stock-Based Compensation

As of December 31, 2015 the Company has not issued any stock-based payments. Stock-based compensation is accounted for at fair value in accordance with SFAS ASC 718, when applicable. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Net Income (Loss) Per Share

The computation of basic earnings per share (“EPS”) 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. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money).

Following is the computation of basic and diluted net loss per share for the years ended December 31, 2015 and 2014:


	Years Ended
	December 31,
	2015			2014
Basic and Diluted EPS Computation
Numerator:
Loss available to common stockholders'	$	(678,133	)	$	(570,159	)

Denominator:
Weighted average number of common shares outstanding		38,733,761			38,729,165

Basic and diluted EPS	$	(0.02	)	$	(0.01	)

Potentially dilutive securities not included in the calculation of diluted net loss per share attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares):


	Years Ended
	December 31,
	2015		2014
Preferred stock		29,100,000		29,100,000

Recent accounting pronouncements

In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-16, Business Combinations (Topic 805). This ASU eliminates the requirement for retrospective application of measurement period adjustments relating to provisional amounts recorded in a business combination as of the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments will be effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The Company does not expect this accounting update to have a material effect on its consolidated financial statements in future periods, although that could change.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and will be effective for fiscal years beginning after December 15, 2015 and for interim periods within those fiscal years. We expect the adoption of this guidance will not have a material impact on our financial statements.

In February 2015, the FASB issued ASU 2015-02, “Amendments to the Consolidation Analysis”, which amends the consolidation requirements in ASC 810 and significantly changes the consolidation analysis required under U.S. GAAP relating to whether or not to consolidate certain legal entities. Early adoption is permitted. The Company’s effective date for adoption is January 1, 2016. The Company does not expect this accounting update to have a material effect on its consolidated financial statements in future periods, although that could change.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205 40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management does not expect the adoption of ASU 2014-15 to have a material impact on our financial statements and disclosures.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes most existing revenue recognition guidance under US GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). On July 9, 2015, the FASB voted to defer the effective date of the new revenue recognition standard by one year. Based on the Board's decision, public organizations would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. We are currently evaluating the impact of the pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard.

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of the new standards will have a significant impact on our financial statements.

NOTE 3 – REAL ESTATE OWNED

During the year ended December 31, 2015, the Company purchased a residential property for $36,000 and made improvements bringing the total carry cost to $63,110.

During 2015, the Company sold both of its properties resulting in gross proceeds of $114,374 and a $3,938 loss on the disposition of the properties. No depreciation was recorded on the properties.

NOTE 4 – DUE FROM / TO RELATED PARTIES & RELATED PARTY TRANSACTIONS

Amounts due from and to related parties as of December 31, 2015 and December 31, 2014 are detailed below:


	December 31,
	2015				2014
Due from related parties	$	207,437		⁽¹⁾	$	227,100		⁽¹⁾
Accounts payable - related party		(72,443	)	⁽²⁾		(39,707	)	⁽²⁾
Advances - related party		(223,660	)	⁽³⁾		(196,912	)	⁽³⁾

———————

⁽¹⁾

As of December 31, 2015, due from related parties primarily represents advances of 1) $166,124 paid to TBG Holdings Corporation owned, in part By Timothy Hart, CFO, for services that are being expensed at a rate of $10,000 per month; 2) $25,000 paid to R3 Accounting owned by Timothy Hart, CFO; and 3) $16,313 paid to Multimedia Platforms, Inc. who’s CFO is Timothy Hart.

⁽²⁾

As of December 31, 2015, $6,000 is due to TBG Holdings Corporation for rent and $64,249 is due to R3 Accounting for accounting related services.

⁽³⁾

Non-interest bearing balances are due to Travel Train Holdings Florida, and are repayable on demand.

On January 23, 2014, Francisco Douglas Magana tendered his letter of resignation as the President, Secretary, Treasurer, Director and member of the Board effective as of that date.

On January 23, 2014, in Lieu of a Special Meeting the Board of Directors of the Company via Unanimous Written Consent, the Company accepted the resignation of Francisco Douglas Magana and elected Neil Swartz to the positions of Director, President and CEO and elected Timothy Hart to the positions of Director, Secretary and CFO until their successors are appointed.

On January 23, 2014, the Company entered in to a Common Stock Purchase Agreement by and among the Company, Francisco Douglas, Magana (the “Seller”) and Train Travel Holdings, Inc., a Florida Corporation where by the Seller who is beneficially the owner of 15,000,000 shares of the Company’s common stock, par value $0.001 desires to sell, and the Purchaser, desires to purchase the full block of shares for an aggregate purchase price of $150,000.

