Good Gaming, Inc 10-Q for FY2024 Q1
Good Gaming, Inc. (GMER)
About this 10-Q
Good Gaming, Inc filed this 10-Q on May 16, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $183
- down 94.4% from $3261 a year earlier
- Net loss
- $355.17K
- compared with a net loss of $371.15K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form
For
the quarterly period ended
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For the transition period from ______ to ______
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| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller Reporting Company | ||
| (Do not check if smaller reporting company) | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None | None |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date. As of March 31, 2024, there were issued and outstanding shares of common stock of the registrant, par value $0.001.
TABLE OF CONTENTS
| Page | ||
| Part I FINANCIAL INFORMATION | ||
| Item 1 | Financial Statements | F-1 |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 11 |
| Item 4 | Controls and Procedures | 11 |
| Part II OTHER INFORMATION | ||
| Item 1 | Legal Proceedings | 11 |
| Item 1A | Risk Factors | 11 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
| Item 3 | Defaults Upon Senior Securities | 12 |
| Item 4 | Mine Safety Disclosures | 12 |
| Item 5 | Other Information | 12 |
| Item 6 | Exhibits | 12 |
| Signatures | 13 | |
| 2 |
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, all of which are subject to risks and uncertainties. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,” “projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially.
These risks and uncertainties, many of which are beyond our control, include, and are not limited to:
| ● | our growth strategies; |
| ● | our anticipated future operations and profitability; |
| ● | our future financing capabilities and anticipated need for working capital; |
| ● | the anticipated trends in our industry; |
| ● | acquisitions of other companies or assets that we might undertake in the future; and |
| ● | current and future competition. |
In addition, factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
| 3 |
PART 1
Item 1. Financial Statements
Good Gaming, Inc.
Consolidated Balance Sheets
(Expressed in U.S. Dollars)
(Unaudited)
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Accounts Receivable | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Digital Assets | ||||||||
| Intangible Assets | ||||||||
| Due from Tebex | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable and Accrued Expenses | $ | $ | ||||||
| Derivative Liability | ||||||||
| Notes Payable | ||||||||
| Convertible Debentures, current | ||||||||
| Accounts Payable Related Party- ViaOne Services | ||||||||
| Accounts Payable and Accrued Expenses | $ | $ | ||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Class A Preferred Stock | ||||||||
| Authorized: Preferred Shares, With a Par Value of $ Per Share Issued and Outstanding: Shares | ||||||||
| Class B Preferred Stock | ||||||||
| Authorized: Preferred Shares, With a Par Value of $ Per Share Issued and Outstanding: Shares | ||||||||
| Class C Preferred Stock | ||||||||
| Authorized: Preferred Shares, With a Par Value of $ Per Share Issued and Outstanding: Share | ||||||||
| Class D Preferred Stock | ||||||||
| Authorized: Authorized: Preferred Shares, With a Par Value of $ Per Share Issued and Outstanding: Shares | ||||||||
| Class E Preferred Stock | ||||||||
| Authorized: Authorized: Preferred Shares, With a Par Value of $ Per Share Issued and Outstanding: | ||||||||
| Preferred stock value | ||||||||
| Common Stock | ||||||||
| Authorized: Common Shares, With a Par Value of $ Per Share Issued and Outstanding: | ||||||||
| Warrant | ||||||||
| Additional Paid-In Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDER’S DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-1 |
Good Gaming, Inc
Consolidated Statement of Operations
(Expressed in U.S Dollars)
(Unaudited)
| 2024 | 2023 | |||||||
| For the Quarter ended March 31 | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | $ | ||||||
| Cost of Revenues | ||||||||
| Gross Profit | ( | ) | ( | ) | ||||
| Operating Expenses | ||||||||
| General & Administrative | ||||||||
| Contract Labor | ||||||||
| Depreciation and Amortization Expense | ||||||||
| Professional Fees | ||||||||
| Total Operating Expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Net Income (Loss) Per Share, Basic and Diluted | $ | $ | ||||||
| Weighted Average Shares Outstanding | ||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-2 |
Good Gaming, Inc
Consolidated Statements of Cash Flows
(Expressed in U.S Dollars)
(Unaudited)
| 2024 | 2023 | |||||||
| For the Quarter Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Operating Activities | ||||||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustment To Reconcile Net Loss to Net Cash Used In Operating Activities | ||||||||
| Due from Tebex | ( | ) | ||||||
| Depreciation and Amortization | ||||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts Receivable | ( | ) | ||||||
| Accounts Payable - Related Party | ||||||||
| Accounts Payable | ( | ) | ||||||
| Net Cash Provided By (Used in) Operating Activities | ( | ) | ( | ) | ||||
| Investing Activities | ||||||||
| Purchase of Digital Assets | ( | ) | ||||||
| Purchase of Intangible Assets | ( | ) | ||||||
| Reclass Digital Assets | ( | ) | ||||||
| Net Cash Provided By (Used in) Investing Activities | ( | ) | ( | ) | ||||
| Financing Activities | ||||||||
| Repayments of Preferred Stock Series D | ||||||||
| Common Stock: Conversion | ||||||||
| Payment on Note Interest | ||||||||
| Due To ViaOne Services | ||||||||
| Net Cash Provided By (Used In) Financing Activities | ||||||||
| Change in Cash and Cash Equivalents | ( | ) | ( | ) | ||||
| Cash and Cash Equivalents, Beginning Of Period | ||||||||
| Cash and Cash Equivalents, End Of Period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-Cash Investing And Financing Activities | ||||||||
| Conversion of Preferred Stock CL B to Common | $ | $ | ||||||
| Common Shares Issued for Conversion Of Debt | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
Good Gaming, Inc.
