0001683252false--06-30Q12025truefalse0.0001500000000020956711622095671162209567116200016832522024-07-012024-09-3000016832522024-05-100001683252tkcm:BusinessCombinationMember2023-06-300001683252tkcm:AsAdjustedMember2022-07-012023-06-300001683252tkcm:ScenarioRestatedMember2022-07-012023-06-300001683252us-gaap:ScenarioAdjustmentMember2022-07-012023-06-300001683252srt:ScenarioPreviouslyReportedMember2022-07-012023-06-300001683252tkcm:AsAdjustedMember2023-06-300001683252us-gaap:ScenarioAdjustmentMember2023-06-300001683252srt:ScenarioPreviouslyReportedMember2023-06-300001683252tkcm:AmericanSoftwareCompanyMember2020-07-1400016832522020-07-042020-07-140001683252tkcm:AmericanSoftwareCompanyMember2020-07-042020-07-140001683252tkcm:iRideioTechPteLtdMember2020-05-012020-05-280001683252tkcm:CommonStocksMember2024-07-012024-09-3000016832522018-02-012018-02-2600016832522023-01-1000016832522018-02-260001683252us-gaap:NoncontrollingInterestMember2024-09-300001683252us-gaap:RetainedEarningsMember2024-09-300001683252us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001683252us-gaap:AdditionalPaidInCapitalMember2024-09-300001683252us-gaap:CommonStockMember2024-09-300001683252us-gaap:NoncontrollingInterestMember2024-07-012024-09-300001683252us-gaap:RetainedEarningsMember2024-07-012024-09-300001683252us-gaap:NoncontrollingInterestMember2024-06-300001683252us-gaap:RetainedEarningsMember2024-06-300001683252us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001683252us-gaap:AdditionalPaidInCapitalMember2024-06-300001683252us-gaap:CommonStockMember2024-06-3000016832522023-09-300001683252us-gaap:NoncontrollingInterestMember2023-09-300001683252us-gaap:RetainedEarningsMember2023-09-300001683252us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001683252us-gaap:AdditionalPaidInCapitalMember2023-09-300001683252us-gaap:CommonStockMember2023-09-300001683252us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001683252us-gaap:RetainedEarningsMember2023-07-012023-09-300001683252us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-3000016832522023-06-300001683252us-gaap:NoncontrollingInterestMember2023-06-300001683252us-gaap:RetainedEarningsMember2023-06-300001683252us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001683252us-gaap:AdditionalPaidInCapitalMember2023-06-300001683252us-gaap:CommonStockMember2023-06-3000016832522023-07-012023-09-3000016832522024-06-3000016832522024-09-3000016832522025-01-14iso4217:USDxbrli:sharesiso4217:USDxbrli:sharesxbrli:pure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2024

Commission File No.

000-55688

Token Communities Ltd.

(Name of small business issuer in its charter)

Delaware

81-3709511

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

850 Tidewater Shore Loop, Suite 402

Bradenton, Florida, 34208

(Address of principal executive offices)

(631) 397-1111

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of January 14, 2025, the Company had 2,095,872,947 outstanding shares of its common stock, par value $0.0001.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, of Part I of this report include forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Information	4
	Unaudited Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Stockholders’ Deficit	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	16
Item 4.	Controls and Procedures	17

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities, and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19
Signatures		20

Table of Contents

Item 1. Financial Statements

TOKEN COMMUNITIES LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

	Sep 30,			June 30,
	2024			2024
ASSETS

Assets
Current Assets:
Cash and equivalents	$	307,263		$	25,939
Accounts Receivable		-			-
Inventory		4,404,918			3,961,964
Total current assets		4,712,181			3,987,903
TOTAL ASSETS	$	4,712,181		$	3,987,903

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	133,573		$	126,573
Taxes Payable		352,156			352,156
Unearned revenue		552			552
Due to related parties		3,816,662			3,213,162
Total current liabilities		4,302,943			3,692,443
Non-Current Liabilities:
Construction Loan	$	228,022		$	35,960
Note payable - related parties		5,000,000			5,000,000
Total non-current liabilities		5,228,022			5,035,960
TOTAL LIABILITIES	$	9,530,965		$	8,728,403

