0001454742 false --12-31 Q2 Yes Yes 0001454742 2023-01-01 2023-06-30 0001454742 2023-07-31 0001454742 2023-06-30 0001454742 2022-12-31 0001454742 us-gaap:NonrelatedPartyMember 2023-06-30 0001454742 us-gaap:NonrelatedPartyMember 2022-12-31 0001454742 us-gaap:RelatedPartyMember 2023-06-30 0001454742 us-gaap:RelatedPartyMember 2022-12-31 0001454742 us-gaap:SeriesAPreferredStockMember 2023-06-30 0001454742 us-gaap:SeriesAPreferredStockMember 2022-12-31 0001454742 us-gaap:SeriesBPreferredStockMember 2023-06-30 0001454742 us-gaap:SeriesBPreferredStockMember 2022-12-31 0001454742 us-gaap:SeriesCPreferredStockMember 2023-06-30 0001454742 us-gaap:SeriesCPreferredStockMember 2022-12-31 0001454742 us-gaap:SeriesDPreferredStockMember 2023-06-30 0001454742 us-gaap:SeriesDPreferredStockMember 2022-12-31 0001454742 us-gaap:SeriesEPreferredStockMember 2023-06-30 0001454742 us-gaap:SeriesEPreferredStockMember 2022-12-31 0001454742 us-gaap:SeriesAPreferredStockMember 2023-03-31 0001454742 2023-04-01 2023-06-30 0001454742 2022-04-01 2022-06-30 0001454742 2022-01-01 2022-06-30 0001454742 2021-12-31 0001454742 2022-06-30 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2022-12-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2022-12-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2022-12-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2022-12-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2022-12-31 0001454742 us-gaap:CommonStockMember 2022-12-31 0001454742 us-gaap:WarrantMember 2022-12-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001454742 us-gaap:RetainedEarningsMember 2022-12-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2023-03-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2023-03-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2023-03-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2023-03-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2023-03-31 0001454742 us-gaap:CommonStockMember 2023-03-31 0001454742 us-gaap:WarrantMember 2023-03-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001454742 us-gaap:RetainedEarningsMember 2023-03-31 0001454742 2023-03-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2021-12-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2021-12-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2021-12-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2021-12-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2021-12-31 0001454742 us-gaap:CommonStockMember 2021-12-31 0001454742 us-gaap:WarrantMember 2021-12-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001454742 us-gaap:RetainedEarningsMember 2021-12-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2022-03-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2022-03-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2022-03-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2022-03-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2022-03-31 0001454742 us-gaap:CommonStockMember 2022-03-31 0001454742 us-gaap:WarrantMember 2022-03-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001454742 us-gaap:RetainedEarningsMember 2022-03-31 0001454742 2022-03-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001454742 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001454742 us-gaap:WarrantMember 2023-01-01 2023-03-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001454742 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001454742 2023-01-01 2023-03-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2023-04-01 2023-06-30 0001454742 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001454742 us-gaap:WarrantMember 2023-04-01 2023-06-30 0001454742 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001454742 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2022-01-01 2022-03-31 0001454742 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001454742 us-gaap:WarrantMember 2022-01-01 2022-03-31 0001454742 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001454742 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001454742 2022-01-01 2022-03-31 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2022-04-01 2022-06-30 0001454742 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001454742 us-gaap:WarrantMember 2022-04-01 2022-06-30 0001454742 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001454742 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2023-06-30 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2023-06-30 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2023-06-30 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2023-06-30 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2023-06-30 0001454742 us-gaap:CommonStockMember 2023-06-30 0001454742 us-gaap:WarrantMember 2023-06-30 0001454742 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001454742 us-gaap:RetainedEarningsMember 2023-06-30 0001454742 us-gaap:PreferredClassAMember us-gaap:PreferredStockMember 2022-06-30 0001454742 us-gaap:PreferredClassBMember us-gaap:PreferredStockMember 2022-06-30 0001454742 GMER:PreferredClassCMember us-gaap:PreferredStockMember 2022-06-30 0001454742 GMER:PreferredClassDMember us-gaap:PreferredStockMember 2022-06-30 