UNITED STATES | ||||||
SECURITIES AND EXCHANGE COMMISSION | ||||||
Washington, D. C. 20549 | ||||||
Form 10-Q | ||||||
[X] QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2016 | ||||||
or | ||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____ | ||||||
Commission File Number: 000-53949 | ||||||
Good Gaming, Inc. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Nevada | 26-3988293 | |||||
(State or other jurisdiction of incorporation) | (IRS Employer Identification Number) | |||||
2130 N. Lincoln Park West, Suite 8N | ||||||
Chicago, Illinois | 60614 | |||||
(Address of principal executive offices and Zip Code) | (Zip Code) | |||||
(773) 698-6047 | ||||||
(Registrant's telephone number, including area code) | ||||||
Large Accelerated Filer
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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer
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[ ]
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Smaller Reporting Company
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[X]
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(Do not check if smaller reporting company)
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APPLICABLE ONLY TO CORPORATE ISSUERS: | ||
As of June 30, 2016, there were 1,995,290,000 shares of the registrant's $0.001 par value common stock issued and outstanding. |
Good Gaming, Inc. | |||
Form 10-Q | |||
For the Fiscal Quarter Ended June 30, 2016 | |||
TABLE OF CONTENTS | |||
Page | |||
Part I | |||
Item 1 | Financial Statements | 3 | |
Item 2 | Management Discussion and Analysis of Financial Condition and Results of Operations | 14 | |
Item 3 | Quantitave and Qualitative Disclosures About Market Risk | 18 | |
Item 4 | Controls and Procedures | 18 | |
Part II | |||
Item 1 | Legal Proceedings | 19 | |
Item 1A | Risk Factors | 19 | |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 19 | |
Item 3 | Defaults Upon Senior Securities | 20 | |
Item 4 | Mine Safety Disclosures | 20 | |
Item 5 | Other Information | 20 | |
Item 6 | Exhibits | 21 | |
22 | |||
Signatures |
PART I - FINANCIAL INFORMATION | |||
Item 1 | Financial Statements | ||
Good Gaming, Inc. | |||
(Formerly HDS International Corp.) | |||
Financial Statements | |||
For the Fiscal Quarter Ended June 30, 2016 | |||
TABLE OF CONTENTS | |||
Page | |||
Balance Sheets (unaudited) | F-1 | ||
Statements of Operations (unaudited) | F-2 | ||
Statements of Cash Flows (unaudited) | F-3 | ||
Notes to the Financial Statements (unaudited) | F-4 | ||
Good Gaming, Inc.
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(Formerly HDS International Corp)
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Balance Sheets
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(Expressed in U. S. Dollars
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June 30,
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December 31,
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|||||||
2016
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2015
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ASSETS
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(Unaudited) | |||||||
Current Assets
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Cash
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$ | 132,270 | $ | - | ||||
Due from affiliate
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260,454 | - | ||||||
Total Current Assets
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392,724 | - | ||||||
Equipment, net
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12,768 | - | ||||||
Other Assets
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Gaming Software, net of amortization
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1,110,000 | - | ||||||
Total Other Assets
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1,110,000 | - | ||||||
Total Assets
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$ | 1,515,492 | $ | - | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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Current Liabilities
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Accounts payable and accrued liabilities
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$ | 108,686 | $ | 96,141 | ||||
Accounts payable and accrued liabilities - related party
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- | 6,670 | ||||||
Convertible debentures, net of unamortized discount of $0 and $36,088, respectively
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75,000 | 83,300 | ||||||
Derivative liability
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735,100 | 453,741 | ||||||
Total Current Liabilities
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918,786 | 639,852 | ||||||
Convertible debentures, long-term
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163,440 | 50,000 | ||||||
Total Liabilities
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1,082,226 | 689,852 | ||||||
Stockholders' Deficit
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Class A Preferred Stock
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Authorized: 249,999,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 7,500,000 shares
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7,500 | 7,500 | ||||||
Class B Preferred Stock
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Authorized: 200,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 23,698,873 and 15,839,300 shares, respectively
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23,698 | 15,839 | ||||||
Authorized: 1,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 0 shares
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- | - | ||||||
Common Stock
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Authorized: 2,050,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 1,995,290,000 and 1,995,290,000 shares, respectively
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1,995,290 | 1,995,290 | ||||||
Stock subscriptions payable
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1,436,723 | |||||||
Additional paid-in capital
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380,323 | 309,592 | ||||||
Accumulated deficit
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(3,410,268 | ) | (3,018,073 | ) | ||||
Total Stockholders' equity (deficit)
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433,266 | (689,852 | ) | |||||
Total liabilities and stockholders' equity (deficit)
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$ | 1,515,492 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements
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Good Gaming, Inc.
