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Large Accelerated Filer
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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer
(Do not check if a smaller reporting company)
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[ ]
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Smaller Reporting Company
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[x]
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 4.
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ITEM 5.
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MARKET FOR THE REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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2016
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High Bid
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Low Bid
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||||||
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First Quarter, Ending March 31
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$ | 0.0001 | $ | 0.0001 | ||||
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Second Quarter, Ending June 30
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$ | 0.0007 | $ | 0.0007 | ||||
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Third Quarter, Ending September 30
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$ | 0.0002 | $ | 0.0002 | ||||
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Fourth Quarter, Ending December 31
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$ | 0.0003 | $ | 0.0002 | ||||
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2015
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High Bid
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Low Bid
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||||||
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First Quarter, Ending March 31
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$ | 0.0001 | $ | 0.0001 | ||||
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Second Quarter, Ending June 30
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$ | 0.0002 | $ | 0.0001 | ||||
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Third Quarter, Ending September 30
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$ | 0.0001 | $ | 0.0001 | ||||
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Fourth Quarter, Ending December 31
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$ | 0.0003 | $ | 0.0002 | ||||
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Plan category
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Number of securities issued upon
exercise of outstanding options,
warrants and rights
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Weighted-average exercise
price of outstanding options,
warrants and rights
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Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
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|||||||||
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(a)
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(b)
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(c)
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||||||||||
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Equity compensation plans
approved by security holders
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0 | 0 | 0 | |||||||||
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Equity compensation plans not
approved by security holders
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0 | 0 | 30,000,000 | |||||||||
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Total
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0 | 0 | 30,000,000 | |||||||||
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●
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1,468,871,393 are freely tradable without restrictions (commonly referred to as the "public float")
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●
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531,118,607 are currently subject to the restrictions and sale limitations imposed by Rule 144.
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a)
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On April 9, 2014, we issued 8,571,429 common shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture.
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b)
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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.
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c)
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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.
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d)
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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.
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e)
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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).
|
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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.
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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.
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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.
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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.
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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.
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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.
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|
|
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.
|
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
|
|
1.
|
Complete 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 prizes to 205 million eSports amateur players.
|
|
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.
|
|
December 31, 2016
|
December 31, 2015
|
|||||||
|
Current Assets
|
$ | 58,400 | $ | - | ||||
|
Current Liabilities
|
477,848 | 639,852 | ||||||
|
Working Capital (Deficit)
|
(419,448 | ) | (639,852 | ) | ||||
|
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
| Index to Consolidated Financial Statements | Page | |||
|
14
|
||||
| Report of Independent Registered Public Accounting Firm – Enterprise CPA, Ltd | 15 | |||
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16
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||||
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17
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18
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||||
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19
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||||
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20
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||||
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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 | ||||||
|
Professional fees
|
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
|
||||||||
|
Purchase of Equipment
|
(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
|
||||||||
|
Good Gaming, Inc.
|
||||||||||||||||||||||||||||||||||||||||||||
|
Consolidated
Statement
s of
Stockholders' Deficit
|
||||||||||||||||||||||||||||||||||||||||||||
|
(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
|
||||||||||||||||||||||||||||||||||||||||||||
|
1.
|
Nature of Operations and Continuance of Business
|
|
2.
|
Summary of Significant Accounting Policies
|
|
a)
|
Basis of Presentation and Principles of 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.
|
|
(c)
|
Use of Estimates
|
|
(d)
|
Cash and Cash Equivalents
|
|
(e)
|
Intangible Assets
|
|
2.
|
Summary of Significant Accounting Policies (continued)
|
|
(f)
|
Impairment of Long-Lived Assets
|
|
(g)
|
Beneficial Conversion Features
|
|
(h)
|
Derivative Liability
|
|
(i)
|
Basic and Diluted Net Loss Per Share
|
|
(j)
|
Income Taxes
|
|
(k)
|
Comprehensive Loss
|
|
(l)
|
Financial Instruments
|
|
2.
|
Summary of Significant Accounting Policies
(continued)
|
|
l)
|
Financial Instruments (continued)
|
| Balance, December 31, 2015 | Conversions | Changes in Fair Values | Balance, December 31, 2016 | |||||||||||||
| Derivative Liability | $ | 453,741 | $ | 18,415 | $ | (243,551 | ) | $ | 228,605 | |||||||
|
m)
|
Equipment
|
|
n)
|
Recent Accounting Pronouncements
|
|
3.
|
Debt
|
|
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.
|
|
4.
|
Derivative Liabilities
|
|
5.
|
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.
|
|
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.
|
|
5.
|
Common Stock (continued)
|
|
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.
|
|
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.
|
|
6.
|
Preferred Stock
|
|
7.
|
Related Party Transactions
|
|
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.
|
|
8.
|
Commitments
|
|
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.
|
|
9.
|
Income Taxes
|
| 2016 | 2015 | |||||||
| Income tax recovery at statutory rate | $ | 171,955 | $ | 195,612 | ||||
| Valuation allowance change | (171,955 | ) | (195,612 | ) | ||||
| Provision for income taxes | $ | - | $ | - | ||||
| 2016 | 2015 | |||||||
| Income tax recovery at statutory rate | $ | 491,300 | $ | 824,952 | ||||
| Valuation allowance change | (491,300 | ) | (824,952 | ) | ||||
| Provision for income taxes | $ | - | $ | - | ||||
|
10.
|
Acquisition of Good Gaming, Inc. Assets.
|
|
|
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:
|
| December 31,2016 | December 31, 2015 | |||||||
| Gaming Software | $ | 1,200,000 | $ | - | ||||
| Accumulated Amortization | (210,000 | ) | - | |||||
| $ | 990,000 | $ | - | |||||
|
11.
|
Subsequent Events
|
|
|
ITEM 9.
|
CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
|
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
|
1.
|
We do not have an Audit Committee
– While not being legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is an utmost important entity level control over the Company's financial statement. 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's activities.
|
|
2.
|
We did not maintain appropriate cash controls
– As of December 31, 2016, we do not maintained 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, the effects of poor cash controls were mitigated by the fact that we have limited transactions in our bank accounts.
|
|
3.
|
We did not implement appropriate information technology controls
– As at December 31, 2016, we retain copies of all financial data and material agreements; however there is no 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.
|
|
1.
|
Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors.
|
|
2.
|
We will appoint additional personnel to assist with the preparation of our monthly financial reporting, including preparation of the monthly bank reconciliations.
|
|
|
ITEM 9B.
|
OTHER
INFORMATION.DATA
|
|
|
ITEM 10.
|
DIRECTORS
, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
|
Name
|
Age
|
Position
|
|||
| Paul Rauner (resigned February 18, 2016) |
47
|
President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole Member of our Board of Directors | |||
| Vikram Grover (as of February 18, 2016) | 47 | President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and Member of our Board of Directors | |||
| Barbara Laken | 62 | Director, Secretary | |||
| David Dorwart | 58 | Director | |||
|
|
1.A 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;
|
|
ii)
|
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) o |