0001454742 GMER:PreferredClassEMember us-gaap:PreferredStockMember 2022-06-30 0001454742 us-gaap:CommonStockMember 2022-06-30 0001454742 us-gaap:WarrantMember 2022-06-30 0001454742 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001454742 us-gaap:RetainedEarningsMember 2022-06-30 0001454742 2022-01-01 2022-12-31 0001454742 2017-03-21 2017-03-22 0001454742 us-gaap:FairValueInputsLevel1Member 2023-06-30 0001454742 us-gaap:FairValueInputsLevel2Member 2023-06-30 0001454742 us-gaap:FairValueInputsLevel3Member 2023-06-30 0001454742 us-gaap:FairValueInputsLevel1Member 2022-06-30 0001454742 us-gaap:FairValueInputsLevel2Member 2022-06-30 0001454742 us-gaap:FairValueInputsLevel3Member 2022-06-30 0001454742 us-gaap:ConvertibleDebtMember GMER:HGTCapitalLLCMember 2015-04-15 0001454742 us-gaap:ConvertibleDebtMember GMER:FirstPaymentMember GMER:HGTCapitalLLCMember 2015-04-01 2015-06-30 0001454742 us-gaap:ConvertibleDebtMember GMER:RemainingPaymentMember GMER:HGTCapitalLLCMember 2015-04-01 2015-06-30 0001454742 us-gaap:ConvertibleDebtMember GMER:HGTCapitalLLCMember 2015-04-14 2015-04-15 0001454742 GMER:ConvertiblePromissoryNoteMember GMER:HGTCapitalLLCMember 2018-09-21 0001454742 GMER:ConvertiblePromissoryNoteMember GMER:HGTCapitalLLCMember 2018-09-20 2018-09-21 0001454742 GMER:HGTCapitalLLCMember 2018-11-27 2018-11-29 0001454742 GMER:HGTCapitalLLCMember 2020-08-16 2020-08-17 0001454742 GMER:HGTCapitalLLCMember 2020-09-08 2020-09-09 0001454742 GMER:HGTCapitalLLCMember 2020-11-10 2020-11-11 0001454742 GMER:HGTCapitalLLCMember 2020-12-17 2020-12-18 0001454742 GMER:HGTCapitalLLCMember 2020-12-31 0001454742 GMER:HGTCapitalLLCMember 2021-06-24 2021-06-25 0001454742 us-gaap:LineOfCreditMember GMER:ViaOneServicesLLCMember GMER:LineOfCreditAgreementMember 2023-06-30 0001454742 us-gaap:LineOfCreditMember GMER:ViaOneServicesLLCMember GMER:LineOfCreditAgreementMember 2023-01-01 2023-06-30 0001454742 us-gaap:ConvertibleNotesPayableMember GMER:ViaOneServicesLLCMember 2021-09-30 2021-09-30 0001454742 GMER:ViaOneServicesLLCMember us-gaap:ConvertibleNotesPayableMember 2021-09-30 0001454742 GMER:SeriesEConvertiblePreferredStockMember GMER:ViaOneServicesLLCMember GMER:RevolvingNoteMember 2021-01-01 2021-12-31 0001454742 GMER:NewEmployeeServiceAgreementMember GMER:ViaOneServicesLLCMember 2021-09-30 2021-09-30 0001454742 GMER:NewEmployeeServiceAgreementMember GMER:ViaOneServicesLLCMember 2021-09-30 0001454742 GMER:NewEmployeeServiceAgreementMember GMER:ViaOneServicesLLCMember GMER:SeriesEConvertiblePreferredStockMember 2021-01-01 2021-12-31 0001454742 GMER:ViaOneServicesLLCMember 2022-01-01 2022-01-01 0001454742 us-gaap:MeasurementInputPriceVolatilityMember 2023-06-30 0001454742 us-gaap:MeasurementInputPriceVolatilityMember 2022-06-30 0001454742 us-gaap:MeasurementInputRiskFreeInterestRateMember 2023-06-30 0001454742 us-gaap:MeasurementInputRiskFreeInterestRateMember 2022-06-30 0001454742 2021-06-30 0001454742 2021-07-01 2022-06-30 0001454742 2022-07-01 2023-06-30 0001454742 GMER:ViaOneEmployeesMember 2023-01-30 2023-01-30 0001454742 GMER:ViaOneEmployeesMember 2023-02-15 2023-02-15 0001454742 GMER:ViaOneEmployeesMember 2023-03-15 2023-03-15 0001454742 GMER:ViaOneEmployeesMember 2023-04-14 2023-04-14 0001454742 GMER:ViaOneEmployeesMember 2023-05-18 2023-05-18 0001454742 GMER:ViaOneEmployeesMember 2023-06-15 2023-06-15 0001454742 srt:MaximumMember 2023-06-30 0001454742 us-gaap:SeriesCPreferredStockMember 2023-01-01 2023-06-30 0001454742 us-gaap:SeriesDPreferredStockMember 2023-01-01 2023-06-30 0001454742 GMER:HGTCapitalLLCMember 2023-06-30 0001454742 us-gaap:PrivatePlacementMember GMER:ArmisticeCapitalLLCMember 2023-06-30 0001454742 us-gaap:PrivatePlacementMember GMER:SabbyManagementMember 2023-06-30 0001454742 us-gaap:PrivatePlacementMember 2023-06-30 0001454742 GMER:SilverLiningsManagementLLCMember 2016-04-07 0001454742 GMER:SilverLiningsManagementLLCMember 2016-04-06 2016-04-07 0001454742 us-gaap:SeriesBPreferredStockMember 2021-01-01 2021-12-31 0001454742 GMER:ViaOneServicesLLCMember 2016-11-30 0001454742 GMER:ViaOneServicesLLCMember 2017-01-31 0001454742 GMER:ViaOneServicesLLCMember 2017-03-01 0001454742 GMER:ViaOneServicesLLCMember 2017-05-05 0001454742 GMER:ViaOneServicesLLCMember 2017-08-31 2017-09-01 0001454742 GMER:ViaOneServicesLLCMember 2017-12-31 0001454742 GMER:ViaOneServicesLLCMember 2017-01-01 2017-12-31 0001454742 GMER:ViaOneServicesLLCMember GMER:LineOfCreditAgreementMember 2018-09-27 0001454742 GMER:ViaOneServicesLLCMember GMER:LineOfCreditAgreementMember 2018-09-26 2018-09-27 0001454742 GMER:ViaOneServicesLLCMember 2021-09-30 2021-09-30 0001454742 GMER:ViaOneServicesLLCMember 2021-09-30 0001454742 GMER:ViaOneServicesLLCMember 2022-05-01 2022-05-01 0001454742 GMER:OriginalEmployeeServiceAgreementMember us-gaap:SeriesEPreferredStockMember 2021-01-01 2021-12-31 0001454742 GMER:NewEmployeeServiceAgreementMember us-gaap:SeriesEPreferredStockMember 2021-01-01 2021-12-31 0001454742 GMER:PromissoryNoteMember us-gaap:SeriesEPreferredStockMember 2021-01-01 2021-12-31 0001454742 GMER:RevolvingConvertibleNoteMember us-gaap:SeriesEPreferredStockMember 2021-01-01 2021-12-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure GMER:Days

