UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D. C. 20549
Form
10-K
☒ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2023,
☐TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number: 000-53949
Good
Gaming, Inc.
(Exact
name of registrant as specified in its charter)
415
McFarlan Road, Suite 108
Kennett
Square, PA19348
(Address
of principal executive offices and Zip Code)
(844)419-7445
Registrant’s
telephone number, including area code
(Former
name, former address and former fiscal year, if changed since last report)
NONE COMMON STOCK
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO
☒
Indicate
by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES ☒ NO
☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO
☒
State
the aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common equity, as of June 30, 2023: $2,431,929. Shares
of common stock held by each officer and director of the registrant on June 30, 2023 have been excluded in that such persons may be deemed
to be affiliates.
State
the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 120,539,109
as of March 25, 2024.
FORWARD
LOOKING STATEMENTS
This
Annual Report on Form 10-K 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;
● 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 Annual
Report on Form 10-K, 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 revisions 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.
PART
I
ITEM
1. BUSINESS
General
The
Company, incorporated on November 3, 2008, under the laws of the State of Nevada, aimed to become a leading tournament gaming provider
and an online destination for over 250 million esports players worldwide looking to compete at the high school or college level. Operating
as a developmental stage business with limited revenues and a history of operating losses, Good Gaming established the Good Gaming platform
in early 2014 to address the need for a structured organization for amateur gamers.
Distinguishing
itself by focusing on over 250 million “amateur” gamers, falling between professional and casual levels, Good Gaming became
the first company to offer multi-game, multi-console services at the amateur esports level. The company completed its first closed public
beta testing of its 2.0 tournament platform on May 4, 2016, and on February 18, 2016, acquired the assets of Good Gaming, Inc. from CMG
Holdings Group, Inc., leading to executive changes with Vikram Grover as CEO and David Dorwart joining the Board.
David
B. Dorwart became the Chairman and CEO on June 27, 2017, bringing over 35 years of start-up entrepreneurism and executive-level management.
The Board further expanded with additions like Domenic Fontana and Jordan Axt, enhancing expertise in finance and branding. Eric Brown
joined as the Chief Operating Officer on August 29, 2017.
Shifting
focus to the Minecraft server in September 2017, the company explored partnerships related to LAN centers and Virtual Reality centers
in December 2017. The acquisition of Crypto Strategies Group, Inc. in March 2018 marked Good Gaming’s entry into the cryptocurrency
market, but it dissolved Crypto Strategies Group, Inc. on December 12, 2018.
In
March 2019, the company discontinued Minecade and Olimpo servers, deciding to concentrate on core Good Gaming servers. Notably, in March
2021, the company formulated a plan for a new game, “MicroBuddiesTM,” combining Ethereum ERC721 NFTs and ERC20 tokens,
launching the beta version in May 2021 and officially on December 17, 2021.
Several
corporate changes occurred in 2021, including uplisting to OTCQB, a private placement to institutional investors, and amendments to the
Articles of Incorporation. Notably, David Sterling was appointed as Chief Operating Officer on January 10, 2022.
In
2022, the Company diversified its development efforts by entering the Roblox gaming platform. As the year concluded, the Company launched
Roblox adaptations of well-received Minecraft titles, namely Treasure Island,” incorporating the unique elements of “MicroBuddiesTM”.
The strategic release allowed the Company to collect valuable player feedback, aiding in the ongoing refinement of both titles’
features and functionality.
The
beta version of “Treasure Island,” a Microbuddies-themed Simulator game on Roblox. The Company has embarked on a robust development
schedule, unveiling beta versions of its SCBB franchise on both the MinecraftTM PC platform and Roblox, a Prison variant for MinecraftTM
PC, and various Microbuddies themed games on the Roblox platform.
However,
the Company encountered substantial challenges related to developers, leading to missed updates, development complexities, and postponed
product launches. Consequently, the Company has decided to temporarily halt Roblox and Minecraft development to conduct comprehensive
reviews of platforms, developers, and marketing efforts. These evaluations aim to identify and address pain points in processes, paving
the way for realistic expectations and enhanced gaming experiences that align with both the Company’s and customers’ expectations,
ultimately contributing to improved financial performance and shareholder value.
