UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
Commission File Number: 000-53949
Good Gaming, Inc.
(Exact name of registrant as specified in its charter)
| | | UNITED STATES | | | |
| | SECURITIES AND EXCHANGE COMMISSION | | |
| | | Washington, D. C. 20549 | | | |
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| | | Form 10-K | | | |
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| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF | | |
| | | THE SECURITIES EXCHANGE ACT OF 1934 | | | |
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| | For the Fiscal year ended December 31, 2016 | | |
| | | | | | |
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| | | Commission File Number: 000-53949 | | | |
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| | Good Gaming, Inc. | | |
| | | (Exact name of registrant as specified in its charter) | | | |
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| Nevada | | | | 26-3988293 | 37-1902603 |
| (State(State or other jurisdiction of incorporation) | | | | (IRS(IRS Employer Identification Number) | |
415 McFarlan Road, Suite 108
Kennett Square, PA 19348
(Address of principal executive offices and Zip Code)
(888) 295-7279
Registrant’s telephone number, including area code
(Former name, former address and former fiscal year, if changed since last report)
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| 2130 N. Lincoln Park West, Suite 8N | | | | | |
| Chicago, Illinois | | | | 60614 | |
| (Address of principal executive offices and Zip Code) | | | | (Zip Code) | |
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| | | (773) 698-6047 | | | |
| | | (Registrant's telephone number, including area code) | | | |
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| Securities registered pursuant to Section 12(b) of the Act: | | | | Securities registered pursuant to section 12(g) of the Act: | |
| NONE | | | | COMMON STOCK | |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.YES [ ] NO [x][X]
Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act:YES [x][X] NO [ ]
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 [x][X] 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 [x][X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant'sregistrant’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. See the definitions of "large“large accelerated filer," "accelerated filer"” “accelerated filer” and "smaller“smaller reporting company"company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | | [ ] | | Accelerated Filer | | [ ] |
Non-accelerated Filer(Do not check if a smaller reporting company) | | [ ] | | Smaller Reporting Company | | [x]X] |
| | | | 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 Act).YES [ ] NO [x][X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as ofDecember 31, 2016: June 30, 2019: $599,997 393,180.
State the number of shares outstanding of each of the issuer'sissuer’s classes of common equity, as of the latest practicable date:1,999,990,00053,988,755 as of December 31, 2016.March 12, 2020.
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, all of which are subject to risks and uncertainties. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,” “projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially.
These risks and uncertainties, many of which are beyond our control, include, and are not limited to:
Financial Condition and Results of Operations,” as well as those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.PART I
General
Previously HDS International, Inc. (the "Company", "we", or "us")The Company was incorporated on November 3, 2008 under the laws of the State of Nevada, to engage in certain business services. Our goal is to become a green technology company providing renewable energy and eco-sustainability solutionsleading tournament gaming provider as well as an emergency management solutions company. On February 18, 2016, we changed the focus of our business to become a leading tournament gaming platform and online destination, targeting the over 250 million eSportsesports players and participants worldwide that want to compete at the high school or college level. We are a developmental stage business, have not generated any significantlimited revenues to date and have a history of operating losses.
We were incorporated November 3, 2008 underThe Good Gaming platform was established in early 2014 by its founding members who recognized the lawsneed that millions of gamers worldwide desired to play games at competitive levels. The founders recognized that there was no structure or organization on a large scale for amateur gamers while professional esports was quickly establishing itself.
Good Gaming is effectively building the business infrastructure for the rapidly growing esports industry, similar to the high school and college athletic industry. Good Gaming is designed to be the gateway for amateur esports athletes to compete at the semi-professional level, improve their gaming skills, and interact with veteran gamers globally in a destination site and social networking framework.
Good Gaming differs from the professional level of the State of Nevada, to engage in providing certain business services.
On August 16, 2011, we entered into an Asset Acquisition Agreement (the "Agreement") with Hillwinds Ocean Energy, LLC, a privately held consulting company ("HOEL"), under which we acquired from HOEL certain of HOEL's assets, including a certain license relating to technologies for gas exchange, carbon dioxide capture and sequestration, algae biomass production and other renewable energy and eco- sustainability applications.
On December 10, 2012, through our wholly-owned Canadian subsidiary, HDS Energy and Ecosystems NB, Ltd., we entered into a new technology license agreement with HEDC, which expandsesports industry by focusing on more than 250 million gamers that fall below the geographic territory under our previous technology licenses. All previous license agreements between HDS and HEDC, includingprofessional level but are above the license under asset acquisition agreement dated August 15, 2011, and the intellectual property agreement consummated October 7, 2011 (dated September 2, 2012) have been terminated and superseded in their entirety by the new license agreement (the "NB Provincial License").
On March 5, 2015, we reached settlement and general mutual release agreements (the "General Release Agreements") with Tassos Recachinas, our at-the-time President & CEO; Alexander Chirkov, our Chief Scientist for renewable energy and eco-sustainability technologies; and a consultant under renewable energy and eco-sustainability technologies; under which we and these three independent parties agreed to settle any and all amounts owing to them under prior employee and consulting agreements, by converting all amounts owing (amounting to $215,225, $684,500, and $49,000, respectively, or in the aggregate, $948,725)casual level, classified as accrued and disclosed on our balance sheet, in exchange for 74,235,000, 74,235,000, and 31,815,000 newly-issued shares of our common stock, respectively, eliminating these liabilities from our balance sheet.
On March 9, 2015, we closed a Strategic Expansion Agreement, dated March 5, 2015 (the "Strategic Expansion Agreement") and entered into by and between us; Hillwinds Ocean Energy, LLC, a Connecticut limited liability company ("HOEL"), which was formerly our controlling shareholder; and SirenGPS, Inc. a Delaware corporation ("SirenGPS"). At that time we changed the focus of our business from the development of renewable energy and eco-sustainability technologies to emergency management software. Pursuant to the terms and conditions of the Strategic Expansion Agreement, we entered into a global technology license agreement (the "E911 License Agreement") granting us certain rights to that certain technology owned and controlled by SirenGPS relating to emergency management, emergency communication, emergency response, enhanced emergency calling and related technologies. In exchange, SirenGPS received: (a) thirteen million three hundred fifty thousand (13,350,000) newly-issued shares of HDS International Corp. Class B Preferred Stock, $0.001 par value per share (the "New HDSI Class B Preferred Stock"), (b) two hundred million (200,000,000) newly-issued restricted shares of our common stock (the "Transaction Shares") and (c) seven million five hundred thousand (7,500,000) shares of HDS International Corp. Class A Preferred Stock, $0.001 par value per share, from HOEL (the "Transferred Class A Preferred Stock). Pursuant to the terms of the Strategic Expansion Agreement, the Company also issued 274,300 newly-issued shares of Class B Preferred Stock to a designee of SirenGPS.
On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and was due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. The Purchaser had the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. The Purchased had the right to prepay according to a schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were initially assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February Note bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 2, 2015, we entered into an equity line of credit agreement (ELOC) with the Purchaser that allows us to "put" shares to the Purchaser at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described.
On April 6, 2015, the Company executed a Common Stock Purchase Warrant with the Purchaser, providing the Purchaser the right to purchase shares of common stock of the company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. The Warrant expires in five years. This Warrant was negotiated as part of the Note.
On February 18, 2016, the Company acquired“amateurs.” Good Gaming Inc.distinguishes itself from CMG Holdings Group, Inc. (OTCQB: CMGO). On that date,its direct and indirect competitors by being the Company’s former CEO, Paul Rauner, resigned. Andfirst company to offer multi-game, multi-console services at the amateur esports level. The Company appointed Vik Groveris not exclusive to the positions of CEO and Director. Vik Grover is a former Wall Street analyst and investment banker with 20 years' experience in telecommunications, media and technology. In addition, Barbara Laken and David Dorwart were elected by the majority shareholders to the Company's Board of Directors. Ms. Laken is a former teacher, with experience creating specialized formats for advanced placement and special needs programs, with emphasis on systems management and curriculum development. A published novelist and co-author of an optioned screenplay. Mr. Dorwart is the Co-Founder and Chairman of Assist Wireless, Inc., a provider of lifeline wireless services to tens of thousands of subscribers primarily in the Midwest.
any particular hardware or software vendor.On May 4, 2016, the Company announced that it hashad completed its first closed public beta testing of their 2.0 tournament platform to determine the functionality, speed, ease of use, and accuracy of the system and are preparing to enter into full-blown production.
TheOn February 18, 2016, the Company, formerly HDS International Corp., acquired the assets of Good Gaming, platformInc. from CMG Holdings Group, Inc. (OTCQB: CMGO). On that date, the Company’s former CEO, Paul Rauner, resigned. The Company appointed Vikram Grover to the positions of CEO and Director of the board of directors (the “Board”). Vikram Grover is a former Wall Street analyst and investment banker with more than 20 years of experience in telecommunications, media and technology. In addition, David Dorwart was established in early 2014elected by the founding members who had recognizedmajority shareholders to the need that hundredsCompany’s Board. Mr. Dorwart is the Co-Founder and Chairman of millionsAssist Wireless, Inc., a provider of gamers worldwide have a desirelifeline wireless services to play games at a competitive level. The founders recognized that while professional eSportstens of thousands of subscribers primarily in the Midwest.
On June 27, 2017 the Board of Directors of the Company appointed David B. Dorwart as the Company’s Chief Executive Officer. On June 21, 2017, Mr. Dorwart was quickly establishing itself, there were no structure or organizations on a large scale for amateur gamers.
appointed to serve as the Chairman of the Board of Directors. David B. Dorwart, Chairman and CEO of Good Gaming,
Inc., brings over 31 years of start-up entrepreneurism and executive level management to the Company. Mr. Dorwart was a CoFounder and CEO of dPi Teleconnect, a prepaid wireless provider, for 10 years. During his tenure, he grew that company from a start-up to $75 million in revenues before selling it. Over the last 9 years, he has been involved with several other successful projects including Assist Wireless, Brooklet Energy Distribution, PayGo Distributors and Britton & Associates. He is
effectively buildingcurrently the
equivalent infrastructureChairman and CoFounder of
High SchoolViaOne Services, a company which specializes in wireless communications and
College Athleticsprovides intricate multi-faceted services for
start-up companies utilizing industry experts. By virtue of the
rapidly growing eSportsownership of this Series C Preferred Stock, ViaOne is the Company’s principal stockholder.On June 27, 2017, the Company also bolstered its Board of Directors with executive level professionals by adding two seasoned individuals who specialize in organization and finance as well as the branding and marketing of established and emerging organizations which are poised to show significant growth.
Domenic Fontana is currently Sr. Vice President of ViaOne Services and a new board member. He is an experienced CPA and financial executive who has worked in progressively more advanced executive roles throughout his career. Having worked at Verizon, Ebay and now ViaOne Services over the last 13 years, he has developed intimate and extensive knowledge of executive level management and the telecommunications industry. He has worked in all aspects of Finance, Accounting, Treasury, and Operations.
Jordan Majkszak Axt, a new board member is a results-producing marketing professional with over 14 years of experience successfully developing marketing and branding strategies. He has been consistently noted by executives, colleagues, and journalists for his specific expertise in bringing products and services online with a comprehensive digital go-to-market strategy. He has previously held executive level positions as Director of Marketing for ProfitPoint Inc. and Clutch Holdings LLC. He is currently Sr. Director of Marketing of ViaOne Services where he develops all marketing and customer acquisition strategies for 14 consumer facing brands.
On July 10, 2017, the Company’s Board of Directors elected David Dorwart its CEO. Additionally, the Board of Directors approved Domenic Fontana and Jordan Axt to the Company’s Board of Directors.
On August 8, 2017, the board of directors of the Company accepted Vikram Grover’s resignation as the Treasurer of the Company and as a member of the Board, effective immediately.
On August 8, 2017, the Board of the Company accepted Barbara Laken’s resignation as the Secretary of the Company and as a member on the Board, effective immediately.
On August 9, 2017, the Company announced a strategic review of its business, which prompted improvements to its business model and a reduction in expenses designed to accelerate its move to free cash flow generation.
On August 29, 2017, Eric Brown became the Chief Operating Officer.
In September of 2017, the Company began focusing on its Minecraft server by enhancing the development staff and launched an offering of microtransactions after it saw the opportunity to generate revenue without adding a great deal of overhead. The initial offering of microtransactions exceeded revenue expectations and the Company has continued to expand the Minecraft server offerings. The Company also began pursuing the acquisition of additional Minecraft servers that were already established to begin scaling this effort.
In December of 2017, the Company began exploring potential partnerships with various franchise opportunities related to both LAN centers and Virtual Reality centers. Financial analysis and research on these opportunities is ongoing.
On March 21, 2018, the Company acquired Crypto Strategies Group, Inc. for consideration of $500. The Company intends to diversify its business and enter into the cryptocurrency market through such acquisition.
On December 12, 2018, the Company dissolved Crypto Strategies Group, Inc.
In March 2019, the Company discontinued Minecade and Olimpo servers and decided to focus on the core Good Gaming is designed to be the gateway for amateur eSports athletes to compete at the semi-professional level, improve their gaming skills, and interact with veteran gamers globally in a destination site and social networking framework.
Good Gaming differsservers.On March 11, 2019, Eric Brown resigned from the professional level of eSports industries by focusing on the 250 million plus gamers that fall below the professional level and above the casual gamer, classified as “amateurs”. Good Gaming also differs from other direct and indirect competitors by being the first to offer multi-game, multi-console services at the amateur eSports level. The Company is not exclusive to any one vendor of hardware or software titles.
Chief Operating Officer’s position.Good Gaming held the largest online tournaments in history in December 2014 based on Activision Blizzard’s title Hearthstone: Heroes of WarcraftTechnology. The tournament attracted 300,000 unique visitors, over 1,250+ paying members and increased overall memberships in Good Gaming from 1,000 to over 15,000 members. In 2015, the Company spent an entire year refining its platform and preparing for a more sustainable business plan that could infinitely scale.
In 2016, the Company completed its 2.0 tournament platform and as a result, has runthereafter ran dozens of robotic internal test tournaments and held numerous free-to-play tournaments of increasing sizeon large scales with its partner The Syndicate, the owner of the world’s longest running online gaming guild withthat has 1,200 members worldwide. Good Gaming also conducted two closed public beta tournaments of hundreds of participants in May 2016 in order to fully vet the system. After making roughly 100 fixes and changes to the system, it now runs flawlessly.smoothly. The system is designed to scale to 512,000 concurrent competitors.
Technology
With The Company has updated the system to handle team tournaments, which will further expand its opportunity to popular titles that have tens of millions of active players and has recently launched titles that have the potential for cross-platform play among Gaming PC, Microsoft Xbox and Sony PlayStation.In 2017, the Company ran hundreds of tournaments on a regular basis with a dedicated customer base of over 30,000 members. Additionally, the Company expanded its website by offering content relevant to the member base with information relating to game play strategy and game news. This generated nearly 100,000 unique visits per month. In an effort to monetize that traffic, the Company employed the use of Google display advertising and tested a subscription model. After careful evaluation of the Company’s strategy, management decided to move away from free tournaments and custom content and focus on growing and monetizing our Minecraft server, which has grown substantially in popularity. This decision was a result of comprehensive competitive analysis and evaluations made in how the esports industry was shifting in its space. Tournaments and custom content are currently suspended while the Company grows revenue and focuses on expanding its efforts with Minecraft. The Company has also aggressively evaluated several business models and acquisition opportunities to resume its previous success as it is related to tournaments.
In 2018, the Company acquired the Minecade and Olimpo Minecraft servers in order to deliver on expansion efforts. This move, coupled with continued advancement of the core Good Gaming’s proprietary technology platform,Gaming Minecraft server substantially increased revenues and traffic. By the end of the year, the Company struck a deal with a prominent Minecraft influencer, which is basedresulted in the single highest monthly earnings achieved within the Minecraft division, to date.
In 2019, following a severe downturn of business in the Minecraft sector as a whole, the Company decided to temporarily suspend the Minecade and Olimpo networks and refocus its efforts back on the infinitely scalablecore Good Gaming server. Much of the year was spent upgrading and stress tested Yii framework gearedoverhauling the server’s existing infrastructure, which had grown stale over prior years. The Company adapted its strategy to target long term success and consistency through major innovations in the SkyBlock and Prison game modes, and began work towards an ambitious full recode of the Minecade server.
Business Strategy
Inthe past, our management team’s strategy was to be a full-service company providing best in class tournaments, the best platform on which they are played, and content that is all about the esports world. We have looked at this strategy and have changed the way we view our business.
It was our ambition and strategy to be great at providing a place for Web 2.0 development, Good Gamingamateurs to play. By focusing on what the gaming universe is lacking, it allowed us to focus on the promotion of teams, leagues and competition. We intended to begin with local servers and expand organically from there. We recognized there are millions of players who desire to compete within the gaming community.
However, as tournaments and investment in servers were not profitable to the Company, we have decided to focus on Minecraft. We have a well-established server and will continue to devote resources to developing and modifying Minecraft assets by introducing new SkyBlock Seasons and Minecraft Prison game modes within our server. We feel that we have learned how to monetize this and will be able to offer publishers and vendors an innovative approach to gaming interactions. Currently there is no way for gamers to barter their skills and labor on the open market in a non-fragmented and less cumbersome process. As competitive gaming reaches critical mass, how gamers interact and barter their skills and labor will become critical if not the most economically lucrative endeavor. The “gamers” economy it expectedcontinue to grow from tensand have it as a meaningful part of millions of dollars every year to multiple billions of dollars and the Good Gaming founders believe that we are rapidly approaching that time.