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended June 30, 2023.

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission File Number: 000-53949

 

Good Gaming, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   46-3917807

(State or other jurisdiction

of incorporation)

 

(IRS Employer

Identification Number)

 

415 McFarlan Road, Suite 108

Kennett Square, PA 19348

(Address of principal executive offices and Zip Code)

 

(888) 295-7279

Registrant’s telephone number, including area code

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None   None   None

 

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.

YES ☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer Accelerated Filer
       
Non-accelerated Filer Smaller Reporting Company
       
    Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date. As of July 31, 2023, there were 116,101,179 issued and outstanding shares of common stock of the registrant, par value $0.001.

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
Part I FINANCIAL INFORMATION
     
Item 1 Financial Statements F-1
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
Item 3 Quantitative and Qualitative Disclosures About Market Risk 13
Item 4 Controls and Procedures 13
     
Part II OTHER INFORMATION
 
Item 1 Legal Proceedings 13
Item 1A Risk Factors 13
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3 Defaults Upon Senior Securities 14
Item 4 Mine Safety Disclosures 14
Item 5 Other Information 14
Item 6 Exhibits 14
  Signatures 15

 

2
 

 

FORWARD LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, all of which are subject to risks and uncertainties. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,” “projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially.

 

These risks and uncertainties, many of which are beyond our control, include, and are not limited to:

 

our growth strategies;
   
our anticipated future operations and profitability;
   
our future financing capabilities and anticipated need for working capital;
   
the anticipated trends in our industry;
   
acquisitions of other companies or assets that we might undertake in the future; and
   
current and future competition.

 

In addition, factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

3
 

 

PART 1

 

Item 1. Financial Statements

 

Good Gaming, Inc.