STOCKHOLDERS’ DEFICIT

Common stock: $0.0001 par value; 5,000,000,000 share authorized; 2,095,671,162 shares of common stock issued and outstanding at September 30, 2024 and June 30, 2024		209,567			209,567
Additional paid-in capital		(3,640,360	)		(3,640,360	)
Accumulated Other comprehensive income		-			-
Accumulated deficit		(1,378,430	)		(1,299,977	)
Non-controlling interest		(9,561	)		(9,730	)
Total stockholders’ deficit		(4,818,784	)		(4,740,500	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	4,712,181		$	3,987,903

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

TOKEN COMMUNITIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30 2024 AND 2023 (unaudited)

	Three months			Three months
	ended			ended
	30-Sep-24			30-Sep-23

REVENUES
Home Sales	$	-		$	-
Lot Sales and Other		20,061			1,792
TOTAL REVENUES		20,061			1,792

COST OF SALES
Home Sales		-			-
TOTAL COST OF SALES		-			-

GROSS PROFIT
Home Sales		-			-
Lot Sales and Other		20,061			1,792
TOTAL GROSS MARGIN		20,061			1,792

OPERATING EXPENSES
Payroll Related Expenses		-			11,578
Rent Expense		-			-
Audit and Legal Fees		30,500			18,594
General and administrative		67,845			10,943
TOTAL OPERATING EXPENSES		98,345			41,115

INCOME (LOSS) FROM OPERATIONS		(78,284	)		(39,323	)

OTHER INCOME (EXPENSES)
Loss on Impairment		-			-
Gain on Extinguishment of Debt		-			-
TOTAL OTHER INCOME (EXPENSES)		-			-

PROVISION FOR INCOME TAXES		-			-

NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST	$	(78,284	)	$	(39,323	)
Less non-controlling interest		169			(1,934	)
NET INCOME (LOSS)	$	(78,453	)	$	(37,389	)

Foreign exchange translation gain (loss)		-			3,772
Comprehensive income	$	(78,453	)	$	(33,617	)

NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED	$	-		$	-

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		2,095,671,162			2,095,671,162

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

TOKEN COMMUNITIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited)

	Common Stock				Additional			Accumulated						Non-			Total
			Par Value,		Paid-In			Comprehensive			Accumulated			controlling			Stockholders'
			$0.0001		Capital			Income			Deficit			Interest			Deficit
Balance, June 30, 2023		2,095,671,162	$	209,567	$	1,039,630		$	(54,481	)	$	(2,576,440	)	$	(5,224	)	$	(1,386,948	)
Foreign currency translation gain (loss)									3,772									3,772
Net income for the period												(37,389	)		(1,934	)		(39,323	)
Balance, Sep 30, 2023		2,095,671,162		209,567		1,039,630			(50,709	)		(2,613,829	)		(7,158	)		(1,422,499	)

Balance, Jun 30, 2024		2,095,671,162	$	209,567	$	(3,640,360	)	$	-		$	(1,299,977	)	$	(9,730	)	$	(4,740,500	)
Net income for the period												(78,453	)		169			(78,284	)
Balance, Sep 30, 2024		2,095,671,162	$	209,567	$	(3,640,360	)	$	-		$	(1,378,430	)	$	(9,561	)	$	(4,818,784	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

TOKEN COMMUNITIES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (unaudited)

	Sep 30,			Sep 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(78,284	)	$	(39,323	)
Other equity adjustments		-			-
Impairment loss		-			-
Changes in operating assets and liabilities
Inventory		(442,954	)		-
Accounts payable, taxes payable and accrued expenses		7,000			4,735
Loans payable - related party		603,500			31,913
Net cash provided (used) in operating activities		89,262			(2,675	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided (used) in investing activities		-			-

CASH FLOWS FROM FINANCING ACTIVITIES:
Construction loan proceeds		192,062			-
Acquisition of ASC Global Inc		-			-
Net cash provided (used) by financing activities		192,062			-

Effect of exchange rate changes on cash and equivalents	$	-		$	3,772

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		281,324			1,097

CASH AND EQUIVALENTS, BEGINNING OF PERIOD	$	25,939		$	1,130

CASH AND EQUIVALENTS, END OF PERIOD	$	307,263		$	2,227

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

TOKEN COMMUNITIES LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Organization and Line of Business

Token Communities Ltd. (the “Company” or “Limited”) was organized under the laws of the State of Delaware on March 6, 2014, under the name Pacific Media Group Enterprises, Inc. On April 7, 2017, the Company amended its Certificate of Incorporation with the Secretary of State of Delaware, changing its name to Extract Pharmaceuticals Inc. On January 26, 2018, the Board of Directors adopted an Amendment to its Certificate of Incorporation, changing its name to Token Communities Ltd. The Company is a development stage company that researches and creates white paper analysis for companies regarding block chain technology and has maintained a remote staff in China to conduct research and development on naturopathic medicine.