Good Gaming’s platform is modular and allows for easy integration of third party applications as well as tight integration into other existing systems. This framework allows for clans/teams/guilds to add functionality over time to include running their own tournaments leveraging the viral nature of the online communities. The Company is offering social networking functionality so gamers can interact, track each other, and communicate. Good Gaming also is completing a content suite to offer videos, blogs, and forums. Additionally, the Company intends to host multiple games online that subscribers to the site can play for free or for fees depending on their Good Gaming status/player level.
Good Gaming has proprietary intelectual property for an online currency barter system (Mercenary System) that allows gamers across multiple games and multiple consoles the ability to trade items and labor in an efficient manner. The Company intends to file a patent for its 2.0 framework later this year, as it is based on proprietary coding that can handle more scope and scale than the legacy 1.0 platform. The market for these transactions is expected to grow from a billion dollars in 2016 to tens of billions of dollars by 2020.
The Company completed the 2.0 site during 2016, which allowes it to go live offering free-to-play tournaments for cash and prizes and offer gamers the premiere destination site for amateur eSports worldwide. In 2017, the Company intends to perfect is B2C model targeting gamers directly. In 2017, Good Gaming intends to launch a B2B program so other groups, including colleges, restaurants, bars and casino operators can offer their own tournaments using its platform. The Company also intends to work on a 3.0 system that will integrate with mobile networks and offer additional features to its customers.
Insurance Policies
We do not currently maintain any insurance, but are in the process of obtaining the appropriate insurance to support our business operations.
strategy.Insurance Policies
We have an insurance policy through ARGO Group with the Insurance coverage of $1,000,000.
Employees
There are currently over 20 contractorsWe have one contractor working on the Good Gaming project. This groupHe is made up of programmers,our programmer, tournament administrators,administrator, and social media experts and executives. As the process matures most of these people and others will be hired as full timeexpert. Pursuant to our Management Services Agreement with ViaOne Services LLC, certain employees of ViaOne are deemed to be consultants of the Company.
Offices
Offices
Our executive offices are located at 2130 N Lincoln Park West, Chicago, IL 60614.415 McFarlan Rd, Suite 108, Kennett Square, PA 19501. Our telephone number is 773-698-6047.
(888) 295-7279.ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 2. PROPERTIES
The only real or personal property we own are the intellectual property licenses and related assets we'vewe’ve acquired relating to gaming software.
The Company has received a complaint in he State of New York from HGT Capital, LLC regarding a default on a $50,0000 loan.. The Company has retained council and is in the process of negotiaitng a settlement.
We do not currently rent or lease real property.ITEM3. LEGAL PROCEEDINGS
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock commenced trading on the over-the-counter Bulletin Board on October 7, 2009. It currently trades under the symbol "GMER"“GMER”. Following is a table of the high bid price and the low bid price for each quarter during the last two years.
| 2016 | High Bid | | Low Bid | |
| First Quarter, Ending March 31 | | $ | 0.0001 | | | $ | 0.0001 | |
| Second Quarter, Ending June 30 | | $ | 0.0007 | | | $ | 0.0007 | |
| Third Quarter, Ending September 30 | | $ | 0.0002 | | | $ | 0.0002 | |
| Fourth Quarter, Ending December 31 | | $ | 0.0003 | | | $ | 0.0002 | |
| | | | | | | | | |
| 2015 | High Bid | | Low Bid | |
| First Quarter, Ending March 31 | | $ | 0.0001 | | | $ | 0.0001 | |
| Second Quarter, Ending June 30 | | $ | 0.0002 | | | $ | 0.0001 | |
| Third Quarter, Ending September 30 | | $ | 0.0001 | | | $ | 0.0001 | |
| Fourth Quarter, Ending December 31 | | $ | 0.0003 | | | $ | 0.0002 | |
| | | | | | | | | |
| 2018 | | High Bid | | | Low Bid | |
| First Quarter, Ending March 31 | | $ | 0.2900 | | | $ | 0.0225 | |
| Second Quarter, Ending June 30 | | $ | 0.0400 | | | $ | 0.0100 | |
| Third Quarter, Ending September 30 | | $ | 0.0200 | | | $ | 0.0100 | |
| Fourth Quarter, Ending December 31 | | $ | 0.0438 | | | $ | 0.0055 | |
| 2019 | | High Bid | | | Low Bid | |
| First Quarter, Ending March 31 | | $ | 0.0199 | | | $ | 0.0072 | |
| Second Quarter, Ending June 30 | | $ | 0.0140 | | | $ | 0.0025 | |
| Third Quarter, Ending September 30 | | $ | 0.0075 | | | $ | 0.0040 | |
| Fourth Quarter, Ending December 31 | | $ | 0.0065 | | | $ | 0.0028 | |
Holders
As of December 31, 2016,March 12, 2020, we had 1,990,990,000have 53,988,755 shares of our common stock issued and outstanding held by 4653 stockholders of record.
CurrentlyAs of March 12, 2020, we have 7,500,000had 7,500 shares of our ClassSeries A Preferred Stock issued and outstanding, and 161,528,77968,997 shares of our ClassSeries B Preferred Stock issued and outstanding, nd 1,0001 share of Series C Preferred Stock issued and outstanding, and 0 shares of our Class CSeries D Preferred Stock.
Stock issued and outstanding.Dividends
We have never declared or paid cash dividends. We currently intend to retain all future earnings for the operation and expansion of our business and do not anticipate paying cash dividends on the common stock in the foreseeable future. Any payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, contractual restrictions and other factors deemed relevant by our directors.
In addition, our Series D shares have cumulative dividend preference.Securities Authorized for Issuance Under Equity Compensation Plans
On July 18, 2012, a Registration Statement on Form S-8 (the "Registration Statement"“Registration Statement”) was filed by us together with our 2012 Non-Qualified Stock Option Plan (the "Plan"“Plan”) relating to 30,000,000 shares of our common stock, par value $0.001 per share, to be offered and sold to accounts of eligible persons.
one (1) share of Series C Preferred Stock of the Company that entitles such holder to vote a majority of the issued and outstanding voting securities of the Company’s approved by written consent that the Company adopts the 2018 Stock Incentive Plan (the “2018 Plan”) under which the Board may decide at its sole discretion to grant equity awards to certain employees and consultants as set forth in the 2018 Plan. The description of the 2018 Plan does not purport to be complete and is incorporated herein by reference to a current report on form 8-k filed with the Securities and Exchange Commission on May 4, 2018.Equity Compensation Plan
| Plan category | | Number of securities issued upon exercise of outstanding options, warrants and rights | | | Weighted-average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| | | (a) | | | (b) | | | (c) | |
| | | | | | | | | | |
| Equity compensation plans approved by security holders | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | |
| Equity compensation plans not approved by security holders | | | 0 | | | | 0 | | | | 30,000,000 | |
| | | | | | | | | | | | | |
| Total | | | 0 | | | | 0 | | | | 30,000,000 | |
We do not have any other equity compensation plan at this time.
Penny Stock Regulations and Restrictions on Marketability
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities$5. Securities are registered on certain national securities exchanges or quoted on the NASDAQ system provided thatwhich provides the current price and volume information with respect to transactions in such securities is provided by the exchange or system.information. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) contains a description of the broker'sbroker’s or dealer'sdealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws, (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price, (d) contains a toll-free telephone number for inquiries on disciplinary actions, (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks, and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer must also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock, (b) the compensation of the broker-dealer and its salesperson in the transaction, (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock, and (d) a monthly account statement showing the market value of each penny stock held in the customer'scustomer’s account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser'spurchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling their shares of our common stock.
Our Articles of Incorporation authorize us to issue up to 2,000,000,000100,000,000 shares of common stock, $0.001 par value. Each holder of our common stock is entitled to one (1) vote for each share held of record on all voting matters we present for a vote of stockholders, including the election of directors. Holders of common stock have no cumulative voting rights or preemptive rights to purchase or subscribe for any stock or other securities, and there are no conversion rights or redemption or sinking fund provisions with respect to our common stock. All shares of our common stock are entitled to share equally in dividends from sources legally available when, and if, declared by our Board of Directors.
Our Board of Directors is authorized to issue additional shares of common stock not to exceed the amount authorized by the Articles of Incorporation, on such terms and conditions and for such consideration as the Board may deem appropriate without further stockholder action.
In the event of our liquidation or dissolution, all shares of our common stock are entitled to share equally in our assets available for distribution to stockholders. However, the rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of preferred stock that have been issued or shares of preferred stock that our Board of Directors may decide to issue in the future.
As of December 31, 2016, we had 1,999,990,000 shares of common stock issued and outstanding.
Our Articles of Incorporation authorize us to issue up to 450,000,0002,500,350 shares of preferred stock, $0.001 par value.value per share. Of the 450,000,0002,500,000 authorized shares of preferred stock, the total number of shares of ClassSeries A Preferred Shares the Corporation shall have the authority to issue is Two-Hundred -Forty-Nine Million-Nine-Hundred-Ninety-Nine Thousand (249,999,000)Thousand-Nine-Hundred-Ninety-Nine (249,999), with a stated par value of $0.001 per share, the total number of shares of ClassSeries B Preferred Shares the CorporationCompany shall have the authority to issue is Two-Hundered-Million (200,000,000), with a stated par value of $0.001 per shareand the total number of shares of Class C Preferred Shares the Corporation shall have the authority to issue is OneTwo-Hundred Thousand (1,000,000)(200,000), with a stated par value of $0.001 per share, the total number of shares of Series C Preferred Shares the Company shall have the authority to issue is One (1), .with a stated par value of $0.001 per share, and the total number of shares of Series D Preferred Shares the Company shall have the authority to issue is Three Hundred and Fifty (350), with a stated par value of $0.001 per share. Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors'Directors’ power to set the terms of, and our ability to issue, preferred stock will provide flexibility in connection with possible financing or acquisition transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring or preventing a change in control of our company.
Company.As of December 31, 2016,March 12, 2020, we had 7,500,0007,500 shares of our ClassSeries A preferred stock issued and outstanding, 161,528,77968,997 shares of ClassSeries B preferred stock issued and outstanding, and 1,000 shares1 share of our ClassSeries C Preferred Stock issued and outstanding, and 0 share of our Series D Preferred Stock issued and outstanding.
The 7,500,0007,500 issued and outstanding shares of ClassSeries A Preferred Stock are convertible into shares of common stock at a rate of 20 common stock shares for each one ClassSeries A Preferred Share. The 161,528,77968,997 issued and outstanding shares of ClassSeries B Preferred Stock are convertible into shares of common stock at a rate of 200 common stock shares for each one ClassSeries B Preferred Share. 100,000,000 ofOf the issued and outstanding shares of ClassSeries B Preferred Stock, is47,881 shares are owned by CMG Holdings Group, Inc.Lincoln Acquisition Corporation. If all of our ClassSeries A Preferred Stock and ClassSeries B Preferred Stock waswere converted into shares of common stock, the number of issued and outstanding shares of our common stock willwould increase to 13,949,400 shares.
We had six (6) issued and outstanding shares of Series D Preferred Stock that were convertible into shares of common stock at a rate of 125% of the conversion amount at a price that is the lower of 110% of the volume weighted average prices (“VWAP”) of the common stock on the issuance date of the preferred stock, the VWAP of the common stock on the conversion date, or the VWAP of the common stock on the date prior to the conversion date.
On September 21, 2018, RedDiamond modified the agreement with the Company. RedDiamond and the Company agreed that the Preferred Shares were convertible into Common Stock (the “Conversion Shares”) at the lower of the Fixed Conversion Price ($.06) or at the VWAP which were defined as the average of the five (5) lowest closing prices during the 20 days prior to conversion; for the avoidance of doubt, RedDiamond did not waived its right to the 25% Conversion Premium as defined in the COD. The Company had the obligation to redeem 46.531 of the Preferred Shares (which represents 50% of the Preferred Shares Owned by 32,455,755,800 shares.
RedDiamond) at 110% of the Stated Value of $46,531 by making three equal payments of $17,061 on October 15, 2018, November 15, 2018 and December 15, 2018. On January 10, 2019, RedDiamond converted the six shares of Series D Preferred Stock into common stock of the Company.As a result, we have no remaining shares of Series D Preferred Stock outstanding.Options
We have not issued and do not have any outstanding any options to purchase shares of our common stock. Good Gaming, Inc.
has 100 million warrants with an exercise price of .001 (common stock).
Registration Rights
As of December 31, 2016,2019, there are no other outstanding registration rights or similar agreements.
On April 8,15, 2015, we consentedthe Company issued a convertible debenture with the principal amount of $100,000 to HGT Capital, LLC (“HGT”), a non-related party. During the assignmentquarter ended June 30, 2015, the Company received the first $50,000 in payment. The remaining $50,000 payment would be made at the request of the February 18, 2014 and the October 4, 2013 Asher Notes, whichborrower. No additional payments were previously assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According tomade as of September 30, 2018. Under the terms of the April 8, 2015 assignment agreement,debentures, the February 18, 2014 noteamount was soldunsecured and was due on October 16, 2016. It was convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the Purchaserdate the conversion notice was sent by the holder to the Company. On September 21, 2018, the Company entered into a modification agreement with HGT with respect to the convertible promissory note which had had a balance of $107,238. Pursuant to such modification agreement, all defaults were waived and simultaneously exchangedit was agreed that such note will convert at a 25% discount to the market rather than the default rate. HGT also agreed to certain sale restrictions which limit the amount of shares that they can sell in any month for the next three months. HGT also agreed to dismiss, with prejudice, the lawsuit that it had filed against the Company. On November 29, 2018, HGT converted $6,978 of a convertible note into 1,655,594 shares of the Company’s common stock.
The Company entered into a line of credit agreement (“Line Of Credit”) with ViaOne on September 27, 2018 (the “Effective Date”). This Line of Credit dated as of, was entered into by and between the Company and ViaOne. The Company had an immediate need for additional capital and asked ViaOne to make a new noteloan(s) in an initial amount of $25,000 on the Effective Date (the "New February Note"“New Loan”). In accordanceThe Company may need additional capital and ViaOne has agreed pursuant to this Line of Credit to provide for additional advances, although ViaOne shall have no obligation to make any additional loans. Any further New Loans shall be memorialized in a promissory note with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the originalNew Loan and shall be secured by all of the assets of the Company. On or before the Effective Date, the Company may request in writing to ViaOne that it loan the Company additional sums of up to $250,000 and within five days of such request(s), ViaOne shall have the right, but not an obligation, to make additional loans to the Company and the Company shall in turn immediately issue a note within the following exceptions:amount of such loan. In consideration for making the New February bears 0%Loan, the Company entered into a security agreement whereby ViaOne received a senior security interest and the overall ownershipin all of the Purchaserassets of the Company.
Related Party Transactions
On or around April 7, 2016, Silver Linings Management, LLC funded the Company $13,440 in the form of convertible debentures secured by certain high-powered gaming machines purchased from XIDAX. Such note bore interest at a rate of 10% per annum, payable in cash or kind at the option of the Company, matured on April 1, 2018, and was convertible into Series B Preferred shares at the option of the holder at any one moment shall be limited to 9.99%time. On January 08, 2019, Silver Linings Management converted its Series B Preferred shares into shares of the Company’s Common Stock.
On November 30, 2016, ViaOne purchased a Secured Promissory Note equal to a maximum initial principal amount of $150,000 issued by the Company to ViaOne. As additional advances were made by ViaOne to the Company, the principal amount of the Note was increased to $225,000 and outstanding shares$363,000 by amendments dated January 31, 2017 and March 1, 2017, respectively.
On May 5, 2017, ViaOne delivered a default notice to the Company pursuant to Section 6 of our common stock. the Note Purchase Agreement but has subsequently extended the due date and has increased the funding up to One Million ($1,000,000) dollars. After giving the Company a fifteen (15) day notice period to cure the default under the Stock Pledge Agreement, dated November 30, 2016, entered by and among the Company, CMG and ViaOne (“Pledge Agreement”), ViaOne took possession of the Series C Stock, which was subject of the Pledge Agreement.
The Purchaser also entered into an agreement with JABRO, grantingSecured Promissory Note as amended increased from time to time due to additional advances provided to the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015.
Company by ViaOne.On April 6, 2015,September 1, 2017, the Company executed an amended Employee Services Agreement with ViaOne which stipulated that ViaOne would continue providing to the Company services relating to the Company’s human resources, marketing, advertising, accounting and financing for a Common Stock Purchase Warrant withmonthly management fee of $25,000. This agreement was amended on January 1, 2018. The accrued monthly management fees, $100,000 at December 31, 2017, are convertible by ViaOne into the Purchaser, providing the Purchaser the right to purchase shares of common stock of the company by investing up to $50,000 into new shares ofCompany’s common stock at a rate of 125% of the accrued fees at a conversion price of $0.001(i) $0.05 per share. The Warrant expires in five years. This Warrant was negotiated as partshare; or (ii) the volume weighted adjusted price (“VWAP”) of the Note.common stock on the 14th day of each month if the 14th of that month is a trading day. In the event the 14th day of a month falls on a Saturday, Sunday, or a trading holiday, the VWAP of the Common Stock will be valued on the last trading day before the 14th day of the month.
On September 27, 2018, the Company and ViaOne, entered into a Line of Credit Agreement (the “LOC Agreement”), pursuant to which the Company issued a secured promissory note with the initial principal amount of $25,000 to ViaOne in exchange for a loan of $25,000 (the “Initial Loan Amount”). In accordance with this Agreement, the Company may request ViaOne to provide loans of up to $250,000, including the Initial Loan Amount, and ViaOne has the right to decide whether it will honor such request. The Initial Loan Amount shall become due on September 30, 2019 (the “Maturity Date”) and bears an interest rate of 8.0% per annum. The unpaid principal and interest of the Promissory Note after the Maturity Date shall accrue interest at a rate of 18.0% per annum. The principal amount of the Promissory Note may increase from time to time up to $250,000 in accordance with the terms and conditions of the Agreement. In connection with the Agreement and Promissory Note, the Company has anand ViaOne executed a security agreement dated September 27, 2018 whereby the Company granted ViaOne a security interest in all of its assets, including without limitation, cash, inventory, account receivables, real property and intellectual properties, to purchasesecure the Purchaser debt for face value.
repayment of the loans made pursuant to the LOC Agreement and Promissory Note.As of December 31, 2019, the total amount owed to ViaOne Services was $1,738,295.