In
response to these challenges, the Company initiated an in-depth business development research project, exploring opportunities in the
mobile gaming industry. Following the review, the Company forged a multi-year strategic partnership with ViaOne Services Inc. to distribute
Good Gaming mobile games to the Assist Wireless® and enTouch Wireless® customer bases. Simultaneously, the Company plans to release
its new mobile gaming experiences on popular platforms like the Apple App Store® and Google PlayTM Store.
A
significant development partnership with Arcadia Studios, a division of the Coeus Group of Companies, was also announced. Coeus Solutions,
a leading German software development group, collaborated with the Company in this endeavor. The first mobile game resulting from this
partnership, titled “Galactic Acres,” launched on February 16, 2024.
Technology
In
2016, the Company successfully launched its 2.0 tournament platform, conducting extensive internal tests and hosting large-scale tournaments
in collaboration with The Syndicate, a renowned online gaming guild. With two closed public beta tournaments in May 2016 and numerous
system refinements, the platform demonstrated smooth operation and scalability for up to 512,000 concurrent competitors. The system was
further updated to accommodate team tournaments and cross-platform play among Gaming PC, Microsoft Xbox, and Sony PlayStation.
Throughout
2017, the Company hosted hundreds of tournaments, cultivating a dedicated customer base exceeding 30,000 members. The website expanded
to include relevant content, generating nearly 100,000 unique visits per month. However, the decision was made to shift away from free
tournaments and custom content, focusing on growing and monetizing the Minecraft server, which experienced substantial popularity.
In
2018, the acquisition of Minecade and Olimpo Minecraft servers significantly boosted revenues and traffic. A partnership with a prominent
Minecraft influencer led to the highest monthly earnings within the Minecraft division by year-end.
Facing
a downturn in the Minecraft sector in 2019, the Company temporarily suspended Minecade and Olimpo networks, concentrating efforts on
upgrading the core Good Gaming server. The year involved infrastructure overhauls, innovations in SkyBlock and Prison game modes, and
plans for a complete recode of the Minecade server.
By
2020, infrastructure upgrades were finalized, leading to the launch of the experimental Prison MMO mode and successful releases of new
SkyBlock game modes. The implementation of a new workflow management style and consistent updates resulted in robust revenue growth,
with the fall release of Prison marking the highest revenue-producing month of the year.
In
2021, the Company continued to enhance SkyBlock and Prison editions, experimenting with new release schedules and mechanics. The introduction
of “MicroBuddiesTM,” a game combining NFTs and strategic gameplay on the Polygon Network, marked a significant milestone,
launching in December 2021 after successful beta testing.
Expanding
its development portfolio in 2022, the Company ventured into the Roblox gaming platform, releasing Roblox versions of popular Minecraft
titles. Gathering crucial player feedback, the Company planned further development for both titles in 2023. Additional agreements, including
a publishing deal with Roblox creator Joshua Mckittrick, were signed, and a family-themed brand, “Family Games presented by Good
Gaming,” was established for the Roblox platform. Development partnerships with Meraki Studios and multiple releases were planned
for 2023, featuring updates to the Minecraft 1.19 software version.
In
2024, the Company takes a significant step forward by entering the mobile gaming market with a focus on creating character and story
driven, connected blockchain powered experiences. Our expansion into blockchain enhanced mobile gaming experiences will allow us to capitalize
on the rapidly growing blockchain gaming player community. In 1Q 2024, the company launched a new intellectual property on mobile called
“Galactic AcresTM”. “Galactic AcresTM” marks the beginning of a series of mobile games designed to
not only offer engaging gameplay but also integrate blockchain experiences, fostering a deeper level of player engagement and exploring
innovative revenue models within the mobile gaming space. By combining our existing initiatives with a focus on mobile gaming, and strategic
utilization of blockchain technology, the Company is committed to a multi-pronged revenue model that diversifies our revenue streams
across multiple platforms and technologies. We believe this diversified model will solidify Good Gaming’s position as a leader
in the ever-evolving interactive entertainment landscape and create long tail revenue and profit opportunities.
Business
Strategy
In
the past, our management team’s business strategy was to be a full-service company providing best-in-class Esports gaming tournaments
and Minecraft experiences. With the onset of the pandemic, the Esports industry has suffered a considerable amount of lost business opportunities.