On February 26, 2018, the Company entered into an Acquisition and Share Exchange Agreement with Token Communities PLC (“PLC”). Under the Agreement, the Company’s majority shareholder returned 19,266,000 common shares to treasury, and at closing, 100% of the issued and outstanding shares of PLC were acquired by the Company, for 172,800,000 newly issued common shares equal to 64% of the Company’s outstanding common stock as of the closing date, thus making the stockholders of PLC the majority stockholders of the Company. The transaction closed on May 18, 2018. This transaction was accounted for as a reverse acquisition under the purchase method of accounting since PLC obtained control of Limited. Accordingly, the merger of PLC into Limited was recorded as a recapitalization of PLC, PLC being treated as the continuing entity. The transaction was treated as a recapitalization and not as a business combination. Limited had 116,466,000 shares outstanding prior to the merger. At the time of the merger, Limited’s principal stockholder surrendered 19,266,000 shares, which were cancelled. After the merger, the total number of Limited shares outstanding was 270,000,000.

PLC is a Gibraltar Financial Advisory firm which specializes in Blockchain, Artificial Intelligence and Fin-Tech investment in incubating, as well as advising and managing qualified companies in the blockchain and distributed ledger technologies arena, including smart contracts, TGEs, DApps, and more. Advisement comprises the authoring of industry standard White Papers, technical aspects, design and implementation of market strategies, business appraisal and more. All potential clients are vetted and Anti-Money Laundering / Know-Your-Customer approved. The Company is also developing its own software technology with its dedicated team of developers.

The historical financial statements presented are the financial statements of PLC. The Acquisition and Share Exchange Agreement was treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. At the date of the merger, the net liabilities of the legal acquirer, Limited, were $57,107.

The combined entities are referred to hereafter as the “Company.”

On May 28, 2020, the Company acquired 3.5 billion iRide tokens in exchange for 80 million shares provided to iRide.io Tech Pte., Ltd., valued at $8,000, which was immediately expensed.

On July 14, 2020, a change in control of the Company was affected by a privately held corporation (American Software Company, controlled by 2 individuals) acquiring 83% of the outstanding stock from other control individuals. As part of this transaction, the Company transferred the 3.5 billion iRide tokens and 1,745,406 shares of its common stock to American Software in exchange for all technology, software codes and other intelligent products of the Lukki Exchange, a non-operating cyber coin exchange. Since the Lukki exchange had no previous material revenue nor assets, the acquisition has been accounted for as an asset acquisition and due to the fact that it has no value, and the parties to this transaction are related, the transaction has been accounted for as $(0), the value of the tokens are $(0), and no financial statements are being provided as part of the transaction.

Table of Contents

As a condition to the closing of the transactions contemplated in the Asset Purchase Agreement, shareholders agreed to cancel an aggregate of 174,540,600 shares of Common Stock of the Company, and the holders of the Company’s Series A, B, C, D and E warrants agreed to the cancellation of all such warrants. On April 25, 2022 Token Communities, Ltd. (the “Company”) closed on the sale of the “Lukki Exchange” and related Lukki tokens in exchange for Fifty Thousand Dollars. This consideration has not been received by the Company and was written off on June 30, 2023.

On January 10, 2023 the Company entered into a Stock Purchase Agreement with Elements of Health and Wellness, Inc., a company incorporated in the Florida (“Elements”) whereby the Company acquired ninety shares of common stock of Elements (which represents ninety percent of the outstanding shares of common stock of Elements), in exchange for the issuance of a promissory note in the principal amount of Two Hundred Twenty Five Thousand Dollars ($225,000) (the “Note”). The Note provides for a term of five years and bears interest at a rate of three percent per annum. The transactions set forth above closed on January 10, 2023. As a result of the closing of transaction set forth above, Elements has become a subsidiary of the Company and the Company has expanded its business operations into the health and wellness sector.

