GOOD GAMING, INC. - Quarter Report: 2015 June (Form 10-Q)

f10q0615_hds.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015

[ ]

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

Commission File Number 000-53949

HDS INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Nevada

(State of incorporation)

2130 N. Lincoln Park West, Suite 8N

Chicago, IL 60614

(Address of principal executive offices)

(773) 698-6047

(Registrant's telephone number)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES [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 (SS 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 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," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	[ ]	Accelerated Filer	[ ]
Non-accelerated Filer	[ ]	Smaller Reporting Company	[X]
(Do not check if smaller reporting company)

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of June 30, 2015, there were 1,948,756,889 shares of the registrant's $0.001 par value common stock issued and outstanding.

		Page
	PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS.	4
	Balance Sheets	5
	Statements of Operations	6
	Statements of Cash Flows	7
	Notes to the Financial Statements	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	18
ITEM 4.	CONTROLS AND PROCEDURES.	18

	PART II. OTHER INFORMATION
ITEM 1A.	RISK FACTORS	18

ITEM 6.	EXHIBITS.	19

Signatures		20

Exhibit Index		21

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

HDS International Corp. (A Development Stage Company)
June 30, 2015
	Index
Balance Sheets (unaudited)	5
Statements of Operations (unaudited)	6
Statements of Cash Flows (unaudited)	7
Notes to the Financial Statements (unaudited)	8

HDS International Corp
(A Development Stage Company)
Balance Sheets
(Expressed in U. S. Dollars
	June 30,			December 31,
	2015			2014
	(Unaudited)

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	$	89,956		$	728,581
Accountspayable and accrued liabilities - related party		6,670			304,962
Due to related parties		-			300,000
Convertible debentures, net of unamortized discount of $0 and $36,088. respectively		115,000			31,952
Derivative liability		56,417			70,290

Total Current Liabilities		268,043			1,435,785

Convertible debentures		50,000

Total Liabilities		318,043			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		(2,646,264	)		(2,310,541	)

Total Stockholders' deficit		(318,043	)		(1,434,692	)

Total liabilities and stockholders' deficit	$	-		$	1,093



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

HDS International Corp
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in U. S. Dollars
(unaudited)
	For the Three						For the Six
	Months Ended						Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Revenues	$	-		$	-		$	-		$	-

Operating Expenses

Consulting fees		28,859			96,000			98,694			192,000
General and administrative		119,516			926			127,925			2,686
Profeesionsl fees		42,250			10,380			45,500			21,480
Transfer agent fees		-			20			-			20

Total Operating Expenses		190,625			107,326			272,119			216,186

Net Loss Before Other Expenses		(190,625	)		(107,326	)		(272,119	)		(216,186	)

Other Expenses

Interest expense		8,144			27,035			30,974			44,412
Loss on Change in fair value of derivitive liability		7,241			41,691			32,630			86,443

Total Other Expenses		15,385			68,726			63,604			130,855

Net Loss	$	(206,010	)	$	(176,052	)	$	(335,723	)	$	(347,041	)

Net Loss Per Share, Basic and Diluteded	$	-		$	-		$	-		$	-

Weigted Average Shares Outstanding		1,995,290,000			384,926,783			1,549,334,532			381,086,267

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

HDS International Corp
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U. S. Dollars
(unaudited)
	For the Six			For the Six
	June 30,			Months
	Ended			Ended
	June 30,			June 30,
	2015			2014

Operating Activities

Net Loss	$	(335,723	)	$	(347,041	)

Adjustment to reconcile net loss to
net cash used in operating activities

Accretion of debt discount		15,052			21,665
Amortixation of deferred financing costs		1,020			3,136
Loss on change in fair value of derivitive liability		32,630			86,443

Changes in operating asstes and liabilities

Accounts payable and accrued liabilities		77,991			138,664
Accounts payable and accrued liabilities-related parties		43,957			74,877

Net Cash Provided by (Used in) Operating Activities		(165,073	)		(22,256	)

Financing activities

Proceeds from Convertible debenturee, net of financing costs		165,000			15,000
Proceeds from related parties		-			4,218

Net Cash Provided by (Used in) Financing activities		165,000			19,218

Change in Cash		(73	)		(3,038	)

Cash, Beginning of Period		73			3,371

Cash, End of period	$	-		$	333

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

HDS International Corp.

(A Development Stage Company)

Notes to the 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 plans to engage in the business of providing emergency management services through a license agreement. 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 Junene 11, 2012, HDS Energy and Ecosystems NB, Ltd., the Company's wholly owned subsidiary, was incorporated in the Province of New Brunswick, Canada to manage the operations and other business development efforts. In March of 2015 the wholly owned subsidiary was spun off as a result asset purchase agreement with SirenGPS.

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated no revenues to date and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of June 30, 2015, the Company had a working capital deficiency of $268,043 and an accumulated deficit of $2,464,264. 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

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)	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.

c)	Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of June 30, 2015 and December 31, 2014, the Company had no cash equivalents.

d)	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.

