GOOD GAMING, INC. - Annual Report: 2015 (Form 10-K)
| 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, 2015 | ||||||
| Commission File Number: 000-53949 | ||||||
| HDS International Corp. | ||||||
| (Exact name of registrant as specified in its charter) | ||||||
| Nevada | 26-3988293 | |||||
| (State or other jurisdiction of incorporation) | (IRS Employer Identification Number) | |||||
| 2130 N. Lincoln Park West, Suite 8N | ||||||
| Chicago, Illinois | 60614 | |||||
| (Address of principal executive offices and Zip Code) | (Zip Code) | |||||
| (773) 698-6047 | ||||||
| (Registrant's telephone number, including area code) | ||||||
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to section 12(g) of the Act: | |||||
| 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 [x]
Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act: YES [x] 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 [x] 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 [x] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
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.
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Large Accelerated Filer
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Accelerated Filer
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Non-accelerated Filer (Do not check if a smaller reporting company)
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Smaller Reporting Company
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[x]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [x]
State the aggregate market value of the 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 December 31, 2015: $598,587.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,995,290,000 as of December 31, 2015.
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ITEM 1.
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General
Previously HDS International, Inc. (the "Company", "we", or "us") was a green technology company providing renewable energy and eco-sustainability solutions as well as an emergency management solutions company. On February 18, 2016, we changed the focus of our business to become a leading tournament gaming platform and online destination targeting the over 205 million eSports players and participants worldwide that want to compete at the high school or college level. We are a developmental stage business, have not generated any revenues to date and have a history of operating losses.
We were incorporated November 3, 2008 under the laws of the State of Nevada, to engage in providing certain business services.
On August 16, 2011, we entered into an Asset Acquisition Agreement (the "Agreement") with Hillwinds Ocean Energy, LLC, a privately held consulting company ("HOEL"), under which we acquired from HOEL certain of HOEL's assets, including a certain license relating to technologies for gas exchange, carbon dioxide capture and sequestration, algae biomass production and other renewable energy and eco- sustainability applications.
On December 10, 2012, through our wholly-owned Canadian subsidiary, HDS Energy and Ecosystems NB, Ltd., we entered into a new technology license agreement with HEDC, which expands the geographic territory under our previous technology licenses. All previous license agreements between HDS and HEDC, including the license under asset acquisition agreement dated August 15, 2011, and the intellectual property agreement consummated October 7, 2011 (dated September 2, 2012) have been terminated and superseded in their entirety by the new license agreement (the "NB Provincial License").
On March 5, 2015, we reached settlement and general mutual release agreements (the "General Release Agreements") with Tassos Recachinas, our at-the-time President & CEO; Alexander Chirkov, our Chief Scientist for renewable energy and eco-sustainability technologies; and a consultant under renewable energy and eco-sustainability technologies; under which we and these three independent parties agreed to settle any and all amounts owing to them under prior employee and consulting agreements, by converting all amounts owing (amounting to $215,225, $684,500, and $49,000, respectively, or in the aggregate, $948,725) as accrued and disclosed on our balance sheet, in exchange for 74,235,000, 74,235,000, and 31,815,000 newly-issued shares of our common stock, respectively, eliminating these liabilities from our balance sheet.
On March 9, 2015, we closed a Strategic Expansion Agreement, dated March 5, 2015 (the "Strategic Expansion Agreement") and entered into by and between us; Hillwinds Ocean Energy, LLC, a Connecticut limited liability company ("HOEL"), which was formerly our controlling shareholder; and SirenGPS, Inc. a Delaware corporation ("SirenGPS"). At that time we changed the focus of our business from the development of renewable energy and eco-sustainability technologies to emergency management software. Pursuant to the terms and conditions of the Strategic Expansion Agreement, we entered into a global technology license agreement (the "E911 License Agreement") granting us certain rights to that certain technology owned and controlled by SirenGPS relating to emergency management, emergency communication, emergency response, enhanced emergency calling and related technologies. In exchange, SirenGPS received: (a) thirteen million three hundred fifty thousand (13,350,000) newly-issued shares of HDS International Corp. Class B Preferred Stock, $0.001 par value per share (the "New HDSI Class B Preferred Stock"), (b) two hundred million (200,000,000) newly-issued restricted shares of our common stock (the "Transaction Shares") and (c) seven million five hundred thousand (7,500,000) shares of HDS International Corp. Class A Preferred Stock, $0.001 par value per share, from HOEL (the "Transferred Class A Preferred Stock). Pursuant to the terms of the Strategic Expansion Agreement, the Company also issued 274,300 newly-issued shares of Class B Preferred Stock to a designee of SirenGPS.
On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and is due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. The Purchaser had the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note. The Purchased had the right to prepay according to a schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were initially assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February Note bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 2, 2015, we entered into an equity line of credit agreement (ELOC) with the Purchaser that allows us to "put" shares to the Purchaser at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described.
On April 6, 2015, the Company executed a Common Stock Purchase Warrant with the Purchaser, providing the Purchaser the right to purchase shares of common stock of the company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. The Warrant expires in five years. This Warrant was negotiated as part of the Note.
On February 18, 2016, the Company acquired Good Gaming, Inc. from CMG Holdings Group, Inc. (OTCQB: CMGO). On that date, the Company’s former CEO, Paul Rauner, resigned. And the Company appointed Vik Grover to the positions of CEO and Director. Vik Grover is a former Wall Street analyst and investment banker with 20 years' experience in telecommunications, media and technology. In addition, Barbara Laken and David Dorwart were elected by the majority shareholders to the Company's Board of Directors. Ms. Laken is a former teacher, with experience creating specialized formats for advanced placement and special needs programs, with emphasis on systems management and curriculum development. A published novelist and co-author of an optioned screenplay. Mr. Dorwart is the Co-Founder and Chairman of Assist Wireless, Inc., a provider of lifeline wireless services to tens of thousands of subscribers primarily in the Midwest.
On May 4, 2016 the Company announced that it has completed its first closed public beta testing of their 2.0 tournament platform to determine the functionality, speed, ease of use, and accuracy of the system and are preparing to enter into full-blown production.
The Good Gaming platform was established in early 2014 by the founding members who had recognized the need that hundreds of millions of gamers worldwide have a desire to play games at a competitive level. The founders recognized that while professional eSports was quickly establishing itself, there were no structure or organizations on a large scale for amateur gamers.
Good Gaming is effectively building the equivalent infrastructure of High School and College Athletics for the rapidly growing eSports industry. Good Gaming is designed to be the gateway for amateur eSports athletes to compete at the semi-professional level, improve their gaming skills, and interact with veteran gamers globally in a destination site and social networking framework.
Good Gaming differs from the professional level of eSports industries by focusing on the 205 million plus gamers that fall below the professional level and above the casual gamer, classified as “amateurs”. Good Gaming also differs from other direct and indirect competitors by being the first to offer multi-game, multi-console services at the amateur eSports level. The Company is not exclusive to any one vendor of hardware or software titles.
Good Gaming held one of the largest pay-to-play online tournaments in history in December 2014 based on Activision Blizzard’s title Hearthstone: Heroes of Warcraft. The tournament attracted 300,000 unique visitors, over 1,250+ paying members and increased overall memberships in Good Gaming from 1,000 to over 15,000 members. In 2015, the Company spent an entire year refining its platform and preparing for a more sustainable business plan that could infinitely scale. In 2016, the Company completed its 2.0 tournament platform and, as a result, has run dozens of robotic internal test tournaments and held numerous free-to-play tournaments of increasing size with its partner, The Syndicate, the owner of the world’s longest running online gaming guild with 1,200 members worldwide. Good Gaming also conducted two closed public beta tournaments of hundreds of participants in May 2016 in order to fully vet the system. After making roughly 100 fixes and changes to the system, it now runs flawlessly. The system is designed to scale to 512,000 concurrent competitors.
Technology
With Good Gaming’s proprietary technology platform, which is based on the infinitely scalable and stress tested Yii framework geared for Web 2.0 development, Good Gaming will be able to offer publishers and vendors an innovative approach to gaming interactions. Currently there is no way for gamers to barter their skills and labor on the open market in a non-fragmented and less cumbersome process. As competitive gaming reaches critical mass, how gamers interact and barter their skills and labor will become critical if not the most economically lucrative endeavor. The “gamers” economy it expected to grow from tens of millions of dollars every year to multiple billions of dollars and the Good Gaming founders believe that we are rapidly approaching that time.
Good Gaming’s platform is modular and allows for easy integration of third party applications as well as tight integration into other existing systems. This framework allows for clans/teams/guilds to add functionality over time to include running their own tournaments leveraging the viral nature of the online communities. The Company is offering social networking functionality so gamers can interact, track each other, and communicate. Good Gaming also is completing a content suite to offer videos, blogs, and forums. Additionally, the Company intends to host multiple games online that subscribers to the site can play for free or for fees depending on their Good Gaming status/player level.
Good Gaming has one patent filed for an online currency barter system (Mercenary System) that allows gamers across multiple games and multiple consoles the ability to trade items and labor in an efficient manner. The Company intends to file a patent for its 2.0 framework later this year, as it is based on proprietary coding that can handle more scope and scale than the legacy 1.0 patent filing. The market for these transactions will grow from a few hundred million dollars in 2014 to tens of billions of dollars by 2018.
The Company intends to complete the 2.0 site during spring 2016, which will then allow it to go live offering pay-to-play and free-to-play tournaments for cash and prizes and offer gamers the premiere destination site for amateur eSports worldwide. In 2016, the Company intends to perfect is B2C model targeting gamers directly. In 2017, Good Gaming intends to launch a B2B program so other groups, including colleges, restaurants, bars et al. can offer their own tournaments using its platform. The Company also intends to work on a 3.0 system that will integrate with mobile networks and offer additional features to its customers.