We were not immune to the effects of the pandemic on our Esports business. In addition, the size of the PC-based Minecraft gaming community
has shrunk considerably. We have taken a hard look at both the Esports and Minecraft business verticals and determined that both strategies
are no longer in the best interest of the company and our shareholders. We feel that both the Esports and Minecraft verticals do not
have a significant upside in the future. As such, the Esports and Minecraft business verticals will not comprise a meaningful segment
of our ongoing business strategy. We will not designate any future investment in either of these verticals for the foreseeable future.
With
the rise in the popularity of cryptocurrency and blockchain technologies, the Company has decided to invest in the creation of its new
game, “MicroBuddiesTM,” which combines Ethereum ERC721 NFTs (Non-fungible tokens), non-standard ERC20 tokens (GOOTM),
and strategic, long-tail web browser gameplay to replicate and create unique and collectible NFTs. ERC20 “GOOTM” tokens
are limited to use as in-game currency only. This strategy will enable us to enter the emerging NFT and blockchain gaming space. Initial
revenues from “MicroBuddiesTM” will come from the sale of Nano Factory Tokens that will be used to synthesize generation
0 of “MicroBuddiesTM.” Ongoing “MicroBuddiesTM” revenues will be generated from a 5% royalty on all
sales of “MicroBuddyTM” NFTs in third-party marketplaces and a 0.01 MATIC per “MicroBuddyTM” replication.
In 2022, we will introduce additional initiatives around the “MicroBuddiesTM” intellectual property. We expect the ancillary
“MicroBuddiesTM” initiatives to create consistent, recurring revenue over the life of the project.
In
2023, the Company encountered significant challenges related to RobloxTM and MinecraftTM game development and publishing initiative
including developer issues, publishing delays due to platform integrations and functionality, and marketing strategy lapses. Consequently,
the Company has decided to halt Roblox and Minecraft development until publishing to both platforms makes sense.
In
2023, the Company announced a strategic partnership with ViaOne Services Inc. to distribute Good Gaming mobile games to the Assist Wireless®
and enTouch Wireless® the Company is committed to building connected mobile gaming experiences. We believe our pivot to mobile games
featuring integrated Web3 experiences will lead to ongoing revenue and profit generation. The Company plans to integrate its intellectual
properties into our mobile games in order to continue to build long lasting awareness across a global audience.
Our
initial partnership with ViaOne Services, will feature integrated Web3 opportunities. These dynamic gaming experiences position us to
capitalize on the vast potential of the evolving mobile gaming audience. Our initial strategic partnership with ViaOne Services allows
us to embed our mobile games on over 80,000 phones per month by the end of 2024. Player acquisition is the most difficult aspect of game
publishing. Our partnership with ViaOne Services will produce considerable exposure for our games to a massive player base and should
supercharge our player acquisition effort.
Creating
great games is all about telling compelling stories. We are continuing our “MicroBuddiesTM” story on mobile. We are
expanding the “MicroBuddiesTM” brand beyond the initial browser based game by creating engaging mobile experiences featuring
the “MicroBuddiesTM” IP. Our ambition doesn’t stop there! We’ve launched a brand-new IP on mobile. “Galactic
AcresTM” is our new IP featuring unique characters, stories, and Web3 enhanced experiences. “Galactic AcresTM”
is just the beginning – as we have announced a series of mobile games designed with dynamic player engagements through integrated
blockchain experiences and innovative revenue models are planned for 2024 and beyond.
Intellectual
Property
We
announced “Galactic AcresTM “ as a new intellectual property for our first
mobile game. “Galactic AcresTM “ features new characters, settings and
stories to be featured throughout our mobile game releases and connected Web3 experiences.
Insurance
Policies
We
have an insurance policy through AXIS Insurance Company with the insurance coverage of up to $1,000,000.
Employees
We
have three full-time consultants and four part-time contractors working on various Good Gaming initiatives. The full-time consultants
consist of one Chief Operating Officer, one Gaming Director, and one Operations Manager. The part-time consultant team includes two QA
staff, one Video Engineer, and a Marketing Coordinator. Pursuant to our Management Services Agreement with ViaOne Services LLC, certain
ViaOne employees are considered consultants of the Company.
Offices
Our
executive offices are at 415 McFarlan Rd, Suite 108, Kennett Square, PA 19501. Our phone is (844) 419-7445.
Corporate
Information
Good
Gaming, Inc. was incorporated in the State of Nevada on November 3, 2008. Our principal business address is 415 McFarlan Rd, Suite 108,
Kennett Square, PA 19501. Our website address is www.good-gaming.com. The references to our website in this annual report are inactive
textual references only. The information on our website is neither incorporated by reference into this annual report nor intended to
be used in connection with this annual report.
