NOTES
TO FINANCIAL STATEMENTS
NOTE
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Business
Description
Empire
Global Gaming, Inc. (the “Company”) was incorporated in the State of Nevada on May 11, 2010 in order to acquire certain
U.S Patent license agreements pertaining to roulette and actively engage in the gaming business worldwide and commenced operations
in June, 2010. Empire Global Gaming, Inc. was founded to develop, manufacture and sell Class II & Class III Casino electronic
and table games for the general public and casinos worldwide. The Company owns exclusive rights through license agreements to
four U.S. Patents consisting of 14 roulette games patents. EGGI also sells a complete line of public and casino grade gaming products
for roulette, blackjack, craps, baccarat, mini baccarat, pinwheels, Sic Bo, slot machines, poker tables and bingo games. These
patents are certified by Gaming Laboratories International to minimize any unfairness in the multi-number bets in roulette (American
double 0 & European single 0) to both players and casinos. One of the patents controlled by the Company is for a “new
number pattern and board layout” that will insure, the various gaming control boards and commissions in the United States
and eventually worldwide, that the highest standards of security and integrity are met.
The
Company developed a website (www.lottopick3.com) which provides analytical data to consumers on several different lottery type
games. This program is not a gambling/consulting program. It is strictly an analysis program. The website does not offer any advice
one way or the other. It offers an in depth breakdown of all the previous numbers that have been drawn in all states that have
the pick 3 games. The software breaks things down into all the possible categories and shows any types of trends that may occur.
Summary
of Significant Accounting Policies
Cash
The
Company considers all highly liquid investments with an original maturity of year end or less to be cash equivalents. Cash equivalents
include cash on hand and cash in the bank.
Advertisin
g
The
Company expenses advertising when incurred. The Company has incurred no advertising expenses for the years ended December 31,
2018 and 2017, respectively.
Basis
of Presentation
The
Company’s financial statements are presented in accordance with accounting principles generally accepted in the United States
of America.
EMPIRE
GLOBAL GAMING, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions which affect the reporting of assets and liabilities as of the dates of the financial
statements and revenues and expenses during the reporting period. These estimates primarily relate to the sales recognition, allowance
for doubtful accounts, inventory obsolescence and asset valuations. Actual results could differ from these estimates. Management’s
estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the unaudited condensed financial
statements in the periods they are determined to be necessary.
Fair
Value of Financial Instruments
Generally
Accepted Accounting Principles (“GAAP”) requires certain disclosures regarding the fair value of financial instruments.
The fair value of financial instruments is made as of a specific point in time, based on relevant information about financial
markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of
significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair
values.
GAAP
defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required
or permitted to be recorded at fair value, the Company considers the principal, or most advantageous market in which it would
transact, and it considers assumptions that market participants would use when pricing the asset or liability.
GAAP
establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the degree
of subjectivity that is necessary to estimate the fair value of a financial instrument. GAAP establishes three levels of inputs
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 included within Level 1
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.
The Company has no assets
or liabilities valued at fair value on a recurring basis.
Revenue
Reco
g
nition
The Company recognizes
revenue under ASC 606,
Revenue from Contracts with Customers
(“ASC 606”). The core principle of this standard
is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the company expects to be entitled in exchange for those goods or services.
ASC 606 prescribes a five
step process to achieve its core principle. The Company recognizes revenue from product sales as follows:
I.
Identify the contract with the customer.
II.
Identify the contractual performance obligations.
III.
Determine the amount of consideration/price for the transaction.
IV.
Allocate the determined amount of consideration/price to the contractual obligations.
V.
Recognize revenue when or as the performing party satisfies performance obligations.
The consideration/price
for the transaction (performance obligation(s)) is determined as per the invoice for the products.
The
Company derives its revenue from sale of gaming products and from fees earned for the use of its online lottery number selecting
application. The Company recognizes revenue from product sales only when there is persuasive evidence of an arrangement, delivery
has occurred, the sale price is determinable and collectability is reasonably assured and from fees as paid for in an online transaction.
EMPIRE
GLOBAL GAMING, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment
of long lived assets
The
Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by
applying the provisions of Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) 360-35, Property, Plant and Equipment, Subsequent Measurement (“ASC 360-35”). ASC 360-35 requires
that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual
disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value.
Income
Taxes
The
Company utilizes the ASC 740 “Income Tax” (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for the expected future tax consequence of events that have been include in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial
statement carrying amounts and the tax bases of assets and liabilities using enacting tax rates in effect in the years in which
the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized.
The
Company has adopted the provision of FASB ASC 740-10-05, “Accounting for Uncertainties in Income Taxes.” The ASC clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a
recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition.
Financial
and Concentrations Risk
The
Company does not have any concentration or related financial credit risk as of December 31, 2018 and 2017.
We
maintain cash balances at highly-rated financial institutions in various states. Accounts at each institution are insured by the
Federal Deposit Insurance Corporation up to $250,000. At December 31, 2018 and 2017, we had no account balances over federally
insured limits.
Stock
Based Compensation
The
Company follows FASB ASC 718, Compensation – Stock Compensation, which prescribes accounting and reporting standards for
all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing
or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation
rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense
in the unaudited condensed financial statements based on their fair values. That expense is recognized over the period during
which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the
vesting period).