The Company’s Chairman and Chief Executive Officer is the Chairman of ViaOne.
Shares Eligible for Future Sale
As of December 31, 2016,March 12, 2020, we had 1,999,990,00053,988,755 shares of our common stock issued and outstanding, a breakdown of which follows:
| ● | 1,468,871,39333,889,211 shares are freely tradable without restrictions (commonly referred to as the "public float"“public float”) |
| |
| ● | 531,118,60720,099,544 shares are currently subject to the restrictions and sale limitations imposed by Rule 144. |
From time to time, certain of our stockholders may be eligible to sell some or all of their restricted shares of our common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain volume restrictions and restrictions on the manner of sale. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement (which disappears after one year).requirement. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale, current public information and notice requirements.
The eventual availability for sale of substantial amounts of our common stock under Rule 144 could adversely affect prevailing market prices for our securities and cause you to lose most, if not all, of your investment in our business.
Our transfer agent is Action Stock Transfer Corp.
with its principal address at 2469 East Fort Union Boulevard, Suite 214, Salt Lake City, Utah 84121
( 801) 274-1088 Phone
84121. Its telephone number is (801) 274-1099 Fax
info@actionstocktransfer.com Email
274-1088. Its fax number is (801) 274-1099. Investors may reach our transfer agent at info@actionstocktransfer.com.Recent Sales of Unregistered Securities
The issuance and salesOn January 8, 2018, Silver Linings Management, LLC converted 15,000 shares of securities without registration since March 28, 2014 throughthe Company’s Series B Preferred Stock into 3,000,000 shares of the Company’s common stock.
On January 8, 2018, Britton & Associates converted 5,000 of the Company’s Series B Preferred Shares into 1,000,000 shares of the Company’s common stock.
On January 9, 2018, ViaOne converted $200,000 of its convertible note into 8,333,333 shares of the Company’s common stock.
On January 12, 2018, SSB Trading converted 10,000 of the Company’s Series B Preferred Shares into 2,000,000 shares of the Company’s common stock.
On January 12, 2018, CMG Holdings converted 5,605 of the Company’s Series B Preferred Shares into 1,211,000 common shares of the Company.
On January 18, 2018, CMG Holdings converted 9,000 of the Company’s Series B Preferred Shares into 1,800,000 shares of the Company’s common stock.
On January 23, 2018, Iconic converted $65,155 of its convertible note into 814,438 shares of the Company’s common stock.
On January 26, 2018, Michael Tadin converted 5,000 of the Company’s Series B Preferred Shares into 1,000,000 shares of the Company’s common stock.
On February 9, 2018, Vik Grover converted 8,665 of the Company’s Series B Preferred Shares into 1,733,000 shares of common stock of the Company.
On April 16, 2018, Iconic converted $18,000 of a convertible note into 1,892,828 shares of the Company’s common stock.
On April 13, 2018, RedDiamond Partners, Inc. (“RedDiamond”) converted 5 shares of Series D Preferred Stock into 555,556 shares of the Company’s common stock.
On April 17, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 609,756 shares of the Company’s common stock.
On April 23, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 806,452 of the Company’s common stock.
On May 9, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,020,408 of the Company’s common stock.
On May 23, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 657,895 of the Company’s common stock.
On June 19, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,234,756 of the Company’s common stock.
On July 9, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,250,000 of the Company’s common stock.
On July 24, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,467,391 of the Company’s common stock.
On September 25, 2018, RedDiamond converted 6.50 shares of Series D Preferred Stock into 1,450,893 of the Company’s common stock.
On October 16, 2018, RedDiamond converted 6.50 shares of Series D Preferred Stock into 1,377,119 of the Company’s common stock.
On November 1, 2018, RedDiamond converted 6.34 shares of Series D Preferred Stock into 792,750 of the Company’s common stock.
On November 6, 2018, Lincoln Acquisition converted 17,314 shares of Preferred B Stock into 3,462,800 of the Company’s common stock.
On November 13, 2018, RedDiamond converted 6 shares of Series D Preferred Stock into 1,027,397 of the Company’s common stock.
On November 29, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 961,538 of the Company’s common stock.
On November 29, 2018, HGT converted $6,978 of a convertible note into 1,655,594 shares of the Company’s common stock.
On December 31, 2015 comprise14, 2018, Lincoln Acquisition converted 20,000 shares of Preferred B Stock into 4,000,000 of the transactions relating toCompany’s common stock.
On December 21, 2018, RedDiamond converted 10 shares of Series D Preferred Stock into 1,811,594 of the Asher Notes, as well as those transactions described below.
a) | On April 9, 2014, we issued 8,571,429Company’s common stock.On January 2, 2019, Lincoln Acquisition converted 200 shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture. |
b) | On October 21, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. |
c) | On October 28, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. |
d) | On November 21, 2014, we issued 15,500,000 common shares for the conversion of $1,240 of principal of the June 7, 2013 convertible debenture. |
e) | On November 26, 2014, we issued 19,000,000 common shares for the conversion of $1,520 of principal of the July 15, 2013 convertible debenture. |
f) | On December 2, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. |
g) | On December 4, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. |
h) | On December 9, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. |
i) | On February 6, 2015, we issued 28,000,000 common shares upon the issuance of $1,400 of principal of the July 15, 2013 convertible debenture. |
j) | On February 10, 2015, we issued 28,000,000 common shares upon the conversion of $1,400 of principal of the July 15, 2013 convertible debenture. |
k) | On February 13, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture. |
l) | On February 18, 2015, we issued 31,000,000 common shares upon the conversion of $1,550 of principal of the July 15, 2013 convertible debenture. |
m) | On February 23, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture. |
n) | On March 2, 2015, we issued 35,000,000 common shares upon the conversion of $1,750 of principal of the July 15, 2013 convertible debenture. |
o) | On March 3, 2015, we issued 37,000,000 common shares upon the issuance of $1,850 of principal of the July 15, 2013 convertible debenture. |
p) | On March 5, 2015, we entered into settlement and general mutual release agreements with our former president and director and two of our consultants. Pursuant to the settlement and release agreements, we agreed to issue 180,285,000 shares of common stock for the settlement of all amounts owing to these parties. |
q) | On March 9, 2015, we issued 13,350,000 newly-issued shares of Class B preferred stock and 200,000,000 newly-issued share of restricted shares of common stock under the Strategic Expansion Agreement to SirenGPS. Additionally, under the Strategic Expansion Agreement, we issued to HOEL 342,150,496 newly-issued restricted shares of common stock. Also under the Expansion Agreement, we issued 274,300 newly-issued shares of Class B preferred stock to a designee of the Licensor. |
r) | On March 13, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture. |
s) | On March 17, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture. |
t) | On March 18, 2015, we issued 83,000,000 common shares upon the issuance of $1,490 of principal of the July 15, 2013 convertible debenture and $2,660 of accrued and unpaid interest. Refer to Note 3(b). |
u) | On March 24, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture. |
v) | On March 25, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture. |
w) | On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were previously assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, the New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015. |
x) | On April 1, 2015, we issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000. Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end of day closing prices of our common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note. This agreement was terminated subsequent to year-end. |
y) | On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock, respectively, into 1,050,000 shares and 1,165,000 shares of Class B Preferred Stock, respectively. This agreement was terminated subsequent to year-end. |
z) | On April 6, 2015, we executed a Common Stock Purchase Warrant with Iconic Holdings, LLC, a west coast-based institutional investor (the "Purchaser"), providing the Purchaser the right to purchase our shares of common stock by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. On April 2, 2015, we entered into an equity line of credit (ELOC) agreement that permits us to "put" shares to the Purchaser at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to us Once the registration is filed, funding under the ELOC occurs at our discretion. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016. |
| aa) On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture.
|
| bb) On August 16, 2016, the Company exchanged 1.15MM Series B Preferred Shares with an investor for 179,450,000 common shares which were retired into treasury. These common shares were pledged to Iconic Holdings, LLC contractually as collateral against a $25,000 convertible debenture that was restructured in February 2016. By agreement, the lender converted a portion of this note into common shares eliminating debt from the Company’s balance sheet. The Company has agreed to deliver an additional 70,050,000 common shares to the lender by year-end 2016, which will eliminate the debenture in its entirety. Iconic Holdings has agreed to lock-up a $100,000 convertible debenture for a period of one-year effective June 10, 2016, subject to strict covenants that will protect common shareholders from significant dilution. The net effect of this Agreement is that the common share float of the Company has not been increased and that shareholders will not be negatively impacted by a common stock increase and additional dilution.
|
| cc) On August 31, 2016 Iconic Holdings converted $6,250 of convertible debt into 62,250,000 shares of the Company’s common stock
|
| dd) On October 5, 2016 Iconic Holdings converted $6,250 of convertible debt into 62,250,000 shares of the Company’s common stock..
|
| ee) On October 11, 2016 Iconic Holdings converted $5,915 of convertible debt into 59,150,000 shares of the Company’s common stock.
|
the Company’s common stockOn January 10, 2019, RedDiamond converted 6 shares of Series D Preferred Stock into 520,833 of the Company’s common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchases
During each month within the fourth quarter of the fiscal year ended December 31, 2016,2019, neither we nor any "affiliated purchaser"“affiliated purchaser”, as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our common stock or other securities.
ITEM 6. Selected Financial Data
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. |
Forward Looking Statements
This Management'sITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant 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 those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
We are considered a start-up corporation. Our auditors have issued a going concern opinion on the consolidated financial statements for the year ended December 31, 2016.
Our auditors have issued a going concern opinion.2019. This means that our auditors believe there is substantial doubt that we can continue as an on-goingongoing business for the next twelve months from the date of issuance of these financial statements unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues arelittle revenue although revenue is anticipated untilto grow as we completehave completed the development of our website, sourcesourced out suppliers for products to sell and sourcesourced out customers to buy our products. We believe the technical aspects of our websites will be sufficiently developed to use for our operations 60 days from the completion of our offering. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our company.company and the revenue we generate from the sales of our products. We must raise cash to implementcontinue our project and beginbuild our operations.
Plan of Operation – Milestones
We are in theat an early stagesstage of our new business operations. Over the next twelve months, our primary target milestones include:
1. 1 | CompleteContinue to achieve substantial growth within our Minecraft division. This is a profitable center for us and we expect the 2.0 destination site www.good-gaming.com and launch the world’s premiere online destination site for social networking and tournaments for cash and prizescontinued growth of our existing server, good-gaming.com as well.
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| 2 | Continue to 205 million eSports amateur players.evaluate opportunities which have synergies to our existing business line. |
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| 3 | Anticipate sustainable financial profitability in 2021. |
2. | Enhance the platform with 3.0 features to integrate with mobile networks and offer other value-added features. |
3. | File provisional patent application to protect the 2.0 Mercenary System, which offers a marketplace for the purchase and/or exchange of virtual goods and gaming labor. |
4. | Add a suite of online games that subscribers can play for free depending on their status on the system.. |
5. | The Company will need to raise additional capital to move from the relaunch phase this spring-summer and fully fund its plan into 2018. |
6. | Obtain the backing of corporate sponsors for cash and prizes and to provide advertising during tournaments and to its subscribers on the systems. To this end, Good Gaming already has verbal indications of interest for such sponsorships and advertising, but buyers of ad inventory are waiting to inspect the Company’s 2.0 platform. |
7. | The Company intends to continue to expand its Advisory Board with industry professionals that can further help refine the site, facilitate introductions to sponsors and strategic partners, and add credibility to the business. |
Limited operating history;history and need for additional capital
There is nolimited historical financial information about us upon which to base an evaluation of our performance relating to our new business direction. We have not generated any meaningful revenues.little revenue. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Results of Operations –
December 31, 20162019 as compared to December 31, 2015
Working Capital
| | | December 31, 2016 | | | December 31, 2015 | |
| Current Assets | | $ | 58,400 | | | $ | - | |
| Current Liabilities | | | 477,848 | | | | 639,852 | |
| Working Capital (Deficit) | | | (419,448 | ) | | | (639,852 | ) |
Operating Revenues
2018| | | December 31, 2019 | | | December 31, 2018 | |
| Current Assets | | $ | 10,772 | | | $ | 22,449 | |
| Current Liabilities | | | 2,762,373 | | | | 2,116,954 | |
| Working Capital (Deficit) | | $ | (2,751,601) | | | $ | (2,094,505) | |
We have only generated minimal revenues since inception.
Operating Expenses$49,519 in revenue in 2019 and Net Loss
$109,575 in revenue in the fiscal year of 2018, which reflects a decrease of $60,056 or 55%. | ● | Operating Expenses and Net Loss |
Operating expenses for the year ended December 31, 20162019 were $676,266$905,442 compared with $240,419$990,445 for the year ended December 31, 2014.2018. The increasedecrease in operating expenses in the amount of $85,003 or 8.5% was attributed to adecreases in general and administrative, contract labor, and professional fees, offset by an increase in depreciation and amortization of assets acquired in 2016 and general and administrative expenses for day to day operating costs.
expense.During the year ended December 31, 2016,2019, the Company recorded a net loss of $491,300$1,130,769 compared with a net loss of $707,532$991,693 for the year ended December 31, 2015. In addition2018. The increase in net loss in the amount of $139,076 or 14% was attributed to the above, the Company incurred a changedecrease in fairrevenues and operating expenses offset by an increase in value of the Company’s derivative liability.
Liquidity and Capital Resources
liabilities. | ● | Liquidity and Capital Resources |
As atof December 31, 2016,2019, the Company'sCompany’s cash balance consisted of $47,900$2,022 compared to cash balance of $0$12,449 as atof December 31, 2015.2018. The increasedecrease in the cash balance was attributed to the financing that we received for day-to-day activities. As atof December 31, 2016,2019, the Company had $1,059,824$15,952 in assets compared to total assets of $0$501,302 as at December 31, 2015.2018. The increasedecrease in assets was attributable to the financing received to pay for the day to day operationsamortization of the Company andassets purchased during the acquisition of Good Gaming, Inc.
As atof December 31, 2016,2019, the Company had total liabilities of $641,288$2,762,373 compared with total liabilities of $689,852$2,116,954 as atof December 31, 2015.2018. The decreaseincrease in liabilities was attributable to increase in financing and accounts payable and decrease in derivative liabilities.
As atof December 31, 2016,2019, the Company has a working capital deficit of $419,448$2,751,601 compared with a working capital deficit $639,852 atof $2,094,505 as of December 31, 20152018 with the decreaseincrease in the working capital deficit attributed to an increase in financing the Company received for day to day operating costs.
general working capital purposes.CashflowCash flow from Operating Activities
During the year ended December 31, 2016,2019, the Company used $317,225$432,716 of cash for operating activities compared to the use of $133,373cash in an amount of cash$739,684 for operating activities during the year ended December 31, 2015.2018. The increase in the usedecrease of cash for operating activities$306,968 or 41.5% was attributed to the fact that the Company increasednet decrease in operations due to the purchase of the gaming software.
CashflowCash flow from Investing Activities
During the years ended December 31, 20162019, the Company had $13,440used $478 in cash used in investing activities compared to $0having $26,250 for the year ended December 31, 2015.2018. The increasedecrease of $26,728 was due to the Company purchasing computers in 2016.
Company’s decision to use the limited servers.CashflowCash flow from Financing Activities
During the year ended December 31, 2016,2019, the Company received $378,565$421,810 of proceeds from financing activities compared to $133,300$717,346 during the year ended December 31, 2015.2018. The increasedecrease in proceeds fromnet cash provided by financing activities was due to receivingthe decline in proceeds from the sale of preferred stock receipt ofand convertible debenture, and stock subscriptions.
Developments after December 31, 2016
On January 4, 2017 the Company cancelled 70,000,000 of its common shares that had been issued to Hillwinds Ocean Energy.
On January 5, 2017 Iconic Holdings converted $6,585 of convertible debt into 65,850,000 shares of the Company’s common stock.
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited consolidated financial statements that they have substantial doubt that we will be able to continue as a going concern for a period of one year from the issuance of these financial statements without further financing.
Off-Balance Sheet Arrangements
WeAs of December 31, 2019, we have no 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 are material to stockholders.
We will continue to rely on equity sales of our preferred shares in order to continue to fund our business operations. IssuancesIssuance of additional shares will result in dilution to existing stockholders.
There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Critical Accounting Policies
Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities atas of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated financial statements. In general, management'sManagement’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The To the Shareholders and
Board of Directors and
Stockholders of Good Gaming, Inc.
IOpinion on the Financial Statements
We have audited the accompanying balance sheetsheets of Good Gaming, Inc. (the “Company”) as of December 31, 2016,2019 and 2018, the related statements of operations, stockholders’ equity (deficit), and cash flows for year then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit 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, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Good Gaming, Inc. as of December 31, 2016, and the results of its operations and its cash flows for the year ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the Company’s net loss, working capital deficiency and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Management’s plans are also described in Note 1. The financial statements do not include adjustments that might result from the outcome of this uncertain.
/s/ Boyle CPA, LLC
April 17, 2017
Bayville, NJ
F-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
To: The Board of Directors
HDS International Corp
We have audited the accompanying balance sheet of HDS International Corp. (the “Company”) as of December 31, 2015, and the related statement of loss, shareholders’ deficit, and cash flows for yeareach of the two years in the period ended December 31, 2015.2019, and the related notes (collectively referred to as the “financial statements”). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
audits. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.Basis of Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with 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.misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding 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'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.
