U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
For the transition period from _________to _________
Commission
File Number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip code)
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| N/A |
Indicate by check mark whether the registrant (i) 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 ☒
Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☐
Yes ☒
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act).
☐
Yes
On August 1, 2024, there were shares of Common Stock issued and outstanding.
| i |
Item 8. Financial Statements and Supplementary Data.
| Financial Statements | Page | |
| Balance Sheet As on March 31, 2023 | F-2 | |
| Statement of Operations For the Period of January 1, 2023 through March 31, 2023 | F-3 | |
| Statement of Changes in Stockholders’ Equity/Deficit For the Period of January 1, 2023 to March 31, 2023 | F-4 | |
| Statement of Cash Flows For the Period of January 1, 2023 through March 31, 2023 | F-5 | |
| Notes to Financial Statements | F-6 - F-11 |
| F-1 |
Midnight Gaming Corporation
Balance Sheet
As on March 31, 2023
| As on | As on | |||||||
| March 31, 2023 | December 31, 2022 | |||||||
| ASSETS | (unaudited) | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Total Current Assets | ||||||||
| Other Assets | ||||||||
| Notes Receivable | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | $ | ||||||
| Accrued Expenses | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities | ||||||||
| Loan Payable | ||||||||
| Notes Payable | ||||||||
| Accrued Interest | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' deficit: | ||||||||
| Preferred stock (par , issued and outstanding) | ||||||||
| Common stock (par , shares authorized, and issued and outstanding) | ||||||||
| Warrants | ||||||||
| Additional paid in capital | ||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||
| Retained Earnings | ( | ) | ( | ) | ||||
| Total stockholders' deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND DEFICIT | $ | $ | ||||||
Please see accompanying notes to financial statements.
| F-2 |
Midnight Gaming Corporation
Statement of Operations
For the Period of January 1, 2023 through March 31, 2023
| For the Three Months Ended March 30, | ||||||||
| 2023 | 2022 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue, net | $ | $ | ||||||
| Operating Expenses: | ||||||||
| Marketing | $ | $ | ||||||
| Legal and Professional Fees | ||||||||
| Consulting Fees | ||||||||
| Travel | ||||||||
| Other general and administrative expenses | ||||||||
| Total Operating Expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other Expenses | ||||||||
| Interest expense | $ | $ | ||||||
| Net loss before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share | ||||||||
| Basic & Diluted | $ | ) | $ | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Basic & Diluted | ||||||||
Please see accompanying notes to financial statements.
| F-3 |
Midnight Gaming Corporation
Statement of Changes in Stockholders' Equity/Deficit
For the Period of January 1, 2023 to March 31, 2023
| Additional | Total | |||||||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Warrants | Paid-In | Accumulated | Stockholders' | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Capital | Deficit | Equity/(Deficit) | |||||||||||||||||||||||||
| Beginning Balance as of January 1, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Issuance of Preferred Stock | $ | |||||||||||||||||||||||||||||||
| Issuance of Warrants | $ | |||||||||||||||||||||||||||||||
| Equity Adjustment | ||||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Ending Balance as of December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Beginning Balance as of January 1, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Issuance of Warrants | ||||||||||||||||||||||||||||||||
| Issuance of Common Stock | $ | |||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Ending Balance as of December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Beginning Balance as of January 1, 2023 | $ | $ | $ | ( | ) | ( | ) | |||||||||||||||||||||||||
| Issuance of Warrants | ||||||||||||||||||||||||||||||||
| Net Income | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Ending Balance as of March 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
Please see accompanying notes to financial statements.
| F-4 |
Midnight Gaming Corporation
Statement of Cash Flows
For the period of January 1, 2023 through March 31, 2023
| For the Three Months Ended March 30, | ||||||||
| 2023 | 2022 | |||||||
| (unaudited) | (unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Non Cash Compensation Expense | ||||||||
| Change in Accounts Payable | ||||||||
| Change in Accrued Expenses | ||||||||
| Net cash used in operating activities | ( | ( | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Issuance of common stock | $ | $ | ||||||
| Issuance of preferred stock | ||||||||
| Issuance of Warrants | ||||||||
| Additional Paid in Capital | ||||||||
| Additional Paid in Capital - Preferred Stock | ||||||||
| Additional Paid in Capital - Warrants | ||||||||
| Opening Balance Equity Adjustment | ||||||||
| Related party note proceeds received | ( | ) | ( | ) | ||||
| Accrued Interest | ||||||||
| Notes Payable | ||||||||
| Net cash provided by financing activities | ||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING BALANCE | ||||||||
| CASH AND CASH EQUIVALENTS, ENDING BALANCE | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES: | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
Please see accompanying notes to financial statements.