Insurance Policies
We do not currently maintain any insurance, but are in the process of obtaining the appropriate insurance to support our business operations.
Employees
There were currently approximately 10 contractors working on the Good Gaming project, this group is made up of programmers, tournament administrators, social media experts and executives. As the process matures most of these people and others will be hired as full time employees of the company.
Offices
Our executive offices are located at 2130 N Lincoln Park West, Chicago, IL 60614. Our telephone number is 773-698-6047.
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ITEM 1A.
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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.
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ITEM 1B.
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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.
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ITEM 2.
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The only real or personal property we own are the intellectual property licenses and related assets we've acquired relating to gaming software.
We are not presently a party to any litigation.
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ITEM 4.
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Not Applicable.
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ITEM 5.
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Our common stock commenced trading on the over-the-counter Bulletin Board on October 7, 2009. It currently trades under the symbol "HDSI". Following is a table of the high bid price and the low bid price for each quarter during the last two years.
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2015
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High Bid
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Low Bid
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First Quarter, Ending March 31
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$ | 0.0001 | $ | 0.0001 | ||||
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Second Quarter, Ending June 30
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$ | 0.0002 | $ | 0.0001 | ||||
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Third Quarter, Ending September 30
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$ | 0.0001 | $ | 0.0001 | ||||
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Fourth Quarter, Ending December 31
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$ | 0.0003 | $ | 0.0002 | ||||
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2014
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High Bid
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Low Bid
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First Quarter, Ending March 31
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$ | 0.0039 | $ | 0.0012 | ||||
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Second Quarter, Ending June 30
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$ | 0.0035 | $ | 0.001 | ||||
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Third Quarter, Ending September 30
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$ | 0.0014 | $ | 0.0005 | ||||
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Fourth Quarter, Ending December 31
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$ | 0.0008 | $ | 0.0001 | ||||
Holders
As of December 31, 2015, we had 1,995,290,000 shares of our common stock issued and outstanding held by 46 stockholders of record.
Currently we have 7,500,000 shares of our Class A Preferred Stock issued and outstanding, and 13,624,300 shares of our Class B 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.
Securities Authorized for Issuance Under Equity Compensation Plans
On July 18, 2012 a Registration Statement on Form S-8 (the "Registration Statement") was filed by us together with our 2012 Non-Qualified Stock Option Plan (the "Plan") relating to 30,000,000 shares of our common stock, par value $0.001 per share, to be offered and sold to accounts of eligible persons.
Equity Compensation Plan
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Plan category
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Number of securities issued upon
exercise of outstanding options,
warrants and rights
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Weighted-average exercise
price of outstanding options,
warrants and rights
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Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
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(a)
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(b)
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(c)
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Equity compensation plans approved by security holders
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0 | 0 | 0 | |||||||||
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Equity compensation plans not approved by security holders
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0 | 0 | 30,000,000 | |||||||||
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Total
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0 | 0 | 30,000,000 | |||||||||
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 of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. 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 also must 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 us to issue up to 2,000,000,000 shares of common stock, $0.001 par value. Each holder of our common stock is entitled to one (1) vote for each share held of 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 our common stock are entitled to share equally in dividends from sources legally available when, and if, declared by our 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 our 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.
As of December 31, 2015, we had 1,995,290,000 shares of common stock issued and outstanding.
Preferred Stock
Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of preferred stock, $0.001 par value. Of the 50,000,000 authorized shares of preferred stock, the total number of shares of Class A Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), with a stated par value of $0.001 per share, and the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), 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 December 31, 2015, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. As of December 31, 2015, we had 15,839,300 shares of Class B preferred stock issued and outstanding.
The 7,500,000 issued and outstanding shares of Class A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one Class A Preferred Share. The 15,839,800 issued and outstanding shares of Class B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one Class B Preferred Share. 14,400,000 of the issued and outstanding shares of Class B Preferred Stock is owned by CMG Holdings Group, Inc. If all of our Class A Preferred Stock and Class B Preferred Stock was converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 3,317,960,000 shares.
Options
We have not issued and do not have outstanding any options to purchase shares of our stock. HGT Capital has 100 million warrants with an exercise price of .001 (common stock).
Registration Rights
As of December 31, 2015, there are no other outstanding registration rights or similar agreements.
Convertible Securities
On April 8, 2015, we consented to the assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were previously assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015.
On April 6, 2015, the Company executed a Common Stock Purchase Warrant with the Purchaser, providing the Purchaser the right to purchase shares of common stock of the company by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. The Warrant expires in five years. This Warrant was negotiated as part of the Note. The Company has an agreement to purchase the Purchaser debt for face value.
Shares Eligible for Future Sale
As of December 31, 2015, we had 1,995,290,000 shares of our common stock issued and outstanding, a breakdown of which follows:
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1,468,871,393 are freely tradable without restrictions (commonly referred to as the "public float")
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479,885,496 are currently subject to the restrictions and sale limitations imposed by Rule 144.
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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 (which disappears after one year). 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
Action Stock Transfer Corp.
2469 East Fort Union Boulevard, Suite 214 Salt Lake City, Utah 84121
( 801) 274-1088 Phone
(801) 274-1099 Fax
info@actionstocktransfer.com Email
Recent Sales of Unregistered Securities
The issuance and sales of securities without registration since March 28, 2014 through December 31, 2015 comprise the transactions relating to the Asher Notes, as well as those transactions described below.
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a)
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On April 9, 2014, we issued 8,571,429 common shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture.
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b)
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On October 21, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture.
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c)
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On October 28, 2014, we issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture.
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d)
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On November 21, 2014, we issued 15,500,000 common shares for the conversion of $1,240 of principal of the June 7, 2013 convertible debenture.
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e)
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On November 26, 2014, we issued 19,000,000 common shares for the conversion of $1,520 of principal of the July 15, 2013 convertible debenture.
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f)
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On December 2, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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g)
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On December 4, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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h)
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On December 9, 2014, we issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture.
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i)
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On February 6, 2015, we issued 28,000,000 common shares upon the issuance of $1,400 of principal of the July 15, 2013 convertible debenture.
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j)
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On February 10, 2015, we issued 28,000,000 common shares upon the conversion of $1,400 of principal of the July 15, 2013 convertible debenture.
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k)
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On February 13, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture.
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l)
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On February 18, 2015, we issued 31,000,000 common shares upon the conversion of $1,550 of principal of the July 15, 2013 convertible debenture.
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m)
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On February 23, 2015, we issued 31,000,000 common shares upon the issuance of $1,550 of principal of the July 15, 2013 convertible debenture.
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n)
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On March 2, 2015, we issued 35,000,000 common shares upon the conversion of $1,750 of principal of the July 15, 2013 convertible debenture.
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o)
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On March 3, 2015, we issued 37,000,000 common shares upon the issuance of $1,850 of principal of the July 15, 2013 convertible debenture.
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p)
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On March 5, 2015, we entered into settlement and general mutual release agreements with our former president and director and two of our consultants. Pursuant to the settlement and release agreements, we agreed to issue 180,285,000 shares of common stock for the settlement of all amounts owing to these parties.
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q)
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On March 9, 2015, we issued 13,350,000 newly-issued shares of Class B preferred stock and 200,000,000 newly-issued share of restricted shares of common stock under the Strategic Expansion Agreement to SirenGPS. Additionally, under the Strategic Expansion Agreement, we issued to HOEL 342,150,496 newly-issued restricted shares of common stock. Also under the Expansion Agreement, we issued 274,300 newly-issued shares of Class B preferred stock to a designee of the Licensor.
|
|
r)
|
On March 13, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture.
|
|
s)
|
On March 17, 2015, we issued 75,000,000 common shares upon the issuance of $3,750 of principal of the July 15, 2013 convertible debenture.
|
|
t)
|
On March 18, 2015, we issued 83,000,000 common shares upon the issuance of $1,490 of principal of the July 15, 2013 convertible debenture and $2,660 of accrued and unpaid interest. Refer to Note 3(b).
|
|
u)
|
On March 24, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture.
|
|
v)
|
On March 25, 2015, we issued 87,000,000 common shares upon the issuance of $4,350 of principal of the October 4, 2013 convertible debenture.
|
|
w)
|
On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were previously assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, the New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015.
|
|
x)
|
On April 1, 2015, we issued a draw-down convertible promissory note to a non-related party in the principal amount of up to $600,000. Under the terms of the promissory note, the amount is unsecured, bears interest at 10% per annum, and is due on April 1, 2016. The note is convertible into shares of common stock at a conversion rate of 50% of the average of the three lowest end of day closing prices of our common stock for the twenty-five trading days prior to the date the holder elects to convert all or part of the promissory note. This agreement was terminated subsequent to year-end.
|
|
y)
|
On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock, respectively, into 1,050,000 shares and 1,165,000 shares of Class B Preferred Stock, respectively. This agreement was terminated subsequent to year-end.
|
|
z)
|
On April 6, 2015, we executed a Common Stock Purchase Warrant with Iconic Holdings, LLC, a west coast-based institutional investor (the "Purchaser"), providing the Purchaser the right to purchase our shares of common stock by investing up to $50,000 into new shares of common stock at a price of $0.001 per share. On April 2, 2015, we entered into an equity line of credit (ELOC) agreement that permits us to "put" shares to the Purchaser at a 20% discount to the lowest trading price over the five consecutive trading days immediately succeeding the applicable Put Notice Date. The ELOC requires the filing of a registration statement prior to the funds becoming available to us Once the registration is filed, funding under the ELOC occurs at our discretion. This agreement was terminated through a settlement and restructuring agreement with the Purchaser in February 2016.
|
|
|
aa) On April 10, 2015, the Company issued 149,844,444 common shares upon the issuance of $6,743 of principal of the February 18, 2014 convertible debenture.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchases
During each month within the fourth quarter of the fiscal year ended December 31, 2015, 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.