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(Formerly HDS International Corp)
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Statements of Operations
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(Unauditeds) | ||||||||||||||||
(Expressed in U. S. Dollars
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For the Three Months Ended
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For the Six Months Ended
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June 30,
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June 30,
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2016
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2015
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2016
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2015
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Revenues
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$ | - | $ | - | $ | - | $ | - | ||||||||
Operating Expenses
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Consulting fees
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95,090 | 28,859 | 121,090 | 98,694 | ||||||||||||
General and administrative
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74,601 | 119,516 | 140,761 | 127,925 | ||||||||||||
Professional fees
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- | 42,250 | 5,000 | 45,500 | ||||||||||||
Stock compensation
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- | - | 41,921 | - | ||||||||||||
Total Operating Expenses
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169,691 | 190,625 | 308,772 | 272,119 | ||||||||||||
Net Loss Before Other Expenses
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(169,691 | ) | (190,625 | ) | (308,772 | ) | (272,119 | ) | ||||||||
Other Income (Expenses)
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Interest expense
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(3,360 | ) | (8,144 | ) | (6,720 | ) | (30,974 | ) | ||||||||
Debt Restructure
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- | 58,300 | - | |||||||||||||
Loss on Change in fair value of derivative liability
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30,000 | (7,241 | ) | (281,359 | ) | (32,630 | ) | |||||||||
Total Other Income (Expenses)
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26,640 | (15,385 | ) | (229,779 | ) | (63,604 | ) | |||||||||
Net Loss
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$ | (143,051 | ) | $ | (206,010 | ) | $ | (538,551 | ) | $ | (335,723 | ) | ||||
Net Loss Per Share, Basic and Diluted
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$ | - | $ | - | $ | - | $ | - | ||||||||
Weighted Average Shares Outstanding
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1,995,290,000 | 1,995,290,000 | 1,995,290,000 | 1,549,334,532 | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
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Good Gaming, Inc.
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(Formerly HDS International Corp)
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Statements of Cash Flows
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(Unaudited) | ||||||||
(Expressed in U. S. Dollars)
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For the six Months Ended
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June 30,
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2016
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2015
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Operating Activities
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Net Loss
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$ | (538,551 | ) | $ | (335,723 | ) | ||
Adjustment to reconcile net loss to
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net cash used in operating activities
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Accretion of debt discount
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281,359 | 15,052 | ||||||
Depreciation
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672 | - | ||||||
Amortization of software
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90,000 | |||||||
Amortization of deferred financing costs
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- | 1,020 | ||||||
Loss on change in fair value of derivative liability
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- | 32,630 | ||||||
Stock compensation
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41,921 | - | ||||||
Debt Reduction
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(58,300 | ) | ||||||
Changes in operating assets and liabilities
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Due from affiliate
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27,572 | |||||||
Accounts payable and accrued liabilities
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12,544 | 77,991 | ||||||
Accounts payable and accrued liabilities-related parties
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(6,670 | ) | 43,957 | |||||
Net Cash Provided by (Used in) Operating Activities
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(149,453 | ) | (165,073 | ) | ||||
Investing activities
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Purchase of equipment
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(13,440 | ) | - | |||||
Net Cash Provided by (Used in) Investing activities
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(13,440 | ) | ||||||
Financing activities
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Proceeds from purchase of Good Gaming
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1,723 | - | ||||||
Proceeds from convertible debenture, net of financing costs
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113,440 | 165,000 | ||||||
Proceeds from sale of preferred stock CL B
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30,000 | - | ||||||
Proceeds from stock subscriptions
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150,000 | - | ||||||
Net Cash Provided by (Used in) Financing activities
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295,163 | 165,000 | ||||||
Change in Cash
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132,270 | (73 | ) | |||||
Cash, Beginning of Period
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- | 73 | ||||||
Cash, End of period
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$ | 132,270 | $ | - | ||||
Non-cash investing and financing activities
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Adjustment to Derivative liability
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$ | - | $ | 53,911 | ||||
Common shares issued for conversion of debt
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$ | - | $ | 39,960 | ||||
Common shares issued for payment of related party payable
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$ | 6,670 | ||||||
Debt Discount due to beneficial conversion feature
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$ | - | $ | 15,500 | ||||
The accompanying notes are an integral part of these consolidated financial statements
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1.