In our opinion,Substantial Doubt About the financial statements referredCompany’s Ability to above present fairly, in all material respects, the financial position of HDS International Corp.Continue as of December 31, 2015, and the results of its operations and their cash flows for the year ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.
a Going ConcernAs discussed in Note 1 to the financial statements, the Company’s net loss ofcontinuing operating historylosses, working capital deficiency and financial resourcesaccumulated deficit raise substantial doubt about its ability to continue as a going concern.concern for a period of one year from the issuance of the financial statements. Management’s plans are also described in Note 1. The financial statements do not include adjustments that might result from the outcome of this uncertainty and ifuncertainty.
/s/ Boyle CPA, LLC
We have served as the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations immediately.
Company’s auditor since 2016Bayville,NJ
March30, 2020
| 361Hopedale Drive SE | P (732) 822-4427 |
| |
| Bayville, NJ 08721 | F (732) 510-0665 |
Enterprise CPAs, Ltd.
Chicago, IL
May 26, 2016
F-3
| Good Gaming, Inc. | | | | | | |
| (Formerly HDS International Corp) | | | | | | |
| Consolidated Balance Sheets | | | | | | |
| (Expressed in U. S. Dollars) | | | | | | |
| | | December 31, | | | December 31, | |
| | | 2016 | | | 2015 | |
| | | | | | | |
| ASSETS | | | | | | |
| Current Assets | | | | | | |
| Cash | | $ | 47,900 | | | $ | - | |
| Loan to Pristec | | | 10,500 | | | | - | |
| | | | | | | | | |
| Total Current Assets | | | 58,400 | | | | - | |
| | | | | | | | | |
| Equipment, net | | | 11,424 | | | | - | |
| | | | | | | | | |
| Other Assets | | | | | | | | |
| Gaming Software, net of amortization | | | 990,000 | | | | - | |
| Total Other Assets | | | 990,000 | | | | - | |
| | | | | | | | | |
| Total Assets | | $ | 1,059,824 | | | $ | - | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 117,658 | | | $ | 96,141 | |
| Accounts payable and accrued liabilities - related party | | | - | | | | 6,670 | |
| Note Payable to Related Party - Assist Wireless | | | 75,000 | | | | - | |
| Convertible debentures, net of unamortized discount of $0 and $36,088, respectively | | | 56,585 | | | | 83,300 | |
| Derivative liability | | | 228,605 | | | | 453,741 | |
| | | | | | | | | |
| Total Current Liabilities | | | 477,848 | | | | 639,852 | |
| | | | | | | | | |
| Convertible debentures, long-term | | | 150,000 | | | | 50,000 | |
| Note Payable Computers | | | 13,440 | | | | | |
| | | | 163,440 | | | | 50,000 | |
| | | | | | | | | |
| Total Liabilities | | | 641,288 | | | | 689,852 | |
| | | | | | | | | |
| Stockholders' Equity (Deficit) | | | | | | | | |
| | | | | | | | | |
| Class A Preferred Stock | | | | | | | | |
| Authorized: 249,999,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 7,500,000 shares | | | 7,500 | | | | 7,500 | |
| | | | | | | | | |
| Class B Preferred Stock | | | | | | | | |
| Authorized: 200,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 161,528,779 and 15,839,300 shares, respectively | | | 161,529 | | | | 15,839 | |
| | | | | | | | | |
| Class C Preferred Stock | | | | | | | | |
| Authorized: 1,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 1,000 and 0 shares, respectively | | | 1 | | | | - | |
| | | | | | | | | |
| Common Stock | | | | | | | | |
| Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 1,999,990,000 and 1,995,290,000 shares, respectively | | | 1,999,990 | | | | 1,995,290 | |
| | | | | | | | | |
| Additional paid-in capital | | | 1,758,889 | | | | 309,592 | |
| Accumulated deficit | | | (3,509,373 | ) | | | (3,018,073 | ) |
| | | | | | | | | |
| Total Stockholders' equity (deficit) | | | 418,536 | | | | (689,852 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' deficit | | $ | 1,059,824 | | | $ | - | |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financial statements | |
| Good Gaming, Inc. | | | | | | |
| (Formerly HDS International Corp) | | | | | | |
| Consolidated Statements of Operations | | | | | | |
| (Expressed in U. S. Dollars) | | | | | | |
| | | | | | | |
| | | For the Year Ended | |
| | | December 31, | |
| | | 2016 | | | 2015 | |
| | | | | | | |
| Revenues | | $ | 2,000 | | | $ | - | |
| | | | | | | | | |
| Operating Expenses | | | | | | | | |
| | | | | | | | | |
| Prizes | | | 57,790 | | | | - | |
| Depreciation and Amortization | | | 212,016 | | | | - | |
| Consulting fees | | | 95,090 | | | | 98,694 | |
| General and administrative | | | 309,870 | | | | 97,925 | |
| | | 1,500 | | | | 43,800 | |
| | | | | | | | | |
| Total Operating Expenses | | | 676,266 | | | | 240,419 | |
| | | | | | | | | |
| Net Loss Before Other Expenses | | | (674,266 | ) | | | (240,419 | ) |
| | | | | | | | | |
| Other Income(Expenses) | | | | | | | | |
| | | | | | | | | |
| Interest expense | | | (100,470 | ) | | | (37,159 | ) |
| Debt forgiveness | | | 58,300 | | | | - | |
| Gain on Change in fair value of derivative liability | | | 225,136 | | | | (429,954 | ) |
| | | | | | | | | |
| Total Other Expenses | | | 182,966 | | | | (467,113 | ) |
| | | | | | | | | |
| Net Loss | | $ | (491,300 | ) | | $ | (707,532 | ) |
| | | | | | | | | |
| Net Loss Per Share, Basic and Diluted | | $ | - | | | $ | - | |
| | | | | | | | | |
| Weigted Average Shares Outstanding | | | 1,976,803,836 | | | | 1,549,334,532 | |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financial statements | |
| Good Gaming, Inc. | | | | | | |
| Consolidated Statements of Operations | | | | | | |
| (Expressed in U. S. Dollars) | | | | | | |
| | | | | | | |
| | | For the Year Ended | |
| | | December 31, | |
| | | 2016 | | | 2015 | |
| | | | | | | |
| Operating Activities | | | | | | |
| | | | | | | |
| Net Loss | | $ | (491,300 | ) | | $ | (707,532 | ) |
| | | | | | | | | |
| Adjustment to reconcile net loss to | | | | | | | | |
| net cash used in operating activities | | | | | | | | |
| | | | | | | | | |
| Accretion of debt discount | | | 100,000 | | | | 15,052 | |
| Depreciation | | | 2,016 | | | | - | |
| Amortization of software | | | 210,000 | | | | - | |
| Amortization of deferred financing costs | | | - | | | | 1,020 | |
| Debt Forgiveness | | | (58,300 | ) | | | - | |
| Gain on change in fair value of derivitive liability | | | (225,136 | ) | | | 429,954 | |
| Stock based compensation | | | 29,092 | | | | - | |
| | | | | | | | | |
| Changes in operating asstes and liabilities | | | | | | | | |
| | | | | | | | | |
| Accounts payable and accrued liabilities | | | 133,573 | | | | 90,276 | |
| Accounts payable and accrued liabilities-related parties | | | (6,670 | ) | | | 37,857 | |
| Loan to Pristec | | | (10,500 | ) | | | - | |
| | | | | | | | | |
| Net Cash Provided by (Used in) Operating Activities | | | (317,225 | ) | | | (133,373 | ) |
| | | | | | | | | |
| Investing activities | | | | | | | | |
| | | | | | | | | |
| | | (13,440 | ) | | | - | |
| | | | | | | | | |
| Net Cash Provided by (Used in) Investing Activities | | | (13,440 | ) | | | - | |
| | | | | | | | | |
| Financing activities | | | | | | | | |
| | | | | | | | | |
| Proceeds from convertible debenture, net of financing costs | | | 166,700 | | | | 133,300 | |
| Proceeds from purchase of Good Gaming | | | 1,723 | | | | - | |
| Proceeds from equipment loan | | | 13,440 | | | | - | |
| Proceeds from priate placement | | | 196,702 | | | | - | |
| | | | | | | | | |
| Net Cash Provided by (Used in) Financing activities | | | 378,565 | | | | 133,300 | |
| | | | | | | | | |
| Change in Cash | | | 47,900 | | | | (73 | ) |
| | | | | | | | | |
| Cash, Beginning of Period | | | - | | | | 73 | |
| | | | | | | | | |
| Cash, End of period | | $ | 47,900 | | | $ | - | |
| | | | | | | | | |
| Non-cash investing andd financing activities | | | | | | | | |
| Common shares issued for conversion of debt | | $ | 73,894 | | | $ | 1,436,534 | |
| Debt Discount due to beneficial conversion feature | | $ | 100,000 | | | $ | 186,397 | |
| Shares issued for acquisition of Software | | $ | 1,200,000 | | | $ | - | |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financial statements | |
F-6
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Expressed in U. S. Dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Preferred Stock | | | Common Stock | | | Additional | | | | | | | |
| | | Class A | | | Class B | | | Class C | | | | | | Paid-in | | | Accumulated | | | | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2014 | | | 7,500,000 | | | $ | 7,500 | | | | - | | | $ | - | | | | - | | | $ | - | | | | 571,564,504 | | | $ | 571,564 | | | $ | 296,785 | | | $ | (2,310,541 | ) | | $ | (1,434,692 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common shares issued for conversion of debt | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,845,725,496 | | | | 1,845,726 | | | | (409,192 | ) | | | - | | | | 1,436,534 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares Cancelled | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (422,000,000 | ) | | | (422,000 | ) | | | 422,000 | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Preferred shares issued | | | - | | | | - | | | | 15,839,300 | | | | 15,839 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 15,839 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (707,532 | ) | | | (707,532 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance December 31, 2015 | | | 7,500,000 | | | | 7,500 | | | | 15,839,300 | | | | 15,839 | | | | - | | | | - | | | | 1,995,290,000 | | | | 1,995,290 | | | | 309,593 | | | | (3,018,073 | ) | | | (689,851 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued foracquisition of Good Gaming Software | | | - | | | | - | | | | 86,650,000 | | | | 86,650 | | | | - | | | | - | | | | - | | | | - | | | | 1,113,350 | | | | - | | | | 1,200,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued in private placement | | | - | | | | - | | | | 47,500,000 | | | | 47,500 | | | | - | | | | - | | | | - | | | | - | | | | 149,200 | | | | - | | | | 196,700 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued for services | | | - | | | | - | | | | 2,859,573 | | | | 2,860 | | | | - | | | | - | | | | - | | | | - | | | | 26,232 | | | | - | | | | 29,092 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued to settle debt | | | - | | | | - | | | | 7,529,906 | | | | 7,530 | | | | - | | | | - | | | | - | | | | - | | | | 47,949 | | | | - | | | | 55,479 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Issue Class C preferred stock | | | | | | | | | | | - | | | | - | | | | 1,000 | | | | 1 | | | | - | | | | - | | | | - | | | | - | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of common stock | | | | | | | | | | | 1,150,000 | | | | 1,150 | | | | - | | | | - | | | | (179,450.000 | ) | | | (179,450 | ) | | | 178,300 | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of convertible debt | | | | | | | | | | | - | | | | - | | | | - | | | | - | | | | 184,150,000 | | | | 184,150 | | | | (165,735 | ) | | | - | | | | 18,415 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Beneficial Conversion Feature | | | | | | | | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 100,000 | | | | - | | | | 100,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss for the year | | | | | | | | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (491,300 | ) | | | (491,300 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance December 31, 2015 | | | 7,500,000 | | | $ | 7,500 | | | | 161,528,779 | | | $ | 161,529 | | | | 1,000 | | | $ | 1 | | | | 1,999,990,000 | | | $ | 1,999,990 | | | $ | 1,758,889 | | | $ | (3,509,373 | ) | | $ | 418,536 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financial statements | |
F-7
Good Gaming, Inc.
Balance Sheets
(Expressed in U.S. Dollars)
| | | December 31, 2019 | | | December 31, 2018 | |
| ASSETS | | | | | | | | |
| Current Assets | | | | | | | | |
| Cash and Cash Equivalents | | $ | 2,022 | | | $ | 12,449 | |
| Prepaid expenses- related party | | | 8,750 | | | | 10,000 | |
| | | | | | | | | |
| Total Current Assets | | | 10,772 | | | | 22,449 | |
| | | | | | | | | |
| Furniture and Equipment, Net | | | 5,180 | | | | 28,853 | |
| Gaming Software, Net | | | - | | | | 450,000 | |
| TOTAL ASSETS | | $ | 15,952 | | | $ | 501,302 | |
| LIABILITIES & STOCKHOLDERS’ DEFICIT | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts Payable and Accrued Expenses | | $ | 133,260 | | | $ | 111,973 | |
| Derivative Liability | | | 777,118 | | | | 574,797 | |
| Notes Payable- related party | | | 13,440 | | | | 13,440 | |
| Convertible Debentures, current | | | 100,260 | | | | 100,260 | |
| Notes Payable - ViaOne Services | | | 1,738,295 | | | | 1,316,484 | |
| Total Current Liabilities | | | 2,762,373 | | | | 2,116,954 | |
| | | | | | | | | |
| Total Liabilities | | | 2,762,373 | | | | 2,116,954 | |
| | | | | | | | | |
| Stockholders’ Deficit | | | | | | | | |
| Series A Preferred Stock | | | | | | | | |
| Authorized: 2,000,000 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 7,500 Shares | | | 8 | | | | 8 | |
| | | | | | | | | |
| Series B Preferred Stock | | | | | | | | |
| Authorized: 249,999 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 68,997 Shares | | | 69 | | | | 69 | |
| | | | | | | | | |
| Series C Preferred Stock | | | | | | | | |
| Authorized: 1 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 1 Shares | | | 1 | | | | 1 | |
| | | | | | | | | |
| Series D Preferred Stock | | | | | | | | |
| Authorized: 350 Preferred Shares, With a Par Value of $0.001 Per Share; Issued and Outstanding: 0 Share at December 31, 2019 and 1 Share at December 31, 2018 | | | - | | | | 1 | |
| | | | | | | | | |
| Common Stock | | | | | | | | |
| Authorized: 100,000,000 Common Shares, With a Par Value of $0.001 Per Share; Issued and Outstanding: 53,988,755 Shares at December 31, 2019 and 49,717,922 Shares at December 31, 2018 | | | 53,988 | | | | 49,718 | |
| | | | | | | | | |
| Additional Paid-In Capital | | | 4,210,995 | | | | 4,215,264 | |
| Accumulated Deficit | | | (7,011,482) | | | | (5,880,713) | |
| Total Stockholders’ Deficit | | | (2,746,421) | | | | (1,615,652) | |
| TOTAL LIABILITIES & DEFICIT | | $ | 15,952 | | | $ | 501,302 | |
The accompanying notes are an integral part of these financial statements
Good Gaming, Inc.
Statement of Operations
(Expressed in U.S Dollars)
| | | For the Years Ended December 31, | |
| | | 2019 | | | 2018 | |
| Revenues | | $ | 49,519 | | | $ | 109,575 | |
| Cost of Revenues | | | 23,020 | | | | 29,943 | |
| Gross Profit | | | 26,499 | | | | 79,632 | |
| | | | | | | | | |
| Operating Expenses | | | | | | | | |
| General & Administrative | | | 54,966 | | | | 110,323 | |
| Contract Labor | | | 36,328 | | | | 112,963 | |
| Payroll Expense | | | - | | | | 41,986 | |
| Depreciation and Amortization Expense | | | 455,416 | | | | 307,557 | |
| Professional Fees | | | 358,732 | | | | 417,616 | |
| Total Operating Expenses | | | 905,442 | | | | 990,445 | |
| Operating Loss | | | (878,943) | | | | (910,813) | |
| Other Income (Expense) | | | | | | | | |
| Loss on Stock Conversion | | $ | - | | | | (75,395) | |
| Gain in Debt Settlement | | | - | | | | 40,000 | |
| Loss on disposal of Fixed Assets | | | (17,779) | | | | - | |
| Interest Income | | | - | | | | - | |
| Interest Expense | | | (31,726) | | | | (21,958) | |
| Gain (Loss) on Change in Fair Value of Derivative Liability | | | (202,321) | | | | (23,527) | |
| Total Other Income (Loss) | | | (251,826) | | | | (80,880) | |
| Net Loss Before Discontinued Operations | | | (1,130,769) | | | | (991,693) | |
| Discontinued Operations | | | - | | | | - | |
| Net Loss | | $ | (1,130,769) | | | $ | (991,693) | |
| | | | | | | | | |
| Net Loss Per Share, Basic and Diluted | | $ | (0.02) | | | $ | (0.04) | |
| | | | | | | | | |
| Weighted Average Shares Outstanding | | | 53,921,421 | | | | 24,158,309 | |
The accompanying notes are an integral part of these financial statements
Good Gaming, Inc.
Statements of Cash Flows
(Formerly HDS International Corp.)