Available
Information
We
file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the
“SEC”). These filings are available to the public through the SEC’s website at http://www.sec.gov. All statements made
in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in
which the statement is included unless otherwise specified, and we do not assume or undertake any obligation to update any of those statements
or documents unless we are required to do so by law.
ITEM
1A. RISK FACTORS
We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this
item.
ITEM
1B. UNRESOLVED STAFF COMMENTS
Not
applicable.
ITEM
2. PROPERTIES
We
do not currently rent, lease, or own any real property.
ITEM3.
LEGAL PROCEEDINGS
We
are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business,
financial condition or operating results. From time to time, we may become involved in various lawsuits and legal proceedings, which
arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters
may arise from time to time that may harm our business.
ITEM
4. MINE SAFETY DISCLOSURES
Not
Applicable.
PART
II
ITEM
5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our
common stock commenced trading on the over-the-counter Bulletin Board on October 7, 2009.On closing of the OTCBB, the Company has been
trading on the OTCQB marketplace, and currently trades under the symbol “GMER”. You should be aware that over-the-counter
market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual
transactions. Following is a table of the high bid price and the low bid price for each quarter during the last two years.
2022 High Bid Low Bid
2023 High Bid Low Bid
Holders
As
of March 25, 2024, we have 120,539,109 shares of our common stock issued and outstanding held by 93 stockholders of record.
As
of March 25, 2024, we had 7,500 shares of Series A Preferred Stock issued and outstanding, 19,296 shares of Series B Preferred Stock
issued and outstanding, 1 share of Series C Preferred Stock issued and outstanding, 0 share of Series D Preferred Stock issued and outstanding,
and 57,663 shares of Series E Preferred Stock issued and outstanding.
Dividends
We
have never declared or paid cash dividends. We currently intend to retain all future earnings for the operation and expansion of our
business and do not anticipate paying cash dividends on the common stock in the foreseeable future. Any payment of cash dividends in
the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements,
contractual restrictions and other factors deemed relevant by our directors. Moreover, our Series D shares have cumulative dividend preference.
Securities
Authorized for Issuance Under Equity Compensation Plans
The
information required by this item with respect to securities authorized for issuance under equity compensation plans is set forth in
Part III, Item 12 of this Annual Report on Form 10-K, and is incorporated herein by reference.
Penny
Stock Regulations and Restrictions on Marketability
The
SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a market price below $5. Securities are registered on certain national securities exchanges or quoted on the NASDAQ
system which provides the current price and volume information. The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature
and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) contains a description of the broker’s
or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such
duties or other requirements of the securities laws, (c) contains a brief, clear, narrative description of a dealer market, including
bid and ask prices for penny stocks and the significance of the spread between the bid and ask price, (d) contains a toll-free telephone
number for inquiries on disciplinary actions, (e) defines significant terms in the disclosure document or in the conduct of trading in
penny stocks, and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall
require by rule or regulation.
The
broker-dealer must also provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations
for the penny stock, (b) the compensation of the broker-dealer and its salesperson in the transaction, (c) the number of shares to which
such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock, and
(d) a monthly account statement showing the market value of each penny stock held in the customer’s account.
In
addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks,
and a signed and dated copy of a written suitability statement.
These
disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty
selling their shares of our common stock.
Common
Stock
Our
Articles of Incorporation authorize the Company to issue up to 100,000,000 shares of common stock, $0.001 par value. On May 3, 2018,
the Company increased its authorized common shares from 100,000,000 to 200,000,000. Each holder of our common stock is entitled to one
(1) vote for each share held on record on all voting matters we present for a vote of stockholders, including the election of directors.
Holders of common stock have no cumulative voting rights or preemptive rights to purchase or subscribe for any stock or other securities,
and there are no conversion rights or redemption or sinking fund provisions with respect to our common stock. All shares of the Company’s
common stock are entitled to share equally in dividends from sources legally available when, and if, declared by the Company’s
Board of Directors.
Our
Board of Directors is authorized to issue additional shares of common stock not to exceed the amount authorized by the Articles of Incorporation,
on such terms and conditions and for such consideration as the Board may deem appropriate without further stockholder action.
