10-Q/A: Token Communities Ltd. Files Amended Quarterly Report After Accountant Review

Token Communities Ltd. files an amended quarterly report to reflect the completion of a SAS 100 review by its independent accountant, Beckles & Co., and to make certain non-material revisions.

Summary

• Token Communities Ltd. filed an amended quarterly report on Form 10-Q/A for the period ended September 30, 2024.
• The original Form 10-Q was filed on January 14, 2025, without the consent of its independent accountant, Beckles & Co. Inc.
• This amendment reflects the completion of Beckles & Co.'s SAS 100 review of the consolidated financial statements.
• Certain non-material revisions and deletions were made to the footnotes and financial statements.
• The figures in the original Form 10-Q have not been revised.
• As of January 14, 2025, the company had 2,095,872,947 outstanding shares of common stock.
• For the three months ended September 30, 2024, the company generated revenues of $20,061 compared to $1,792 for the same period in 2023.
• The company's net loss was $78,453 compared to a net loss of $33,617 for the three months ended September 30, 2023.
• The company had $307,263 in cash and equivalents as of September 30, 2024.
• The company has a working capital of $409,238 and a total stockholders' deficit of $(4,818,784) as of September 30, 2024.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the increased net loss, significant stockholders' deficit, ineffective disclosure controls, and the company's dependence on raising additional capital to continue as a going concern.

Positives

• The company's independent accountant has completed the SAS 100 review.
• Revenue increased to $20,061 for the three months ended September 30, 2024, compared to $1,792 for the same period in 2023.
• Cash and equivalents increased to $307,263 as of September 30, 2024, compared to $25,939 as of June 30, 2024.
• Net cash provided by operating activities was $89,262 for the three months ended September 30, 2024.

Negatives

• The original Form 10-Q was filed without the consent of the independent accountant.
• The company has a significant stockholders' deficit of $(4,818,784) as of September 30, 2024.
• The company incurred a net loss of $78,453 for the three months ended September 30, 2024.
• The company's disclosure controls and procedures were not effective as of September 30, 2024.

Risks

• The company's ability to continue as a going concern is dependent on raising additional capital, obtaining additional financing, and/or acquiring or developing a business that generates sufficient positive cash flows.
• The company's disclosure controls and procedures were not effective as of September 30, 2024, indicating potential weaknesses in internal controls.
• The company has inadequate segregation of duties consistent with control objectives, which is a material weakness.
• The company is party to certain legal proceedings, which could result in fines, penalties, or damages.

Future Outlook

The company hopes to achieve profitable operations in the future, but may need to raise capital from stockholders or other sources to sustain operations and achieve viable operations.

Management Comments

• The core business of ASC Global is luxury waterfront home development in southwest Florida.
• We are positioned as the waterfront luxury home developer for the specialty premium niche market in Florida.

Industry Context

The company's acquisition of ASC Global positions it in the luxury waterfront home development market in southwest Florida, which is a competitive and potentially lucrative segment of the real estate industry.

Comparison to Industry Standards

• It's difficult to compare Token Communities Ltd. directly to industry standards due to its diverse business activities and development stage.
• However, in the luxury waterfront home development sector, companies like Toll Brothers and Lennar are established players with significant market share and financial resources.
• Token Communities' success will depend on its ability to effectively manage its projects, control costs, and generate sales in a competitive market.
• Compared to other development stage companies, Token Communities Ltd. will need to demonstrate consistent revenue growth and profitability to attract investors and sustain operations.

Legal Proceedings

• The Company is party to certain legal proceedings, from time to time, incidental to the conduct of its business.

Related Party Transactions

• Amounts due to a related party are for advances made by a stockholder of the Company.
• On May 10, 2024, the Company entered into a promissory note for $5,000,000 with a stockholder.

Stakeholder Impact

• Shareholders face the risk of dilution if the company raises additional capital through equity offerings.
• Employees' job security is dependent on the company's ability to achieve profitable operations.
• Creditors face the risk of non-payment if the company is unable to generate sufficient cash flow.
• Customers of ASC Global may be impacted by the company's ability to complete its luxury waterfront home development projects.

Next Steps

• The company plans to pay off current liabilities through sales and increasing revenue through sales of Company services and or products, or through financing activities.
• The company needs to improve its internal controls and disclosure procedures.

Key Dates

Keywords

Form 10-Q/A, amended quarterly report, financial statements, SAS 100 review, Token Communities Ltd., Beckles & Co., financial results, internal controls, going concern, ASC Global, revenue, net loss, liquidity, capital resources