Statements of Stockholders’ Equity (Deficit)
(Expressed in U. S. Dollars)
| Preferred Stock | Common Stock | Warrants | Additional | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | Class C | Class D | Class E | Paid-in | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | ( | ) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Based Compensation converted to common stock | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Based Compensation converted to common stock | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements
| F-4 |
Good Gaming, Inc.
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
(Unaudited)
1. Nature of Operations and Continuance of Business
Good Gaming, Inc. (formerly HDS International Corp.) (the “Company”) was incorporated on November 3, 2008, under the laws of the State of Nevada. The Company operates as a leading tournament gaming platform and online destination, targeting over 250 million esports players and participants worldwide interested in competing at the high school or college level. While a substantial portion of the Company’s activities has involved developing a business plan, establishing contacts, and gaining visibility in the marketplace, it has not generated substantial revenue to date. Beginning in 2018, the Company started deriving revenue by providing transaction verification services within the digital currency networks of cryptocurrencies. However, on December 12, 2018, the Company discontinued such transaction verification services by dissolving Crypto Strategies Group, Inc., its wholly-owned subsidiary.
In 2021, we leveraged the rise of NFTs and blockchain technologies, in our “MicroBuddies™ release,” a novel game integrating NFTs, in-game tokens (“GOO™”), and browser-based gameplay. This innovative approach allows us to generate revenue through the sale of “Nano Factory Tokens” for creating first-generation “MicroBuddies™” NFTs, along with ongoing royalties on third-party marketplace sales and fees per NFT replication.
Building on our commitment to creating innovative entertainment experiences the Company made a strategic shift to adapt to the evolving gaming landscape by shifting from legacy gaming platforms to connected mobile gaming experiences. After developing and releasing beta versions of our gaming experiences for MineCraft and Roblox in early 2023, we recognized the growth limitations inherent in both platforms. We paused continued development and exited future plans for these platforms. Our focus turned to combining mobile gaming and emerging Web3 technologies within the blockchain gaming segments.
In 2024, the Company takes a significant step forward by entering the mobile gaming market with a focus on creating character and story driven, connected entertainment experiences. Our expansion into blockchain enhanced mobile gaming experiences will allow us to capitalize on potentially immense player bases. In 1Q 2024, the company launched a new intellectual property on mobile called “Galactic Acres™” In addition to “Galactic Acres™”, we are actively expanding the “MicroBuddies™” brand beyond its initial game by creating engaging mobile experiences, but we are not stopping with just “MicroBuddies™. “Galactic Acres™” marks the beginning of a series of mobile games designed to not only offer engaging gameplay but also integrate blockchain experiences, fostering a deeper level of player engagement and exploring innovative revenue models within the mobile gaming space. By combining our existing initiatives with a focus on mobile gaming, and strategic utilization of blockchain technology, the Company is committed to a multi-pronged approach that diversifies our revenue streams across platforms and technologies while building highly recognizable character and story driven gaming experiences for our player base. We believe this proactive strategy will solidify Good Gaming’s position as a leader in the ever-evolving interactive entertainment landscape.