Consolidated Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)

 

   June 30, 2023   December 31, 2022 
ASSETS          
Current Assets          
Cash and Cash Equivalents  $295,098   $931,868 
Accounts Receivable  $16,504      
Prepaid expenses  $2,370    9480 
Total Current Assets  $313,972    941,348 
           
Digital Assets  $113,577    113,091 
Property and Equipment, Net  $478    1557 
Due from Tebex  $125    - 
TOTAL ASSETS  $428,152   $1,055,996 
LIABILITIES & STOCKHOLDERS’ DEFICIT          
Current Liabilities          
Accounts Payable and Accrued Expenses  $376,222   $426,386 
Derivative Liability  $-    - 
Notes Payable  $-    - 
Convertible Debentures, current  $-    - 
Notes Payable Related Party- ViaOne Services  $-    - 
Total Current Liabilities  $376,222    426,386 
           
Total Liabilities  $376,222    426,386 
           
Stockholders’ Deficit          
Class A Preferred Stock          
Authorized: 2,000,000 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 7,500 Shares   8    8 
Class B Preferred Stock          
Authorized: 249,999 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 19,296 Shares   19    19 
Class C Preferred Stock          
Authorized: 1 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 1 Share   1    1 
Class D Preferred Stock          
Authorized: Authorized: 350 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 0 Shares   -    - 
Class E Preferred Stock          
Authorized: Authorized: 2,750,000 Preferred Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 57,663   58    58 
           
Common Stock          
Authorized: 200,000,000 Common Shares, With a Par Value of $0.001 Per Share Issued and Outstanding: 115,361,524   115,361    110,924 
Warrant   333    333 
Additional Paid-In Capital   10,390,204    10,265,127 
Accumulated Deficit   (10,454,055)   (9,746,860)
Total Stockholders’ Deficit   51,930    629,610 
TOTAL LIABILITIES & STOCKHOLDER’S DEFICIT  $428,152   $1,055,996 

 

The accompanying notes are an integral part of these consolidated financial statements

 

F-1
 

 

Good Gaming, Inc

Consolidated Statement of Operations

(Expressed in U.S Dollars)

(Unaudited)

 

   2023   2022 
   For three months ended
June 30
 
   2023   2022 
Revenues   155   $478 
Cost of Revenues   76,954    111,899 
Gross Profit   (76,799)   (111,421)
           
Operating Expenses          
General & Administrative   43,977    143,009 
Contract Labor   1,200    3,600 
Depreciation and Amortization Expense   540    1,027 
Professional Fees   213,504    286,578 
Total Operating Expenses   259,221    434,214 
Operating Loss   (336,020)   (545,635)
Other Income (Expense)          
Gain on Digital Assets   -    1,408 
Impairment Cost   (25)   (166,403)
Loss on Stock Conversion   -    - 
Gain on Debt Settlement   -    - 
Loss on disposal of fixed assets   -    - 
Interest Income   -    - 
Interest Expense   -    - 
Gain (Loss) on Change in Fair Value of Derivative Liability   -    - 
Total Other Income (Loss)   (25)   (164,995)
           
Net Income (Loss)   (336,045)  $(710,630)
           
Net Income (Loss) Per Share, Basic and Diluted   -   $(0.01)
           
Weighted Average Shares Outstanding   115,361,524    103,526,044 

 

The accompanying notes are an integral part of these consolidated financial statements

 

F-2
 

 

Good Gaming, Inc

Consolidated Statement of Operations

(Expressed in U.S Dollars)

(Unaudited)

 

   2023   2022 
   For the six months ended
June 30
 
   2023   2022 
Revenues  $3,416   $1,744 
Cost of Revenues  $205,278    118,892 
Gross Profit  $(201,862)   (117,148)
           
Operating Expenses          
General & Administrative  $84,337    325,267 
Contract Labor  $2,400    49,400 
Depreciation and Amortization Expense  $1,080    2,055 
Professional Fees  $417,492    529,534 
Total Operating Expenses  $505,308    906,257 
Operating Loss  $(707,170)   (1,023,405)
Other Income (Expense)          
Gain on Digital Assets  $-    13,498 
Impairment Cost  $(25)   (167,828)
Loss on Stock Conversion  $-    - 
Gain on Debt Settlement  $-    - 
Loss on disposal of fixed assets  $-    - 
Interest Income  $-    - 
Interest Expense  $-    - 
Gain (Loss) on Change in Fair Value of Derivative Liability  $-    - 
Total Other Income (Loss)  $(25)   (154,330)
           
Net Income (Loss)  $(707,194)  $(1,177,735)
           
Net Income (Loss) Per Share, Basic and Diluted  $-   $- 
           
Weighted Average Shares Outstanding   115,361,524    103,526,044 

 

The accompanying notes are an integral part of these consolidated financial statements