In
the event of our liquidation or dissolution, all shares of the Company’s common stock are entitled to share equally in our assets
available for distribution to stockholders. However, the rights, preferences and privileges of the holders of our common stock are subject
to, and may be adversely affected by, the rights of the holders of shares of preferred stock that have been issued or shares of preferred
stock that our Board of Directors may decide to issue in the future.
Preferred
Stock
Our
Articles of Incorporation initially authorized us to issue up to 2,250,350 shares of preferred stock, $0.001 par value. On December 21,
2021, the Company filed the amendment to increase the authorized shares of preferred stock to 5,000,000 shares. Of the 5,000,000 authorized
shares of preferred stock, the total number of shares of Series A Preferred Stock the Corporation shall have the authority to issue is
2,000,000, with a stated par value of $0.001 per share, the total number of shares of Series B Preferred Stock the Corporation shall
have the authority to issue is 249,999, with a stated par value of $0.001 per share, the total number of shares of Series C Preferred
Stock the Corporation shall have the authority to issue is 1, with a stated par value of $0.001 per share, the total number of shares
of Series D Preferred Stock the Corporation shall have the authority to issue is 350, with a stated par value of $0.001 per share, and
the total number of shares of Series E Preferred Stock the Corporation shall have the authority to issue is 2,750,000, with a stated
par value of $0.001 per share. 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 March 25, 2024, we had 7,500 shares of our Series A preferred stock, 19,296 shares of Series B preferred stock, 1 share of Series
C preferred stock, 0 share of Series D preferred stock, and 57,663 shares of Series E preferred stock issued and outstanding.
The
7,500 issued and outstanding shares of Series A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares
for each Series A Preferred Share. The 19,296 issued and outstanding shares of Series B Preferred Stock are convertible into shares of
common stock at a rate of 200 common shares for each Series B Preferred Share. The 57,663 issued and outstanding shares of Series E Preferred
Stock are convertible into shares of common stock at a rate of 1,000 common shares for each Series E Preferred Share. If all our Series
A, B and E Preferred Stock are converted into shares of common stock, the number of issued and outstanding shares of our common stock
will increase by 61,672,201 shares.
The
one issued and outstanding shares of Series C Preferred Stock has voting rights equivalent to 51% of all shares entitled to vote and
is held by ViaOne Services LLC, a Company controlled by our CEO.
The
Series D Preferred Stock can be convertible into shares of common stock at the lower of the Fixed Conversion Price ($.06 per share) or
at the VWAP which shall be defined as the average of the five (5) lowest closing prices during the 20 days prior to conversion. We did
not have any shares of Series D preferred stock issued and outstanding as of March 25, 2024.
Holders
of Series A, Series B, Series C, Series D and Series E have liquidation preference over common shareholders.
Options
We
have not issued and do not have any outstanding options to purchase shares of our common stock.
Registration
Rights
As
of December 31, 2023, there are no other outstanding registration rights or similar agreements.
Convertible
Securities
None.
Related
Party Transactions
On
November 30, 2016, ViaOne purchased a Secured Promissory Note equal to a maximum initial principal amount of $150,000 issued by the Company
to ViaOne. As additional advances were made by ViaOne to the Company, the principal amount of the Note was increased to $225,000 and
$363,000 by amendments dated January 31, 2017, and March 1, 2017, respectively.
On
May 5, 2017, ViaOne delivered a default notice to the Company pursuant to Section 6 of the Note Purchase Agreement but has subsequently
extended the due date and has increased the funding up to One Million ($1,000,000) dollars. After giving the Company a fifteen (15) day
notice period to cure the default under the Stock Pledge Agreement, dated November 30, 2016, entered by and among the Company, CMG, and
ViaOne (“Pledge Agreement”), ViaOne took possession of the Series C Stock, which was the subject of the Pledge Agreement.
The
Secured Promissory Note as amended increased from time to time due to additional advances provided to the Company by ViaOne.
On
September 1, 2017, the Company executed an amended Employee Services Agreement with ViaOne, which stipulated that ViaOne would continue
providing to the Company services relating to the Company’s human resources, marketing, advertising, accounting, and financing
for a monthly management fee of $25,000. This agreement was amended on January 1, 2018. The accrued monthly management fees, $100,000
at December 31, 2017, are convertible by ViaOne into the Company’s common stock at a rate of 125% of the accrued fees at a conversion
price of (i) $0.05 per share; or (ii) the volume-weighted adjusted price (“VWAP”) of the common stock on the 14th day of
each month if the 14th of that month is a trading day. In the event the 14th day of a month falls on a Saturday, Sunday, or a trading
holiday, the VWAP of the Common Stock will be valued on the last trading day before the 14th day of the month. The agreement was terminated
on August 31, 2021.