On January 23, 2014, in conjunction with the Stock Purchase Agreement, the Company authorized the issuance of 600,000 preferred shares convertible into 29,100,000 common shares as compensation for services provided to the Company by its Chairman and Chief Financial Officer. The fair market value of the preferred shares at the date of their issuance was determined by management to be $174,600. The fair market value the preferred shares on the date of issuance was determined using the price of the most recent sale of the Company’s shares of common stock for cash. The Company did not use the quoted market price of its common shares as there has been no active trading market in the Company’s common shares and consequently the quoted price in a highly illiquid market is not indicative of the true fair value of these shares.

On June 1, 2014, the Company issued 2,931,665 shares of its common stock to settle $17,590 of non-interest bearing advances due to Train Travel Holdings Florida. The fair market value the shares of preferred shares on the date of issuance was determined using the price of the most recent sale of the Company’s shares of common stock for cash. The Company did not use the quoted market price of its common shares as there has been no active trading market in the Company’s common shares and consequently the quoted price in a highly illiquid market is not indicative of the true fair value of these shares.

On August 15, 2014, the Company issued 1,060,000 shares of its common stock to settle $6,360 non-interest bearing advance due to Train Travel Holdings Florida. The fair market value the shares of common stock at their date of issuance was determined using the price of the most recent sale of the Company’s shares of common stock for cash. The Company did not use the quoted market price of its common shares as there has been no active trading market in the Company’s common shares and consequently the quoted price in a highly illiquid market is not indicative of the true fair value of these shares.

NOTE 5 – ADVANCES PAYABLE

During the three months ended December 31, 2015, the Company received proceeds of $200,000 for an anticipated business transaction. The details of the transaction were to be negotiated in the first quarter of 2016. Subsequent to December 31, 2015, the terms of the transaction had not been agreed to, thus the Board of Directors has considered various alternatives to satisfy this liability and has proposed to issue 2,000,000 shares of common stock at $.10 per share to consummate the transaction.

NOTE 6 – PREFERRED STOCK

The Company has 1,000,000 preferred shares authorized with a par value of $ 0.001 per share.

On January 23, 2014 the Company authorized the issuance of 600,000 preferred shares convertible into 29,100,000 common shares as compensation for services provided to the Company by its Chairman and Chief Financial Officer. The fair market value of the preferred shares at the date of their issuance was determined by management to be $174,600. The fair market value of the shares of preferred stock at their date of issuance was determined using the price of the most recent sale of the Company’s shares of common stock for cash. The Company did not use the quoted market price of its common shares as there has been no active trading market in the Company’s common shares.

NOTE 7 – COMMON STOCK

The Company has 75,000,000 common shares authorized with a par value of $ 0.001 per share. As of December 31, 2015 and 2014, 38,831,665 and, 38,729,165 shares of our common stock were issued and outstanding, respectively.

During November and December 2015, the Company issued 102,500 shares of common stock to prior year investors whose issuances were overlooked.

On July 6, 2015, the Company completed a Share Exchange Agreement for 100% of the issued and outstanding shares of Turnkey Home Buyers USA, Inc. by issuing 15,337,500 shares of common stock. Due to the common control of Turnkey and the Company, 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 requires the receiving entity to report the results of operations as if both entities had always been combined. As a result the Company has reflected the shares issued pursuant to the Agreement retrospectively.

During the year ended December 31, 2015 the Company issued 102,500 shares of it’s common stock to correct errors in issuances related to prior year investments.

During the year ended December 31, 2014, the Company issued 3,991,665 shares of its common stock to settle $23,950 of non-interest bearing advances due to Train Travel Holdings Florida. As described above under Note 4.

On April 4, 2014 the Company effectuated a forward 5 for 1 split of its common stock. All common stock references and per share amounts in these financial statements have been restated to reflect this 5 for 1 forward split.

NOTE 8 – SUBSEQUENT EVENTS

Management has reviewed material events subsequent to the annual period ended December 31, 2015 and prior to the filing of financial statements in accordance with FASB ASC 855 “Subsequent Events”. There were no additonal disclosures deemed nessecary.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

In February 2014, the Company's board of directors engaged Cutler & Co, LLC. Certified Public Accountants, Arvada, Colorado, as the Company's new independent registered public accounting firm and discharged Ronald R. Chadwick, P.C. There have been no disagreements with Cutler & Co, LLC, or our previous independent registered public accounting firm, Ronald R Chadwick, P.C., with respect to accounting and financial disclosure.