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 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
|
Forward Looking Statements
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
We are considered a start-up corporation. Our auditors have issued a going concern opinion on the consolidated financial statements for the year ended December 31, 2015.
Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we complete the development of our website, source out suppliers for products to sell and source out customers to buy our products. We believe the technical aspects of our websites will be sufficiently developed to use for our operations 60 days from the completion of our offering. 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. We must raise cash to implement our project and begin our operations.
Plan of Operation – Milestones
We are in the early stages of our new business operations. Over the next twelve months, our primary target milestones include:
|
1.
|
Complete the 2.0 destination site www.good-gaming.com and launch the world’s premiere online destination site for social networking and tournaments for cash and prizes to 205 million eSports amateur players.
|
|
2.
|
Enhance the platform with 3.0 features to integrate with mobile networks and offer other value-added features.
|
|
3.
|
File provisional patent application to protect the 2.0 Mercenary System, which offers a marketplace for the purchase and/or exchange of virtual goods and gaming labor.
|
|
4.
|
Add a suite of online games that subscribers can play for free or for fees depending on their status on the system..
|
|
5.
|
The Company will need to raise additional capital to move from the relaunch phase this spring-summer and fully fund its plan into 2017.
|
|
6.
|
Obtain the backing of corporate sponsors for cash and prizes and to provide advertising during tournaments and to its subscribers on the systems. To this end, Good Gaming already has verbal indications of interest for such sponsorships and advertising, but buyers of ad inventory are waiting to inspect the Company’s 2.0 platform.
|
|
7.
|
The Company intends to continue to expand its Advisory Board with industry professionals that can further help refine the site, facilitate introductions to sponsors and strategic partners, and add credibility to the business.
|
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance relating to our new business direction. We have not generated any revenues. 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, 2015 as compared to December 31, 2014
Working Capital
|
December 31, 2015
|
December 31, 2014
|
|||||||
|
Current Assets
|
$ | - | $ | 1,093 | ||||
|
Current Liabilities
|
639,852 | 1,435,785 | ||||||
|
Working Capital (Deficit)
|
(639,852 | ) | (1,434,692 | ) | ||||
Cash Flows
|
For the year ended
December 31, 2015
$
|
For the year ended
December 31, 2014
$
|
|||||||
|
Cash Flows from (used in) Operating Activities
|
(73 | ) | (20,016 | ) | ||||
|
Cash Flows from (used in) Investing Activities
|
– | – | ||||||
|
Cash Flows from (used in) Financing Activities
|
- | 26,718 | ||||||
|
Net Increase (decrease) in Cash During Period
|
(73 | ) | (3,298 | ) | ||||
Operating Revenues
We have not generated any revenues since inception.
Operating Expenses and Net Loss
Operating expenses for the year ended December 31, 2015 were $240,419 compared with $420,593 for the year ended December 31, 2014. The decrease in operating expenses was attributed to a decrease in transfer agent fees of $185 and consulting fees of $285,305 offset by an increase professional fees of $10,337 and in general and administrative expense of $94,980 for day-to-day operating costs.
During the year ended December 31, 2015, the Company recorded a net loss of $707,532 compared with a net loss of $607,819 for the year ended December 31, 2014. In addition to the above, the Company incurred a decrease of $71,387 of interest expense relating to debt balances and $429,954 of loss on change in fair value of derivative liability.
Liquidity and Capital Resources
As at December 31, 2015, the Company's cash balance consisted of $0 compared to cash balance of $73 as at December 31, 2014. The decrease in the cash balance was attributed the use of cash during the year for day-to-day activities. As at December 31, 2015, the Company had no assets compared to total assets of $1,093 as at December 31, 2014. The decrease in total assets was attributed to the decrease in cash, as noted above, and decrease in deferred financing costs related to the issuance of convertible debt which was expensed during the year ended December 31, 2015.
As at December 31, 2015, the Company had total liabilities of $689,852 compared with total liabilities of $1,435,785 as at December 31, 2014. The decrease in total liabilities is attributed to a $632,440 decrease in accounts payable and accrued liabilities, $298,292 decrease in accounts payable and accrued liabilities – related parties, as well as a $51,348 increase in convertible debentures and a $383,451 increase in derivative liability and $300,000 decrease in Note Payable – related party.
As at December 31, 2015, the Company has a working capital deficit of $639,852 compared with a working capital deficit $1,434,692 at December 31, 2014 with the increase in the working capital attributed to decrease in cash used to fund day-to-day activities and an increase in accounts payable due to the low cash balance held at year end as well as due to the convertible debentures and derivative liability issued and recorded during the year.
Cashflow from Operating Activities
During the year ended December 31, 2015, the Company used $133,373 of cash for operating activities compared to the use of $30,016 of cash for operating activities during the year ended December 31, 2014. The decrease in the use of cash for operating activities was attributed to the fact that the Company had more outstanding and current obligations at year end to conserve cash.
Cashflow from Investing Activities
During the years ended December 31, 2015 and 2014, we did not conduct any investing activities.
Cashflow from Financing Activities
During the year ended December 31, 2015, the Company received $133,300 of proceeds from financing activities compared to $26,718 during the year ended December 31, 2014. The increase in proceeds from financing activities was due to receipt of $15,000 in debt financing received during the prior year, as well as $11,718 from the proceeds of advances from related parties, compared to the receipt of $133,300 from issuance of convertible debt and $0 from related parties in current year.
Developments after December 31, 2015
|
a)
|
On or around February 18, 2016, a special meeting of the shareholders of the Company was called to change the name of the Company to “Good Gaming, Inc.” The Company subsequently effected the name change with the Secretary of State of Nevada and has submitted an application to FINRA for a name change and ticker change, both of which are pending with a requirement that the Company bring its SEC filings current.
|
|
b)
|
On or around February 18, 2016, a minimum funding threshold had been achieved by CMG on behalf of the Good Gaming transaction. Therefore, CMG sold Good Gaming’s assets including intellectual property, software code, computer equipment, brand name and trademarks to the Company.
|
|
c)
|
On or around February 18, 2016, the Company executed a settlement agreement with a lender which lowered their amounts due from approximately $100,000 to $25,000 and fixed its conversion price. Additionally, as part of the agreement, the lender funded $100,000 new monies to the Company. Separately, management has negotiated the purchase of a second lender’s debt for $50,000 and aims to consummate that transaction as soon as possible.
|
|
d)
|
On or around February 18, 2016, management terminated plans to effectuate a share increase to 10 billion, a reverse split of 1-30, and approve 50 billion share stock option plan.
|
|
e)
|
On or around February 18, 2016, Paul Rauner resigned his positions of CEO and Director. Additionally, a special meeting of the shareholders of the Company was called, at which time they appointed Vikram Grover to the same positions.
|
|
f)
|
On or around February 22, 2016, a special meeting of the shareholders of the Company was called to appoint Barbara Laken and David Dorwart to the Board of Directors and to appoint Barbara Laken as the Company’s Corporate Secretary.
|
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited consolidated financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Future Financings
We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Critical Accounting Policies
Our consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is included in the notes to our consolidated financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and we do 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.
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 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
| Index to Consolidated Financial Statements | Page | |||
|
14
|
||||
| Report of Independent Registered Public Accounting Firm – M&K CPAs, PLLC | 15 | |||
|
16
|
||||
|
17
|
||||
|
18
|
||||
|
19
|
||||
|
20
|
||||
F-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
To: The Board of Directors
HDS International Corp
We have audited the accompanying balance sheet of HDS International Corp. (the “Company”) as of December 31, 2015, and the related statement of loss, shareholders’ deficit, and cash flows for year ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HDS International Corp. as of December 31, 2015, and the results of its operations and their cash flows for the year ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the Company’s net loss of operating history and financial resources raise substantial doubt about its ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations immediately.
/s/ Enterprise CPAs, Ltd.
Enterprise CPAs, Ltd.
Chicago, IL
May 26, 2016
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors HDS International Corp.