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2. Summary of Significant Accounting Policies (continued)

e)	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.

f)	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.

g)	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.

h)	Development Stage Company

The Company is currently considered a development stage company as defined by ASC 915-10-05. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. An entity remains in the development stage until such time as, among other factors, revenues have been realized. To date, the development stage of the Company's operations consists of developing the business model and marketing concepts.

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 June 30, 2015, the Company had 1,650,000,000 (December 31, 2014 – 1,572,180,000) potentially dilutive shares from outstanding convertible debentures.

j)	Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

HDS International Corp.

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2. Summary of Significant Accounting Policies (continued)

k)	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.

l)	Comprehensive Loss

ASC 220, Comprehensive Income , establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at June 30, 2015 and December 31, 2014, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

m)	Financial Instruments

ASC 820, "Fair Value Measurements" and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis were presented on the Company's balance sheet as at June 30, 2015 and December 31, 2014 as follows:

	Balance,		New					Changes in		Balance,
	December 31, 2014		Issuances		Conversions			Fair Values		June 30, 2015

Derivative Liability	$	70,290		-	$	(64,767	)	$	50,894	$	56,417

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.

HDS International Corp.

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

2.	Summary of Significant Accounting Policies (continued)

n)	Recent Accounting Pronouncements

The Company has limited operations and is considered to be in the development stage. During the period ended May 31, 2014, 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.

In July 2013, FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, with certain exceptions related to availability. ASU No. 2013 11 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU No. 2013-11 did not have a material impact on the Company's consolidated financial statements.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 did not have a material impact on the Company's consolidated financial statements.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities , which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 did not have a material impact on the Company's consolidated financial statements.

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.	Convertible Debentures

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 June 30, 2014, the Company recorded accrued interest of $448 (December, 31, 2013 -

$nil), 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 September 30, 2015, the Company had amortized $590 (December, 31, 2014 - $1,038) of the debt discount to interest expense. As at June 30, 2014, the carrying value of the debenture was $590 (December, 31, 2014 - $1,038).

HDS International Corp.

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

3.	Convertible Debentures (continued)

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 at June 30, 2015, the Company recorded accrued interest of $1,041 (December, 31, 2014 $0), which has been included in accounts payable and accrued liabilities.

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 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.

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.

HDS International Corp.

(A Development Stage Company)

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 period ended June 30, 2015 , the Company recorded a loss on the change in fair value of derivative liability of $ 32,630 ( December, 31, 2014 - $78,680 ). As at June 30, 2015 , the Company recorded a derivative liability of $ 56,417 ( December, 31, 2014 - $70,290).

The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended June 30, 2015 and December 31, 2014 :

a)	The underlying stock price of $0.0014 was used as the fair value of the common stock as at December 31, 2014.

b)	The underlying stock price of $0.0013 was used as the fair value of the common stock as at June 30, 2015.

c)	The Holder would redeem based on availability of alternative financing 0% of the time increasing 1.0% monthly to a maximum of 10%.

d)	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.

f)	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 31, 2013	$	45,521
Derivative loss due to new issuances		105,816
Adjustment for conversion		(59,911	)
Mark to market adjustment		(27,136	)
Balance, December 31, 2014		70,290
Adjustment for conversion		(64,767	)
Mark to market adjustment		50,894
Balance, June 30, 2015	$	56,417

HDS International Corp.

(A Development Stage Company)

Notes to the Financial Statements

(expressed in U.S. dollars)

5.	Common Stock

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.

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.

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).

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.

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.

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.

During the period ended June 30, 2015 the Company issued 495,290,000 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.

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.

6.	Preferred Stock

On March 5, 2015, the Company issued 13,624,300 Class B preferred stock with a par value of $13,624 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. Each Class B preferred stock is convertible into common stock of the Company at a rate of 200 shares of common stock per each Class B preferred stock.

b)	On April 3, 2015, The Company issued 2,215,000 shares of Class B Preferred Stock, see Note 5 (h) above.

HDS International Corp.

(A Development Stage Company)

Notes to the Consolidated Financial Statements (expressed in U.S. dollars)

7.	Related Party Transactions

a)	As at June 30, 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.

b)	As at June 30, 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. Subsequent Events

On December 3, 2015, the Company launched a private placement of Series B shares to raise monies in order to close the asset purchase agreement signed with CMG Holdings Group, Inc.’s majority-owned subsidiary Good Gaming, Inc. announced the prior month. A minimum threshold of $300,000 was required under the agreement as a condition to close. That threshold was not reached by year-end 2015, though commitments for a substantial portion of the round were received on or around December 22, 2015.

b)	On November 15, 2015, entered an asset purchase agreement signed with CMG Holdings Group, Inc. to purchase the assets of Good Gaming, Inc. The assets purchase agreement was not closed until February of 2016 due to not meeting the threshold mentioned above..

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.

d)	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.