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Nature of Operations and Continuance of Business
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2.
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Summary of Significant Accounting Policies
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(a)
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Basis of Presentation and Principles of Consolidation
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(b)
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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.
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(c)
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Use of Estimates
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(d)
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Cash and Cash Equivalents
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(e)
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Intangible Assets
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2.
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Summary of Significant Accounting Policies (continued)
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(f)
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Impairment of Long-Lived Assets
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(g)
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Beneficial Conversion Features
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(h)
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Derivative Liability
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(i)
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Basic and Diluted Net Loss Per Share
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(j)
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Income Taxes
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(k)
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Comprehensive Loss
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(l)
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Financial Instruments
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2.
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Summary of Significant Accounting Policies (continued)
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Balance, December 31, 2014
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Conversions
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Changes in Fair Values
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Balance, June 30, 2016
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Derivative Liability
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$
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453,741
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$
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—
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$
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281,359
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$
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735,100
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(m)
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Recent Accounting Pronouncements
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3.
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Other Assets
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4.
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Debt
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(a)
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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. As of March 31, 2016, the Company recorded accrued interest of $1,260 (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.
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(b)
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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. In February 2016 as part of a settlement between the lender and the Company, the note along with a remaining balance of $8300 from former JABRO-Asher notes were restructured to a principle amount of $25,000 with a due date of June 18, 2017 and a 0% interest rate. 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 with the lender subject to strict lock-up and leak-out provisions. The Company is currently negotiating the lock-up of these debentures from conversion into common stock for a period of one-year commencing June 10, 2016.
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(c)
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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.
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(d)
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On or around April 7, 2016, Silver Linings Management, LLC funded the Company $13,439.50 in the form of convertible debentures secured by certain high-powered gaming machines purchased from XIDAX. The notes bear interest at a rate of 10% per annum payable in cash or kind at the option of the Company, mature April 1, 2018, and are convertible into Series B Preferred shares at the option of the holder at any time.
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The Company did not allocate to equity any increase in note value due to the fact that the conversion value was lower than the par value. Thereby creating a zero or negative value.
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5.
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Derivative Liabilities
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Balance December 31, 2014
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$ | 70,290 | ||
Adjustment for Conversion
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(64,767 | ) | ||
Mark to market adjustment at December 31, 2015
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448,218 | |||
Balance December 31, 2015
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453,741 | |||
Adjustment for Conversion
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- | |||
Mark to market adjustment at June 30, 2016
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281,359 | |||
Balance June 30, 2016
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$ | 735,100 |
6.
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Common Stock
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7.
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Preferred Stock
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7.
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Preferred Stock (continued)
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8.
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Related Party Transactions
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(a)
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As at June 30,2016, the Company owes $0 (December 31, 2015 – $570) to the previous President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
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As at June 30, 2016, the Company owes $0 (December 31, 2015 – $6,100) to the previous President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
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9.
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Income Taxes
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2016
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2015
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Income tax recovery at statutory rate
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$ | 22,077 | $ | 195,612 | ||||
Valuation allowance change
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$ | (22,077 | ) | $ | (195,612 | ) | ||
Provision for income taxes
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$ | - | $ | - | ||||
The Significant components of deferred income tax assets and liabilities at June 30, 2016 and December 31, 2015 are as follows:
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Net operating loss carried forward
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$ | 3,245.293 | $ | 3,018,073 | ||||
Valuation allowance
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$ | (3,245,293 | ) | $ | (3,018,073 | ) | ||
Net deferred income tax asset
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$ | - | $ | - | ||||
10.