 

F-3
 

 

Good Gaming, Inc

Consolidated Statements of Cash Flows

(Expressed in U.S Dollars)

(Unaudited)

 

   2023   2022 
   For six months Ended June 30, 
   2023   2022 
Operating Activities          
           
Net Income (Loss)  $(707,194)  $(1,177,735)
           
Adjustment To Reconcile Net Loss to Net Cash Used In Operating Activities          
Accounts Receivable   (16,504)   - 
Due from Tebex   (125)   - 
Digital Assets   -    - 
Depreciation and Amortization   1,080    2,055 
Loss on disposal of fixed assets   -    - 
Change In Fair Value Of Derivative Liability   -    - 
Stock based compensation   125,076    - 
Gain on debt settlement   -    - 
Gain on Digital Assets   -    (13,498)
Impairment Cost   25    167,828 
Changes in operating assets and liabilities          
Prepaid expenses   7,110    (14,470)
Accounts Payable   (50,164)   147,688 
           
Net Cash Provided By (Used in) Operating Activities   (640,697)   (888,131)
           
Investing Activities          
           
Purchase of Digital Assets   (55)   (1,236)
Selling Digital Assets   -    38,962 
Reclass Digital Assets   (456)   1,955 
Selling Property and Equipment   -    - 
Purchase of Property and Equipment   -    - 
           
Net Cash Provided By (Used in) Investing Activities   (511)   39,681)
           
Financing Activities          
Repayments of Preferred Stock Series D          
Common Stock: Conversion   4,438    - 
Proceeds From Sale Of Preferred Stock CL D   -    - 
Payment on Note Interest        (6,628)
Due To ViaOne Services   -    - 
           
Net Cash Provided By (Used In) Financing Activities   4,438    (6,628)
           
Change in Cash and Cash Equivalents   (636,770)   (855,078)
           
Cash and Cash Equivalents, Beginning Of Period   931,868    2,407,966 
           
Cash and Cash Equivalents, End Of Period  $295,098   $1,552,889 
           
Supplemental disclosure of cash flow information          
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 
           
Non-Cash Investing And Financing Activities          
Unpaid Property and Equipment Acquired  $-   $- 
Common Shares Issued for Conversion Of Debt  $-   $- 
Shares Issued For Acquisition Of Software  $-   $- 

 

The accompanying notes are an integral part of these consolidated financial statements

 

F-4
 

 

Good Gaming, Inc.

Statements of Stockholders’ Equity (Deficit)

(Expressed in U. S. Dollars)

(Unaudited)

 

   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount       Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
   Preferred Stock               Common Stock   Warrants   Additional         
   Class A   Class B   Class C   Class D       Class E                   Paid-in   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount       Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
                                                                         
Balance, December 31, 2022   7,500    8    19,296    19    1    1    -    -        57,663    58    110,923,593    110,923    3,333,333    333    10,265,129    (9,746,860)  $629,610 
                                                                                           
Stock Based Compensation converted to common stock   -    -    -    -    -    -    -    -         -    -    2,218,965    2,219    -    -    74,927    -    77,146 
Net Income (Loss)                                                                                   (371,150)   (371,150)
                                                                                           
Balance, March 31, 2023   7,500    8    19,296    19    1    1    -    -        57,663    58    113,142,558    113,142    3,333,333    333    10,340,056    (10,118,010)   335,607 
                                                                                           
Stock Based Compensation converted to common stock   -    -    -    -    -    -    -    -         -    -    2,218,965    2,219    -    -    50,149    -    52,368 
Net Income (Loss)                                                                                   (336,045)   (336,045)
                                                                                           
Balance, June 30, 2023   7,500    8    19,296    19    1    1    -    -        57,663    58    115,361,523    115,361    3,333,333    333    10,390,205    (10,454,054)   51,930 

 

The accompanying notes are an integral part of these financial statements

 

F-5
 

 

Good Gaming, Inc.