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.

f)	On or around February 18, 2016, management terminated plans to use a previously filed form 14C to effectuate a share increase to 10 billion, a reverse split of 1-30, and approve 50 billion share stock option plan.

g)	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.

h)	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.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN 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 in the financial statements for the year ended December 31, 2014.

RESULTS OF OPERATIONS

Working Capital

	June 30,			December 31,
	2015			2014

Current Assets	$	-		$	1,093
Current Liabilities		268,043			1,435,785
Working Capital (Deficit)		(268,043	)		(1,434,692	)

Cash Flows

	June 30,			September 30,
	2015			2014

Cash Flows from (used in) Operating Activities	$	(73	)	$	(12,759	)
Cash Flows from (used in) Financing Activities		-			16.000
Net Increase (decrease) in Cash During Period		(73	)		3,441

Operating Revenues

We have not generated any revenues since inception.

Operating Expenses and Net Loss

Operating expenses for the three months ended June 30, 2015 were $190,625 compared with $107,326 for the three months ended June 30, 2014. The increase in operating expenses was attributed to a decrease in consulting fees of $67,141 and transfer agent fees of $20 offset by an increase in professional fees of $31,870 and an increase in general and administrative fees of $118,590 for day-to-day operating costs. For the six months ended June 30, 2015 the Company incurred operating expenses of $272,119 compared with $216,186 for the six months ended June 30, 2014. The increase in operating expenses was attributed to a decrease in consulting fees of $93,306 and transfer agent fees of $20 offset by an increase in professional fees of $24,020 and an increase in general and administrative fees of $125,239.

During the six months ended June 30, 2015, the Company recorded a net loss of $335,723 compared with net loss of $347,041 for the six months ended June 30, 2014. In addition to the above, the Company incurred $30,974 of interest expense relating to debt balances and $32,630 for loss on the change in fair value of derivatively liabilities.

Liquidity and Capital Resources

As at June 30, 2015, the Company's cash balance was $0 compared to cash balance of $73 as at December 31, 2014. As at June 30, 2015, the Company's total assets were $0 compared to total assets of $1,093 as at December 31, 2014. The decrease in the cash balance and total assets was attributed to the use of cash for operations.

As at June 30, 2015, the Company had total liabilities of $318,043 compared with total liabilities of $1,435,785 as at December 31, 2014. The decrease in total liabilities is attributed to a decrease of account payable and accrued liabilities of $936,917, $638,625 of which pertained to trade accounts payable and $298,292 pertained to related party accounts payable and accrued liabilities as well as an increase in convertible debentures of $58,048 and a decrease in derivative liabilities of $13,873.

As at June 30, 2015, the Company has a working capital deficit of $268,043 compared with working capital deficit of $1,434,692 at December 31, 2014 with the decrease in the working capital deficit attributed to the decreases in accounts payable and accrued liabilities, convertible debentures and derivative liabilities during the period as discussed above.

Cashflow from Operating Activities

During the six months ended June 30, 2015, the Company used $165,073 of cash for operating activities compared to the use of $22,246 of cash for operating activities during the six months ended June 30, 2014. The decrease in the level of cash used for operating activities was due to the increase in non-cash accretion of debt discount, amortization and deferred financing costs and loss on change in fair value of derivative liability as well as the change in the level of accounts payable and accrued liabilities – related parties offset by an increase in net loss as well as the change in the level of accounts payable and accrued liabilities.

Cashflow from Financing Activities

During the six months ended June 30, 2015, the Company received $165,000 of proceeds from financing activities compared to $19,218 during the six months ended June 30, 2015.

Subsequent Developments

None

Going Concern

We have not attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.

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 consolidated 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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on April 7, 2014, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 6. EXHIBITS.

Incorporated by reference

Filed

Number

Description of Exhibit

Form

Date

Number

herewith

3.1

Articles of Incorporation.

S-1

3/24/09

3.1

3.2

Bylaws.

S-1

3/24/09

3.2

3.3

Amended and Restated Articles of Incorporation.

8-K

6/14/11

3.1

3.4

Amended and Restated Articles of Incorporation.

8-K

8/17/11

3.1

10.1

Promissory Note issued to HGT Capital LLC. dated

8-K

04/21/1515

10.1

April 15, 2015.

14.1

Code of Ethics.

10-K

3/29/11

14.1

21.1

List of subsidiaries

S-1/A-1

1/17/13

21.1

31.1

Certification of Principal Executive Officer and Principal Financial

Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer and Chief Financial Officer

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension – Schema.

101.CAL

XBRL Taxonomy Extension – Calculations.

101.LAB

XBRL Taxonomy Extension – Labels.

101.PRE

XBRL Taxonomy Extension – Presentation.

101.DEF

XBRL Taxonomy Extension – Definition.

SIGNATURES

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 on this 3rd day of May, 2016.

	HDS INTERNATIONAL CORP.
	(the "Registrant")

	BY:	VIKRAM GROVE
		Vikram Grover
		President, Principal Executive Officer,
		Principal Financial Officer and Principal Accounting Officer