Player acquisition is the greatest challenge faced by any developer/publisher. In 2024, we announced our first strategic distribution partnership with ViaOne Services. As part of our partnership with ViaOne Services, we plan to distribute our mobile games to ViaOne’s large player base. Our strategic partnership with ViaOne Services will allow us to embed our mobile games into the firmware of ViaOne phones so players will not have to spend any time or effort in finding and downloading our games.
| F-5 |
Going Concern
These
financial statements have been prepared on a going concern basis, implying that the Company will continue to realize its assets and
discharge its liabilities in the normal course of business. The Company has generated minimal revenues to date, has never paid any
dividends, and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. As of March
31,2024, the Company had a working capital deficit of $(
The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.
These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the fair values of convertible debentures, derivative liability, stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Certain reclassifications have been made to prior-year amounts to conform to the current period presentation.
As
per ASC 250-10-50-4, the effect on income from operations, net income, and any related per-share amounts of the current period should
be disclosed for a change in estimate that affects several future periods and has a material impact. The adjustment in the The Company’s
estimate led to a decrease of $
Cash Equivalents
The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents. Amounts receivable from credit card processors are also considered cash equivalents because they are both short-term and highly liquid in nature.
Intangible Assets
Intangible
assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the
respective assets, generally
| F-6 |
Impairment of Long-Lived Assets
Long-lived assets and certain identifiable intangible assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets and certain identifiable intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
Beneficial Conversion Features
From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Derivative Liability
From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the statement of operations.
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 March 31, 2024 and December 31, 2023, the Company had and potentially dilutive shares from outstanding convertible debentures, respectively.
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. Unrecognized tax positions, if ever recognized in the consolidated financial statements, are recorded in the statement of operations as part of the income tax provision. Our policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no liability for uncertain tax positions. Unrecognized tax positions, if ever recognized in the consolidated financial statements, are recorded in the statement of operations as part of the income tax provision. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions, if any, as part of the income tax provision. The Company has no liability for uncertain tax positions.
On
March 22, 2017, tax reform legislation known as the Tax Cuts and Jobs Act (the “U.S. Tax Reform Act”) was enacted in the
United States. The U.S. Tax Reform Act, among other things, reduced the U.S. corporate income tax rate from
| F-7 |
Financial Instruments
ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument categorized within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
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.
| F-8 |
Advertising Expenses
Advertising
expenses are included in general and administrative expenses in the consolidated Statements of Operations and are expensed as incurred.
The Company incurred $
Revenue Recognition
Revenue is recognized in accordance with ASC 606. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenues primarily include revenues from microtransactions. Microtransaction revenues are derived from the sale of virtual goods to the Company’s players. Proceeds from the sales of virtual goods are directly recognized as revenues when a player uses the virtual goods.
Recent Accounting Pronouncements
The Company has implemented all other new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
| F-9 |
3. Other Assets
Property and Equipment consisted of the following:
Schedule of Property and Equipment
| 2024 | 2023 | |||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| Computers and servers | $ | $ | ||||||
| Accumulated Depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expense for the three months ended March 31, 2024 and 2023 was $
4. Digital Assets
In 2021, the Company has been working to create a new game called MicroBuddies™ that will be played online and will use blockchain technology. Digital Asset prices have been volatile in the past and may continue to be so in the future, owing to a variety of risks and uncertainties. Under current accounting rules, digital assets are considered indefinite-lived intangible assets. The Company needs to recognize impairment charges if any decrease in their fair values, whereas the Company may not make any upward revisions for market price increases until a sale. Thus, the carrying value represents the lowest fair value of the digital assets.
As
of March 31, 2024, the carrying value of the Company’s digital assets was $
5. Intangible assets
Good
Gaming Inc. initiated the development of a new game, Galactic Acres, in 2023 eventually launching it on Google Play on February 17, 2024.
During the preliminary development phase, expenses were recorded as incurred. Subsequently, in the development phase, the Company incurred
costs from third-party services. These expenses were reclassified as Intangible Assets under ASC 350-40-30-1, permitting the capitalization
of costs associated with obtaining computer software from third parties. The capitalized costs are being amortized over an estimated
useful life of
Schedule of Intangible Assets
| 2024 | 2023 | |||||||
| March 31, | ||||||||
| 2024 | 2023 | |||||||
| Intangible Assets | $ | $ | ||||||
| Accumulated Amortization | ( | ) | ||||||
| Intangible Assets, Net | $ | $ | ||||||
6. Common Stock
Share Transactions for the Quarter Ended March 31, 2023:
On January 30, 2023, the Company issued Company’s common stock to ViaOne employees as stock based compensation.
On February 15, 2023, the Company issued Company’s common stock to ViaOne employees as stock based compensation.