Statements of Stockholders’ Equity (Deficit)

(Expressed in U. S. Dollars)

(Unaudited)

 

   Preferred Stock               Common Stock   Warrants   Additional         
   Class A   Class B   Class C   Class D       Class E                   Paid-in   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount       Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
                                                                         
Balance, December 31, 2021   7,500    8    20,296    20    1    1    -    -        57,663    58    103,526,044    103,526    3,333,333    333    9,956,764    (7,638,959)   2,421,751 
                                                                                           
Stock Based Compensation   -    -    -    -    -    -    -    -         -    -    -    -    -    -    -    -    - 
Net income (Loss)   -    -    -    -    -    -    -    -         -    -    -    -    -    -    -    (467,105)   (467,105)
                                                                                           
Balance, March 31, 2022   7,500    8    20,296    20    1    1    -    -        57,663    58    103,526,044    103,526    3,333,333    333    9,956,764    (8,106,064)   1,954,646 
                                                                                           
Conversion of preferred shares B to common shares   -     -     -     -     -     -     -     -          -     -     -     -     -     -     -            
Net income (Loss)                                                                                   (710,630)   (710,630)
                                                                                           
Balance, June 30, 2022   7,500    8    20,296    20    1    1    -    -        57,663    58    103,526,044    103,526    3,333,333    333    9,956,764    (8,816,693)   1,244,017 

 

The accompanying notes are an integral part of these financial statements

 

F-6
 

 

Good Gaming, Inc.

Notes to the Consolidated Financial Statements

(expressed in U.S. dollars)

(Unaudited)

 

1. Nature of Operations and Continuance of Business

 

Good Gaming, Inc. (Formerly 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 over 250 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 substantial revenue to date. Beginning in 2018, the Company began deriving revenue by providing transaction verification services within the digital currency networks of cryptocurrencies. However, on December 12, 2018, the Company discontinued such transaction verification services by dissolving Crypto Strategies Group, Inc., its wholly-owned subsidiary. In 2021, the Company formulated a new plan to create a new game called “MicroBuddies™” that combines Ethereum ERC721 NFTs (Non-fungible tokens), non-standard ERC20 tokens (GOO™), and strategic gameplay to replicate and create unique and rare NFTs. The game is played online via the MicroBuddies website and blockchain transactions take place on the Polygon Network. The game was launched after beta testing in December of 2021. 2022 was a year of growth for our Company. In response to the crypto winter that began in early 2022 and continues today, the Company launched a series of new business development strategies. In mid-2022, the Company launched beta versions of its Minecraft Super Craft Brothers Brawl (“SCBB”) franchise on the Roblox platform. In 2023, the Company plans to launch the full game version of SCBB on Roblox after a great deal of feedback from the community. In late 2022, the Company also launched a beta version of “Treasure Island”; a Microbuddies themed Simulator game on Roblox. To date, the Company has launched beta versions of its SCBB franchise on both the Minecraft™ PC platform and Roblox, our Prison variant for Minecraft™ PC, and multiple Microbuddies themed games on the Roblox platform. Over the course of the development schedule, the Company experienced significant developer related challenges which resulted in missed updates to already released games, development creep on games in production, and delayed product launches. After reviewing our third-party developer and internal efforts, the Company has decided to paused Roblox and Minecraft development until the Company completes platform, developer and marketing effort reviews. These reviews will result in outputs hope to point out the pain points in our processes, and illustrate a plausible forward course of action that is realistic in its expectations, and can create gaming experiences that can generate results that are up to the Company’s and customer’s expectations, and generate significant additive results to our financial performance and shareholder value.

 

In response to the production difficulties with the Minecraft and Roblox developers, the Company undertook a significant business development research project to determine what possible opportunities exist within the mobile gaming industry. After a lengthy review, the Company has entered into a multi-year strategic partnership with ViaOne Services Inc. to distribute Good Gaming mobile games to the Assist Wireless® and enTouch Wireless® customer bases. Assist Wireless and enTouch Wireless are operated and managed by ViaOne Services. The Company will also make its new mobile gaming experiences available through the Apple App Store® and Google Play™ Store. The Company has slated its first mobile game to be released in late 2023. The Company has created a significant development schedule that will span multiple games over the next several years. In addition to a traditional mobile game experience, the Company has plans to create integrated Web3 gaming components powered by blockchain technology. The main mobile game will stand on its own as a dynamic entertainment experience while the Web3 integration will exist as an optional experience for the mobile players. Players can decide to participate in the Web3 experiences or play the traditional mobile game without taking part in the Web3 segments of the game. Along with the traditional mobile gaming experience these integrated Web3 gaming components will feature an expansive rewards tree to keep players engaged for many years. The Company will announce additional content for the mobile games roadmap when appropriate.

 

Going Concern

 

As of June 30, 2023, the Company had a working capital deficit of $62,250 and an accumulated deficit of $10,454,055. 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 for a period of one year from the issuance of these financial statements. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

 

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.

 

Certain reclassifications have been made to prior-year amounts to conform to the current period presentation.

 

Cash Equivalents

 

The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature.