On May 10, 2024 the Company entered into an agreement with ASC Global Inc. (“ASC Global), whereby the Company acquired all of the issued and outstanding shares of common stock of ASC Global in exchange for the issuance of a promissory note by the Company to the shareholder (David Chen, President of the Company) of ASC Global in the principal amount of Five Million Dollars (the “Promissory Note”). The Promissory Note bears interest at the rate of four percent per annum and provides that all outstanding principal of and accrued but unpaid interest thereon shall be paid in full on or before May 10, 2027.

Basis of Presentation

The accompanying consolidated financial statements (“CFS”) were prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Limited’s functional currency is the United States Dollars (“$” or “USD”) and Limited’s wholly-owned subsidiary, PLC’s functional currency is the Pound Sterling (“GBP”).

Going Concern

The accompanying CFS were prepared in conformity with U.S. GAAP, which contemplates the continuation of the Company as a going concern. The Company had a stockholders’ deficit of $(4,818,784) as of September 30, 2024 and has incurred losses from operations since inception and expects to continue to generate operating losses and negative cash flows for the foreseeable future. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent upon its ability to raise additional capital, obtain additional financing and/or acquire or develop a business that generates sufficient positive cash flows from operations.

The accompanying CFS do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

Foreign Currency Translation

Various payables were maintained in GBP and CNY. These accounts were translated into USD in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 830 Foreign Currency Transaction, with the GBP as the functional currency. According to Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with ASC Topic 220, Comprehensive Income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statement of operations and comprehensive income (loss). The following table details the exchange rates used for the periods.

	Sept 30, 2024		Sept 30, 2023
Period end GBP to USD exchange rate		0.0000		1.2199
Period end GBP to CNY exchange rate		0.0000		0.1374

On June 30, 2024 all remaining accounts subject to foreign currency fluctuations were deemed to be either discharged, cancelled or expired. These accounts were derecognized on that date and the company recognized a gain on extinguishment of debt of $730,820.

Table of Contents

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Real Estate Inventories and Cost of Sales

Real estate inventories include actively selling projects as well as projects under development or held for future development. Inventories are stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to its fair value. The Company capitalizes pre-acquisition costs, land deposits, land, development, and other allocated costs, including interest, property taxes, and indirect construction costs to real estate inventories. Pre-acquisition costs, including non-refundable land deposits, are removed from inventory and expensed to other income, net, if the Company determines continuation of the prospective project is not probable. Land, development, and other common costs are typically allocated to real estate inventories using a methodology that approximates the relative-sales-value method. If the relative-sales-value-method is impracticable, costs are allocated based on area methods, such as square footage or lot size, or other value methods as appropriate under the circumstances. Home construction costs per production phase are recorded using the specific identification method.

Capitalization of Interest

The Company follows the practice of capitalizing interest to real estate inventories during the period of development and to investments in unconsolidated joint ventures, when applicable, in accordance with ASC 835, Interest. Interest capitalized as a component of real estate inventories is included in cost of sales as related homes or lots are delivered to customers.

Home Sales Revenue

Home sales revenue is recognized when the Company’s performance obligations within the underlying sales contracts are fulfilled. The Company considers its obligations fulfilled when closing conditions are complete, title has transferred to the homebuyer, and collection of the purchase price is reasonably assured. Sales incentives are recorded as a reduction of revenue when the respective home is closed. When it is determined that the earnings process is not complete, the related revenue is deferred for recognition in future periods.

Lot Sales and Other Revenue

Revenues from lot sales and other revenue are recorded and a margin is recognized when performance obligations are satisfied, which includes transferring a promised good or service to a customer. Lot sales and other revenue is recognized when all conditions of escrow are met, including delivery of the real estate asset in the agreed-upon condition, passage of title, receipt of appropriate consideration, and collection of associated receivables, if any, is probable, and other applicable criteria are met. Based upon the terms of the agreement, when it is determined that the performance obligation is not satisfied, the sale and the related margin are deferred for recognition in future periods.

Use of Estimates

The preparation of CFS in conformity with U.S. 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 CFS and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Principles of Consolidation

The accompanying CFS include the accounts of Limited, its wholly owned subsidiary PLC, its wholly owned subsidiary ASC Global Inc. and its majority owned subsidiary Elements of Health and Wellness Inc. All significant intercompany transactions and balances were eliminated in consolidation.