We have audited the accompanying consolidated balance sheets of HDS International Corp (the "Company") as of December 31, 2014 and 2013 and the related consolidated statements of operations, stockholders' deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of HDS International Corp. as of December 31, 2014 and 2013, and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company suffered a net loss from operations and has a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
April 15, 2015
F-3
|
HDS International Corp
|
||||||||
|
Consolidated Balance Sheets
|
||||||||
|
(Expressed in U. S. Dollars
|
||||||||
|
December 31,
|
December 31,
|
|||||||
|
2015
|
2014
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
$ | - | $ | 73 | ||||
|
Current Portion of deferred financing costs
|
- | 1,020 | ||||||
|
Total Current Assets
|
- | 1,093 | ||||||
|
Total Assetrs
|
$ | - | $ | 1,093 | ||||
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
|
Current Liabilities
|
||||||||
|
Accountspayable and accrued liabilities
|
$ | 96,141 | $ | 728,581 | ||||
|
Accountspayable and accrued liabilities - related party
|
6,670 | 304,962 | ||||||
|
Note Payable – related party, currently in default
|
- | 300,000 | ||||||
|
Convertible debentures, net of unamortized discount of $0 and $36,088, respectively
|
83,300 | 31,952 | ||||||
|
Derivative liability
|
453,741 | 70,290 | ||||||
|
Toital Current Liabilities
|
639,852 | 1,435,785 | ||||||
|
Convertible debentures, long-term
|
50,000 | |||||||
|
Total Liabilities
|
689,852 | 1,435,785 | ||||||
|
Stockholders' Deficit
|
||||||||
|
Class A Preferred Stock
|
||||||||
|
Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 7,500,000 shares
|
7,500 | 7,500 | ||||||
|
Class B Preferred Stock
|
||||||||
|
Authorized: 25,000,000 preferred shares, with a par value of $0.001 per share Issued and outstanding: 15,839,300 and 0 shares, respectively
|
15,839 | - | ||||||
|
Common Stock
|
||||||||
|
Authorized: 2,000,000,000 common shares, with a par value of $0.001 per share Issued and outstanding: 1,995,290,000 and 571,564,504 shares, respectively
|
1,995,290 | 571,564 | ||||||
|
Additional paid-in capital
|
309,592 | 296,785 | ||||||
|
Accumulated deficit
|
(3,018,073 | ) | (2,310,541 | ) | ||||
|
Total Stockholders' deficit
|
(689,852 | ) | (1,434,692 | ) | ||||
|
Total liabilities and stockholders' deficit
|
$ | - | $ | 1,093 | ||||
|
The accompanying notes are an integral part of these consolidated financial statements
|
||||||||
F-4
|
HDS International Corp
|
||||||||
|
Consolidated Statements of Operations
|
||||||||
|
(Expressed in U. S. Dollars
|
||||||||
|
For the Year Ended
|
||||||||
|
December 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Revenues
|
$ | - | $ | - | ||||
|
Operating Expenses
|
||||||||
|
Consulting fees
|
98,694 | 384,000 | ||||||
|
General and administrative
|
97,925 | 2,945 | ||||||
|
Profeesionsl fees
|
43,800 | 33,463 | ||||||
|
Transfer agent fees
|
- | 185 | ||||||
|
Total Operating Expenses
|
240,419 | 420,593 | ||||||
|
Net Loss Before Other Expenses
|
(240,419 | ) | (420,593 | ) | ||||
|
Other Expenses
|
||||||||
|
Interest expense
|
37,159 | 108,546 | ||||||
|
Loss on Change in fair value of derivitive liability
|
429,954 | 78,680 | ||||||
|
Total Other Expenses
|
467,113 | 187,226 | ||||||
|
Net Loss
|
$ | (707,532 | ) | $ | (607,819 | ) | ||
|
Net Loss Per Share, Basic and Diluteded
|
$ | - | $ | - | ||||
|
Weigted Average Shares Outstanding
|
1,549,334,532 | 406,443,367 | ||||||
|
The accompanying notes are an integral part of these consolidated financial statements
|
||||||||
F-5
|
HDS International Corp
|
||||||||
|
Consolidated Statements of Cash Flows
|
||||||||
|
(Expressed in U. S. Dollars
|
||||||||
|
For the Year Ended
|
||||||||
|
December 31,
|
||||||||
|
2015
|
2014
|
|||||||
|
Operating Activities
|
||||||||
|
Net Loss
|
$ | (707,532 | ) | $ | (607,819 | ) | ||
|
Adjustment to reconcile net loss to
|
||||||||
|
net cash used in operating activities
|
||||||||
|
Accretion of debt discount
|
15,052 | 63,399 | ||||||
|
Amortization of deferred financing costs
|
1,020 | 6,165 | ||||||
|
Loss on change in fair value of derivitive liability
|
429,954 | 78,680 | ||||||
|
Changes in operating asstes and liabilities
|
||||||||
|
Accounts payable and accrued liabilities
|
90,276 | 279,559 | ||||||
|
Accounts payable and accrued liabilities-related parties
|
37,857 | 150,000 | ||||||
|
Net Cash Provided by (Used in) Operating Activities
|
(133,373 | ) | (30,016 | ) | ||||
|
Financing activities
|
||||||||
|
Proceeds from Convertible debenturee, net of financing costs
|
133,300 | 15,000 | ||||||
|
Proceeds from related parties
|
- | 11,718 | ||||||
|
Net Cash Provided by (Used in) Financing activities
|
133,300 | 26,718 | ||||||
|
Change in Cash
|
(73 | ) | (3,298 | ) | ||||
|
Cash, Beginning of Period
|
73 | 3,371 | ||||||
|
Cash, End of period
|
$ | - | $ | 73 | ||||
|
Non-cash investing andd financing activities
|
||||||||
|
Adjustment to Derivative liabilitiy
|
$ | 429,954 | $ | 53,911 | ||||
|
Common shares issued for conversion of debt
|
$ | 1,436,534 | $ | 39,960 | ||||
|
Debt Discount due to beneficial conversion feature
|
$ | 186.397 | $ | 15,500 | ||||
|
The accompanying notes are an integral part of these consolidated financial statements
|
||||||||
F-6
|
HDS International Corp
|
||||||||||||||||||||||||||||||||||||
|
Consolidated Statements of Stockholders' Deficit
|
||||||||||||||||||||||||||||||||||||
|
(Expressed in U. S. Dollars
|
||||||||||||||||||||||||||||||||||||
|
Deficit
|
||||||||||||||||||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
Additional
|
During the
|
||||||||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Common Stock
|
Paid-in
|
Developmenmt
|
||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||||||||||||||
|
Balance, December 31, 2013
|
7,500,000 | $ | 7,500 | - | $ | - | 377,203,075 | $ | 377,203 | $ | 381,775 | $ | (1,702,722 | ) | $ | (936,244 | ) | |||||||||||||||||||
|
Fair value of beneficial conversion recorded on issuance of convertible debt
|
- | - | - | - | - | - | 15,500 | - | 15,500 | |||||||||||||||||||||||||||
|
Common shares issued for conversion of debt
|
- | - | - | - | 194,361,429 | 194,361 | (100,490 | ) | - | 93,871 | ||||||||||||||||||||||||||
|
Net loss for the year
|
- | - | - | - | - | - | - | (607,819 | ) | (607,819 | ) | |||||||||||||||||||||||||
|
Balance, December 31, 2014
|
7,500,000 | 7,500 | - | - | 571,564,504 | 571,564 | 296,785 | (2,310,541 | ) | (1,434,692 | ) | |||||||||||||||||||||||||
|
Common shares issued for conversion of debt
|
- | - | - | - | 1,845,725,496 | 1,845,726 | (409,192 | ) | - | 1,436,534 | ||||||||||||||||||||||||||
|
Shares Cancelled
|
- | - | - | - | (422,000,000 | ) | (422,000 | ) | 422,000 | - | - | |||||||||||||||||||||||||
|
Preferred shares issued
|
- | - | 15,839,300 | 15,839 | - | - | - | - | 15,839 | |||||||||||||||||||||||||||
|
Net loss for the year
|
- | - | - | - | - | - | - | (707,532 | ) | (707,532 | ) | |||||||||||||||||||||||||
|
Balance December 31, 2015
|
7,500,000 | 7,500 | 15,839,300 | 15,839 | 1,995,290,000 | 1,995,290 | 309,593 | (3,018,073 | ) | (689,851 | ) | |||||||||||||||||||||||||
|
The accompanying notes are an integral part of these consolidated financial statements
|
||||||||||||||||||||||||||||||||||||
F-7
HDS International Corp.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
|
1.
|
Nature of Operations and Continuance of Business
|
HDS International Corp. (the "Company") was incorporated on November 3, 2008 under the laws of the State of Nevada. The Company is a leading tournament gaming platform and online destination targeting the over 205 million eSports players and participants worldwide that want to compete at the high school or college level. A substantial portion of the Company's activities has involved developing a business plan and establishing contacts and visibility in the marketplace and the Company has not generated any revenue to date.
On February 18, 2016, the Company acquired Good Gaming, Inc. from CMG Holdings Group, Inc. (OTCQB: CMGO).
Going Concern
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of December 31, 2015, the Company had a working capital deficiency of $639,852 and an accumulated deficit of $3,018,073. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
|
2.
|
Summary of Significant Accounting Policies
|
|
a)
|
Basis of Presentation and Principles of Consolidation
|
The consolidated financial statements for the periods ending December 31, 2015 and 2014 include the accounts of the Company, and HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary, effective June 11, 2012. All intercompany transactions and balances have been eliminated on consolidation.
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.
|
b)
|
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company's fiscal year-end is December 31.
|
|
(c)
|
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.
|
(d)
|
Cash and Cash Equivalents
|
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2015 and 2014, the Company had no cash equivalents.
|
(e)
|
Intangible Assets
|
Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years.
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
2.
|
Summary of Significant Accounting Policies (continued)
|
|
(f)
|
Impairment of Long-Lived Assets
|
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
|
(g)
|
Beneficial Conversion Features
|
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
|
(h)
|
Derivative Liability
|
From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is records at is fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations.
|
(i)
|
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 December 31, 2015, the Company had 90,000,000 (2014 – 1,572,180,000) potentially dilutive shares from outstanding convertible debentures.
|
(j)
|
Income Taxes
|
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
|
(k)
|
Comprehensive Loss
|
ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2015 and 2014, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
|
(l)
|
Financial Instruments
|
ASC 820, "Fair Value Measurements" and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
2.
|
Summary of Significant Accounting Policies (continued)
|
|
l)
|
Financial Instruments (continued)
|
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
Assets and liabilities measured at fair value on a recurring basis were presented on the Company's balance sheet as at December 31, 2015 and 2014 as follows:
| Balance, December 31, 2014 | Conversions | Changes in Fair Values | Balance, December 31, 2015 | |||||||||||||
| Derivative Liability | $ | 70,290 | $ | (64,767 | ) | $ | 448,218 | $ | 453,741 | |||||||
The carrying values of all of our other financial instruments, which include accounts payable and accrued liabilities, and amounts due to related parties approximate their current fair values because of their nature and respective maturity dates or durations.
|
m)
|
Recent Accounting Pronouncements
|
The Company has limited operations and is considered to be in the development stage. During the year ended December 31, 2015, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements . The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
|
3.
|
Debt
|
Convertible Debentures
|
a)
|
On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,191 (2013 - $1,475), which has been included in accounts payable and accrued liabilities.
|
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company issued 25,277,857 common shares for the conversion of $32,500 of this debenture. During the year ended December 31, 2014, the Company had amortized $28,384 (2013 - $4,116) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $nil (2013 -
$4,116).