In October 2015, the Company's board of directors engaged Baum & Company PA. (“Baum”), as the Company's new independent registered public accounting firm and discharged Cutler & Co, LLC. There have been no disagreements with Baum & Company PA., or our previous independent registered public accounting firm, Cutler & Co, LLC, P.C., with respect to accounting and financial disclosure.

Item 9A. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures (as defined in Securities Exchange Act Rule 15d-15(e)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. There were no other members of management at that time. Based on the foregoing evaluation, our management has concluded that our disclosure controls and procedures are effective in timely alerting management to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management, consisting of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, based on criteria established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. Based on this assessment, management believes that as of December 31, 2015, our internal control over financial reporting is effective based on those criteria.

This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the SEC to provide only management's report in this annual report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during our last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Offices and Corporate Governance.

Directors and Executive Officers

The following table and text sets forth the names and ages of all our directors and executive officers and our key management personnel as of December 31, 2015. All of our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors, and are elected or appointed to serve until the next Board of Directors meeting following the annual meeting of stockholders. Also provided is a brief description of the business experience of each director and executive officer and the key management personnel during the past five years and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws.

Neil Swartz, CEO

Mr. Swartz was reappointed as president, chief executive officer and director on October 31, 2014 as part of the agreement to unwind the October 2, 2014 Share Exchange. Previously he was the president, chief executive officer and director of our company from January 23, 2014 to October 3, 2014. From 2009, Mr. Swartz has been president and CEO of TBG Holdings Corp (“TBG”) a financial consulting firm that works with public and private companies, bringing a sophisticated and efficient approach to structuring their capital, allowing them to take advantage of the existing foundation and continued development. Mr. Swartz’s business experience includes positions such as managing director of Sunbelt South East Florida, LLC, a business brokerage of mergers and acquisitions firm with 350 offices worldwide. Prior to TBG and Sunbelt, Swartz was chairman and CEO of a software company, which he took public on the Nasdaq Small Cap Market. Under his management, the company went from building one product to over thirty products with in-house manufacturing capabilities. Mr. Swartz is a CPA and received his BS degree in accounting from Northeastern University. He is a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants.

Timothy S. Hart, CFO

Mr. Hart was appointed chief financial officer and director on October 31, 2014, and previously served as our chief financial officer and member of our board of directors from January 23, 2014 until October 3, 2014. Mr. Hart has over 30 years of accounting and finance experience. Since July 2013 Mr. Hart has been the CFO and a director of Monkey Rock Group, Inc. (OTC Markets: MKRO). Mr. Hart has held the position of CFO of TBG Holdings Corporation since March 2012 and a director since September 9, 2013. Hart has been providing accounting and consulting services from R3 Accounting LLC, a private accounting firm he formed in 2008. He consulted extensively with the RailAmerica, Inc., a NYSE-listed holding company for short line and regional railroads in the U.S., which was acquired by Fortress Investment Group in 2007, during its initial public offering and assisted the company with governmental compliance. Hart’s firm also provided consulting, strategic tax planning and compliance, and acquisition audits for Patriot Rail Corp., a Boca Raton, Florida based company, which is an operator of short line and regional railroad in the U.S. Mr. Hart served as chief financial officer of Alternative Americas Fuels, Inc. (OTCBB: AFAI) from August 2011 until February 2012. Mr. Hart holds B.A.s in Accountancy, Economics and Business Administration from Thomas More College and has been a certified public accountant since 1984. Mr. Hart devotes approximately 30% of his time to our business and operations.

Director Qualifications

Mr. Swartz’s executive business experience and merger and acquisition experience were factors considered by the Board in selecting Mr. Swartz to serve on the Board.

Mr. Hart’s prior public company and accounting experience were factors considered by the Board in selecting Mr. Hart to serve on the Board.

Committees of the board of directors; stockholder nominations; audit committee financial expert

We have not established any committees comprised of members of our board of directors, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing similar functions. The functions of those committees are being undertaken by our board of directors as a whole.

Audit Committee Financial Expert

Our Board currently acts as our audit committee. Mr. Hart is considered an “audit committee financial expert,” as defined in Item 401(e) of Regulation S-K and is not “independent,” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

Family Relationships

During the period covered by this report, there were no family relationships on the board of directors or with key management.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining that person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors, director nominees or executive officers has been involved in any transactions with our Company or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.