Expressed in U.S Dollars)| | | For the Years Ended December 31, | |
| | | 2019 | | | 2018 | |
| Operating Activities | | | | | | | | |
| | | | | | | | | |
| Net Loss | | $ | (1,130,769) | | | $ | (991,693) | |
| | | | | | | | | |
| Adjustments To Reconcile Net Loss to | | | | | | | | |
| Net Cash Used In Operating Activities- | | | | | | | | |
| Depreciation and Amortization | | | 455,416 | | | | 307,557 | |
| Gain on Debt Settlement | | | - | | | | (40,000) | |
| Change In Fair Value Of Derivative Liability | | | 202,321 | | | | (23,527) | |
| Loss on Disposal of Fixed Assets | | | 17,779 | | | | - | |
| Changes in operating assets and liabilities | | | | | | | | |
| Due from Affiliate | | | | - | | | 700 | |
| Prepaid Expenses | | | 1,250 | | | | (10,000) | |
| Accounts Payable and Accrued Liabilities | | | 21,287 | | | | 17,279 | |
| | | | | | | | | |
| Net Cash Provided By (Used in) Operating Activities | | | (432,716) | | | | (739,684) | |
| | | | | | | | | |
| Investing Activities | | | | | | | | |
| | | | | | | | | |
| Proceeds from sale of Property and Equipment | | | 2,500 | | | | - | |
| Purchase Of Equipment | | | (2,022) | | | | (26,250) | |
| | | | | | | | | |
| Net Cash Provided By (Used in) Investing Activities | | | 478 | | | | (26,250) | |
| | | | | | | | | |
| Financing Activities | | | | | | | | |
| | | | | | | | | |
| Proceeds From Sale Of Preferred Stock Series D | | | - | | | | 105,000 | |
| Repayments of Preferred Stock Series D | | | - | | | | (63,241) | |
| Due To ViaOne Services | | | 421,811 | | | | 675,587 | |
| | | | | | | | | |
| Net Cash Provided By (Used In) Financing Activities | | | 421,811 | | | | 717,346 | |
| | | | | | | | | |
| Change in Cash and Cash Equivalents | | | (10,427) | | | | (48,588) | |
| | | | | | | | | |
| Cash and Cash Equivalents, Beginning Of Year | | | 12,449 | | | | 61,037 | |
| | | | | | | | | |
| Cash and Cash Equivalents, End Of Year | | $ | 2,022 | | | $ | 12,449 | |
| | | | | | | | | |
| Supplemental disclosure of cash flow information: | | | | | | | | |
| Cash paid for interest | | $ | - | | | $ | - | |
| Cash paid for taxes | | $ | - | | | $ | - | |
| | | | | | | | | |
| Non-Cash Investing And Financing Activities | | | | | | | | |
| Common Shares Issued for Conversion Of Debt | | $ | - | | | $ | 290,134 | |
| Conversion of Loan to ViaOneDebt Discount Due To Beneficial Conversion Feature | | $ | - | | | $ | - | |
| Shares Issued For Acquisition Of Software | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements
Good Gaming, Inc.
Statements of Stockholders’ Deficit
(Expressed in U. S. Dollars)
| | | Preferred Stock | | | | | | Additional | | | | | | | |
| | | Class A | | | Class B | | | Class C | | | Class D | | | Common Stock | | | Paid-in | | | Accumulated | | | | |
| | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Total | |
| Balance, December 31, 2017 | | | 7,500 | | | | 8 | | | | 164,781 | | | | 165 | | | | 1 | | | | 1 | | | | 105 | | | | 1 | | | | 2,881,424 | | | | 2,881 | | | | 3,996,373 | | | | (4,889,020 | ) | | | (889,591 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common shares issued for conversion of debt | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Conversion of common shares to preferred shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Conversion of preferred shares B to common shares | | | - | | | | - | | | | (95,584 | ) | | | (96 | ) | | | - | | | | - | | | | - | | | | - | | | | 19,116,800 | | | | 19,117 | | | | (19,021 | ) | | | - | | | | - | |
| Conversion of preferred shares D to Common Shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (160 | ) | | | (1 | ) | | | 15,023,505 | | | | 15,024 | | | | (155,375 | ) | | | - | | | | (140,352 | ) |
| Conversion of preferred shares D to Cash | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (44 | ) | | | - | | | | | | | | | | | | - | | | | | | | | - | |
| Conversion of ViaOne Loan to Common Stocks | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 8,333,333 | | | | 8,333 | | | | 191,667 | | | | | | | | 200,000 | |
| Conversion of Iconic Note 1 & 2 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,707,266 | | | | 2,708 | | | | 80,448 | | | | | | | | 83,156 | |
| Conversion of HGT Convertible Note | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,655,594 | | | | 1,655 | | | | 16,173 | | | | | | | | 17,828 | |
| Issuance of Series D Shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 105 | | | | 1 | | | | - | | | | - | | | | 104,999 | | | | - | | | | 105,000 | |
| Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (991,693 | ) | | | (991,693 | ) |
| Balance December 31, 2018 | | | 7,500 | | | | 8 | | | | 69,197 | | | | 69 | | | | 1 | | | | 1 | | | | 6 | | | | 1 | | | | 49,717,922 | | | | 49,718 | | | | 4,215,264 | | | | (5,880,713 | ) | | | (1,615,652 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of preferred shares B to common shares | | | - | | | | - | | | | (200 | ) | | | - | | | | - | | | | - | | | | - | | | | - | | | | 3,750,000 | | | | 3,750 | | | | (3,750 | ) | | | - | | | | - | |
| Conversion of preferred shares D to Common Shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (6 | ) | | | (1 | ) | | | 520,833 | | | | 520 | | | | (519 | ) | | | - | | | | - | |
| Net loss for the year | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,130,769 | ) | | | (1,130,769 | ) |
| Balance December 31, 2019 | | | 7,500 | | | $ | 8 | | | | 68,997 | | | $ | 69 | | | | 1 | | | $ | 1 | | | | - | | | $ | - | | | | 53,988,755 | | | $ | 53,988 | | | $ | 4,210,995 | | | $ | (7,011,482 | ) | | $ | (2,746,421 | ) |
The accompanying notes are an integral part of these financial statements
Good Gaming, Inc.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
1. | Nature of Operations and Continuance of Business |
1. Nature of Operations and Continuance of Business
Good Gaming, Inc. (Formerly HDS International Corp.) (the "Company"“Company”) was incorporated on November 3, 2008 under the laws of the State of Nevada. The Company is a leading tournament gaming platform and online destination targeting the over 205250 million eSportse-sports players and participants worldwide that want to compete at the high school or college level. A substantial portion of the Company'sCompany’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace.
On February 17, 2016,marketplace and the Company acquired Good Gaming's assets including intellectual property, trademarks, software code, equipment and other from CMG Holdingshas not generated any substantial revenue to date. Beginning in 2018, the Company began deriving revenue by providing transaction verification services within the digital currency networks of cryptocurrencies. However, on December 12, 2018, the Company discontinued such transaction verification services by dissolving Crypto Strategies Group, Inc. (OTCQB: CMGO).
, its wholly-owned subsidiary.Going Concern
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated minimal revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of December 31, 2016,2019, the Company had a working capital deficiency of $419,448$2,751,601 and an accumulated deficit of $3,509,373.$7,011,482. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company'sCompany’s future business. These factors raise substantial doubt regarding the Company'sCompany’s ability to continue as a going concern.concern for a period of one year from the issuance of these financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. | Summary of Significant Accounting Policies |
a) | Basis of Presentation and Principles of Consolidation |
The consolidated financial statements forReverse Stock Split
On February 17, 2017, the periods ending December 31, 2016 and 2015 include the accountsBoard of Directors of the Company approved a reverse split of its common and Siren GPS,preferred shares on a 1 for 1,000 basis. The Articles of Incorporation were amended, decreasing the Company's wholly owned subsidiary,authorized common shares from 2,000,000,000 to 100,000,000 and decreasing the authorized preferred shares from 450,000,000 to 2,250,000. A special meeting of the Company’s shareholders was not required since written consent was obtained by the stockholders who held the majority of the outstanding voting stock. The Reverse Stock Split became effective on June 11, 2012. 14, 2017.
All intercompany transactionsreferences in this Annual Report regarding the number of preferred and balancescommon shares, price per share and weighted average shares of common stock have been eliminatedadjusted to reflect the Reverse Stock Split on consolidation.
b) | These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31. |
a retroactive basis for all prior periods presented, unless otherwise noted, including reclassifying an amount equal to the reduction in par value of common and preferred stock to additional paid-in capital.2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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. The Company regularly evaluates estimates and assumptions related to the fair values of convertible debentures, derivative liability, stock-based compensation, and deferred income tax asset valuation allowances. 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'sCompany’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
(d) | Cash and Cash Equivalents |
Certain reclassifications have been made to prior-year amounts to conform to the current period presentation.
Cash Equivalents
The Company considers all highly liquid instruments with maturitymaturities of three months or less at the time of issuance to be cash equivalents. As of December 31, 2016Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and 2015, the Company had cash of $47,900.
highly liquid in nature.Intangible Assets
Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally around five years.
Good Gaming, Inc.Long-Lived Assets
(Formerly HDS International Corp.)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
2. | Summary of Significant Accounting Policies (continued) |
(f) | Impairment of Long-Lived Assets |
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstancecircumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
Beneficial Conversion Features
(g) | Beneficial Conversion Features |
From time to time, the Company may issue convertible notes that may contain an imbeddedembedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Derivative Liability
From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recordsrecorded at isits fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations.
(i) | Basic and Diluted Net Loss Per Share23 | |
Basic and Diluted Net Loss Per Share
The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. AtOn December 31, 2015,2019 and December 31, 2018, the Company had 90,000,000 (2014 – 1,572,180,000)10,000,000 and 10,000,000 potentially dilutive shares from outstanding convertible debentures.debentures, respectively.
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components Unrecognized tax positions, if ever recognized in the consolidated financial statements. As at December 31, 2016statements, are recorded in the statement of operations as part of the income tax provision. Our policy is to recognize interest and 2015,penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive lossliability for uncertain tax positions. Unrecognized tax positions, if ever recognized in the consolidated financial statements.statements, are recorded in the statement of operations as part of the income tax provision. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no liability for uncertain tax positions.On March 22, 2017, tax reform legislation known as the Tax Cuts and Jobs Act (the “U.S. Tax Reform Act”) was enacted in the United States. The U.S. Tax Reform Act, among other things, reduced the U.S. corporate income tax rate from 35% to 21% beginning in 2018. On March 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on how to account for the effects of the U.S. Tax Reform Act under ASC 740.
Financial Instruments
(l) | Financial Instruments |
ASC 820, "Fair“Fair Value Measurements" Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorizationinstrument categorized within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Good Gaming, Inc.
(Formerly HDS International Corp.)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
2. | Summary of Significant Accounting Policies (continued)
|
l) | Financial Instruments (continued) |
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis were presented on the Company'sCompany’s balance sheet as at December 31, 20152019 and 20142018 as follows:
| | | Balance, December 31, 2015 | | | Conversions | | | Changes in Fair Values | | | Balance, December 31, 2016 | |
| Derivative Liability | | $ | 453,741 | | | $ | 18,415 | | | $ | (243,551 | ) | | $ | 228,605 | |
| Description | | Fair Value Measurements at December 31, 2019 Using Fair Value Hierarchy | |
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | |
| Derivative liability | | $ | 777,118 | | | $ | - | | | $ | - | | | $ | 777,118 | |
| Total | | $ | 777,118 | | | $ | - | | | $ | - | | | $ | 777,118 | |
| Description | | Fair Value Measurements at December 31, 2018 Using Fair Value Hierarchy | |
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | |
| Derivative liability | | $ | 574,797 | | | $ | - | | | $ | - | | | $ | 574,797 | |
| Total | | $ | 574,797 | | | $ | - | | | $ | - | | | $ | 574,797 | |
The carrying values of all of our other financial instruments, which include accounts payable and accrued liabilities, and amounts due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.
Advertising Expenses
Equipment consistsAdvertising expenses are included in general and administrative expenses in the Statements of computer equipmentOperations and is stated at cost, less accumulated depreciation. Equipment is depreciated using the straight-line method over the estimated useful lives of 5 years.
n) | Recent Accounting Pronouncements |
are expensed as incurred. The Company has limited operationsincurred $14,080 and is considered to be$55,838 in advertising and promotion expenses in the development stage. During the yearyears ended December 31, 2015,2019 and 2018, respectively.Revenue Recognition
Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company has electedevaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to early adoptthe respective performance obligation when (or as) the performance obligation is satisfied.. Revenues primarily include revenues from microtransactions. Microtransaction revenues are derived from the sale of virtual goods to the Company’s players. Proceeds from the sales of virtual goods directly are recognized as revenues when a player uses the virtual goods.
Recent Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities2016-02, Leases (Topic 915): Elimination842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet (with the exception of Certain Financial Reporting Requirements short-term leases). TheThis new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption ofpermitted. We adopted this ASU allowsnew standard effective January 1, 2019. Adoption did not have any effect on the Company to remove the inception to date information and all references to development stage.
as it does not have any leases.The Company has implemented all other new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3. Other Assets
Furniture and fixtures consisted of the following:
| | | December 31, | |
| | | 2019 | | | 2018 | |
| Computers | | $ | 14,998 | | | $ | 39,226 | |
| Accumulated Depreciation | | | (9,818 | ) | | | (10,373 | ) |
| | | $ | 5,180 | | | $ | 28,853 | |
Depreciation expense for the years ended December 31, 2019 and 2018 was $5,416 and $7,557, respectively.
On February 17, 2016, the Company acquired Good Gaming’s assets including intellectual property, trademarks, software code, equipment and other from CMG Holdings Group, Inc. The Company valued the software purchased at $1,200,000. The software has a useful life of 5 years. During the 4th Quarter of 2018, the Company assessed the useful life of the software and determined that the remaining useful life was 1.25 years. As such, the Company prospectively is amortizing the Software through December 31, 2019. Amortization for the years ended December 31, 2019 and 2018 was $450,000 and $300,000, respectively. The software consisted of the following:
| | | December 31, | |
| | | 2019 | | | 2018 | |
| Software | | $ | 1,200,000 | | | $ | 1,200,000 | |
| Accumulated Amortization | | | (1,200,000 | ) | | | (750,000 | ) |
| | | $ | - | | | $ | 450,000 | |
4. Debt
Convertible Debentures
On April 1, 2015, we entered into a transaction with Iconic Holdings (“Iconic”) whereby Iconic agreed to provide up to $600,000 through a structured convertible promissory note (the “2015 Iconic Note”), with funds to be received in tranches. The note bears interest of 10% and was due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by Iconic as an original issue discount, and $6,000 retained by Iconic for legal expenses. On February 17, 2016 as part of a settlement between Iconic and the Company, the 2015 Iconic Note along with a remaining balance of $8,300 from former JABRO-Asher notes were restructured to a principal amount of $25,000 with a due date of June 18, 2017 and an interest rate of 0%. Iconic is subject to strict lock-up and leak-out provisions. Additionally, as part of the February 2016 settlement with Iconic, Iconic funded $100,000 new debentures (the “$100,000 Convertible Promissory Note”) due August 2018 bearing 0% interest with the lender subject to strict lock-up and leak-out provisions. On June 27, 2017, Iconic’s $100,000 Convertible Promissory Note issued on February 18, 2016 was amended to reflect an amendment of the conversion price from $.10 cents to $.08 cents per share of common stock. On July 5, 2017, Iconic converted $15,895 of its $100,000 Convertible Promissory Note. On July 25, 2017, Iconic converted $18,950 of its $100,000 Convertible Promissory Note. On January 23, 2018, Iconic converted $65,155 of its $100,000 Convertible Promissory Note. Accordingly, the $100,000 Convertible Promissory Note issued on February 18, 2016 was fully converted into 1,250,001 shares of the Company’s common stock.
Good Gaming, Inc.
(Formerly HDS International Corp.$100,000 to HGT Capital, LLC (“HGT”)
Notes, a non-related party. During the quarter ended June 30, 2015, the Company received the first $50,000 in payment. The remaining $50,000 payment would be made at the request of the borrower. No additional payments were made as of September 30, 2018. Under the terms of the debentures, the amount was unsecured and was due on October 16, 2016. It was convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the Consolidated Financial Statements
(expresseddate the conversion notice was sent by the holder to the Company. On September 21, 2018, the Company entered into a modification agreement with HGT with respect to the convertible promissory note which had had a balance of $107,238. Pursuant to such modification agreement, all defaults were waived and it was agreed that such note will convert at a 25% discount to the market rather than the default rate. HGT also agreed to certain sale restrictions which limit the amount of shares that they can sell in U.S. dollars)
any month for the next three months. HGT also agreed to dismiss, with prejudice, the lawsuit that it had filed against the Company.On June 29, 2017, the Company issued Iconic a 10% Convertible Promissory Note in the principal amount of $27,000 (the “2017 Iconic Note”). Upon the execution of such Note, the sum of $9,000 was remitted and delivered to the Company. On August 14, 2017, Iconic remitted and delivered to the Company another $9,000. The Company was only required to repay the amount funded and the Company was not required to repay any unfunded portion of the 2017 Iconic Note. As of March 31, 2018, the Company had received a total $18,000 of the $27,000 principal amount. On April 16, 2018, the note was fully converted.
As part of the asset purchase agreement between CMG Holdings Group, Inc. (“CMG Holdings”) and the Company, the Company issued SirenGPS a 0% convertible debenture of $60,000 that matured in August 2018. The debenture was convertible into the Company’s common stock at a 20% discount to the 20-day moving average of the Company’s common stock after a period of seven months. The debt was subject to strict lock-up and leak-out provisions. Recently, ViaOne Services, LLC, a Texas Limited Liability Corporation (“ViaOne”) purchased this debenture from SirenGPS at face value.