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
b)
|
On February 18, 2014, the Company entered into a $15,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on August 20, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (August 17, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $1,074, which has been included in accounts payable and accrued liabilities.
|
|
|
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended June 30, 2015, the Company had amortized $590 (December, 31, 2014 - $2,431) of the debt discount to interest expense. As at December 31, 2015, the carrying value of the debenture was $nil (December, 31, 2014 - $nil).
|
On December 4, 2013, the note became convertible resulting in the Company recording a derivative liability of $46,532 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $115 (2013 - $1,011) as a loss on change in fair value of derivative liabilities. As at December 31, 2014, the fair value of the derivative liability was $1,605 (2013 - $45,521). Refer to Note 4.
|
c)
|
On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on January 16, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,077 (2013 -
|
$1,019), which has been included in accounts payable and accrued liabilities.
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company issued 23,312,500 common shares for the conversion of $7,460 of this debenture. During the year ended December 31, 2014, the Company had amortized $22,461 (2013 - $2,779) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $17,780 (2013 - $2,779).
On January 11, 2014, the note became convertible resulting in the Company recording a derivative liability of $36,272 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $23,331 (2013 - $nil) as a gain on change in fair value of derivative liabilities. As at December 31, 2014, the fair value of the derivative liability was $3,061 (2013 - $nil). Refer to Note 4.
|
d)
|
On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on July 8, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at December 31, 2014, the Company recorded accrued interest of $3,227 (2013 - $627), which has been included in accounts payable and accrued liabilities.
|
In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the year ended December 31, 2014, the Company had amortized $10,123 (2013
- $1,618) of the debt discount to interest expense. As at December 31, 2014, the carrying value of the debenture was $11,741 (2013 -
$1,618).
On April 2, 2014, the note became convertible resulting in the Company recording a derivative liability of $47,794 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at December 31, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $2,882 (2013 - $nil) as a gain on change in fair value of derivative liabilities. As at December 31, 2014, the fair value of the derivative liability was $44,912 (2013 - $nil). Refer to Note 4.
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
3.
|
Debt (continued)
|
Convertible Debentures (continued)
|
e)
|
On April 15, 2015, the Company entered into a $100,000 convertible debenture with a non-related party. During the quarter ended June 30, 2015 The Company received the first $50,000 payment. The remaining $50,000 payment will be made at the request of the borrower. No additional payments have been made as of June 30, 2015. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and is due on October 16, 2016. The note is convertible into shares of common stock any time after the maturity date at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As of December 310, 2015, the Company recorded accrued interest of $3,894 (December, 31, 2014 $0), which has been included in accounts payable and accrued liabilities.
|
|
f)
|
On April 1, 2015, we entered into a transaction with Iconic Holdings, LLC (the "Purchaser"), whereby Iconic Holdings agreed to provide up to $600,000 through a structured convertible promissory note (the "Note"), with funds to be received in tranches. The note bears interest of 10% and is due April 1, 2016. The initial proceeds of $40,000 was received on April 9, 2015, with $30,000 remitted and delivered to us, $4,000 retained by the Purchaser as an original issue discount, and $6,000 retained by the Purchaser for legal expenses. Subsequent to year-end 2015 the $600,000 facility has since been terminated and restructured.
|
The Purchaser has the right to convert the outstanding principal amount and interest under the Note in whole or in part into shares of common stock at a price equal to 50% of the average of the lowest three end of day closing prices of the Company's common stock during the 25 consecutive trading days prior to the date on which Holder elects to convert all or part of the Note.
The Note may be prepaid according to the following schedule: Between 1 and 90 days from the date of execution, the Note may be prepaid for 135% of face value plus accrued interest. Between 91 and 180 days from the date of execution, the Note may be prepaid for 145% of face value plus accrued interest. After 180 days from the date of execution until the Due Date, the Note may not be prepaid without written consent from the Purchaser.
|
g)
|
On April 1, 2015, we consented to the further assignment of the February 18, 2014 and the October 4, 2013 Asher Notes, which were initially assigned to JABRO. The April 8, 2015 assignment assigned the notes to the Purchaser. According to the terms of the April 8, 2015 assignment agreement, the February 18, 2014 note was sold to the Purchaser and simultaneously exchanged for a new note (the "New February Note"). In accordance with the exchange, The New February Note was deemed to have been issued February 18, 2014, and carried substantially the same terms as the original note, with the following exceptions: the New February Note bears 0% interest, and the overall ownership of the Purchaser at any one moment shall be limited to 9.99% of the issued and outstanding shares of our common stock. The Purchaser also entered into an agreement with JABRO, granting the Purchaser the exclusive right to purchase the October 4, 2013 note, on or before May 7, 2015. Subsequent to year-end 2015, the Asher Notes have been restructured.
|
F-12
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
4.
|
Derivative Liabilities
|
The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Notes 3(a) and 3(b) in accordance with ASC 815, Derivatives and Hedging . The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the year ended Dec ember 31, 2015 , the Company recorded a loss on the change in fair value of derivative liability of $32,630 ( 2014 - $78,680 ). As at December 31, 2015 , the Company recorded a derivative liability of $ 56,417 ( 2013 - $70,290).
The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended December 31, 2015 and 2014 :
The underlying stock price of $0.0014 was used as the fair value of the common stock as at December 31, 2013.
The underlying stock price of $0.0013 was used as the fair value of the common stock as at June 30, 2015. The principal of the debenture on the June 7, 2013 date of issuance was $32,500.
The balance of the principal and interest of the June 7, 2013 debenture on December 4, 2013, the date the June 7, 2013 debenture became convertible, was $33,775.
The balance of the principal and interest of the June 7, 2013 debenture on December 31, 2013 was $33,975.
The balance of the principal and interest of the June 7, 2013 debenture on December 31, 2014 was $3,191.
The principal of the debenture on the July 15, 2013 date of issuance was $27,500.
The balance of the principal and interest of the July 15, 2013 debenture on January 11, 2014, the date the July 15, 2013 debenture became convertible, was $28,579.
The balance of the principal and interest of the July 15, 2013 debenture on December 31, 2014 was $23,117.
The principal of the debenture on the October 4, 2013 date of issuance was $32,500.
The balance of the principal and interest of the October 4, 2013 debenture on April 2, 2014, the date the October 4, 2013 debenture became convertible, was $33,782.
The balance of the principal and interest of the October 4, 2013 debenture on December 31, 2014 was $35,727.
The principal of the debenture on the February 18, 2014 date of issuance was $15,500.
The balance of the principal and interest of the February 18, 2014 debenture on August 17, 2014, the date the February 18, 2014 debenture became convertible, was $16,112.
The balance of the principal and interest of the February 18
The Holder would redeem based on availability of alternative financing 0% of the time increasing 1.0% monthly to a maximum of 10%.
The Holder would automatically convert the note at maturity if the registration (after 120 days) was effective and the Company is not in default.
The projected annual volatility for each valuation period was based on the historic volatility of the Company of 176% as at December 31, 2013, 175% as at January 11, 2014, 176% as at June 30, 2014, 176% as at August 17, 2014, 170% as at September 30, 2014, 2014, 166% as at October 26, 2014, 168% as at December 2, 2014, 170% as at December 4, 2014, 172% as at December 9, 2014, 183% as at December 31, 2014, 203% as at February 6, 2015, 206% as at February 10, 2015, 209% as at February 13, 2015, 212% as at February 18, 2015, 216% as at February 23, 2015, 222% as at March 2, 2015, 223% as at March 3, 2015, 238% as at March 16, 2015, 240% as at March 17, 2015, 244% as at March 19, 2015, 249% as at March 24, 2015, 251% as at March 25, 2015, and 259% as at March 31, 2015.
An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 5%. To date, the debenture is not in default nor converted by the Holder.
|
A summary of the activity of the derivative liability is shown below:
|
||||
|
Balance, December, 2013
|
$ | 45,521 | ||
|
Derivative loss due to new issuances
|
105,816 | |||
|
Adjustment for conversion
|
(53,911 | ) | ||
|
Mark to market adjustment at December 31, 2014
|
(27,136 | ) | ||
|
Balance, December 31, 2014
|
70,290 | |||
|
Adjustment for conversion
|
(64,767 | ) | ||
|
Mark to market adjustment at December 31, 2015
|
50,894 | |||
|
Balance, December 31, 2015
|
$ | 56,417 | ||
F-13
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
5.
|
Common Stock
|
Share Transactions for the Year Ended December 31, 2015:
|
a)
|
On March 5, 2015, the Company issued 200,000,000 common shares with a par value of $200,000 pursuant to a license agreement with a third party to acquire the rights to technologies related to emergency management and communications. As the transaction resulted in a change of control, the par value of the license was allocated to additional paid-in capital. As a result of the completion of the transaction, SirenGPS and Paul Rauner are deemed related parties.
|
|
b)
|
On March 5, 2015, the Company issued 106,050,000 common shares with a fair value of $21,210 for the settlement of accounts payable of $733,500 owing to consultants resulting in a gain on settlement of debt of $712,290. As the transaction was pursuant to the agreement which resulted in a change of control, the gain has been recorded to additional paid-in capital.
|
|
c)
|
On March 5, 2015, the Company issued 342,150,496 common shares with a fair value of $68,430 for the settlement of $300,000 of principal and $107,479 of accrued interest owing to a company controlled by the former President and CEO of the Company. The transaction resulted in a gain on settlement of debt of $339,049 which was recorded against additional paid-in capital. Refer to Note 7 (a).
|
|
d)
|
On March 5, 2015, the Company issued 74,235,000 common shares with a fair value of $14,847 for the settlement of $215,225 owing to the former President and CEO and companies under his control. The transaction resulted in a gain on settlement of debt of $200,378 which was recorded against additional paid-in capital. Refer to Notes 7 and 8.
|
|
e)
|
During the period ended March 31, 2015, the Company issued 454,000,000 common shares for the conversion of $20,040 of principal and $2,660 of accrued interest of the July 15, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
|
f)
|
During the period ended March 31, 2015, the Company issued 174,000,000 common shares for the conversion of $8,700 of principal of the October 4, 2013 convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
|
g)
|
During the period ended June 30, 2015 the Company issued 298,912,445 common shares for the conversion of $25,505 of Principal and interest of the February convertible debenture. As the conversions were within the terms of the agreement, no additional gain or loss was recognized as a result of the conversion.
|
|
h)
|
On April 3, 2015, SirenGPS, Inc., and Hillwinds Ocean Energy, LLC, agreed to convert 200,000,000 shares of common stock, and 222,000,000 shares of common stock owned by them into 1,050,000 shares of Class B Preferred Stock, and 1,165,000 shares of Class B Preferred Stock, respectively, in order to facilitate the closing of the other transactions herein described.
|
All were converted within the original terms, so no gains (losses) were recorded.
