Overview

Token Communities Ltd. (the "Company" or "Limited") researches and creates white paper analysis for companies regarding block chain technology, and also operates the "Lukki Exchange," including all client lists, intellectual property related to the brand "Lukki".





Critical Accounting Policies

Our significant accounting policies are more fully described in the notes to our financial statements included herein for the period ended September 30, 2020.

New and Recently Adopted Accounting Pronouncements

Any new and recently adopted accounting pronouncements are more fully described in Note 2 to our financial statements included herein for the period ended September 30, 2018.





Results of Operations

Financial Condition and Changes in Financial Condition





Overall Operating Results:

Comparison of the Three Months Ended September 30, 2018 with the Three Months Ended September 30, 2017

Revenue. For the three months ended September 30, 2018, we generated revenues of $150,000 as compared to $0 for the three months ended September 20, 2017. The increase of revenue was due primarily to commencement of operations.

Operating Expenses. For the three months ended September 30, 2018 Operating Expenses increased to $599,481 from $0 for the three months ended September 30, 2018. The increase was mainly due to the Company's blockchain operations.

General and Administrative Expenses. Our general and administrative expenses increased to $539,481 for the three months ended September 30, 2018 from $0 for the three months ended September 30, 2017. The increase was primarily a result of commencement of operations and write off of bad debts during the current period.





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Other Income. For the three months ended September 30, 2018, other income was $442,539, compared to other expense of $0 for the three months ended September 30, 2017. The increase in other income was primarily due to the change in derivative liability during the period.

Net Loss. The Company's net loss was $6,942 compared to $0 for the three months ended September 30, 2018 and 2017, respectively. The increase in net loss was mainly due to commencement of operations with ongoing expenses. The loss was reduced by a decrease in the derivative liability.

Liquidity and Capital Resources

We are an early stage company and have generated insufficient revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

The Company had $312 in cash as of September 30, 2018. The Company has negative working capital of approximately $3,500,375, and total stockholders' deficit of $3,480,558 as of September 30, 2018. As of September 30, 2018, the Company has yet to achieve profitable operations, and while the Company hopes to achieve profitable operations in the future, if not it may need to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's principal sources of liquidity have been cash provided by operating activities, as well as its ability to raise capital. The Company's operating results for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to become profitable and continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses, the Company may not be able to maintain profitability. The Company's ability to continue in existence is dependent on the Company's ability to achieve profitable operations.

Should we not be able to fulfill our cash needs through the increase of revenue we will need to raise money through outside investors through convertible notes, debt or similar instrument(s), including but not limited to the current outstanding convertible notes. The Company has no committed external source of funds, and there is no guarantee we would be able to raise such funds. 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 as mentioned above.





Operating Activities

Cash flow used in operating activities - Net cash used in operating activities was ($119,269) for the three months ended September 30, 2018 primarily as a result of commencement of operations of the Company.





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Investing Activities

Cash flow from investing activities - Net cash used in investing activities was ($837) for the three months ended September 30, 2018 primarily as a result of purchase of other assets.





Financing Activities

Cash flow from financing activities - During the three months ended September 30, 2018, our financing activities provided cash of $105,863 primarily from commencement of operations.

Off Balance Sheet Arrangements

We do not have any significant 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 is material to investors.

Recent Accounting Pronouncements

During the three months ended September 30, 2018, there were no accounting standards and interpretations issued which are expected to have a material impact on the Company's financial position, operations or cash flows.

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