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Stock Subscriptions
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11.
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Consulting Agreements
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On or around April 14, 2016, the Company formed and advisory Board and engaged Syndicate Studios, LLC for consulting services and issuing the Syndicate Studios 100,000,000 warrants with a two-year expiration and a strike price of $0.0002. The warrants do not vest for one year and are subject to mutually agreed to performance criteria. Sean Stalzer, owner of The Syndicate, has already been instrumental in introducing the Company to games publishers, members of the media, and gamers who have been vetting the Good Gaming 2.0 platform for the past few months.
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12.
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Subsequent Events
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On July 25, 2016, the Company engaged Kevin Harrington Enterprises (KBHJJ LLC) to provide consulting services, including introductions to potential investors and sponsors for eSports tournaments, among other things. As part of the Agreement, the Company appointed Kevin Harrington to its Advisory Board and issued KBHJJ one hundred million common stock purchase warrants with a two-year expiration, cashless exercise, and strike price of $0.0003. The warrants do not vest for a period of one year.
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ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION. |
June 31, | December 31, | |||||||
2016 | 2015 | |||||||
Current Assets | $ | 392,724 | $ | - | ||||
Current Liabilities | 918,786 | 639,842 | ||||||
Working Capital (Deficit) | (526,062 | ) | (639,872 | ) |
June 30, | December 31, | |||||||
2016 | 2015 | |||||||
Cash Flows from (used in) Operating Activities | $ | (149,453 | ) | $ | (73 | ) | ||
Cash Flows from (used in) Investment Activities | (13,440 | ) | - | |||||
Cash Flows from (used in) Financing Activities | 295,163 | - | ||||||
Net Increase (decrease) in Cash During Period | 132,270 | (73 | ) |
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Operating Revenues
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We have not generated any revenues since inception.
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Operating Expenses and Net Loss
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Liquidity and Capital Resources
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Cashflow from Operating Activities
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Cashflow from Investing Activities
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Cashflow from Financing Activities
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During the six months ended June 30, 2016, the Company received $1,723 cash from the purchase of Good Gaming assets. compared to $0 during the six months ended June 30, 2015. The Company received $113,440 in convertible debentures, $30,000 from sale of Cl B preferred stock and $150,000 from stock subscriptions.
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Subsequent Developments
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On July 25, 2016, the Company engaged Kevin Harrington Enterprises (KBHJJ LLC) to provide consulting services, including introductions to potential investors and sponsors for eSports tournaments, among other things. As part of the Agreement, the Company appointed Kevin Harrington to its Advisory Board and issued KBHJJ one hundred million common stock purchase warrants with a two-year expiration, cashless exercise, and strike price of $0.0003. The warrants do not vest for a period of one year.
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Going Concern
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ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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Share Sales – Series B Preferred Shares
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On or around February 18, 2016, as part of the closing of the Good Gaming asset sale by CMG Holdings Group to HDS International Corp., CMG Holdings is due an additional 85,600,000 Series B Preferred Shares. These shares due are currently in the form of a subscription payable by HDS International to CMG Holdings Group.
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On or around February 18, 2016, Vikram Grover was issued 859,073 Series B Preferred shares in lieu of compensation due for services rendered to SirenGPS in 2015.
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On or around February 23, 2016, Andrew Albrecht was issued 2,000,000 Series B Preferred shares as consideration for an investment in the Company.
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On or around February 26, 2016, William Schultz funded monies to the Company and had a subscription receivable for 2,500,000 Series B Preferred shares as consideration for an investment in the Company.
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On or around February 26, 2016, Paul Rauner was issued 800,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
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On or around February 26, 2016, Galina Berkovich was issued 800,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
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On or around February 26, 2016, Bernard Mangold was issued 400,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
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On or around March 7, 2016, Silver Lining Management, an entity controlled by David Dorwart, our Director, funded monies to the Company and had a subscription receivable for 5,000,000 Series B Preferred shares as consideration for an investment in the Company.
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On or around March 15, 2016, Brett Nesland was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company.