F-14
HDS International Corp.
Notes to the Financial Statements
|
5.
|
Common Stock (continued)
|
Share Transactions for the Year Ended December 31, 2014:
|
a)
|
On April 9, 2014, the Company issued 8,571,429 common shares for the conversion of $12,000 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
|
b)
|
On October 21, 2014, the Company issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
|
c)
|
On October 28, 2014, the Company issued 38,520,000 common shares for the conversion of $9,630 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
|
d)
|
On November 21, 2014, the Company issued 15,500,000 common shares for the conversion of $1,240 of principal of the June 7, 2013 convertible debenture. Refer to Note 3(a).
|
|
e)
|
On November 26, 2014, the Company issued 19,000,000 common shares for the conversion of $1,520 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
|
f)
|
On December 2, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
|
g)
|
On December 4, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
|
h)
|
On December 9, 2014, the Company issued 24,750,000 common shares for the conversion of $1,980 of principal of the July 15, 2013 convertible debenture. Refer to Note 3(b).
|
All were converted within the original terms, so no gains (losses) were recorded.
F-15
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
6.
|
Preferred Stock
|
Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of preferred stock, $0.001 par value. Of the 50,000,000 authorized shares of preferred stock, the total number of shares of Class A Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), with a stated par value of $0.001 per share, and the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), 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 December 31, 2015, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. As of December 31, 2015, we had 15,839,300 shares of Class B preferred stock issued and outstanding.
The 7,500,000 issued and outstanding shares of Class A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one Class A Preferred Share. The 15,839,800 issued and outstanding shares of Class B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one Class B Preferred Share. If all of our Class A Preferred Stock and Class B Preferred Stock was converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 3,317,960,000 shares.
|
7.
|
Related Party Transactions
|
|
a)
|
As at December 31, 2014, the Company owes $300,000 (2013 - $300,000) to a company controlled by former officers and directors of the Company. The amount owing is unsecured, bears interest at 10% per annum, and is due on August 16, 2012, currently in default. As at December 31, 2014, the Company has recorded accrued interest of $102,219 (2013 - $72,219) which has been included in accounts payable and accrued liabilities – related party.
|
|
b)
|
As at December 31, 2014, the Company owes $15,225 (2013 - $10,225) to companies under common control by former officers and directors of the Company which has been included in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.
|
|
c)
|
During the year ended December 31, 2014, the Company has incurred $120,000 (2013 - $45,000) to the former President and CEO of the Company for consulting services. As at December 31, 2014, the Company recorded a related party accounts payable of $180,000 (2013 - $60,000), which has been included in accounts payable and accrued liabilities – related party. The amounts owing are unsecured, non-interest bearing, and due on demand.
|
|
d)
|
As at December 31, 2014, the Company owes $7,518 (2013 – $800) to the former President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
|
e)
|
As at December 31, 2015, the Company owes $570 (December 31, 2014 – $0) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
|
f)
|
As at December31, 2015, the Company owes $6,100 (December 31, 2014 – $0) to the President and CEO of the Company for reimbursement of expenses which has been included in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
|
|
8.
|
Commitments
|
|
a)
|
On October 12, 2011, the Company entered into a verbal consulting agreement with a non-related party whereby the Company will pay a monthly consulting fee for services provided in the amounts of $3,000. The agreement is for a one month term automatically renewing in each successive month unless earlier terminated. On July 18, 2012, the Board of Directors reviewed the consulting agreement and authorized an increase to the monthly consulting fee from $3,000 to $3,750 per month beginning July 2012. On October 1, 2012, the Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,750 to $3,000 per month beginning October 2012. On April 8, 2014, The Board of Directors reviewed the consulting agreement and adjusted the consulting fee from $3,000 to $500 per month effective January 1, 2014. All these related party amounts and commitments have since been settled for cash or stock. This commitment was settled in stock and/or cash as part of the SirenGPS change of control in Februyary 2016.
|
F-16
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
9.
|
Income Taxes
|
The Company has a net operating loss carried forward of $3,018,073 available to offset taxable income in future years which commence expiring in fiscal 2029.
The income tax benefit has been computed by applying the weighted average income tax rates of Canada (federal and provincial statutory rates) and of the United States (federal and state rates) of 27% and 27%, respectively, to the net loss before income taxes calculated for each jurisdiction. The tax effect of the significant temporary differences, which comprise future tax assets and liabilities, are as follows:
| 2015 | 2014 | |||||||
| Income tax recovery at statutory rate | $ | 195,612 | $ | 158,351 | ||||
| Valuation allowance change | (195,612 | ) | (158,351 | ) | ||||
| Provision for income taxes | $ | - | $ | - | ||||
The significant components of deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:
| 2015 | 2014 | |||||||
| Income tax recovery at statutory rate | $ | 824,952 | $ | 629,340 | ||||
| Valuation allowance change | (824,952 | ) | (629,340 | ) | ||||
| Provision for income taxes | $ | - | $ | - | ||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited.
F-17
HDS International Corp.
Notes to the Financial Statements
(expressed in U.S. dollars)
|
10.
|
Subsequent Events
|
We have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events after December 31, 2015, except for the following:
|
a)
|
On or around February 18, 2016, a special meeting of the shareholders of the Company was called to change the name of the Company to “Good Gaming, Inc.” The Company subsequently effected the name change with the Secretary of State of Nevada and has submitted an application to FINRA for a name change and ticker change, both of which are pending with a requirement that the Company bring its SEC filings current.
|
|
b)
|
On or around February 18, 2016, a minimum funding threshold had been achieved by CMG on behalf of the Good Gaming transaction. Therefore, CMG sold Good Gaming’s assets including intellectual property, software code, computer equipment, brand name and trademarks to the Company.
|
|
c)
|
On or around February 18, 2016, the Company executed a settlement agreement with a lender which lowered their amounts due from approximately $100,000 to $25,000 and fixed its conversion price. Additionally, as part of the agreement, the lender funded $100,000 new monies to the Company. Separately, management has negotiated the purchase of a second lender’s debt for $50,000 and aims to consummate that transaction as soon as possible.
|
|
d)
|
On or around February 18, 2016, management terminated plans to effectuate a share increase to 10 billion, a reverse split of 1-30, and approve 50 billion share stock option plan.
|
|
e)
|
On or around February 18, 2016, Paul Rauner resigned his positions of CEO and Director. Additionally, a special meeting of the shareholders of the Company was called, at which time they appointed Vikram Grover to the same positions.
|
|
f)
|
On or around February 22, 2016, a special meeting of the shareholders of the Company was called to appoint Barbara Laken and David Dorwart to the Board of Directors and to appoint Barbara Laken as the Company’s Corporate Secretary.
|
F-18
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
None.
|
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2015. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.
Management's Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2015 using the criteria established in " Internal Control - Integrated Framework " issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2015, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
|
1.
|
We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is an utmost important entity level control over the Company's financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management's activities.
|
|
2.
|
We did not maintain appropriate cash controls – As of December 31, 2015, we do not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on our bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that we have limited transactions in our bank accounts.
|
|
3.
|
We did not implement appropriate information technology controls – As at December 31, 2015, we retain copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of our data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.
|
Accordingly, we have concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company's internal controls.
As a result of the material weaknesses described above, did not maintain effective internal control over financial reporting as of December 31, 2015 based on criteria established in Internal Control—Integrated Framework issued by COSO.
Continuing Remediation Efforts to address deficiencies in Company's Internal Control over Financial Reporting
Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:
|
1.
|
Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors.
|
|
2.
|
We will appoint additional personnel to assist with the preparation of our monthly financial reporting, including preparation of the monthly bank reconciliations.
|
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2014, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the our internal control over financial reporting.
|
|
ITEM 9B.
|
OTHER INFORMATION.DATA
|
None.
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
Our directors serve until their successor is elected and qualified. Our officers are appointed by our board of directors. The following table provides the names, positions and ages of our directors and officers:
|
Name
|
Age
|
Position
|
|||
| Paul Rauner (resigned February 18, 2016) |
46
|
President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole Member of our Board of Directors | |||
| Vikram Grover (as of February 18, 2016) | 46 | President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and Member of our Board of Directors | |||
| Barbara Laken | 61 | Director, Secretary | |||
| David Dorwart | 57 | Director | |||
We have no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in our control. We are not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.
Set forth below is a brief description of the background and business experience of Paul Rauner, our sole officer and director.