Conflicts of Interest

Certain potential conflicts of interest are inherent in the relationships between our officers and directors, and us.

From time to time, one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and unrelated to the type of business that we own and operate. These persons expect to continue to form, hold an ownership interest in and/or manage additional other businesses which may compete with ours with respect to operations, including financing and marketing, management time and services and potential customers. These activities may give rise to conflicts between or among the interests of us and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited from undertaking such activities, and neither we nor our shareholders will have any right to require participation in such other activities.

Further, because we intend to transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers, directors or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these related persons or entities. We believe that such transactions will be effected on terms at least as favorable to us as those available from unrelated third parties.

With respect to transactions involving real or apparent conflicts of interest, we have adopted policies and procedures which require that: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

Code of Ethics and Conduct

We have adopted a Code of Ethics and Conduct which applies to our board of directors, our executive officers and our employees. The Code of Ethics and Conduct outlines the broad principles of ethical business conduct we adopted, covering subject areas such as:

conflicts of interest;

corporate opportunities;

public disclosure reporting;

confidentiality;

protection of company assets;

health and safety;

conflicts of interest; and

compliance with applicable laws

A copy of our Code of Ethics and Conduct is available without charge to any person desiring a copy by written request to us at our principal offices at 2929 East Commercial Blvd., PH-D, Fort Lauderdale, Florida 33308.

Director compensation

Our directors do not receive compensation for their services as directors.

Compliance with Section 16(a) of the Exchange Act

Our common stock is not registered pursuant to Section 12(g) or Section 12(b) of the Exchange Act and, accordingly, our officers, directors and 10% or greater stockholders are not subject to compliance with Rule 16(a) of the Exchange Act.

Item 11. Executive Compensation.

The following table and descriptive materials set forth information concerning compensation earned for services rendered to us by: the Chief Executive Officer (the “CEO”); the Chief Financial Officer (the “CFO”) who were serving as executive officers during the fiscal year ended December 31, 2015 and 2014.

SUMMARY COMPENSATION TABLE


Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Neil Swartz	2015	—	—	—	—	—	—	—	—
President, CEO	2014	—	—	—	—	—	—	—	—

Timothy Hart	2015	—	—	—	—	—	—	—	—
CFO, Treasurer, Chief Accounting Officer, director and Secretary	2014	—	—	—	—	—	—	—	—

Francisco Magana	2014	—	—	—	—	—	—	—	—
Former President, CEO, CFO, Treasurer, Chief Accounting Officer, director and Secretary

We do not have employment agreements with the CEO or CFO.

Outstanding Equity Awards as Fiscal Year-End

None.

Payments Upon Termination of Change in Control

There are no understandings or agreements known by management at this time which would result in a change in control.

Compensation of Directors

We do not currently compensate our directors.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information concerning the ownership of the Company’s 38,831,665 shares of common stock issued and outstanding as of December 31, 2015, with respect to: (i) all officers and directors; (ii) each person known by us to be the beneficial owner of more than five percent (5%) of our common stock; and (iii) our directors and executive officers as a group.


Names of Managers and Beneficial Owners	Title of Class	Number of Shares	Percent of Class
Neil Swartz, Chief Executive Officer	Common	—	—	%
Timothy Hart, Chief Financial Officer	Common	—	—	%
Train Travel Holdings Inc. (Florida) (1)	Common	10,452,666	26.9	%
Officer and Directors as a Group (2 persons)	Common	—	—	%

Timothy Hart, Chief Financial Officer	Preferred	300,000	50	%
Neil Swartz, Chief Executive Officer	Preferred	300,000	50	%
Officers and Directors as a Group (2 persons)(4)	Preferred	600,000	100	%

5% Shareholders
Joseph Blair	Common	4,000,000	10.3	%

———————

(1)

Train Travel Holdings Inc. (Florida) is a subsidiary of TBG Holdings Corporation (Florida) whose officers and majority shareholders are Neil Swartz and Timothy Hart.

(2)

The principal shareholder(s) of Train Travel Holdings, Inc. (Florida) is (are) TBG Holdings Inc.

(3)

The share certificates are held directly by the shareholder.

(4)

Securities Authorized for Issuance Under Equity Compensation Plans

None.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

We do not have a formal written policy for the review and approval of transactions with related parties. However, our Code of Ethics requires actual or potential conflict of interest to be reported to the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board and outside legal counsel review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director's independence. If the transaction is deemed to present a conflict of interest, the Board will determine the appropriate action to be taken.