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On or around April 22, 2016, William Crusoe was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company. The investor has since agreed to lockup his shares for a period of one year.
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On or around April 22, 2016, Francesca Dorwart was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company.
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The vast majority of the Series B Preferred stock investors have agreed to lock-up their investments for a period of one year as of May 2016.
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ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
ITEM 4. | MINE SAFETY DISCLOSURE. |
ITEM 5. | OTHER INFORMATION. |
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The vast majority of the Series B preferred stock investors have agreed to lock-up their investments for a period of one year. The vast majority of the convertible note holders have agreed to lock-up their investments for a period of one year. The balance have agreed to sell their positions to the Company or to investors of the Company’s choosing
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ITEM 6. | EXHIBITS |
Exhibit | Incorporated by reference | Filed | |||
Number | Form | Date | Number | herewith | |
3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | |
3.2
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Bylaws.
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S-1
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3/24/09
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3.2
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3.3
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Amended and Restated Articles of Incorporation.
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8-K
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6/14/11
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3.1a
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3.4
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Amended and Restated Articles of Incorporation.
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8-K
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8/17/11
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3.1
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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
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Promissory Note issued to HGT Capital LLC. dated April 15, 2015
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8-K
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4/21/15
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10.1
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10.9 | Settlement Agreement and Mutual Release dated February 17, 2016 | 10-Q | 3/31/16 | 10.1 | |
10.10 | Convertible Promissory Note dated February 17, 2016 | 10-Q | 3/31/16 | 10.2 | |
14.1
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Code of Ethics.
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10-K
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3/29/11
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14.1
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X
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|||||
X
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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 | |||
Reports on Form 8-K: | |||||
Amendment to Articles of Incorporation - Change of Name | 8-K | 6/30/16 | 5.03 and 7.02 | ||
HDS INTERNATIONAL CORP. | ||
(the "Registrant") | ||
BY: | VIKRAM GROVE | |
Vikram Grover | ||
President, Principal Executive Officer, | ||
Principal Financial Officer and Principal Accounting Officer |
1.
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I have reviewed this Form 10-Q for the quarter ended June 30, 2016 of Good Gaming, Inc.
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2.
|
Based on my knowledge, this 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 such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Document And Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2016
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | GOOD GAMING, INC. |
Document Type | 10-Q |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 1,995,290,000 |
Amendment Flag | false |
Entity Central Index Key | 0001454742 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Smaller Reporting Company |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Jun. 30, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q2 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Statement [Abstract] | ||||
Revenues | ||||
Operating Expenses | ||||
Consulting fees | 95,090 | 28,859 | 121,090 | 98,694 |
General and administrative | 74,601 | 119,516 | 140,761 | 127,925 |
Professional fees | 42,250 | 5,000 | 45,500 | |
Stock compensation | 41,921 | |||
Total Operating Expenses | 169,691 | 190,625 | 308,772 | 272,119 |
Net Loss Before Other Expenses | (169,691) | (190,625) | (308,772) | (272,119) |
Other Income (Expenses) | ||||
Interest expense | (3,360) | (8,144) | (6,720) | (30,974) |
Debt Restructure | 58,300 | |||
Loss on Change in fair value of derivative liability | 30,000 | (7,241) | (281,359) | (32,630) |
Total Other Income (Expenses) | 26,640 | (15,385) | (229,779) | (63,604) |
Net Loss | $ (143,051) | $ (206,010) | $ (538,551) | $ (335,723) |
Net Loss Per Share, Basic and Diluted | ||||
Weighted Average Shares Outstanding | 1,995,290,000 | 1,995,290,000 | 1,995,290,000 | 1,549,334,532 |
Nature of Operations and Continuance of Business |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Nature of Operations and Continuance of Business |
HDS International Corp. (the "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 205 million eSports players and participants worldwide that want to compete at the high school or college level. A substantial portion of the Company's activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.
On February 18, 2016, the Company acquired Good Gaming, Inc. from CMG Holdings Group, Inc. (OTCQB: CMGO).
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 no 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 June 30, 2016, the Company had a working capital deficiency of $526,062 and an accumulated deficit of $3,410,268. 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's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. 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. |
Summary of Significant Accounting Policies |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
The financial statements for the periods ending March 31, 2016 include the accounts of the Company. 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.