On
September 27, 2018, the Company and ViaOne entered into a Line of Credit Agreement (the “LOC Agreement”), pursuant to which
the Company issued a secured promissory note with the initial principal amount of $25,000 to ViaOne in exchange for a loan of $25,000
(the “Initial Loan Amount”). In accordance with this Agreement, the Company may request ViaOne to provide loans of up to
$250,000, including the Initial Loan Amount, and ViaOne has the right to decide whether it will honor such request. The Initial Loan
Amount became due on September 30, 2019 (the “Maturity Date”) and bore an interest rate of 8.0% per annum. The unpaid principal
and interest of the Promissory Note after the Maturity Date accrued interest at a rate of 18.0% per annum. The principal amount of the
Promissory Note may increase from time to time up to $250,000 in accordance with the terms and conditions of the Agreement. In connection
with the Agreement and Promissory Note, the Company and ViaOne executed a security agreement dated September 27, 2018, whereby the Company
granted ViaOne a security interest in all of its assets, including without limitation, cash, inventory, account receivables, real property,
and intellectual properties, to secure the repayment of the loans made pursuant to the LOC Agreement and Promissory 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 the 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 the 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
September 30, 2021, the Company and ViaOne 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 Company granted ViaOne warrants to purchase the 1,000,000 shares of Common Stocks at
an exercise price of $0.42, a premium of 20% to the closing bid price of the Common Stock the trading day prior to the execution of the
Revolving Note. Payment of all obligations under the Revolving Note is secured by a security interest granted to ViaOne by the Company
in all of the right, title and interest of the Company in all assets of the Company currently owned or acquired hereafter. 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. The Revolving Note
contains customary events of default, including, among others, the failure by the Company to make a payment of principal or interest
when due. Following an event of default, ViaOne is entitled to accelerate the entire indebtedness under the Revolving Note. The restrictions
are also subject to certain additional qualifications and carve-outs, as set forth in the Revolving Note.
On
December 31, 2021, the Company amended both the original and new Employee Service Agreements, Secured Promissory Note, and Revolving
Convertible Promissory Note to allow for the conversion of Notes into shares of the Company’s Series E Preferred Stocks. Effective
December 31, 2021, the original Employee Service Agreement was converted into 24,540 shares of the Company’s Series E Preferred
Stocks and the new Employee Service Agreement was converted into 1,557 shares of the Company’s Series E Preferred Stocks. Additionally,
the Secured Promissory Note and Revolving Convertible Note were converted into 24,836 and 6,730 shares of the Company’s Series
E Preferred Stocks, respectively.
As
of December 31, 2023, the Company owes ViaOne Services a total of $418,371, comprising $301,446 as part of the employee service agreement
and $116,925 as vendor payment.
The
Company’s Chairman and Chief Executive Officer are the Chairman of ViaOne.
Shares
Eligible for Future Sale
As
of March 25, 2024, we had 120,539,109 shares of our common stock issued and outstanding, a breakdown of which follows:
From
time to time, certain of our stockholders may be eligible to sell some or all of their restricted shares of our common stock by means
of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain
volume restrictions and restrictions on the manner of sale. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely
after six months subject only to the current public information requirement. Affiliates may sell after six months subject to the Rule
144 volume, manner of sale, current public information and notice requirements.
The
eventual availability for sale of substantial amounts of our common stock under Rule 144 could adversely affect prevailing market prices
for our securities and cause you to lose most, if not all, of your investment in our business.
Transfer
Agent
Our
transfer agent is Securities Transfer Corporation with its principal address at 2901 N Dallas Parkway, Suite 380, Plano, TX 75093. Their
phone number is (469) 633-0101. Investors may reach our transfer agent at info@stctransfer.com.
Recent
Sales of Unregistered Securities
On
July 26, 2022, William Crusoe converted 1,000 Class B shares into common stock.
Purchases
of Equity Securities by the Issuer and Affiliated Purchases
During
each month within the fourth quarter of the fiscal year ended December 31, 2023, neither we nor any “affiliated purchaser”,
as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our common stock or other securities.