Paul Rauner
Paul Rauner was our sole officer and director from,March 9, 2015 to February 18, 2016. He is the controlling shareholder of SirenGPS, a privately-held emergency management technology company. Following the execution of the Strategic Expansion Agreement, SirenGPS became our controlling shareholder, making Mr. Rauner a controlling shareholder of the Company. Mr. Rauner served as Chief Executive Officer and Chairman of SirenGPS from January 2012 to January 2015, and currently serves as Executive Director and Chairman of SirenGPS. Mr. Rauner is also Chief Operating Officer of Gremln, Inc., which provides social media compliance to companies in the financial sector. Mr. Rauner is an adjunct professor at the Boston University School of Medicine Healthcare Emergency Management Masters Degree Program (BU HEM), a terminal masters degree program that trains professionals to serve as emergency management professionals at the enterprise level in the public and private sectors. Mr. Rauner received a B.A. in Philosophy from Calvin College in 1992 and a Juris Doctor with distinction from the University of Iowa College of Law in 1997. Mr. Rauner previously served in a variety of capacities providing risk management consulting and insurance placement services, including as President of Rauner Risk Services, Inc. from 2005 to 2013; General Counsel to the NASDAQ Insurance Agency, a subsidiary of the NASDAQ Stock Market from 2003 to 2005; and Assistant Director, Legal at AON Corporation from 2001 to 2003. Based on the foregoing, we determined that Mr. Rauner was duly qualified to serve as the sole member of our Board of Directors.
Vikram Grover
Vikram Grover has over twenty-years track record as a leading thought provider and research analyst in the financial markets covering the emerging communications provider and technology sectors. Since February 18, 2016, he is the CEO of Good Gaming, Inc., acquired by the Company in at that time. He is also a consultant under the DBA “IX Advisors”. IXA is a management consulting and corporate strategy provider to emerging growth companies in the communications, Internet and digital media markets, leveraging a diverse network of C-level executives, sales and distribution channels, technology providers, and investors. From November 2006 to July 2015, he was Senior Managing Director Investment Banking, for Source Capital Group, focusing on emerging growth companies particularly in the telecom, Internet and digital media sectors. Previous to that, he was Managing Director, Investment Banking at MCF Corp., and Senior VP, Equity Research at Thomas Weisel Partners coverage of emerging communications providers and Internet infrastructure companies. From 2003 to 2005, he was a Principal, Equity Research at Needham & Co. From 1998 to 2005, he served as Director of Research at Kaufman Bros., LP a TMT boutique investment banking firm, and from 1995 to 1998, he served as a Research Analyst at Sterne Agee. Mr. Grover received his M.S. in Management from Georgia Institute of Technology with a focus in investment banking and finance, and his B.A. in Marketing from the university of California, San Diego, majoring in Marketing and Communications, with minors in Calculus and Latin.
Barbara Laken
Barbara Laken is a sucessful licensed real estate broker since 1997, Barbara has been buying and selling real estate since moving to Chicago from the New York area. She has developed a soon to be released website called “Location Ovation,” designed to give residents a platform to promote the unique features that define their communities via continuous, real time posts. She graduated from Long Island University with a B.S. in Elementary Education.
David Dorwart
David Dorwart from January 2011 to the present, is the Chairman of the Board of Assist Wireless, a company based in Fort Worth, Texas that is leading provider of lifeline phone service for individuals and families who qualify for government assistance. They are one of the fastest growing wireless providers in the telecommunications industry targeting the unbanked/under-banked and credit-challenged consumer demographic. In addition, Mr. Dorwart, since 2010, is the President and CEO of Acacia Energy, LLC. A provider of electric service to Customers in the Texas deregulated areas. We service both residential and small commercial business. He is also since 2010, the CEO of PayGo Distributors, LLC, a distribution company with over 100 Independent Sales Organizations under their management. PayGO focuses on distributing prepaid Electric, Home Phone and Wireless Services to residential Customers within the United States. Since 2009, he is the CEO of Britton & Associates, a full service Construction Consulting Firm. They specialize in the resolution of construction claims and construction disputes throughout the United States. From 1999 to 2009 He was the Founder, President & CEO of dPi Teleconnect/dPi Energy, LLC. He graduated from University of Delaware with a B.S. in Business.
Involvement in Certain Legal Proceedings
During the past ten years, Mr. Rauner has not been the subjects of the following events:
|
|
1.A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
|
|
2.
|
Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
3.
|
The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;
|
|
i)
|
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
|
|
ii)
|
Engaging in any type of business practice; or
|
|
iii)
|
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
|
|
4.
|
The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
|
|
5.
|
Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
|
|
6.
|
Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
|
|
7.
|
Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
|
|
i)
|
Any Federal or State securities or commodities law or regulation; or
|
|
ii)
|
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
|
|
iii)
|
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
|
8.
|
Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
Audit Committee Financial Expert
We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
Audit Committee
We do not have a separately designated audit committee. Accordingly, our board of directors is deemed our audit committee as provided for under the Sarbanes-Oxley Act of 2002.
Code of Ethics
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics is filed as Exhibit 14.1 to our Form 10-K for the period ended December 31, 2015.
Disclosure Committee
We do not have a disclosure committee or disclosure committee charter. Our disclosure committee is effectively comprised of our sole director, Mr. Paul Rauner.
Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms we received, we believe that during the fiscal year ended December 31, 2015, all such filing requirements applicable to our officers and directors were complied with. Mr. Rauner our current sole officer and director has not filed his Form 3 as of the date of this report. We expect him to file the same shortly.
Director Independence
We have one independent director, Mr. David Dorwarts.
Family Relationships
There are no family relationships between any of the officers, directors, or consultants. Barbara Laken, one of our directors is the wife of Glenn Laken Chairman and CEO of CMG Holdings our majority and control shareholder.
Conflicts of Interest
Our officers and directors will devote time to projects that do not involve us.
|
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
The following table sets forth the compensation paid by us for the last two fiscal years ending December 31, 2014 for each of our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.
| Executive Officer Compensation Table | ||||||||||
|
Non-Equity
|
Nonqualified Deferred
|
|||||||||
|
Name and
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Incentive Plan Compensation
|
Compensation Earnings
|
All Other Compensation
|
Total
|
||
|
Principal Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
|
Paul Rauner
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0 [1]
|
0
|
|
|
President/CEO/CFO
|
2014
|
0
|
0
|
0
|
0
|
0
|
0
|
0 [1]
|
|
0 |
|
Tassos Recachinas
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
President/CEO/CFO (Resigned 3-9-2015)
|
2014
|
60,000
|
0
|
0
|
0
|
0
|
0
|
60,000 [1]
|
120,000
|
|
[1] Represents cash consideration in connection with consulting services.
We have not entered into any written employment agreements with any of our officers. We may enter into employment agreements in the future.
The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.
There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors other than as described herein.
Compensation of Directors
The members of our board of directors are not compensated for their services as directors. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director's service contracts. The following table sets forth compensation paid to our directors from inception to our year end on December 31, 2015. Since that time, we have not paid any compensation to any director.
| Executive Officer Compensation Table | ||||||||||
|
Non-Equity
|
Nonqualified Deferred
|
|||||||||
|
Name and
|
Salary
|
Bonus
|
Stock Awards
|
Option Awards
|
Incentive Plan Compensation
|
Compensation Earnings
|
All Other Compensation
|
Total
|
||
|
Principal Position
|
Year
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
(US$)
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
|
Paul Rauner
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0 1]
|
0
|
|
|
President/CEO/CFO
|
2014
|
0
|
0
|
0
|
0
|
0
|
0
|
0 1]
|
|
0 |
|
Tassos Recachinas
|
2015
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
|
President/CEO/CFO (Resigned 3-9-2015)
|
2014
|
60,000
|
0
|
0
|
0
|
0
|
0
|
60,000 [1]
|
120,000
|
|
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
|
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
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The following tables set forth the ownership, as of the date of this prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS:
| Number of | Percentage | Number of Class A | Percentage | Number of Class B | Percentage | |||||||||||||||||||
| Name and Address Beneficial Owner | Common Shares | of Ownership | Preferred Shares (1)(2) | of Ownership | Preferred Shares (1)(3) | of Ownership | ||||||||||||||||||
| CMG Holdings Group, Inc, - OTC CMGO (5) | 0 | 0.00 | % | 0 | 0.00 | % | 14,400,000 | 60.76 | % | |||||||||||||||
| 2130N. Lincoln Park West, Suite 8N | ||||||||||||||||||||||||
| Chicago, IL 60614 | ||||||||||||||||||||||||
SECURITY OWNERSHIP OF MANAGEMENT:
| Number of | Percentage | Number of Class A | Percentage | Number of Class B | Percentage | |||||||||||||||||||
| Name and Address Beneficial Owner | Common Shares | of Ownership | Preferred Shares (1)(2) | of Ownership | Preferred Shares (1)(3) | of Ownership | ||||||||||||||||||
| Paul Rauner | 0 | 0.00 | % | 7,500.000 | (4) | 100.00 | % | 800,000 | 3.38 | % | ||||||||||||||
| 9272 Olive Boulevard | ||||||||||||||||||||||||
| St. Louis, MO 63132 | ||||||||||||||||||||||||
| Vikram Grover | 0 | 0.00 | % | 0 | 0.00 | % | 859,073 | 3.62 | % | |||||||||||||||
| 111 N 4th Avenue | ||||||||||||||||||||||||
| St. Charles, IL 60174 | ||||||||||||||||||||||||
| Barbara Laken (5) | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||
| 2130N. Lincoln Park West, Suite 8N | ||||||||||||||||||||||||
| Chicago, IL 60614 | ||||||||||||||||||||||||
| David Dorwart | 0 | 0.00 | % | 0 | 0.00 | % | 0 | 0.00 | % | |||||||||||||||
| 11011 Brooklet Dr., Suite 220 | ||||||||||||||||||||||||
| Houston, TX 77099 | ||||||||||||||||||||||||
| All officers and directors as a group | 0 | 0.00 | % | 0 | 100.00 | % | 1,659,073 | 7.00 | % | |||||||||||||||
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[1] Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of preferred stock, $0.001 par value. Of the 50,000,000 authorized shares of preferred stock, the total number of shares of Class A Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), with a stated par value of $0.001 per share, and the total number of shares of Class B Preferred Shares the Corporation shall have the authority to issue is Twenty Five Million (25,000,000), 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.