| F-5 |
Midnight Gaming Corporation
Notes to Financial Statements
March 31, 2023
NOTE 1: DESCRIPTION OF BUSINESS
Midnight Gaming Corporation (the “Company”) was incorporated in Delaware on October 11, 2016. It is still in the development stage and has no revenue until now.
The Company engages in the business of acquiring income producing business entities during early stages of their respective business life cycle, to enrich the acquisitions business model to result in increased business activity, revenue, and valuation.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Organization
The financial statements of the Company for the period from January 1, 2023 to March 31, 2023 have been prepared in accordance with generally accepted accounting principles.
Cash and cash equivalents
For the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered as cash equivalents.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period they are determined.
Fair value of financial instruments and fair value measurements
For certain of the Company's financial instruments, including cash, accrued expenses and short-term debt, the carrying amounts approximate their fair values due to their short maturities. We adopted ASC Topic 820, "Fair Value Measurements and Disclosures", which requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of valuation hierarchy are defined as follows:
| Level 1: | Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority; | |
| Level 2: | Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability; | |
| Level 3: | Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. |
| F-6 |
Revenue recognition
Revenue from sales of products and services is recognized when persuasive evidence of an arrangement exists, products have been shipped or services have been delivered to the customer, the price is fixed or determinable and collection is reasonably assured.
Stock-based compensation
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and earned. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50.
Property, plant and equipment
Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of property, plant and equipment and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
Intangible assets
Intangible assets with no determinable life are initially assessed for impairment upon purchase, with subsequent assessments required annually. When there is reason to believe that their values have been diminished or impaired, a write-down is recognized as necessary. Intangible assets with rights that expire over time are amortized over the time that the rights exist.
Income taxes
The Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.
As
of March 31, 2023, the Company had
| F-7 |
period ended March 31, 2023 or in computing its tax provision for 2023. Management has not yet filed any tax return. The Company is subject to examination by U.S. Federal and State tax authorities from inception to present, generally, for three years after they are filed.
Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, warrants, and stock awards.
New Accounting Pronouncements
In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. We are evaluating the impact this guidance will have on our financial position and statement of operations.
In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) “ASU 2014-09”. ASU 2014-09 was subsequently amended by ASU No. 2016-10 and 2016-12. As amended, Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments create a new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For a public entity, the amendments to ASU 2014-09 are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact of the pronouncement in its financial statements.
All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.
NOTE 3: NOTE PAYABLE – RELATED PARTY
Since inception and until March 31, 2023 this Company is due $ from the major shareholder of the Company, representing an unsecured note payable bearing interest at % per annum. During Q1 2022, the balance shifted from a liability to a loan receivable. The note along with accrued interest was due on December 31, 2017. interest was accrued in Q1 2023. Subsequent to the year ended September 30, 2017, the note terms were amended. The note is now due on demand.
NOTE 3A: NOTE PAYABLE – NON-RELATED PARTY
The
company entered into three notes payable bearing an interest rate of
The
company entered into five notes payable bearing an interest rate of
A
note payable bearing an interest rate at
| F-8 |
interest
of $
NOTE 4: INCOME TAXES
The
Company had
Deferred tax liabilities:
| Schedule of deferred tax liabilities | ||||
| Net loss before taxes | $ | ( |
) | |
| Deferred tax | ||||
| Less deferred tax asset on net operating loss | ||||
| Net deferred tax liability | $ |
NOTE 5: GOING CONCERN
The
accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate the
continuation of the Company as a going concern. The Company reported accumulated deficit of $
In view of the matters described, there is substantial doubt as to the Company’s ability to continue as a going concern without a significant infusion of capital. This company expects to raise capital as a source of financing the project plan. As of March 31, 2023, the Company had minimal operations. There can be no assurance that management will be successful in implementing its plans. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We anticipate that we will have to raise additional capital to fund operations in the next 3 months. To the extent that we are required to raise additional funds to acquire properties, and to cover costs of operations, we intend to do so through additional offerings of debt or equity securities. There are no commitments or arrangements for other offerings in place, no guaranties that any such financings would be forthcoming, or as to the terms of any such financings. Any future financing involves substantial dilution to existing investors.