ITEM
6. Reserved
None.
ITEM
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This
Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For
this purpose, any statements contained in this Form 10-K that are not statements of historical fact including, without limitation, statements
under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the
Company’s financial position, business strategy and the plans and objectives of management for future operations, may be deemed
to be forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made
by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated
by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.
The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set
forth below includes forward-looking statements that involve risks and uncertainties.
Our
auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2023. This means that our auditors
believe there is substantial doubt that we can continue as an ongoing business for the next twelve months from the date of issuance of
these financial statements unless we obtain additional capital to pay our bills. This is because we have generated little revenue although
revenue is anticipated to grow as we have completed the development of our website, sourced out suppliers for products to sell and sourced
out customers to buy our products. Accordingly, we must raise cash from sources other than operations. Our only other source for cash
at this time is investments by others in our company and the revenue we generate from the sales of our products. We must raise cash to
continue our project and build our operations.
Plan
of Operation – Milestones
We
are at an early stage of our new business operations focusing on integrated mobile and Web3 gaming experiences. Over the next twelve
months, our primary target milestones include:
Limited
operating history and need for additional capital
There
is limited historical financial information about us upon which to base an evaluation of our performance relating to our new business
direction. We have generated little revenue. We cannot guarantee we will be successful in our business operations. Our business is subject
to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due
to price and cost increases in services and products.
Results
of Operations
December
31, 2023 as compared to December 31, 2022
● Working Capital
● Operating Revenues
We
have generated $3,443 in revenue in 2023 and $9609 in revenue in the fiscal year of 2022, which reflects an decrease of $6,166 or 64.17%.
The decline in revenue is attributable to the Company’s focus on developing a new game, Galactic Acres, and reduced activity on
the Microbuddies game by customers.
● Operating Expenses and Net Loss
Operating
expenses for the year ended December 31, 2023 were $694,363 compared with $1,657,407 for the year ended December 31, 2022. The decrease
in operating expenses in the amount of $963,044 or 58.11% is primarily attributed to strategic adjustments in professional fees, advertising
and promotional expenditures, along with the reversal of insurance accrual.
During
the year ended December 31, 2023, the Company recorded a net loss of $864,979 compared with a net loss of $2,107,901 for the year ended
December 31, 2022. The decrease in net loss in the amount of $1,242,922 or 58.96% is attributed to a decrease in revenue and an increase
in cost of revenue as the Company directed its efforts toward the development of a new game, Galactic Acres, partially offset by gains
realized from the sale of digital assets.
● Liquidity and Capital Resources
As
of December 31, 2023, the Company’s cash balance consisted of $304,225 compared to cash balance of $931,868 as of December 31,
2022. The decrease in cash balance is attributed to the payment of operating expenses associated with day-to-day activities. As of December
31, 2023, the Company had $484,394 in assets compared to total assets of $1,055,996 as at December 31, 2022. The decrease in total assets
is primarily attributed to the sale of digital assets and the utilization of cash for ongoing operational activities partially offset
by acquisition of intangible assets.
As
of December 31, 2023, the Company had total liabilities of $520,277 compared with total liabilities of $426,385 as of December 31, 2022.
The increase in liabilities is attributed to operating expenses incurred for the day-to-day activities necessary to sustain and run the
business.
As
of December 31, 2023, the Company has a working deficit of $122,427 compared with a working capital of $514,963 as of December 31, 2022.
The decrease in the working capital ascribed to the utilization of cash for operational needs and the sale of digital assets to support
the ongoing sustainability of the business.
Cash
flow from Operating Activities
During
the year ended December 31, 2023, the Company used $783,879 of cash for operating activities as compared to the cash usage of $1,513,674
for operating activities during the year ended December 31, 2022. The decrease of cash usage by $729,796 or 48.21% is attributed to the
company’s decision to curtail expenditures on advertising and promotions, professional fee,
and contracted labor so the Company can focus on developing a new game, Galactic Acres.
Cash
flow from Investing Activities
During
the years ended December 31, 2023, the Company had $146,381 in cash from the investing activities compared to $39,400 in cash for the
year ended December 31, 2022. The increase of $106,981 or 271.53% in cash in investing activities is ascribed to the sale of digital assets
partially offset by acquisition of intangible assets.
Cash
flow from Financing Activities
During