The Company entered into a line of credit agreement (“Line Of Credit”) with ViaOne on September 27, 2018 (the “Effective Date”). This Line of Credit dated as of, was entered into by and between the Company and ViaOne. The Company had an immediate need for additional capital and asked ViaOne to make a new loan(s) in an initial amount of $25,000 on the Effective Date (the “New Loan”). The Company may need additional capital and ViaOne has agreed pursuant to this Line of Credit to provide for additional advances, although ViaOne shall have no obligation to make any additional loans. Any further New Loans shall be memorialized in a promissory note with substantially the same terms as the New Loan and shall be secured by all of the assets of the Company. On or before the Effective Date, the Company may request in writing to ViaOne that it loan the Company additional sums of up to $250,000 and within five days of such request(s), ViaOne shall have the right, but not an obligation, to make additional loans to the Company and the Company shall in turn immediately issue a note in the amount of such loan. In consideration for making the New Loan, the Company entered into a security agreement whereby ViaOne received a senior security interest in all of the assets of the Company.
Convertible Debentures5. Derivative Liabilities
a. | On April 15, 2015, the Company entered into a $100,000 convertible debenture with a non-related party. During the quarter ended June 30, 2015 The Company received the first $50,000 payment. The remaining $50,000 payment will be made at the request of the borrower. No additional payments have been made as of March 31, 2016. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 16, 2016. The note is convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. For the year ended December 31, 2016, the Company recorded accrued interest of $2,520 (December, 31, 2015 $3,894), which has been included in accounts payable and accrued liabilities. The lender has agreed to sell this investment to the Company or to an investor of the Company’s choosing at face value plus interest. |
b. | On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and is due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. On February 17, 2016 as part of a settlement between the lender and the Company, the note along with a remaining balance of $8,300 from former JABRO-Asher notes were restructured to a principle amount of $25,000 with a due date of June 18, 2017 and an interest rate of 0%. The lender is subject to strict lock-up and leak-out provisions. Additionally, as part of the February 2016 settlement with the lender, the lender funded $100,000 new debentures due August 2018 bearing 0% interest and convertible at $0.0001 per share, with the lender subject to strict lock-up and leak-out provisions. The Company has negotiated the lock-up of these debentures from conversion into common stock for a period of one-year commencing June 10, 2016. The Company recognized a $100,000 beneficial conversion feature on this debenture which was accreted to interest expense in 2016. |
c) | As part of the asset purchase agreement between HDS International Corp. and CMG Holdings Group, Inc., SirenGPS was issued a $60,000 0% interest convertible debenture that matures in August 2018. The debentures are convertible into common stock at a 20% discount to the 20-day moving average of the Company’s common stock after a period of seven months. The debt is subject to strict lock-up and leak-out provisions. SirenGPS has agreed to sell this security to the Company or to an investor of the Company’s choosing at face value. |
d) | On or around April 7, 2016, Silver Linings Management, LLC funded the Company $13,439.50 in the form of convertible debentures secured by certain high-powered gaming machines purchased from XIDAX. The note bears interest at a rate of 10% per annum payable in cash or kind at the option of the Company, mature April 1, 2018, and are convertible into Series B Preferred shares at the option of the holder at any time. |
e) | The Company advanced $10,500 to a company during 2016. This amount was repaid subsequent to December 31, 2016. |
Good Gaming, Inc.
(Formerly HDS International Corp.)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
4. | Derivative Liabilities |
The following inputs and assumptions were used to value the convertible debentures outstanding during the years ended December 31, 20162019 and December 31, 2015:
2018:The projected annual volatility for each valuation period was based on the historic volatility of the Company of 172% an 170%194% and 381.8% at December 31, 20162019 and 2015,2018, respectively.
An event of default would occur The risk free rate was 1.48% and 2.45% at December 31, 2019 and 2018, respectively. The expected life was one year and the dividend yield was 0% for each year.A summary of the time, increasing to 1.0% per month to a maximumactivity of 5%.the derivative liability is shown below:
| Balance, December 31, 2017 | | $ | 570,643 | |
| Change in value | | | 4,154 | |
| Balance, December 31, 2018 | | | 574,797 | |
| Change in value | | | 202,321 | |
| Balance, December 31, 2019 | | $ | 777,118 | |
6. Common Stock
| A summary of the activity of the derivative liability is shown below: | | | |
| | | | |
| Balance, December, 2014 | | $ | 70,290 | |
| Adjustment for conversion | | | (64,767 | ) |
| Mark to market adjustment | | | 448,218 | |
| Balance, December 31, 2015 | | | 453,741 | |
| Adjustment for conversion | | | 18,415 | |
| Mark to market adjustment | | | (243,551 | ) |
| Balance, December 31, 2016 | | $ | 228,605 | |
ShareEquity Transactions for the Year Ended December 31, 2015:
On January 8, 2018, Silver Linings Management, LLC converted 15,000 shares of the Company’s Series B Preferred Stock into 3,000,000 shares of the Company’s common stock.
On January 8, 2018, Britton & Associates converted 5,000 of the Company’s Series B Preferred Shares into 1,000,000 shares of the Company’s common stock.
On January 9, 2018, ViaOne converted $200,000 of its convertible note into 8,333,333 shares of the Company’s common stock.
On January 12, 2018, SSB Trading converted 10,000 of the Company’s Series B Preferred Shares into 2,000,000 shares of the Company’s common stock.
On January 12, 2018, CMG Holdings converted 5,605 of the Company’s Series B Preferred Shares into 1,211,000 common shares of the Company.
On January 18, 2018, CMG Holdings converted 9,000 of the Company’s Series B Preferred Shares into 1,800,000 shares of the Company’s common stock.
On January 23, 2018, Iconic converted $65,155 of its convertible note into 814,438 shares of the Company’s common stock.
On January 26, 2018, Michael Tadin converted 5,000 of the Company’s Series B Preferred Shares into 1,000,000 shares of the Company’s common stock.
On February 9, 2018, Vik Grover converted 8,665 of the Company’s Series B Preferred Shares into 1,733,000 shares of common stock of the Company.
On April 16, 2018, Iconic converted $18,000 of a convertible note into 1,892,828 shares of the Company’s common stock.
On April 13, 2018, RedDiamond Partners, Inc. (“RedDiamond”) converted 5 shares of Series D Preferred Stock into 555,556 shares of the Company’s common stock.
On April 17, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 609,756 shares of the Company’s common stock.
On April 23, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 806,452 of the Company’s common stock.
a) | On March 5, 2015, the Company issued 200,000,000 common shares with a par value of $200,000 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties.28 | |
b) | On March 5, 2015, the Company issued 106,050,000 common shares with a fair value of $21,210 for the settlement of accounts payable of $733,500 owing to consultants resulting in a gain on settlement of debt of $712,290. As the transaction was pursuant to the agreement which resulted in a change of control, the gain has been recorded to additional paid-in capital. |
c) | On March 5, 2015, the Company issued 342,150,496 common shares with a fair value of $68,430 for the settlement of $300,000 of principal and $107,479 of accrued interest owing to a company controlled by the former President and CEO of the Company. The transaction resulted in a gain on settlement of debt of $339,049 which was recorded against additional paid-in capital. Refer to Note 7 (a). |
d) | On March 5, 2015, the Company issued 74,235,000 common shares with a fair value of $14,847 for the settlement of $215,225 owing to the former President and CEO and companies under his control. The transaction resulted in a gain on settlement of debt of $200,378 which was recorded against additional paid-in capital. Refer to Notes 7 and 8. |
e) | During the period ended March 31, 2015, the Company issued 454,000,000 common shares for the conversion of $20,040 of principal and $2,660 of accrued interest of the July 15, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
f) | During the period ended March 31, 2015, the Company issued 174,000,000 common shares for the conversion of $8,700 of principal of the October 4, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
g) | During the period ended June 30, 2015 the Company issued 298,912,445 common shares for the conversion of $25,505 of Principal and interest of the February convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion. |
h) | On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described. |
All wereOn May 9, 2018, RedDiamond converted within5 shares of Series D Preferred Stock into 1,020,408 of the original terms, so no gains (losses) were recorded.
Good Gaming, Inc.
(Formerly HDS International Corp.)
Notes toSeries D Preferred Stock into 657,895 of the Consolidated Financial Statements
(expressed in U.S. dollars)
5. | Common Stock (continued) |
ShareCompany’s common stock.On June 19, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,234,756 of the Company’s common stock.
On July 9, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,250,000 of the Company’s common stock.
On July 24, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 1,467,391 of the Company’s common stock.
On September 25, 2018, RedDiamond converted 6.50 shares of Series D Preferred Stock into 1,450,893 of the Company’s common stock.
On October 16, 2018, RedDiamond converted 6.50 shares of Series D Preferred Stock into 1,377,119 of the Company’s common stock.
On November 1, 2018, RedDiamond converted 6.34 shares of Series D Preferred Stock into 792,750 of the Company’s common stock.
On November 6, 2018, Lincoln Acquisition converted 17,314 shares of Preferred B Stock into 3,462,800 of the Company’s common stock.
On November 13, 2018, RedDiamond converted 6 shares of Series D Preferred Stock into 1,027,397 of the Company’s common stock.
On November 29, 2018, RedDiamond converted 5 shares of Series D Preferred Stock into 961,538 of the Company’s common stock.
On November 29, 2018, HGT converted $6,978 of a convertible note into 1,655,594 shares of the Company’s common stock.
On December 14, 2018, Lincoln Acquisition converted 20,000 shares of Preferred B Stock into 4,000,000 of the Company’s common stock.
On December 21, 2018, RedDiamond converted 10 shares of Series D Preferred Stock into 1,811,594 of the Company’s common stock.
Equity Transactions for the Year Ended December 31, 2016:
2019:On January 2, 2019, Lincoln Acquisition converted 200 shares of Preferred B Stock into 3,750,000 of the Company’s common stock
On January 10, 2019, RedDiamond converted 6 shares of Series D Preferred Stock into 520,833 of the Company’s common stock.
a) | ) On August 16, 2016, the Company exchanged 1.15MM Series B Preferred Shares with an investor for 179,450,000 common shares which were retired into treasury. These common shares were pledged to Iconic Holdings, LLC contractually as collateral against a $25,000 convertible debenture that was restructured in February 2016. By agreement, the lender converted a portion of this note into common shares eliminating debt from the Company’s balance sheet. The Company has agreed to deliver an additional 70,050,000 common shares to the lender by year-end 2016, which will eliminate the debenture in its entirety. Iconic Holdings has agreed to lock-up a $100,000 convertible debenture for a period of one-year effective June 10, 2016, subject to strict covenants that will protect common shareholders from significant dilution. The net effect of this Agreement is that the common share float of the Company has not been increased and that shareholders will not be negatively impacted by a common stock increase and additional dilution.
29 | |
b) | On August 31, 2016 Iconic Holdings converted $6,250 of convertible debt into 62,250,000 shares of the Company’s common stock |
c) | On October 5, 2016 Iconic Holdings converted $6,250 of convertible debt into 62,250,000 shares of the Company’s common stock. |
d) | On October 11, 2016 Iconic Holdings converted $5,915 of convertible debt into 59,150,000 shares of the Company’s common stock. |
All were converted within the original terms, so no gains (losses) were recorded.
Good Gaming, Inc.7. Preferred Stock
(Formerly HDS International Corp.)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
Our Articles of Incorporation authorize us to issue up to 450,000,0002,250,350 shares of preferred stock, $0.001 par value. Of the 450,000,0002,250,000 authorized shares of preferred stock, the total number of shares of ClassSeries A Preferred Shares the Corporation shall have the authority to issue is Two-Hundred -Forty-Nine Million-Nine-Hundred-Ninety-Nine Thousand (249,999,000)Two Hundred Forty Nine thousand Nine Hundred Ninety Nine (249,999), with a stated par value of $0.001 per share, the total number of shares of ClassSeries B Preferred Shares the Corporation shall have the authority to issue is Two-Hundered-Million (200,000,000)Two Million (2,000,000), with a stated par value of $0.001 per shareandshare and the total number of shares of ClassSeries C Preferred Shares the Corporation shall have the authority to issue is One Thousand (1,000,000)(1), with a stated par value of $0.001 per share,, .share. Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors'Directors’ power to set the terms of, and our ability to issue preferred stock, will provide flexibility in connection with possible financing or acquisition transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring or preventing a change in control of our company.
As of December 31, 2016,2019, we had 7,500,0007,500 shares of our ClassSeries A preferred stock, issued and outstanding. As of December 31, 2016, we had 161,528,77968,997 shares of ClassSeries B preferred stock, issued1 share of Series C Preferred Stock, and outstanding. As of December 31, 2016, we had 1,0000 shares of Class CSeries D Preferred Stock issued and outstanding.
The 7,500,0007,500 issued and outstanding shares of ClassSeries A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one ClassSeries A Preferred Share. The 15,839,80068,997 issued and outstanding shares of ClassSeries B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one ClassSeries B Preferred Share. If all of our ClassSeries A Preferred Stock and ClassSeries B Preferred Stock wasare converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 3,317,960,00013,949,400 shares.
The 1 issued and outstanding shares of Series C Preferred Stock has voting rights equivalent to 51% of all shares entitled to vote and is held by ViaOne Services LLC, a Company controlled by our CEO.
The 6 issued and outstanding shares of Series D Preferred Stock as of December 31, 2018 were convertible into shares of common stock at a rate of 125% of the conversion amount at a price that was the lower of 110% of the volume weighted average price (“VWAP”) of the common stock on the closing date, the VWAP of the common stock on the conversion date or the VWAP of the common stock on the date prior to the conversion date. Series D Preferred Stock was convertible beginning 6 months from the issue date. On September 21, 2018, RedDiamond modified the agreement with the Company. RedDiamond and the Company agreed that the Preferred Shares were convertible into Common Stock (the “Conversion Shares”) at the lower of the Fixed Conversion Price ($.06 per share) or at the VWAP which shall be defined as the average of the five (5) lowest closing prices during the 20 days prior to conversion; for the avoidance of doubt, RedDiamond had not waived its right to the 25% Conversion Premium as defined in the COD. The Company had the obligation to redeem 46.531 of the Preferred Shares (which represents 50% of the Preferred Shares owned by RedDiamond) at 110% of the Stated Value of $46,531 by making three equal payments of $17,061 on October 15, 2018, November 15, 2018 and December 15, 2018. On January 10, 2019, RedDiamond converted the last six (6) shares of Series D Preferred Stock into the Company’s common stock.
The Series A, Series B, Series C and Series D have a liquidation preference to the common shareholders.
8. Warrant
In connection with the $100,000 convertible debenture issued to HGT, the Company issued HGT a warrant to purchase 100,000 shares of the Company’s common stock at $1.00 per share. This warrant was not exercised as of December 31, 2019, is exercisable through April 15, 2020 and had a remaining life of .29 years as of December 31, 2019. The intrinsic value of the warrant at December 31, 2019 was zero as the exercise price exceeded the closing stock price.
7. | Related Party Transactions30 | |
a) | At December 31, 2016, the Company owes $0 (December 31, 2015 – $570) to the President and CEO of the Company for reimbursement of expenses which has been included in account payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand. |
b) | At December31, 2016, the Company owes $0 (December 31, 2015 – $6,100) to the President and CEO of the Company for reimbursement of expenses which has been included in account payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand. |
c) | At December31, 2016, the Company owes $75,000 to a Company controlled by a Director. The advance is unsecured, non-interest bearing and due on demand. |
a) | On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014. All these related party amounts and commitments have since been settled for cash or stock. This commitment was settled in stock and/or cash as part of the SirenGPS change of control in 2015.
|
Good Gaming, Inc.
(Formerly HDS International Corp.)
Notesconvertible debentures secured by certain high-powered gaming machines purchased from XIDAX. Such note bore interest at a rate of 10% per annum, payable in cash or kind at the option of the Company, matured on April 1, 2018, and was convertible into Series B Preferred shares at the option of the holder at any time. On January 08, 2019, Silver Linings Management converted its Series B Preferred shares into shares of the Company’s Common Stock.On November 30, 2016, ViaOne purchased a Secured Promissory Note equal to a maximum initial principal amount of $150,000 issued by the Company to ViaOne. As additional advances were made by ViaOne to the Consolidated Financial Statements
(expressedCompany, the principal amount of the Note was increased to $225,000 and $363,000 by amendments dated January 31, 2017 and March 1, 2017, respectively.On May 5, 2017, ViaOne delivered a default notice to the Company pursuant to Section 6 of the Note Purchase Agreement but has subsequently extended the due date and has increased the funding up to One Million ($1,000,000) dollars. After giving the Company a fifteen (15) day notice period to cure the default under the Stock Pledge Agreement, dated November 30, 2016, entered by and among the Company, CMG and ViaOne (“Pledge Agreement”), ViaOne took possession of the Series C Stock, which was subject of the Pledge Agreement.
The Secured Promissory Note as amended increased from time to time due to additional advances provided to the Company by ViaOne.
On September 1, 2017, the Company executed an amended Employee Services Agreement with ViaOne which stipulated that ViaOne would continue providing to the Company services relating to the Company’s human resources, marketing, advertising, accounting and financing for a monthly management fee of $25,000. This agreement was amended on January 1, 2018. The accrued monthly management fees, $100,000 at December 31, 2017, are convertible by ViaOne into the Company’s common stock at a rate of 125% of the accrued fees at a conversion price of (i) $0.05 per share; or (ii) the volume weighted adjusted price (“VWAP”) of the common stock on the 14th day of each month if the 14th of that month is a trading day. In the event the 14th day of a month falls on a Saturday, Sunday, or a trading holiday, the VWAP of the Common Stock will be valued on the last trading day before the 14th day of the month.