 

Intangible Assets

 

Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally five years.

 

F-7
 

 

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 circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold, and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

 

Beneficial Conversion Features

 

From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

 

Derivative Liability

 

From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing 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 statement of operations.

 

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. At June 30, 2023 and December 31, 2022, the Company had 10,000,000 and 10,000,000 potentially dilutive shares from outstanding convertible debentures, respectively.

 

Income Taxes

 

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. Unrecognized tax positions, if ever recognized in the consolidated financial statements, are recorded in the statement of operations as part of the income tax provision. Our policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no liability for uncertain tax positions. Unrecognized tax positions, if ever recognized in the consolidated financial statements, are recorded in the statement of operations as part of the income tax provision. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no liability for uncertain tax positions.

 

On March 22, 2017, tax reform legislation known as the Tax Cuts and Jobs Act (the “U.S. Tax Reform Act”) was enacted in the United States. The U.S. Tax Reform Act, among other things, reduced the U.S. corporate income tax rate from 35% to 21% beginning in 2018. On March 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on how to account for the effects of the U.S. Tax Reform Act under ASC 740.

 

F-8
 

 

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 categorized within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

 

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 consolidated balance sheet as of June 30, 2023 and 2022 as follows:

  

    Total     Level 1     Level 2     Level 3  
Description   Fair Value Measurements at June 30, 2023 Using Fair Value
Hierarchy
 
    Total     Level 1     Level 2     Level 3  
Derivative liability  $-   $-   $-   $- 
Total  $-   $-   $-   $- 

 

    Total    Level 1    Level 2    Level 3 
Description   

Fair Value Measurements at June 30, 2022 Using Fair Value

Hierarchy

 
    Total    Level 1    Level 2    Level 3 
Derivative liability  $-   $-   $-   $- 
Total  $-   $-   $-   $- 

 

The carrying values of all 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.

 

F-9
 

 

Advertising Expenses

 

Advertising expenses are included in general and administrative expenses in the consolidated Statements of Operations and are expensed as incurred. The Company incurred $28,691 and $80,487 in advertising and promotion expenses in the three months ended June 30, 2023, and 2022, respectively.

 

Revenue Recognition

 

Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenues primarily include revenues from microtransactions. Microtransaction revenues are derived from the sale of virtual goods to the Company’s players. Proceeds from the sales of virtual goods are directly recognized as revenues when a player uses the virtual goods.

 

Recent Accounting Pronouncements

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet (except for short-term leases). This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual reporting periods, with early adoption permitted. We adopted this new standard effective January 1, 2019. Adoption did not have any effect on the Company as it does not have any leases.

 

The Company has implemented all other new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

F-10
 

 

3. Other Assets

 

Property and Equipment consisted of the following:

  

   2023   2022 
   June 30, 
   2023   2022 
Computers and servers  $22,285   $21,122 
           
Accumulated Depreciation   (21,807)   (17,509)
           
 Property and equipment, net    $478   $3,613 

 

Depreciation expense for the three months ended June 30, 2023, and 2022 was $540 and $1,027, respectively.

 

4. Digital Assets

 

In 2021, the Company started working on creating a new game called MicroBuddies™ that will be played online and will use blockchain technology. Digital Asset prices have been volatile in the past and may continue to be so in the future, owing to a variety of risks and uncertainties. Under current accounting rules, digital assets are considered indefinite-lived intangible assets. The Company needs to recognize impairment charges if there is any decrease in their fair value, whereas the Company may not make any upward revisions for market price increases until a sale. Thus, the carrying value represents the lowest fair value of the digital assets.

 

As of June 30, 2023, the carrying value of the Company’s digital assets was $113,577 compared to $110,416 on June 30, 2022, which reflects $25 impairment charges for the three months ending June 30, 2023 and $166,403 on June 30, 2022.