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's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of June 30, 2016 and 2015, the Company had no cash equivalents.
Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years.
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance 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.
From time to time, the Company may issue convertible notes that may contain an imbedded 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.
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 records at is 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.
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.
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 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 in the financial statements. As at June 30, 2016 and 2015, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
ASC 820, "Fair Value 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 categorization 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:
Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 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 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's balance sheet as at June 30, 2016 and December 31, 2015 as follows:
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.
The Company has 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 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.
|
Other Assets |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 | |||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Other Assets |
The Company valued the software purchased at $1,200,000 at purchase date February 18, 2018. The software has a useful life of 5 years. Amortization expense is calculated with straight line method at mid-month convesion for the period ending June 30, 2016 as $60,000. |
Debt |
6 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||
Debt |
Convertible Debentures
|
Derivative Liabilities |
6 Months Ended | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||
Derivative Liabilities |
The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended June 30, 2016 and December 31, 2015 :
The projected annual volatility for each valuation period was based on the historic volatility of the Company of 165% as at December 31, 2015, 167% as at February 6, 2016, 167% as at February 10, 2016, 168% as at February 13, 2016, 168% as at February 18, 2016, 168% as at February 23, 2016, 169% as at March 2, 2016, 170% as at March 3, 2016, 170% as at March 16, 2016, 170% as at March 17, 2016, 170% as at March 19, 2016, 170% as at March 24, 2016 ,171% as at March 25, 2016, and 171% as at June 30, 2016.
An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 5%.
A summary of the activity of the derivative liability is shown below:
|
Common Stock |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 | |||
Equity [Abstract] | |||
Common Stock |
Share Transactions for the Quarter Ended June 30, 2016:
None |
Preferred Stock |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 | |||
Equity [Abstract] | |||
Preferred Stock |
Our Articles of Incorporation, which were amended effective July 22, 2016, 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, and the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Two Hundred Million (200,000,000), with a stated par value of $0.001 per share, and the total number of newly authorized Class C Preferred Shares the Corporation shall have the authority to issue is One Thousand (1,000). 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.
As of June 30, 2016, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. As of June 30, 2016, we had 23,698,873 shares of Class B preferred stock issued and outstanding. As of June 30, 2016, we had no shares of Class C 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. The 23,698,873 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 4,489,774,600 shares.
Share Sales – Series B Preferred Stock
On or around February 18, 2016, as part of the closing of the Good Gaming asset sale by CMG Holdings Group to HDS International Corp., CMG Holdings is due an additional 85,600,000 Series B Preferred Shares. These shares due are currently in the form of a subscription payable by HDS International to CMG Holdings Group.
On or around February 18, 2016, our CEO Vikram Grover was issued 859,073 Series B Preferred shares in lieu of compensation due for services rendered to SirenGPS in 2015.
On or around February 23, 2016, Andrew Albrecht was issued 2,000,000 Series B Preferred shares as consideration for an investment in the Company.
On or around February 26, 2016, William Schultz funded monies to the Company and had a subscription receivable for 2,500,000 Series B Preferred shares as consideration for an investment in the Company.
On or around February 26, 2016, Paul Rauner was issued 800,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
On or around February 26, 2016, Galina Berkovich was issued 800,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
On or around February 26, 2016, Bernard Mangold was issued 400,000 Series B Preferred shares as consideration for the strategic change of control transaction with CMG Holdings Group, Inc.
On or around March 7, 2016, Silver Lining Management, an entity controlled by David Dorwart, our Director, funded monies to the Company and had a subscription receivable for 5,000,000 Series B Preferred shares as consideration for an investment in the Company.
On or around March 15, 2016, Brett Nesland was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company.
On or around April 22, 2016, William Crusoe was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company. The investor has since agreed to lockup his shares for a period of one year.
On or around April 22, 2016, Francesca Dorwart was issued 1,000,000 Series B Preferred shares as consideration for an investment in the Company.
The vast majority of the Series B Preferred stock investors have agreed to lock-up their investments for a period of one year as of May 2016. |
Related Party Transactions |
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Party Transactions |
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Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
The Company has a net operating loss carried forward of $3,239,596 available to offset taxable income in future years which commence expiring in fiscal 2030.