Cash Equivalents

For the purpose of the statement of cash flows, cash equivalents include time deposits, certificate of deposits, and all highly liquid debt instruments with original maturities of three months or less.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and equivalents, accounts receivable, accounts payable, trust liability and advances, the carrying amounts approximate their fair values due to their short maturities.

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments, their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

Table of Contents

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

Inventory

All inventory is valued at the lower of cost or market. All costs of purchase, costs of development, and any other costs incurred in bringing the inventory to its present condition are capitalized as part of the inventory costs. Interest paid or accrued on construction loans is included in inventory costs. Costs of sales include all capitalized costs pertaining to the inventory sold during the period.

Sales, Cost of Sales and Gross Margin are presented separately on the income statement. Home Sales includes the sales of developed real property. Lot Sales and Other includes the sales of vacant parcels, rent income and the sale of any non-real estate inventory.

Basic and Diluted Earnings (loss) Per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive securities are converted. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during any of the periods presented in these financial statements.

Statement of Cash Flows

Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Recent Accounting Pronouncements

In November 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-04, Debt-Debt with Conversions and Other Option. ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In November 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2024-03 is intended to improve disclosures about a public business entity’s expense and provide more detailed information to investors about the types of expenses in commonly presented expense captions. The amendments in this ASU are effective for the Company in fiscal 2028 on a retrospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In March 2024, the United States Securities and Exchange Commission (SEC) issued Final Rulemaking Release No. 33-11275: The Enhancement and Standardization of Climate-Related Disclosures for Investors. This release is intended to improve consistency, completeness and transparency related to climate risks and events. The disclosure requirements related to this new rule will be phased in, and effective for the Company beginning in fiscal 2027 on a prospective basis. The Company is currently evaluating the potential impact of this release on its financial statements and disclosures.

In March 2024, the Financial Account Standards Board (FASB), issued Accounting Standards Update (ASU) 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. This ASU intends to provide an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. This ASU is effective for all public entities for annual reporting periods beginning after December 15, 2024, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In December 2023, the FASB, issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for the Company in fiscal 2026 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

In December 2023, the FASB, issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. ASU 2023-08 is intended to is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments in this ASU are effective for the Company in fiscal 2026 on a prospective basis, with early adoption permitted. The Company is currently evaluating the potential impact of this guidance on its disclosures.

Table of Contents

Immaterial Out of Period Adjustments

During the three months ended September 30, 2023, the Company identified an immaterial error related to the exclusion of cash balances that impacted the Company’s previously issued June 30, 2023, consolidated financial statements. Management evaluated the effect of the error on the June 30, 2023, financial statements and concluded the error was not material. As a result, in the three months ended September 30, 2023, the Company recorded an out of period adjustment to increase cash, increase related party debt and increase accumulated deficit.

Adjustments

The following unaudited tables present the impact of the adjustments on the Company’s previously reported consolidated financial statements as of and for the year ended June 30, 2023. The values as previously reported were derived from the Company’s original Form 10-K previously filed with the Securities and Exchange Commission:

	As of June 30, 2023
	As Previously Reported			Adjustment			As Adjusted
Assets
Cash and equivalents		-			1,130			1,130
Total Assets		-			1,130			1,130

Liabilities
Due to related parties		1,312,748			1,445			1,314,193
Total liabilities		1,386,633			1,445			1,388,078

Stockholder's Deficit
Accumulated deficit		(2,576,157	)		(315	)		(2,576,472	)
Total stockholders' deficit		(1,386,633	)		(315	)		(1,386,948	)
Total liabilities and stockholders' deficit		-			1,130			1,130

	For the fiscal year ended June 30, 2023
	As Previously Reported			Adjustment			As Adjusted
Operating expenses
General and administrative		30,419			315			30,734
Total operating expenses		79,100			315			79,415

Loss from operations		(79,100	)		(315	)		(79,415	)

Net income (loss) before non-controlling interest		(79,915	)		(315	)		(80,230	)
Less non-controlling interest		(5,192	)		(31	)		(5,223	)
Net income (loss)		(74,723	)		(284	)		(75,007	)

Comprehensive income (loss)		(123,601	)		(284	)		(123,885	)