 

5. Debt

 

Convertible Debentures

 

On April 15, 2015, the Company issued a convertible debenture with the principal amount of $100,000 to HGT Capital, LLC (“HGT”), a non-related party. During the quarter ended June 30, 2015, the Company received the first $50,000 in payment. The remaining $50,000 payment would be made at the request of the borrower. No additional payments have been made as of September 30, 2018. Under the terms of the debentures, the amount was unsecured and was due on October 16, 2016. The note is currently in default and bears an interest of 22% per annum. It was convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading day prior to the date the conversion notice was sent by the holder to the Company. On September 21, 2018, the Company entered into a modification agreement with HGT with respect to the convertible promissory note which has a balance of $107,238. Pursuant to such modification agreement, all defaults were waived and it was agreed that such note will convert at a 25% discount to the market rather than the default rate. HGT also agreed to certain sale restrictions which limit the amount of shares that they can sell in any month for the next three months. HGT also agreed to dismiss, with prejudice, the lawsuit that it had filed against the Company. On November 29, 2018, HGT converted $6,978 of a convertible note into 1,655,594 shares of the Company’s common stock. On August 17, 2020, HGT converted $5,833 of notes into 2,645,449 shares of the Company’s common stock. On September 9, 2020, HGT converted $11,822 of notes into 2,775,076 shares of the Company’s common stock. On November 11, 2020, HGT converted $25,239 of notes into 2,911,055 shares of the Company’s common stock. On December 18, 2020, HGT converted $40,126 of notes into 3,053,696 shares of the Company’s common stock. As of December 31, 2020, the remaining note balance was $17,240. On June 25, 2021, HGT converted the remaining note balance of $17,240 into 1,257,476 shares of the Company’s common stock.

 

The Company entered into a line of credit agreement (“Line Of Credit”) with ViaOne on September 27, 2018 (the “Effective Date”). This Line of Credit dated as of, was entered into by and between the Company and ViaOne. The Company had an immediate need for additional capital and asked ViaOne to make a new loan(s) in an initial amount of $25,000 on the Effective Date (the “New Loan”). The Company may need additional capital and ViaOne has agreed pursuant to this Line of Credit to provide for additional advances, although ViaOne shall have no obligation to make any additional loans. Any further New Loans shall be memorialized in a promissory note with substantially the same terms as the New Loan and shall be secured by all of the assets of the Company. On or before the Effective Date, the Company may request in writing to ViaOne that it loan the Company additional sums of up to $250,000 and within five days of such request(s), ViaOne shall have the right, but not an obligation, to make additional loans to the Company and the Company shall in turn immediately issue a note in the amount of such loan. In consideration for making the New Loan, the Company entered into a security agreement whereby ViaOne received a senior security interest in all of the assets of the Company.

 

On September 30, 2021, the Company and ViaOne Services, LLC entered into a revolving convertible promissory note (the “Revolving Note”). The Company agrees to pay ViaOne the principal sum of $1,000,000 or such a smaller amount as ViaOne may advance to the Company from time to time under the Revolving Note, which is subject to a simple interest rate of 8% per annum and will expire earlier on demand or the third anniversary of the Original Issue Date. The Revolving Note (and any unpaid interest or liquidated damages amount) may be converted into shares of Common Stock at a conversion price of eighty-five percent (85%) of the VWAP for the five (5) trading days immediately prior to the date of the notice of conversion. On December 31, 2021, the Company amended the note to allow for the conversion of the Note into shares of the Company’s Series E Preferred Stocks. Effective December 31, 2021, ViaOne Services, LLC converted the Revolving Note into 6,730 shares of the Company’s Series E Convertible Preferred Stock, terminating the Revolving Note.

 

On September 30, 2021, the Company entered into a new Employee Services Agreement with ViaOne effective as of September 1, 2021 (the “Effective Date”). For a monthly management fee of $42,000 (the “Monthly Management Fee”), ViaOne shall provide to the Company services related to Company’s human resources, payroll, marketing, advertising, accounting, and financial services for a period of one year beginning on the Effective Date and automatically renewing for successive terms of one year each unless either party provides 90 days’ notice. ViaOne has the right to convert part or all of the Monthly Management Fee into shares of the Company’s common stock, par value $0.001 per share at a Conversion Rate equal to 125% of the Conversion Amount, divided by the Conversion Price. The Conversion Price means, with respect to Management Fee, 85% of the volume weighted average price (“VWAP”) for the 5 trading days immediately prior to the date of the notice of conversion. On December 31, 2021, the Company amended the note to allow for the conversion of the Note into shares of the Company’s Series E Preferred Stocks. Effective December 31, 2021, ViaOne Services, LLC converted the new Employee Services Agreement Note into 1,557 shares of the Company’s Series E Convertible Preferred Stock. On Jan 1, 2022, the monthly management fee increased to $72,000 to include the addition of a full time COO and other support employees.

 

F-11
 

 

6. Derivative Liabilities

 

The following inputs and assumptions were used to value the convertible debentures outstanding during the years ended June 30, 2023 and June 30, 2022:

 

The projected annual volatility for each valuation period was based on the historic volatility of the Company of