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, to the net loss before income taxes calculated for each jurisdiction. The tax effect of the significant temporary differences, which comprise future tax assets and liabilities, are as follows:
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. When a change in ownership occurs, net operating loss carry forwards may be limited.
|
Stock Subscriptions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 | |||
Notes to Financial Statements | |||
Stock Subscriptions |
On or around April 5, 2016, Pecan Bluff Investments LLC, funded monies to the Company and had a subscription receivable for 2,500,000 Series B Preferred shares as consideration for an investment in the Company.
On or around April 5, 2016, Fly Faster LLC, funded monies to the Company and had a subscription receivable for 2,500,000 Series B Preferred shares as consideration for an investment in the Company.
On or around April 5, 2016, Independent Drug Distributors LLC, funded monies to the Company and had a subscription receivable for 5,000,000 Series B Preferred shares as consideration for an investment in the Company.
On or around April 8, 2016, David Dorwart, our Director, funded monies to the Company and has a subscription receivable for 5,000,000 Series B Preferred shares as consideration for an investment in the Company.
The vast majority of the Series B Preferred stock investors have agreed to lock-up their investments for a period of one year as of May 2016. |
Consulting Agreements |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2016 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Consulting Agreements |
|
Subsequent Events |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2016 | |||||
Subsequent Events [Abstract] | |||||
Subsequent Events |
|
Summary of Significant Accounting Policies (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
The financial statements for the periods ending March 31, 2016 include the accounts of the Company. 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.
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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's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
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Cash and Cash Equivalents |
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of June 30, 2016 and 2015, the Company had no cash equivalents. |
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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 from fifteen to twenty years. |
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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 circumstance 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. |
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Beneficial Conversion Features |
From time to time, the Company may issue convertible notes that may contain an imbedded 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. |
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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 records at is 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. |
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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. |
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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 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. |
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Comprehensive Loss |
ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at June 30, 2016 and 2015, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. |
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Financial Instruments |
ASC 820, "Fair Value 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 categorization 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:
Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 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 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's balance sheet as at June 30, 2016 and December 31, 2015 as follows:
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. |
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Recent Accounting Pronouncements |
The Company has 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 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. |
Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis |
|
Derivative Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||
Derivative liability |
|
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit |
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Deferred income tax assets and liabilities |
|
Nature of Operations and Continuance of Business (Details Narrative) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Working captial deficiency | $ 556,062 | |
Accumulated deficit | $ (3,410,268) | $ (3,018,073) |
Summary of Significant Accounting Policies (Details) - Assets and Liabilities Measured on a Recurring Basis (USD $) |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Assets and liabilities measured at fair value on a recurring basis [Rollforward] | |