On September 27, 2018, the Company and ViaOne, entered into a Line of Credit Agreement (the “LOC Agreement”), pursuant to which the Company issued a secured promissory note with the initial principal amount of $25,000 to ViaOne in U.S. dollars)exchange for a loan of $25,000 (the “Initial Loan Amount”). In accordance with this Agreement, the Company may request ViaOne to provide loans of up to $250,000, including the Initial Loan Amount, and ViaOne has the right to decide whether it will honor such request. The Initial Loan Amount shall become due on September 30, 2019 (the “Maturity Date”) and bears an interest rate of 8.0% per annum. The unpaid principal and interest of the Promissory Note after the Maturity Date shall accrue interest at a rate of 18.0% per annum. The principal amount of the Promissory Note may increase from time to time up to $250,000 in accordance with the terms and conditions of the Agreement. In connection with the Agreement and Promissory Note, the Company and ViaOne executed a security agreement dated September 27, 2018 whereby the Company granted ViaOne a security interest in all of its assets, including without limitation, cash, inventory, account receivables, real property and intellectual properties, to secure the repayment of the loans made pursuant to the LOC Agreement and Promissory Note.
As of December 31, 2019, the total amount owed to ViaOne was $1,738,295. During the years ended December 31, 2019 and 2018, interest expense of $31,726 and $21,958 were incurred with related parties.
The Company’s Chairman and Chief Executive Officer is the Chairman of ViaOne.
The prepaid expenses are an insurance policy purchased from a related Company.
10. Income Taxes
The Company has a net operating loss carried forward of $3,509,374approximately $3,257,000 available to offset taxable income in future years which commence expiring in fiscal 2030.
The U.S. Tax Reform Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and business. For businesses, the Act reduces the corporate tax rate from a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018. As a result of the rate reduction, the Company has reduced the deferred tax asset balance as of December 31, 2017 by $80,329. As a result of the full valuation allowance on the net deferred tax assets, there was a corresponding adjustment to the valuation allowance for this same amount. Therefore, there is no impact on the Company’s 2017 earnings for the law change.
The significant components of deferred income tax assets and liabilities at December 31, 2019 and 2018 are as follows:
| | | 2019 | | | 2018 | |
| Net Operating Loss Carryforward | | $ | 693,925 | | | $ | 545,754, | |
| Valuation allowance | | | (693,925 | ) | | $ | (545,754 | ) |
| Net Deferred Tax Asset | | $ | - | | | $ | - | |
The income tax benefit has been computed by applying the weighted average income tax rates of Canada (federal and provincial statutory rates) and of the United States (federal and state rates) of 27% and 27%, respectively,21% to thea net loss before income taxes calculated for each jurisdiction. The tax effecteffects of the significant temporary differences, which comprise future tax assets and liabilities, are as follows:
| | | 2016 | | | 2015 | |
| Income tax recovery at statutory rate | | $ | 171,955 | | | $ | 195,612 | |
| Valuation allowance change | | | (171,955 | ) | | | (195,612 | ) |
| Provision for income taxes | | $ | - | | | $ | - | |
| | | 2019 | | | 2018 | |
| Income tax recovery at statutory rate | | $ | 237,461 | | | $ | 208,256 | |
| Valuation allowance change | | | (237,4617 | ) | | $ | (208,256 | ) |
| Provision for income taxes | | $ | - | | | $ | - | |
11. Commitments and Contingencies
None.
12. Acquisition and Discontinued Operations
On March 21, 2018, the Company announced the acquisition of Crypto Strategies Group, Inc. for consideration of $500. The significant components of deferred income taxCompany intended to diversify its business and enter into the cryptocurrency market through such acquisition. As the acquisition was between entities under common control with the Company, the assets and liabilities were recorded at their carrying amount on the date of transfer. On the date of transfer, Crypto Strategies Group, Inc. had no assets or liabilities.
On December 31, 201612, 2018, the Company dissolved Crypto Strategies Group, Inc. and 2015 are as follows:
| | | 2016 | | | 2015 | |
| Income tax recovery at statutory rate | | $ | 491,300 | | | $ | 824,952 | |
| Valuation allowance change | | | (491,300 | ) | | | (824,952 | ) |
| Provision for income taxes | | $ | - | | | $ | - | |
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Whenliabilities were assumed by a change in ownership occurs, net operating loss carry forwards may be limited.
10. | Acquisition of Good Gaming, Inc. Assets. |
13. Subsequent Events
None.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
| | On February 17, 2016, the Company acquired Good Gaming's assets including intellectual property, trademarks, software code, equipment and other from CMG Holdings Group, Inc. The Company received the fair value of the assets acquired of $1,200,000. These assets are being amortized over the estimated useful life of 5 years. The following summarizes the activity:32 | |
| | | December 31,2016 | | | December 31, 2015 | |
| Gaming Software | | $ | 1,200,000 | | | $ | - | |
| Accumulated Amortization | | | (210,000 | ) | | | - | |
| | | $ | 990,000 | | | $ | - | |
On January 05, 2017 Iconic Holdings converted $6,585 of convertible debt into 65,850,000 shares of the Company’s common stock.
Subsequent to December 31, 2016, we raised $235,000 in a note from an affiliate of our outside Director, David Dorwart, who is the primary shareholder of ViaOne Managed Services. The note has the option to convert into a raise of over $200,000.00 under the same terms of said investment.
On January 4, 2017, the Company cancelled 70,000,000 of its common stockthat had been issued to Hillwinds Ocean Energy.
On February 17, 2017, the Board of Directors of the Company approved a reverse split of its' common and preferred shares on a 1 for 1,000 basis, an amendment of Articles of Incorporation decreasing authorized common shares from 2,000,000,000 to 100,000,000 and decreasing authorized preferred shares from 450,0000,000 to 2,250,000. The effectiveness of these actions is pending FINRA approval.
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
None.
| ITEM 9A. | CONTROLS AND PROCEDURES. |
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"“Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'sCommission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2015.2019. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.
Management'seffective until June 30, 2018.We believe we have applied procedures and processes as necessary to ensure the reliability of our financial reporting regarding this annual report. Accordingly, the Company believes, based on its knowledge, that: (i) this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading with respect to the period covered by this report; and (ii) the financial statements, and other financial information included in this annual report, fairly present in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in this annual report.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company'sCompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 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.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company'sCompany’s internal control over financial reporting as of December 31, 20152019 using the criteria established in " “Internal Control - Integrated Framework "(2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"(“COSO”).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company'sCompany’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2016,2019, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1. | 1. | We do not have an Audit Committee– While not being legally obligated to have an audit committee, it is the management'smanagement’s view that such a committee, including a financial expert member, is an utmostthe important entity levelentity-level control over the Company'sCompany’s financial statement.statements. Currently, the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management'smanagement’s activities. |
2. | | |
| 2. | We did not maintain appropriate cash controls– As of December 31, 2016,Until June 30, 2017, we dodid not maintainedmaintain sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on our bank accounts. Alternatively,From June 30, 2017 through December 31, 2018, due to the effectschange in corporate officers and board of poordirectors, we have implemented appropriate cash controls were mitigated by the fact that we have limited transactions in our bank accounts.and enforced separation of accounting functions to appropriately maintain cash controls. |
3. | 3. | We did not implementimplemented appropriate information technology controls– As atof December 31, 2016,2019, we retain copies of all financial data and material agreements; however thereagreements. There is noa formal procedure or evidence of normal backup of our data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors. |
4. | We have an inadequate number of personnel with requisite expertise in the key fuhave appropriate designed and operating entity level controls including risk assessment, information and communication; monitoring, and financial reporting. |
Accordingly, we have concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company'sCompany’s internal controls.
As a result of the material weaknesses described above, we did not maintain effective internal control over financial reporting as of December 31, 20152019 based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.
Continuing Remediation Efforts to address deficiencies in Company'sCompany’s Internal Control over Financial Reporting
Once theThe Company ishas engaged in a business of merit and has sufficient personnel available, then ouravailable. Our Board of Directors, in particular, andhas established the following remediation measures in connection with the aforementioned deficiencies, will establish the following remediation measures:
deficiencies: | 1. | Our Board of Directors will nominate an audit committee orhas nominated a financial expert on our Board of Directors. |
| | |
| 2. | We will appointhave appointed additional personnel to assist with the preparation of our monthly financial reporting, includingwhich includes preparation of the monthly bank reconciliations. |
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2016, there has beenThere are no changerecent changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the our internal control over financial reporting.
| ITEM 9B. | controls.ITEM 9B. OTHER INFORMATION DATA None. OTHER INFORMATION.DATA
|
None.
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our directors shall serve on the Board of Directors until their successor issuccessors are elected and qualified. Our officers are appointed by our boardBoard of directors.Directors. The following table provides the names, positions and ages of our directors and officers:
| Name | | Age | | Position |
Paul Rauner (resigned February 18, 2016)David Dorwart | | | 47
60 | | President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole Member of our Board of DirectorsCEO, Director |
| | | | | | |
Vikram Grover (as of February 18, 2016)Domenic Fontana | | | 4738 | | President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and Member of our Board of DirectorsCFO, Director |
| | | | | | |
Barbara LakenJordan Axt | | | 6238 | | Director, Secretary |
| | | | | |
David Dorwart | | | 58 | | CMO, Director |
We have no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in our control. We are not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.
Set forth below is a brief description of the background and business experience of Paul Rauner, our sole officer and director.
Paul Rauner
Paul Rauner was our sole officer and director from,March 9, 2015 to February 18, 2016. He is the controlling shareholder of SirenGPS, a privately-held emergency management technology company. Following the execution of the Strategic Expansion Agreement, SirenGPS became our controlling shareholder, making Mr. Rauner a controlling shareholder of the Company. Mr. Rauner served as Chief Executive Officer and Chairman of SirenGPS from January 2012 to January 2015, and currently serves as Executive Director and Chairman of SirenGPS. Mr. Rauner is also Chief Operating Officer of Gremln, Inc., which provides social media compliance to companies in the financial sector. Mr. Rauner is an adjunct professor at the Boston University School of Medicine Healthcare Emergency Management Masters Degree Program (BU HEM), a terminal masters degree program that trains professionals to serve as emergency management professionals at the enterprise level in the public and private sectors. Mr. Rauner received a B.A. in Philosophy from Calvin College in 1992 and a Juris Doctor with distinction from the University of Iowa College of Law in 1997. Mr. Rauner previously served in a variety of capacities providing risk management consulting and insurance placement services, including as President of Rauner Risk Services, Inc. from 2005 to 2013; General Counsel to the NASDAQ Insurance Agency, a subsidiary of the NASDAQ Stock Market from 2003 to 2005; and Assistant Director, Legal at AON Corporation from 2001 to 2003. Based on the foregoing, we determined that Mr. Rauner was duly qualified to serve as the sole member of our Board of Directors.
Vikram Grover
Vikram Grover has over twenty-years track record as a leading thought provider and research analyst in the financial markets covering the emerging communications provider and technology sectors. Since February 18, 2016, he is the CEO of Good Gaming, Inc., acquired by the Company in at that time. He is also a consultant under the DBA “IX Advisors”. IXA is a management consulting and corporate strategy provider to emerging growth companies in the communications, Internet and digital media markets, leveraging a diverse network of C-level executives, sales and distribution channels, technology providers, and investors. From November 2006 to July 2015, he was Senior Managing Director Investment Banking, for Source Capital Group, focusing on emerging growth companies particularly in the telecom, Internet and digital media sectors. Previous to that, he was Managing Director, Investment Banking at MCF Corp., and Senior VP, Equity Research at Thomas Weisel Partners coverage of emerging communications providers and Internet infrastructure companies. From 2003 to 2005, he was a Principal, Equity Research at Needham & Co. From 1998 to 2005, he served as Director of Research at Kaufman Bros., LP a TMT boutique investment banking firm, and from 1995 to 1998, he served as a Research Analyst at Sterne Agee. Mr. Grover received his M.S. in Management from Georgia Institute of Technology with a focus in investment banking and finance, and his B.A. in Marketing from the University of California, San Diego, majoring in Marketing and Communications, with minors in Calculus and Latin.
Barbara Laken
Barbara Laken is a sucessful licensed real estate broker since 1997, Barbara has been buying and selling real estate since moving to Chicago from the New York area. She has developed a soon to be released website called “Location Ovation,” designed to give residents a platform to promote the unique features that define their communities via continuous, real time posts. She graduated from Long Island University with a B.S. in Elementary Education.
CEO and DirectorDavid Dorwart from January 2011 to the present, is the Chairman of the Board of Assist Wireless, a company based in Fort Worth, Texas that is leading provider of lifeline phone service for individuals and families who qualify for government assistance. They are one of the fastest growing wireless providers in the telecommunications industry targeting the unbanked/under-bankedunderbanked and credit-challenged consumer demographic. In addition, Mr. Dorwart, since 2010, is the President and CEO of Acacia Energy, LLC. A provider of electric service to Customers in the Texas deregulated areas. We serviceAcacia Energy provides services to both the residential and small commercial business. He is alsobusinesses. Also since 2010, David Dorwart has been the CEO of PayGo Distributors, LLC, a distribution company with over 100 Independent Sales Organizations under their management. PayGO focuses on distributing prepaid Electric, Home Phone and Wireless Services to residential Customers within the United States. Since 2009, he ishas been the CEO of Britton & Associates, a full servicefull-service Construction Consulting Firm. They specialize in the resolution of construction claims and construction disputes throughout the United States. From 1999 to 2009, Hehe was the Founder, President & CEO of dPi Teleconnect/dPi Energy, LLC. He graduated from University of Delaware with a B.S. in Business.
Domenic Fontana, CFO and Director
Domenic Fontana is currently Sr. Vice President of ViaOne Services and a new board member. He is an experienced CPA and financial executive who has worked in progressively more advanced executive roles throughout his career. Having worked at Verizon, Ebay and now ViaOne Services over the last 13 years, he has developed intimate and extensive knowledge of executive level management and the telecommunications industry. He has worked in all aspects of Finance, Accounting, Treasury, and Operations.
Jordan Majkszak Axt, CMO and Director
Jordan Majkszak Axt, a new board member, is a results-producing marketing professional with over 14 years of experience successfully developing marketing and branding strategies. He has been consistently noted by executives, colleagues, and journalists for his specific expertise in bringing products and services online with a comprehensive digital go-to-market strategy. He has previously held executive level positions as Director of Marketing for ProfitPoint Inc. and Clutch Holdings LLC. He is currently Sr. Director of Marketing of ViaOne Services where he develops all marketing and customer acquisition strategies for 14 consumer facing brands.
Involvement in Certain Legal Proceedings
During the past ten years, Mr. Grover or Ms. LakenDavid Dorwart, Domenic Fontana, and Jordan Majikszak Axt have not been the subjectssubject of the following events:
| | 1.AA petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
2. | |
| | Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
3. | |
| | The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities; |
i) | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| | Engaging in any type of business practice; or |
iii) | |
| | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
4. | |
| | The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity; |
5. | Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
6. | |
| | Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
7. | |
| | Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
i) | |
| | Any Federal or State securities or commodities law or regulation; or |
ii) | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or |
iii) | |
| | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
8. | |
| | Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Audit Committee and Financial Expert
We do not have an audit committeecommittee. We have nominated a financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
We do not have a separately designated audit committee. Accordingly, our board of directors is deemed our audit committee as provided for under the Sarbanes-Oxley Act of 2002.
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics is filed as Exhibit 14.1 to our Form 10-K for the period ended December 31, 2015.
Disclosure Committee
We do not have a disclosure committee or disclosure committee charter. Our disclosure committee is effectively comprised of our directors, Mr. David Dorwart and Barbara Laken.
Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms we received, we believe that during the fiscal year ended December 31, 2016, all2017, we have not complied with such filing requirements applicable to our officers and directors were complied with. Mr. Rauner our current sole officer and director hasdirectors. We plan to comply with such filing requirements in the future.
Director Independence
We do not filed his Form 3 as of the date of this report. We expect him to file the same shortly.
Director Independence
We have oneany independent director, Mr. director.David Dorwart.
Family Relationships
There are no family relationships between any of the officers, directors, or consultants. Barbara Laken, one of our directors is the wife of the Chairman and CEO of CMG Holdings our majority and control shareholder.
Our officers and directors are also officers/directors of ViaOne Services and therefore, will devote time to projects that do not involve us.
The following table sets forth the compensation paid by us for the last two fiscal years ending December 31, 2016 for each of our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.
| Executive Officer Compensation Table |
| | Non-Equity | Nonqualified Deferred | |
| Name and | | Salary | Bonus | Stock Awards | Option Awards | Incentive Plan Compensation | Compensation Earnings | All Other Compensation | | Total |
| Principal Position | Year | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | | (US$) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | (j) |
| Vikram Grover | 2016 | 80,000 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| Barbara Laken | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| Paul Rauner | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| President/CEO/CFO | 2015 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| Tassos Recachinas | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | 0 |
| President/CEO/CFO (Resigned 3-9-2015) | 2015 | 60,000 | 0 | 0 | 0 | 0 | 0 | 60,000 [1] | | 120,000 |
[1] Represents cash consideration in connection with consulting services.
We have not entered into any written employment agreements with any of our officers. We may enter into employment agreements in the future.
The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.
There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.