Transactions with Related Persons

The Board is responsible for review, approval, or ratification of "related-person transactions" involving the Company or its subsidiaries and related persons. Under SEC rules (Section 404 (a) of Regulation S-K), a related person is a director, officer, nominee for director, or 5% stockholder of the company since the beginning of the previous fiscal year, and their immediate family members. the Company is required to report any transaction or series of transactions in which the company or a subsidiary is a participant, the amount involved exceeds $120,000, and a related person has a direct or indirect material interest.

The Board has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:

any transaction with another company for which a related person's only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company's shares, if the amount involved does not exceed the greater of $1 million or 2% of that company's total annual revenue;

compensation to executive officers determined by the Board;

compensation to directors determined by the Board;

transactions in which all security holders receive proportional benefits; and

banking-related services involving a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar service.

The Board reviews transactions involving related persons who are not included in one of the above categories and makes a determination whether the related person has a material interest in a transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. The Board reviews all material facts related to the transaction and takes into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent of the related person's interest in the transaction; and, if applicable, the availability of other sources of comparable products or services.

In January 2014, the Company issued 600,000 shares of its Series A Preferred Stock, valued at $174,600, to Train Travel Holdings (Florida) in consideration for services rendered and to be rendered to the Company.

Through TBG Holdings Corporation and R3 Accounting, Timothy Hart, the Company’s Chief Financial Officer, provides accounting and other consulting related services to the Company. During the years ended December 31, 2015 and 2014, the company recognized expense related to these services of $188,211 and $45,000, respectively. At December 31, 2015, the Company owed R3 Accounting and TBG Holdings Corporation $64,248 and $6,000, respectively, which is included on the balance sheet under “Accounts payable – related party”.

Review, Approval or Ratification of Transactions with Related Persons

Our unwritten policy with regard to transactions with related persons is that all material transactions are to be reviewed by the entire Board for any possible conflicts of interest. In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms and conditions of the transaction; and (v) the terms available to unrelated parties or the employees generally. The Board will then document its findings and conclusion in written minutes.

Director Independence

The Company is quoted on the OTCBB inter-dealer quotation system, which does not have director independence requirements. However, for purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). NASDAQ Rule 4200(a)(15) states that a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Accordingly, we do not currently have an independent director.

Item 14. Principal Accountant Fees and Services.

Summary of Principal Accountant Fees for Professional Services Rendered

The following table presents the aggregate fees for professional audit services and other services rendered by Cutler & Co, our independent registered public accountants for 2015 and 2014 audit.


	Year Ended December 31,
	2015		2014

Audit and Audit Related Fees	$	10,000	$	7,750
Tax Fees	$	—	$	—
All Other Fees	$	—	$	—

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as a part of this Form 10-K:

1. Financial Statements

The following financial statements are included in Part II, Item 8 of this Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2015 and 2014

Consolidated Statements of Operations for the years ended December 31, 2015 and 2014

Consolidated Statements of Stockholders’ Deficit For the Years Ended December 31, 2015 and 2014

Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014

Notes to Consolidated Financial Statements

2. Exhibits

The exhibits listed in the Exhibit Index below are incorporated herein by reference, and are filed as part of this Form 10-K.

3. Financial Statement Schedules

Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the financial statements or notes described in Item 15(a)(1) above.


Exhibit No.		Description of Exhibit

3.1		Articles of Incorporation. (Incorporated by reference from Exhibit 3.1 to the to Form S-1 filed with the SEC on January 30, 2013)
3.2		Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock (Incorporated by reference from Exhibit 3.3 to the to the Annual Report on Form 10-K filed with the SEC on April 20, 2015)
3.3		Bylaws. (Incorporated by reference from Exhibit 3.2 to the to Form S-1 filed with the SEC on January 30, 2013)
3.4		Certificate of Amendment to Articles of Incorporation (Incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on February 5, 2016)
3.5		Certificate of Amendment of the Bylaws (Incorporated by reference from Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on February 5, 2016)
31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
31.2		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

———————

Filed herewith.

Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	TurnKey Capital, Inc.

Dated: April 27, 2016	By:	/s/ *Timothy S. Hart*
		Timothy S. Hart
		Chief Financial Officer, Director (Principle Financial Officer)


Dated: April 27, 2016	By:	/s/ *Neil Swartz*
		Neil Swartz
		Chief Executive Officer, Director (Principal Executive Officer)

Name of Officer

Position

Director / Officer Since

Neil Swartz

President, CEO, Director

January 23, 2014

Timothy S. Hart

Secretary, CFO, Director

January 23, 2014