The
Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB
ASC 505-50, Equity–based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is
based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments
issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance
completion date.
For
the years ended December 31, 2018 and 2017, the Company had $200,000 and $0 in stock based compensation, respectively.
EMPIRE
GLOBAL GAMING, INC.
NOTES
TO FINANCIAL STATEMENTS
NOTE
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net
Loss Per Common Share
The
Company utilizes the guidance per ASC 260,
Earnings Per Share
. Basic earnings per share is calculated on the weighted effect
of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the
weighted average shares outstanding during the period. Diluted earnings per share, which is calculated by dividing net income
available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation,
plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding,
is not presented separately as of December 31, 2018 as it is anti-dilutive. There were no potentially dilutive common shares for
the years ended December 31, 2018 and 2017.
Recent
Accounting Pronouncements
From
time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies
that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting
pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting
or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
EMPIRE
GLOBAL GAMING, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE
2. GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The
Company has generated minimal revenues since inception, has experienced recurring operating losses since inception and had negative
working capital of $195,186 and stockholders’ deficit of $195,186 at December 31, 2018. These factors, among others,
raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not
include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from this uncertainty. The Company will need to raise funds or implement its
business plan to continue operations.
The Company’s present plans, the realization of which cannot be assured to overcome these difficulties
include, but are not limited to, among
other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital
from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt
financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
To overcome a going
concern the Company is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph
and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do
not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE
3. INCOME TAXES
The
components of the Company’s deferred tax asset are as follows:
|
|
December 31,
2018
|
|
|
December 31,
2017
|
|
Net operating loss carry forward
|
|
$
|
317,066
|
|
|
$
|
311,458
|
|
Valuation allowance
|
|
|
(317,066
|
)
|
|
|
(311,458
|
)
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The
Company had a net operating loss carryforward of approximately $917,000 and $890,000 for the years ended December 31, 2018 and
2017, which carryforward indefinitely. The net operating losses may be subject to limitations under Internal Revenue Code Section 382
should there be a 50% ownership change as determined under regulations.
The
reconciliation of income tax rate at the U.S. statutory rate of 21% and 35% to the Company’s effective tax rate is as follows:
|
|
2018
|
|
|
2017
|
|
US Statutory rate
|
|
|
21
|
%
|
|
|
35
|
%
|
Valuation allowance
|
|
|
-21
|
%
|
|
|
-35
|
%
|
Income tax provision
|
|
|
-
|
|
|
|
-
|
|
The
Company files income tax returns in the United States. The Company has filed its U.S. federal return for the year ended
December 31, 2018 in 2019, and as a result the U.S. federal returns for 2018, 2017 and 2016 will be considered as open tax
years subject to examination. No tax returns are currently under examination by any tax authorities. The Company has not accrued any additional
interest or penalties for the delinquency of outstanding tax returns as the Company has incurred net losses in those periods
still outstanding.
EMPIRE
GLOBAL GAMING, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE
3. INCOME TAXES (CONTINUED)
In
assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or
all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based
on the assessment, management has established a full valuation allowance against the entire deferred tax asset relating to NOLs
for every period because it is more likely than not that all of the deferred tax asset will not be realized.
NOTE
4. NOTES PAYABLE - RELATED PARTY
The
Company had notes payable to stockholders who are our chief executive officer and chief financial officer. The notes bear interest
at 4% per annum and became due on December 31, 2018. The notes payable had unpaid balance of $159,020 and $153,920 as of December
31, 2018 and 2017, respectively, and are currently in default.
The
Company borrowed $5,100 and $23,100 from directors during the years ended December 31, 2018 and 2017, respectively.
The
Company recorded interest expense of $6,275 and $6,023 for these notes payable for the year ended December 31, 2018 and 2017,
respectively and the balances of accrued interest were $22,561 and $16,286 as of December 31, 2018 and 2017, respectively.
NOTE
5. NOTES PAYABLE - OTHER
On
December 1, 2018 the Company issued a grid note payable to a third party for $13,500 which were used for professional fees.
The note bears interest at 10% per annum and is due on December 31, 2019. The note payable had an unpaid principal balance of
$13,500 and accrued interest of $115 as of December 31, 2018.
NOTE
6. EQUITY
Common
Stock
On
December 6, 2018, the Company approved the issuance of 200,000,000 shares of its common stock, par value $0.001, for the appointment
of the Company’s Chief Executive Officer. The Company has recorded this transaction as Stock Compensation Expense at a value
of $200,000, or $0.001 per share.
As
of December 31, 2018 and 2017, the Company has 980,000,000 authorized shares of common stock, par value $0.001, of which 257,301,000
and 57,301,000 shares are issued and outstanding, respectively.
NOTE
7. SUBSEQUENT EVENTS
Management
has evaluated all transactions and events after the balance sheet date through the date on which these financials were available
to be issued, and except as already included in the notes to these unaudited condensed financial statements, has determined that
no additional disclosures are required.
On
June 1, 2019, the Company issued a grid note payable to a third party for $10,118 which were used for professional fees. The
note bears interest at 10% per annum and is due on December 31, 2019.
On
June 6, 2019, the President of the Company assumed the debt of a related party note totaling $29,273, of which $25,100 was principal
and $4,173 was accrued interest. The related party note was paid in full by the President and will be added to his note balance.