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[2] As of May 26, 2016, we had 7,500,000 shares of our Class A preferred stock issued and outstanding. The 7,500,000 issued and outstanding shares of Class A Preferred Stock are convertible into shares of common stock at a rate of 20 common shares for each one Class A Preferred Share.
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[3] As of May 26, 2016, we had 23,698,873 shares of Class B preferred stock issued and outstanding. The 23,698,873 issued and outstanding shares of Class B Preferred Stock are convertible into shares of common stock at a rate of 200 common shares for each one Class B Preferred Share. If all of our Class A Preferred Stock and Class B Preferred Stock was converted into shares of common stock, the number of issued and outstanding shares of our common stock will increase by 4,889,774,800 shares.
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[4] Owned by Siren GPS, a private corporation owned and controlled by Paul Rauner, our former officer and director.
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[5]Barbara Laken, one of our directors is the wife of Glenn Laken Chairman and CEO of CMG Holdings Group, Inc,.our majority and control shareholder.
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We are not categorized as a "shell company" as that term is defined in Reg. 405 of the Act. A "shell company" is a corporation with no or nominal assets or its assets consist solely of cash, and no or nominal operations.
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
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As of December 31, 2015, the Company had no related party notes payable.
In conjunction with the March 5, 2015 General Release Agreements, we agreed to settle any and all amounts owing to our at-the-time President and CEO in exchange for those certain shares of our newly-issued shares of our common stock, eliminating liabilities from our balance sheet.
In conjunction with the March 9, 2015 Strategic Expansion Agreement, we agreed to settle in full and extinguish all amounts we owed to HOEL under that certain promissory note we issued to HOEL on August 16, 2011 (approximately $407,397) in exchange for transferring, conveying, assigning and delivering to HOEL: (i) all our rights, title and interests under that certain NB Provincial License entered into December 10, 2012 (the "NB Provincial License"), relating to, among other things, technologies for gas exchange, carbon dioxide capture and sequestration, algae biomass production and other renewable energy and eco-sustainability applications (the "Eco-Technologies"), (ii) all our rights, title and interests under that certain exclusivity agreement with the City of Saint John, NB, Canada entered into November 30, 2012 (the "Saint John Contract"), relating to Eco-Technologies, and (iii) three hundred forty two million one hundred fifty thousand four hundred ninety six (342,150,496) newly-issued restricted shares of common stock. The shares of common stock were issued to HOEL partially in exchange for the full conversion and retirement of the HOEL Note. Additionally, we entered into a License Assignment Approval and Consent Agreement with Hillwinds Energy Development Corp., a Connecticut corporation ("HEDC"), under which we agreed to transfer, assign and convey all rights, title and interests in we had in that certain exclusivity agreement with the City of Saint John, NB, Canada dated November 30, 2012 to Hillwinds Ocean Energy, LLC, a Connecticut limited liability company ("HOEL"), for certain good and valuable consideration, exiting us from the renewable energy and eco-sustainability technologies development business.
Additionally, in conjunction with the Strategic Expansion Agreement, Mr. Recachinas resigned as a Director and from all executive officer positions he held with us and Mr. Paul Rauner ("Mr. Rauner") was appointed to the positions of President, CEO, CFO, Secretary, Treasurer and Director. Effective March 9, 2015, we entered into a consulting agreement (the "Consulting Agreement") with Tassos Recachinas, pursuant to which Mr. Recachinas will provide certain transitional services in conjunction with the Strategic Expansion Agreement.
Tassos Recachinas was our only promoter until he resigned on March 6, 2015. Mr. Paul Rauner is our only promoter.
Other than the foregoing transaction, none of our directors or executive officers, nor any person who owned of record or was known to own beneficially more than 5% of our outstanding shares of common stock, nor any associate or affiliate of such persons or companies, have any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect us.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manor:
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Disclosing such transactions in reports where required;
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Disclosing in any and all filings with the SEC, where required;
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Obtaining disinterested directors consent; and
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Obtaining shareholder consent where required.
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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(1)
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Audit and Audit Related Fees
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The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
| FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
| 2015 | $ | 5,500.00 | ENTERPRISE CPAS | ||
| 2014 | $ | 10,750.00 | M&K CPAS, PLC | ||
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(2)
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Tax Fees
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The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
| FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
| 2015 | $ | - | ENTERPRISE CPAS | ||
| 2014 | $ | - | M&K CPAS, PLC | ||
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(3)
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All Other Fees
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The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
| FISCAL YEAR ENDED DECEMBER 31, | AMOUNT | PRINCIPAL ACCOUNTING FIRM | |||
| 2015 | $ | - | ENTERPRISE CPAS | ||
| 2014 | $ | - | M&K CPAS, PLC | ||
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(4)
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Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approved all accounting related activities prior to the performance of any services by any accountant or auditor.
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(5)
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The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was 0%.
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ITEM 15.
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EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULES.
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| Exhibit | Incorporated by reference | Filed | |||
| Number | Form | Date | Number | herewith | |
| 3.1 | Articles of Incorporation. | S-1 | 3/24/09 | 3.1 | |
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3.2
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Bylaws.
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S-1
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3/24/09
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3.2
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3.3
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Amended and Restated Articles of Incorporation.
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8-K
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6/14/11
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3.1a
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3.4
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Amended and Restated Articles of Incorporation.
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8-K
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8/17/11
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3.1
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| 10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
| 10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
| 10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
| 10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
| 10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
| 10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
| 10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
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10.8
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Promissory Note issued to HGT Capital LLC. dated April 15, 2015
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8-K
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4/21/15
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10.1
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14.1
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Code of Ethics.
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10-K
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3/29/11
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14.1
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21.1
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List of subsidiaries
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S-1/A-1
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1/17/13
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21.1
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X
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X
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| 101.INS | XBRL Instance Document. | X | |||
| 101.SCH | XBRL Taxonomy Extension – Schema. | X | |||
| 101.CAL | XBRL Taxonomy Extension – Calculations. | X | |||
| 101.LAB | XBRL Taxonomy Extension – Labels. | X | |||
| 101.PRE | XBRL Taxonomy Extension – Presentation. | X | |||
| 101.DEF | XBRL Taxonomy Extension – Definition. | X | |||
| SIGNATURES | |||||
| Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 15 th day of May, 2016. | |||||
| HDS INTERNATIONAL CORP. | |||||
| (the "Registrant") | |||||
| Date: May 26, 2015 | By: | /s/VIKRAM GROVER | |||
| President, Director, Chief Executive Officer & Chief Financial Officer | |||||
| (Principal Executive Officer) | |||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the date indicated. | |||||
| Signature | Title | Date | |||
| /s/VIKRAM GROVER |
President, Director, Chief Executive Officer & Chief Financial Officer
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May 26, 2016 | |||
| Vikram Grover | (Principal Executive Officer) | ||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||
| /s/BARBARA LAKEN | Director | May 26, 2016 | |||
| Barbara Laken | |||||
| /s/ DAVID DORWART | Director | May 26, 2016 | |||
| David Dorwart | |||||
| Exhibit | Incorporated by reference | Filed | |||
| Number | Form | Date | Number | herewith | |
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3.1
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Articles of Incorporation.
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S-1
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3/24/09
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3.1
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3.2
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Bylaws.
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S-1
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3/24/09
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3.2
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3.3
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Amended and Restated Articles of Incorporation.
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8-K
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6/14/11
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3.1a
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3.4
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Amended and Restated Articles of Incorporation.
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8-K
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8/17/11
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3.1
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| 10.1 | Exchange Note Purchase Agreement between Jabro Funding Corp. and Iconic Holdings, LLC dated March 31, 2015. | 10-K | 4/15/15 | 10.1 | |
| 10.2 | Exchange Note Purchase Agreement with Iconic Holdings, LLC dated April 1,2015. | 10-K | 4/15/15 | 10.2 | |
| 10.3 | Convertible Promissory Note with Iconic Holdings, LLC dated April 1, 2015. | 10-K | 4/15/15 | 10.3 | |
| 10.4 | Investment Agreement (ELOC) and Registration Rights Agreement with Iconic Holdings, LLC dated April 2, 2015. | 10-K | 4/15/15 | 10.4 | |
| 10.5 | Common Stock Purchase Warrant with Iconic Holdings, LLC dated April 6, 2015. | 10-K | 4/15/15 | 10.5 | |
| 10.6 | Stock Conversion and Subscription Agreement with Hillwinds Ocean Energy, LLC dated April 3, 2015. | 10-K | 4/15/15 | 10.6 | |
| 10.7 | Stock Conversion and Subscription Agreement with SirenGPS, Inc. dated April 3, 2015. | 10-K | 4/15/15 | 10.7 | |
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10.8
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Promissory Note issued to HGT Capital LLC. dated April 15, 2015
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8-K
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4/21/15
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10.1
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14.1
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Code of Ethics.
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10-K
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3/29/11
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14.1
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21.1
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List of subsidiaries
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S-1/A-1
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1/17/13
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21.1
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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X
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32.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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X
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| 101.INS | XBRL Instance Document. | X | |||
| 101.SCH | XBRL Taxonomy Extension – Schema. | X | |||
| 101.CAL | XBRL Taxonomy Extension – Calculations. | X | |||
| 101.LAB | XBRL Taxonomy Extension – Labels. | X | |||
| 101.PRE | XBRL Taxonomy Extension – Presentation. | X | |||
| 101.DEF | XBRL Taxonomy Extension – Definition. | X | |||
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