	As of June 30, 2023
	As Previously Reported			Adjustment			As Adjusted
Stockholders' deficit
Net income (loss) for the period		(79,915	)		(315	)		(75,007	)
Total stockholder's deficit		(1,386,633	)		(315	)		(1,386,948	)

	For the fiscal year ended June 30, 2023
	As Previously Reported			Adjustment			As Adjusted
Cash flows from operating activities
Net income (loss)		(79,915	)		(315	)		(80,230	)
Loan payable - related party		54,072			1,445			55,517
Net cash used in operating activities		48,878			1,130			50,008
Cash and equivalents, end of period		-			1,130			1,130

Table of Contents

Business Combinations Between Entities under Common Control

The Company accounts for combinations between entities under common control in accordance with guidance found in Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. The transaction was recorded at the carrying values of the net assets transferred.

NOTE 3 – BUSINESS COMBINATION

Effective May 10, 2024, the Company acquired 100% of the outstanding shares of ASC Global The acquisition was accounted for by applying the guidance in the Transactions Between Entities Under Common Control Subsections of Subtopic 805-50, Business Combinations—Related Issues. The transaction was recorded at the carrying values of the net assets transferred.

The following table presents the allocation of the consideration given to the assets acquired and liabilities assumed from ASC Global, based on their carrying values at June 30, 2023:

Item	Amount
Consideration Given
Notes Payable			$	5,000,000

Allocation of Consideration Given
Cash	$	13,165
Due from Related Parties		174,560
Inventory	$	2,628,800
Total Assets			$	2,816,526

Current Liabilities
Due to Related Parties	$	2,496,516
Total Current Liabilities				2,496,516

Net Assets Acquired			$	320,010

NOTE 4 - STOCKHOLDERS’ EQUITY

As of September 30, 2024, the authorized share capital of the Company consists of 5,000,000,000 shares of common and 20,000,000 shares of preferred stock with $0.0001 par value. 2,095,671,162 shares of common stock issued and outstanding as of June 30, 2023 and 2024. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

NOTE 5 - RELATED PARTY TRANSACTIONS

Amounts due to a related party are, for advances, made by a stockholder of the Company. The balances of $3,816,662 and $3,213,162 as of September 30, 2024 and June 30, 2024 respectively, are presented as due to related parties in the accompanying consolidated balance sheet.

On May 10, 2024, the Company entered into a promissory note for $5,000,000 with a stockholder. The note is presented as a note payable to related parties in the accompanying consolidated balance sheet. The note bears a 4% interest rate, is unsecured and principle and interest are due on May 10, 2027. $78,333.33 of interest has accrued as of September 30, 2024.

NOTE 6 - COMMITMENTS AND CONTINGENCIES

The Company is party to certain legal proceedings, from time to time, incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on the Company’s CFS in the period in which a ruling or settlement occurs. However, based on information available to the Company’s management to date, the Company’s management does not expect the outcome of any matter pending against the Company, to likely to have a material effect on the Company’s CFS.

Table of Contents

NOTE 7 - SUBSEQUENT EVENTS

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to September 30, 2024, to the date these financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

NOTE 8 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company has restated its consolidated balance sheets as of June 30, 2023, and June 30, 2022, and its consolidated statement of operations and consolidated statements of owner’s equity for the fiscal years ended June 30, 2023, and June 30, 2022, along with certain related notes to such restated consolidated financial statements. In addition, the Company has restated its consolidated statement of cash flows for the fiscal years ended June 30, 2023, and June 30, 2022.

The Company determined that the restatement was necessary after an investigation was conducted by the Company’s Board of Directors with the assistance of independent accountants. The restatement corrects errors that were identified as a result of an investigation, as well as certain other errors that were identified by the Company. In addition, the restatement reflects corrections of certain accounts receivables and inventory balances that were no longer valid, as well as certain income and expense items that were incorrectly recorded and were identified by the Company in the normal course of business when the consolidated financial statements for the fiscal years ended June 30, 2023, and June 30, 2022, were originally issued. As a result of the restatement, the Company has determined that it would be appropriate to correct such errors.