NOTE 6: RELATED PARTY TRANSACTIONS
The Company is due $ during the period from October 11, 2016 (inception) to March 31, 2023 from the shareholder, who owns % of the shares of the Company, representing an unsecured note payable bearing interest at % per annum. During Q1 2022, the balance shifted from a liability to a loan receivable. Accrued interest of $ is payable along with the principle on demand. No interest was accrued for Q1 2023. No interest was paid until now. The note terms were amended subsequent to the year ended September 30, 2017. The note holder agrees to advance money to the company as needed and the note will be due on demand.
NOTE 7: STOCKHOLDERS’ EQUITY
The
Company is authorized to issue shares of common stock with $ par. The initial issuance was shares for $
| F-9 |
The company issued shares of common stock for services rendered by consultants during 2020.
The
Company imputed $
The Company issued shares of Common Stock at a par value of $ to a shareholder during Q3 2022.
Convertible Preferred Stock
The Company is authorized to issue shares of preferred stock with $ par.
The
Company had one issuance of Preferred Stock Class D during 2020 at the value of the investment of $
The
Company had two issuances of Preferred Stock Class E during 2020 at the value of the investment of $
The
Company had two issuances of Preferred Stock Class C during 2021 at the value of the investment of $
The
Company had two issuances of Preferred Stock Class B during 2021 at the value of the investment of $
Warrants
During
2021, the Company entered into one warrant agreement for a common stock purchase. The warrant is at the par value of $
During
Q2 2022, the Company entered into eight warrant agreements for a common stock purchase. The warrant is at the par value of $
During
Q3 2022, the Company entered into ten warrant agreements for a common stock purchase. The warrant is at the par value of $
| F-10 |
During
Q4 2022, the company entered into four warrant agreements for a common stock purchase. The warrant is at the par value of $
During
Q1 2023, the company entered into five warrant agreements for a common stock purchase. The warrant is at the par value of $
Equity Reclassification
In
the prior year, the company reported Common Stock at $
In
the prior year, the company presented Preferred Stock at the value of the investment made by the shareholder rather than at the par value
of $ the Preferred Stock. The total balance of the Preferred Stock reported in the prior year was $
The
company posted an adjusting entry related to Stockholder’s Equity to accurately reflect the Preferred Stock and Additional
Paid-In Capital Accounts. The adjusting entries provide the reader of the financial statements a concise value associated to these
accounts. The balance as of December 31, 2020 for Preferred Stock is now reported as $
Except the regrouping of accounts, these adjustments did not impact the financial statements in any manner.
NOTE 8: SPONSORSHIPS
The company no longer sponsors a gaming team and therefore has led to a reduction in player’s winning expense. The company last sponsored a gaming team in 2019.
NOTE 9: SUBSEQUENT EVENTS
| · | There have been no significant subsequent events since the balance sheet date. |
| F-11 |
SIGNATURES
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.
| MIDNIGHT GAMING CORPORATION | ||
| Date: August 1, 2024 | By: | /s/ Kinney McGraw |
| Name: | Kinney McGraw | |
| Chief Executive Officer, Treasurer and Secretary | ||
| (Principal Executive Officer) | ||
Pursuant to the requirements of the Securities Act of 1934 this Annual Report on Form 10-K was signed by the following persons on behalf of the Registrant and in the capacities and on the dates stated:
| Signature | Title | Date | ||
| /s/ Paul K. Danner | ||||
| Paul K. Danner | Director, Chairman of the Board | August 1, 2024 | ||
| 1 |
EXHIBIT INDEX
| * | Filed herewith | |
| ** | Furnished herewith |
| 2 |