Compensation of Directors
The members of our boardBoard of directorsDirectors are not compensated for their services as directors. The boardBoard has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the boardBoard of directors.Directors. We have no director'sdirector service contracts. The following table sets forth compensation paid to our directors from inception to our year end on December 31, 2016. Since that time, we have not paid any compensation to any director.
| Executive Officer Compensation Table |
| | Non-Equity | Nonqualified Deferred | |
| Name and | | Salary | Bonus | Stock Awards | Option Awards | Incentive Plan Compensation | Compensation Earnings | All Other Compensation | | Total |
| Principal Position | Year | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | | (US$) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | (j) |
| Barbara Laken | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| David Dorwart | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| Paul Rauner | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| President/CEO/CFO | 2015 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
| Tassos Recachinas | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | 0 |
| President/CEO/CFO (Resigned 3-9-2015) | 2015 | 0 | 0 | 0 | 0 | 0 | 0 | 0 [1] | | 0 |
Indemnification
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner, he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney'sattorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
The following tables set forth the ownership, as of the date of this prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS:
| | | Number of | | | Percentage | | | Number of Class A | | | Percentage | | | Number of Class B | | | Percentage | |
| Name and Address Beneficial Owner | | Common Shares | | | of Ownership | | | Preferred Shares (1)(2) | | | of Ownership | | | Preferred Shares (1)(3) | | | of Ownership | |
| | | | | | | | | | | | | | | | | | | |
| CMG Holdings Group, Inc, - OTC CMGO (5) | | | 0 | | | | 0.00 | % | | | 0 | | | | 0.00 | % | | | 100,000,000 | | | | 61.72 | % |
| 2130N. Lincoln Park West, Suite 8N | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL 60614 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
SECURITY OWNERSHIP OF MANAGEMENT:
| | | Number of | | | Percentage | | | Number of Class A | | | Percentage | | | Number of Class B | | | Percentage | |
| Name and Address Beneficial Owner | | Common Shares | | | of Ownership | | | Preferred Shares (1)(2) | | | of Ownership | | | Preferred Shares (1)(3) | | | of Ownership | |
| | | | | | | | | | | | | | | | | | | |
| Paul Rauner | | | 0 | | | | 0.00 | % | | | 7,500.000 | (4) | | | 100.00 | % | | | 800,000 | | | | 0.53 | % |
| 9272 Olive Boulevard | | | | | | | | | | | | | | | | | | | | | | | | |
| St. Louis, MO 63132 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Vikram Grover | | | 0 | | | | 0.00 | % | | | 0 | | | | 0.00 | % | | | 8,663,279 | | | | 5.53 | % |
| 111 N 4th Avenue | | | | | | | | | | | | | | | | | | | | | | | | |
| St. Charles, IL 60174 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Barbara Laken (5) | | | 0 | | | | 0.00 | % | | | 0 | | | | 0.00 | % | | | 100,000,000 | | | | 61.72 | % |
| 2130N. Lincoln Park West, Suite 8N | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago, IL 60614 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| David Dorwart | | | 0 | | | | 0.00 | % | | | 0 | | | | 0.00 | % | | | 20,000,000 | | | | 12.34 | % |
| 11011 Brooklet Dr., Suite 220 | | | | | | | | | | | | | | | | | | | | | | | | |
| Houston, TX 77099 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| All officers and directors as a group | | | 0 | | | | 0.00 | % | | | 0 | | | | 100.00 | % | | | 1,659,073 | | | | 80.00 | % |
| [1] Our Articles of Incorporation authorize us to issue up to 450,000,000 shares of preferred stock, $0.001 par value. Of the 450,000,000 authorized shares of preferred stock, the total number of shares of Class A Preferred Shares the Corporation shall have the authority to issue is Two-Hundred -Forty-Nine Million-Nine-Hundred-Ninety-Nine Thousand (249,999,000), with a stated par value of $0.001 per share, the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Two-Hundered-Million (200,000,000), with a stated par value of $0.001 per shareand the total number of shares of Class C Preferred Shares the Corporation shall have the authority to issue is One Thousand (1,000,000), with a stated par value of $0.001 per share,, . Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors' power to set the terms of, and our ability to issue, preferred stock will provide flexibility in connection with possible financing or acquisition transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring or preventing a change in control of our company.
|
| [2] As of April 13, 2017, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. The 7,500,000 issued and outstanding shares of Class A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one Class A Preferred Share.
|
| [3] As of April 13, 2017, we had 162,028,779 shares of Class B preferred stock issued and outstanding. The 162,028,779 issued and outstanding shares of Class B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one Class B Preferred Share. If all of our Class A Preferred Stock and Class B Preferred Stock was converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 32,555,755,800 shares.
|
| [4] Owned by Siren GPS, a private corporation owned and controlled by Paul Rauner, our former officer and director. |
| [5] Barbara Laken, one of our directors is the wife of the Chairman and CEO of CMG Holdings Group, Inc,.our majority and control shareholder.
|
We are not categorized as a "shell company"“shell company” as that term is defined in Reg. 405 of the Act. A "shell company"“shell company” is a corporation with no or nominal assets or its assets consist solely of cash, and no or nominal operationsoperations.
.ITEM 11 EXECUTIVE COMPENSATION
the last two completed fiscal years of us, the total compensation awarded to, earned by or paid to any person who was a principal executive officer during the preceding fiscal year and every other highest compensated executive officers earning more than $100,000 during the last fiscal year (together, the “Named Executive Officers”).
The tables set forth below reflect the compensation of the Named Executive Officers.| | ITEM 13.37 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
AsSummary Compensation Table
| Name and Principal Position | | Year | | | Salary
($) | | | Bonus
($) | | | Stock Awards
($) | | | Option Awards
($) | | | Non-Equity Incentive Plan Compensation
($) | | | Change in Pension
Value and
Nonqualified Deferred Compensation Earnings
($) | | | All Other Compensation
($) | | | Total
($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| David | | | 2018 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
| Dorwart | | | 2019 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Domenic | | | 2018 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
| Fontana | | | 2019 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Jordan | | | 2018 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
| Axt | | | 2019 | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | | | | -0- | |
Narrative Disclosure to Summary Compensation Table
Other than set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
Stock Option Plan
On April 30, 2018, the holder of one (1) share of Series C Preferred Stock of the Company that entitles such holder to vote a majority of the issued and outstanding voting securities of the Company’s approved by written consent that the Company adopts the 2018 Stock Incentive Plan (the “2018 Plan”) under which the Board may decide at its sole discretion to grant equity awards to certain employees and consultants as set forth in the 2018 Plan. The description of the 2018 Plan does not purport to be complete and is incorporated herein by reference to a current report on form 8-k filed with the Securities and Exchange Commission on May 4, 2018.
Grants of Plan-Based Awards
There were no plan-based awards outstanding as of December 31, 2016, the Company had related party notes payable due2019.
Outstanding Equity Awards at Fiscal Year End
The following table summarizes outstanding unexercised options, unvested stocks and equity incentive plan awards held by each of our named executive officers, as of December 31, 2019:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | OPTION AWARDS | | STOCK AWARDS | |
| Name | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned Options
(#) | | | Options
Exercise
Prices ($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) | | | Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Been Issued
(#) | | | Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Been
Issued ($) | |
| David | | | 0 | | | | 0 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 0 | | | $ | 0 | |
| Dorwart | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Domenic | | | 0 | | | | 0 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 0 | | | $ | 0 | |
| Fontana | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Jordan | | | 0 | | | | 0 | | | | 0 | | | | - | | | | - | | | | - | | | | - | | | | 0 | | | $ | 0 | |
| Axt | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors as of December 31, 2019.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to affiliate and etities controlled by David Dorwart, our outside director of $163,440.
In conjunction with the March 5, 2015 General Release Agreements, we agreed to settle any and all amounts owingwhich cash or non-cash compensation is or may be paid to our
at-the-time President and CEO in exchange for thosedirectors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof. (please advise)Employment Contracts
(please advise)
ITEM 12 SECURITY OWENERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Beneficial Owners
The following table sets forth certain sharesinformation regarding beneficial ownership of our newly-issuedcommon stock as of March 25, 2019 (i) each person (or group of affiliated persons) who is known by us to own more than five percent (5%) of the outstanding shares of our common stock, eliminating liabilities from our balance sheet.
In conjunction with the March 9, 2015 Strategic Expansion Agreement, we agreed to settle in full(ii) each director, executive officer and
extinguish all amounts we owed to HOEL under that certain promissory note we issued to HOEL on August 16, 2011 (approximately $407,397) in exchange for transferring, conveying, assigning and delivering to HOEL: (i) all our rights, title and interests under that certain NB Provincial License entered into December 10, 2012 (the "NB Provincial License"), relating to, among other things, technologies for gas exchange, carbon dioxide capture and sequestration, algae biomass production and other renewable energy and eco-sustainability applications (the "Eco-Technologies"), (ii) all our rights, title and interests under that certain exclusivity agreement with the City of Saint John, NB, Canada entered into November 30, 2012 (the "Saint John Contract"), relating to Eco-Technologies,director nominee, and (iii)
three hundred forty two million one hundred fifty thousand four hundred ninety six (342,150,496) newly-issued restricted sharesall of
common stock. Theour directors, executive officers and director nominees as a group.Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock were issuedthat such person has the right to HOEL partially in exchangeacquire within 60 days of the date of the respective table. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of the date of the respective table is deemed to be outstanding for such person, but is not deemed to be outstanding for the full conversionpurpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
Unless otherwise noted, the business address of each beneficial owner listed is 415 McFarlan Road, Suite 108, Kennett Square, PA 19348. Except as otherwise indicated, the persons listed below have the sole voting and retirementinvestment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.
As of March 12, 2020, we had 53,988,755 shares of common stock issued and outstanding.
| Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | | Percent of Class | |
| David Dorwart(1) | | | 3,869,167 | | | | 7.17 | % |
| Domenic Fontana | | | 0 | | | | - | |
| Eric Brown | | | 0 | | | | - | |
| Jordan Majkszak Axt | | | 294 | | | | * | |
| All officers and directors as a group (four persons) | | | 3,869,461 | | | | 7.17 | % |
| (1) | Held through ViaOne, SilverLinings Management, and Britton Associates in the respective amounts of 1,369,167, 1,500,000 and 1,000,000 shares. |
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ViaOne, SilverLinings Management, and CMG Holdings each own more that 5% of the HOEL Note. Additionally, we entered into a License Assignment Approvalcompany’s stock. The shares owned by ViaOne and Consent Agreement with Hillwinds Energy Development Corp., a Connecticut corporation ("HEDC"), under which we agreedSilverLinings Management are deemed to transfer, assign and convey all rights, title and interests in we had in that certain exclusivity agreement with the City of Saint John, NB, Canada dated November 30, 2012 to Hillwinds Ocean Energy, LLC, a Connecticut limited liability company ("HOEL"), for certain good and valuable consideration, exiting us from the renewable energy and eco-sustainability technologies development business.
Additionally, in conjunction with the Strategic Expansion Agreement, Mr. Recachinas resigned as a Director and from all executive officer positions he held with us and Mr. Paul Rauner ("Mr. Rauner") was appointed to the positions of President,be beneficially owned by our CEO, CFO, Secretary, Treasurer and Director. Effective March 9, 2015, we entered into a consulting agreement (the "Consulting Agreement") with Tassos Recachinas, pursuant to which Mr. Recachinas will provide certain transitional services in conjunction with the Strategic Expansion Agreement.
Tassos Recachinas was our only promoter until he resigned on March 6, 2015. Mr. Paul Rauner was our only promoter. until February 18, 2016. Vikram Grover is our only current promoter.
Other than the foregoing transaction, none of ourDavid Dorwart. No other companies, directors or executive officers, nor any person who owned of record or was known to own beneficially more than 5% of our outstanding shares of common stock, nor any associate or affiliate of such persons or companies, have any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect us.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:
| - | Disclosing such transactions in reports where required; |
| - | Disclosing in any and all filings with the SEC, where required; |
| - | Obtaining disinterested directors consent; and |
| - | Obtaining shareholder consent where required. |
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
| (1) | ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
(1) | Audit and Audit Related Fees |
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
| FISCAL YEAR ENDED DECEMBER 31, | | AMOUNT | | PRINCIPAL ACCOUNTING FIRM |
| 2016 | | $ | 5,500.00 | | BOYLE CPA, LLC |
| 2015 | | $ | 5,500.00 | | ENTERPRISE CPAS |
FISCAL YEAR ENDED DECEMBER 31, | | AMOUNT | | | PRINCIPAL ACCOUNTING FIRM |
| | | | | | |
| 2019 | | $ | 10,000 | | | BOYLE CPA, LLC |
| 2018 | | $ | 10,000 | | | BOYLE CPA, LLC |
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
FISCAL YEAR ENDED DECEMBER 31, | | | AMOUNT | | | PRINCIPAL ACCOUNTING FIRM |
20162019 | | $ | - | | | BOYLE CPA, LLC |
20152018 | | $ | - | | ENTERPRISE CPAS | BOYLE CPA, LLC |
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
FISCAL YEAR ENDED DECEMBER 31, | | | AMOUNT | | | PRINCIPAL ACCOUNTING FIRM |
20162019 | | $ | - | | | BOYLE CPA, LLC |
20152018 | | $ | - | | ENTERPRISE CPAS | BOYLE CPA, LLC |
| (4) | Our audit committee'scommittee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approved all accounting related activities prior to the performance of any services by any accountant or auditor. |
| |
| (5) | The percentage of hours expended on the principal accountant'saccountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant'saccountant’s full time, permanent employees was 0%. |
hereof: None.(3) Exhibits
The following exhibits are included herewith:
| (1) | Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed on May 4, 2018. |
| (2) | Incorporated by reference to Exhibit 3.2 to the Company’s Form S-1 filed on March 24, 2009. |
| (3) | Incorporated by reference to Exhibit 14.1 to the Company’s Form 10-k filed on March 29, 2011. |
| | ITEM 15.41 | EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES. |
| Exhibit | | Incorporated by reference | Filed |
| Number | | Form | Date | Number | herewith |
| | | | | | |
| 3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | |
| | | | | | |
| 3.2 | Bylaws. | S-1 | 3/24/09 | 3.2 | |
| | | | | | |
| 3.3 | Amended and Restated Articles of Incorporation. | 8-K | 6/14/11 | 3.1a | |
| | | | | | |
| 3.4 | Amended and Restated Articles of Incorporation. | 8-K | 8/17/11 | 3.1 | |
| | | | | | |
| 10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
| | | | | | |
| 10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
| | | | | | |
| 10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
| | | | | | |
| 10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
| | | | | | |
| 10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
| | | | | | |
| 10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
| | | | | | |
| 10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
| | | | | | |
| 10.8 | Promissory Note issued to HGT Capital LLC. dated April 15, 2015 | 8-K | 4/21/15 | 10.1 | |
| | | | | | |
| 14.1 | Code of Ethics. | 10-K | 3/29/11 | 14.1 | |
| | | | | | |
| 21.1 | List of subsidiaries | S-1/A-1 | 1/17/13 | 21.1 | |
| | | | | | |
| 31.1 | | | | | X |
| | | | | | |
| 32.1 | | | | | X |
| | | | | | |
| 101.INS | XBRL Instance Document. | | | | X |
| 101.SCH | XBRL Taxonomy Extension – Schema. | | | | X |
| 101.CAL | XBRL Taxonomy Extension – Calculations. | | | | X |
| 101.LAB | XBRL Taxonomy Extension – Labels. | | | | X |
| 101.PRE | XBRL Taxonomy Extension – Presentation. | | | | X |
| 101.DEF | XBRL Taxonomy Extension – Definition. | | | | X |
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 on March 30, 2020.| | SIGNATURES | Good Gaming, Inc. |
| | |
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 on this 17th day of April 2017. |
| | |
| | | GOOD GAMING, INC. |
| | (the "Registrant") |
| | |
Date: April 17, 2017 | | By: | /s/VIKRAM GROVER/s/ David B. Dorwart |
| | | | President, Director, Chief Executive Officer & Chief Financial OfficerDavid Dorwart |
| | | | (PrincipalChief Executive Officer)Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signature | | | (Principal Financial Officer and Principal Accounting Officer) |
| Title | | | |
| | | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the date indicated. | | |
| | | |
Signature | | Title | | | Date |
| | | | | | |
/s/VIKRAM GROVER David B. Dorwart | | President, Director, Chief Executive Officer & Chief Financial Officer | | | April 17, 2017 |
Vikram Grover | | (Principal Executive Officer) | | | |
| David Dorwart | | (Principal FinancialChief Executive Officer and Principal Accounting Officer)Chairman of the Board | | March 30, 2020 |
| | | | |
| /s/ Domenic Fontana | | | | |
| Domenic Fontana | | Chief Financial Officer and Director | | March 30, 2020 |
| | | | | | |
/s/BARBARA LAKEN | | Director | | | April 17, 2017 |
Barbara Laken/s/ Jordan Axt | | | | |
| Jordan Axt | | Chief Marketing Officer and Director | | March 30, 2020 |
| | | | | | |
/s/ DAVID DORWART | | Director | | | April 17, 2017 |
David Dorwart | | | | 42 | |
| Exhibit | | Incorporated by reference | Filed |
| Number | | Form | Date | Number | herewith |
| 3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | |
| 3.2 | Bylaws. | S-1 | 3/24/09 | 3.2 | |
| 3.3 | Amended and Restated Articles of Incorporation. | 8-K | 6/14/11 | 3.1a | |
| 3.4 | Amended and Restated Articles of Incorporation. | 8-K | 8/17/11 | 3.1 | |
| 10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
| 10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
| 10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
| 10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
| 10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
| 10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
| 10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
| 10.8 | Promissory Note issued to HGT Capital LLC. dated April 15, 2015 | 8-K | 4/21/15 | 10.1 | |
| 14.1 | Code of Ethics. | 10-K | 3/29/11 | 14.1 | |
| 21.1 | List of subsidiaries | S-1/A-1 | 1/17/13 | 21.1 | |
| 31.1 | | | | | X |
| 32.1 | | | | | X |
| 101.INS | XBRL Instance Document. | | | | X |
| 101.SCH | XBRL Taxonomy Extension – Schema. | | | | X |
| 101.CAL | XBRL Taxonomy Extension – Calculations. | | | | X |
| 101.LAB | XBRL Taxonomy Extension – Labels. | | | | X |
| 101.PRE | XBRL Taxonomy Extension – Presentation. | | | | X |
| 101.DEF | XBRL Taxonomy Extension – Definition. | | | | X |