NOTE 9 – NON REVIEW

This Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024 (the “Form 10-Q”), was prepared without the consent of its independent accountant, Beckles & Co. Inc. (“Beckles & Co.”) in respect of unaudited interim financial information as of and for the three period ended September 30, 2024 set forth herein, as required by Statement on Auditing Standards No. 100, Interim Financial Statements (the “SAS 100 Review”). Due to the fact that Beckles & Co.s’ SAS 100 Review has not yet been done, the consolidated balance sheets, condensed financial statements as of and for the three month period ended September 30, 2024 included in the Form 10-Q should not be relied upon. The Company intends to file an amended Form 10-Q upon completion of Beckles & Co. s’ SAS 100 Review.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

On May 10, 2024 Token Communities Ltd. (the “Company”) entered into an agreement (the “Agreement”) with ASC Global Inc. (“ASC Global), whereby the Company acquired all of the issued and outstanding shares of common stock of ASC Global in exchange for the issuance of a promissory note by the Company to the shareholder (David Chen, President of the Company) of ASC Global in the principal amount of Five Million Dollars (the “Promissory Note”). The Promissory Note bears interest at the rate of four percent per annum and provides that all outstanding principal of and accrued but unpaid interest thereon shall be paid in full on or before May 10, 2027. The core business of ASC Global is luxury waterfront home development in southwest Florida. ASC Global owns over 20 properties in Florida in various stages of development. We are positioned as the waterfront luxury home developer for the specialty premium niche market in Florida. A majority of our properties are premium waterfront homesites in the Greater Sarasota Area, and have started construction on some of these lots in various stages. Most of these lots are located in Northport (Sarasota County), Gulf Cove and Punta Gorda (Charlotte County), all within an hour drive from Downtown Sarasota. The majority of our homesites are gulf-access and sailboat access, located right off the open water, the most desirable locations for the Florida highly sought after premium waterfront homes. We also have some lakefront homesites in Punta Gorda and Tropical Gulf Areas in Charlotte County.

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, 2024.

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, 2024.

Results of Operations

Financial Condition and Changes in Financial Condition

Comparison of the Three Months Ended September 30, 2024 with the Three Months Ended September 30, 2023

Revenue. For the three months ended September 30, 2024, we generated revenues of $20,061 as compared to $1,792 for the three months ended September 30, 2023. The increase was largely due to the acquisition of ASC Global.

Operating Expenses. For the three months ended September 30, 2024 operating expenses increased to $98,345 from $41,115 for the three months ended September 30, 2023. The increase was largely due to an increase in General and Administrative Expenses.

General and Administrative Expenses. Our general and administrative expenses increased to $67,845 for the three months ended September 30, 2024 from $10,943 for the three months ended September 30, 2023. The increase was largely due to the acquisition of ASC Global.

Net Loss. The Company’s net loss was $78,453 compared to a net loss of $33,617 for the three months ended September 30, 2024 and 2023, respectively.

Table of Contents

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 $307,263 in cash and equivalents as of September 30, 2024. The Company has working capital of $409,238, and total stockholders’ deficit of $(4,818,784) as of September 30, 2024. As of September 30, 2024, 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 from operating activities – Net cash provided (used) in operating activities was $89,262 for the three months ended September 30, 2024 primarily as a result loans from related party. Net cash provided (used) in operating activities was ($2,675) for the three months ended September 30, 2023 primarily as a result of net loss from operations during the period.

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, 2024, 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Table of Contents

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have performed an evaluation under the supervision and with the participation of our management, including our President and Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024. Based on that evaluation, our management, including our President and CEO and CFO, concluded that our disclosure controls and procedures were not effective as of September 30, 2024 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure due to the material weaknesses described below.

Based on our evaluation under the framework described above, our management concluded that we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:

inadequate segregation of duties consistent with control objectives.

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2024, there were no changes in our internal control over financial reporting identified in connection with management’s evaluation of the effectiveness of our internal control over the financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Table of Contents

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Neither the Company nor its property is a party to any pending legal proceeding.

Item 1A. Risk Factors

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Table of Contents

Item 6. Exhibits

Exhibit Number		Name of Exhibit
31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)
31.2		Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. (1)
32.1		Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

⁽¹⁾

Filed herewith. In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 31.1, 31.2 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except to the extent that the registrant specifically incorporates it by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

	TOKEN COMMUNITIES LTD.

Dated: January 14, 2025	By:	/s/ David Chen
		David Chen
		Chief Executive Officer, Chief Financial Officer, Director

TOKEN COMMUNITIES LTD. 10-Q