Derivative Liability, beginning | $ 453,741 |
Changes in Fair Values | 281,359 |
Derivative Liability, ending | $ 735,100 |
Other Assets (Details Narrative) |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Software | $ 1,200,000 |
Life of software | 5 years |
Amortization of software | $ 90,000 |
Derivative Liabilities - Derivative liability (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Derivative Liability [Rollforward] | ||
Derivative Liability (in Dollars) , beginning | $ 453,741 | $ 70,290 |
Adjustment for conversion | (64,767) | |
Mark to market adjustment | 281,359 | 448,218 |
Derivative Liability (in Dollars), ending | $ 735,100 | $ 453,741 |
Derivative Liabilities Expected Votality (Details Narrative) |
6 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 26, 2016 |
Mar. 24, 2016 |
Mar. 20, 2016 |
Mar. 16, 2016 |
Mar. 04, 2016 |
Mar. 02, 2016 |
Feb. 23, 2016 |
Feb. 18, 2016 |
Feb. 13, 2016 |
Feb. 10, 2016 |
Feb. 06, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Derivative Liabilities Expected Votality Details Narrative | |||||||||||||
Fair Value Assumptions, Expected Volatility Rate | 171.00% | 170.00% | 170.00% | 170.00% | 170.00% | 169.00% | 168.00% | 168.00% | 168.00% | 167.00% | 167.00% | 171.00% | 165.00% |
Derivative Liabilities (Details Narrative) |
6 Months Ended |
---|---|
Jun. 30, 2016 | |
Minimum [Member] | |
Derivative [Line Items] | |
Fair Value Assumptions, Risk Free Interest Rate monthly increase | 1.00% |
Fair Value Inputs, Probability of Default | 0.00% |
Maximum [Member] | |
Derivative [Line Items] | |
Fair Value Assumptions, Risk Free Interest Rate monthly increase | 5.00% |
Series B Preferred Stock -Share Sales (Details Narrative) - USD ($) |
Apr. 22, 2016 |
Mar. 16, 2016 |
Feb. 26, 2016 |
Feb. 23, 2016 |
Feb. 18, 2016 |
Jun. 30, 2016 |
Mar. 07, 2016 |
---|---|---|---|---|---|---|---|
Stock subscriptions payable | $ 1,436,723 | ||||||
CMG Holdings Group [Member] | |||||||
Stock subscriptions payable | $ 85,600,000 | ||||||
CEO Vikram Grover [Member] | |||||||
Shares issued for services, shares | 859,073 | ||||||
Anderw Albrecht [Member] | |||||||
Stock Issued During Period for Investment (in Shares) | 2,000,000 | ||||||
William Schultz [Member] | |||||||
Subscription Receivable | $ 2,500,000 | $ 5,000,000 | |||||
Paul Rauner [Member] | |||||||
Stock Issued During Period, Shares | 800,000 | ||||||
Galina Berkovich [Member] | |||||||
Stock Issued During Period, Shares | 800,000 | ||||||
Bernard Mangold [Member] | |||||||
Stock Issued During Period, Shares | 400,000 | ||||||
Brett Nesland [Member] | |||||||
Stock Issued During Period for Investment (in Shares) | 1,000,000 | ||||||
William Crusoe [Member] | |||||||
Stock Issued During Period for Investment (in Shares) | 1,000,000 | ||||||
Francesca Dorwart [Member] | |||||||
Stock Issued During Period for Investment (in Shares) | 1,000,000 |
Related Party Transactions (Details Narrative) - USD ($) |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
President and CEO [Member] | ||
Accounts Payable, Related Parties | $ 0 | $ 570 |
President and CEO Additional[Member] | ||
Accounts Payable, Related Parties | $ 0 | $ 6,100 |
Income Taxes - Income tax benefit (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Income tax recovery at statutory rate | $ 22,077 | $ 195,612 |
Valuation allowance change | (22,077) | (195,612) |
Provision for income taxes |
Income Taxes - Deferred income tax assets and liabilities (Details) - USD ($) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Net operating loss carried forward | $ 3,245,293 | $ 3,018,073 |
Valuation allowance change | (3,245,293) | (3,018,073) |
Net deferred income tax asset |
Income Taxes (Details Narrative) |
6 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 3,239,596 |
Expiration date | Dec. 31, 2030 |
Statutory rate | 27.00% |
Stock Subscriptions (Details Narrative) - USD ($) |
Apr. 08, 2016 |
Apr. 05, 2016 |
---|---|---|
Pecan Bluff Investments, LLC [Member] | ||
Class of Stock [Line Items] | ||
Subscription Receivable | $ 2,500,000 | |
Fly Faster LLC [Member] | ||
Class of Stock [Line Items] | ||
Subscription Receivable | 2,500,000 | |
Independent Drugs Distribution LLC [Member] | ||
Class of Stock [Line Items] | ||
Subscription Receivable | $ 5,000,000 | |
David Dorwart[Member] | ||
Class of Stock [Line Items] | ||
Subscription Receivable | $ 5,000,000 |
Consulting Agreements (Details Narrative) - Syndicate Studios, LLC [Member] |
Apr. 14, 2016
$ / shares
shares
|
---|---|
Other Commitments [Line Items] | |
Warrants Issued | shares | 100,000,000 |
Strike price | $ / shares | $ 0.0002 |
Subsequent Events (Details Narrative) - Kevin Harrington Enterprises [Member] |
Jul. 25, 2016
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 100,000,000 |
Debt Instrument, Interest Rate, Effective Percentage | 0.03% |
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