On March 15, 2023, the Company issued Company’s common stock to ViaOne employees as stock based compensation.
Share Transactions for the Quarter Ended March 31, 2024:
On January 26, 2024, the Company issued Company’s common stock to ViaOne employees as stock based compensation.
| F-10 |
7. Preferred Stock
Our Articles of Incorporation authorize us to issue up to shares of preferred stock, $ par value. Of the authorized shares of preferred stock, the total number of shares of Series A Preferred Stock the Corporation shall have the authority to issue is , with a stated par value of $ per share, the total number of shares of Series B Preferred Stock the Corporation shall have the authority to issue is , with a stated par value of $ per share, the total number of shares of Series C Preferred Stock the Corporation shall have the authority to issue is , with a stated par value of $ per share, and the total number of shares of Series D Preferred Stock the Corporation shall have the authority to issue is , with a stated par value of $ per share, and the total number of shares of Series E Preferred Stock the Corporation shall have the authority to issue is , with a stated par value of $ per share. Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors’ power to set the terms of, and our ability to issue preferred stock, will provide flexibility in connection with possible financing or acquisition transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring or preventing a change in control of our company.
As of March 31, 2024, we had shares of our Series A preferred stock, shares of Series B preferred stock, shares of Series C Preferred Stock, and shares of Series D Preferred Stock, and shares of Series E preferred stock issued and outstanding.
The
issued and outstanding shares of Series A Preferred Stock are convertible into shares of common stock at a rate of common shares
for each Series A Preferred Share. The issued and outstanding shares of Series B Preferred Stock are convertible into shares of
common stock at a rate of common shares for each Series B Preferred Share. The issued and outstanding shares of Series E Preferred
Stock are convertible into shares of common stock at a rate of common shares for each Series E Preferred Share.
The holders of Series A, Series B, Series C and Series D have a liquidation preference to the common shareholders.
8. Warrant
As
part of the Private Placement funding, the Company issued two new warrants to Armistice Capital, LLC and Sabby Management to purchase
| F-11 |
9. Related Party Transactions
As
of March 31, 2024, the Company owes ViaOne Services a total of $
The Company’s Chairman and Chief Executive Officer are the Chairman of ViaOne.
10. Income Taxes
The
Company has a net operating loss carried forward of $
The significant components of deferred income tax assets and liabilities at March 31, 2024 and 2023 are as follows:
Schedule of Deferred Tax Assets and Liabilities
| 2024 | 2023 | |||||||
| Net Operating Loss Carryforward | $ | $ | ||||||
| Valuation allowance | $ | ( | ) | $ | ( | ) | ||
| Net Deferred Tax Asset | $ | $ | ||||||
The
income tax benefit has been computed by applying the weighted average income tax rates of the United States (federal and state rates)
of
Schedule of Components of Income Tax Expense
| 2024 | 2023 | |||||||
| Income tax recovery at statutory rate | $ | $ | ||||||
| Valuation allowance change | $ | ( | ) | |||||
| Provision for income taxes | $ | $ | ||||||
11. Commitments and Contingencies
None.
12. Acquisition and Discontinued Operations
None.
13. Subsequent Events
None.
| F-12 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Cautionary Statements
This Quarterly Report on Form 10-Q (“Form 10-Q”) may contain “forward-looking statements,” as that term is used in federal securities laws, about Good Gaming, Inc. (“GMER,” “we,” “our,” “us,” the “Company,” “management”) and its financial condition, results of operations and business. These statements include, among others:
| ● | statements concerning the potential benefits that we may experience from our business activities and certain transactions we contemplate or have completed; and |
| ● | statements of GMER’s expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. These statements may be made expressly in this Form 10-Q. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” “opines,” or similar expressions used in this Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause GMER’s actual results to be materially different from any future results expressed or implied by GMER in those statements. The most important facts that could prevent GMER from achieving its stated goals include, but are not limited to, the following: |
| (a) | volatility or decline of our stock price; |
| (b) | potential fluctuation of quarterly results; |
| (c) | failure of GMER to achieve revenues or profits; |
| (d) | inadequate capital to continue or expand our business, and inability to raise additional capital or financing to implement our business plans; |
| (e) | decline in demand for GMER’s products and services; |
| (f) | rapid adverse changes in markets; |
| (g) | litigation with or legal claims and allegations by outside parties against us, including but not limited to challenges to our intellectual property rights; and |
| (h) | insufficient revenues to cover operating costs. |
There is no assurance that GMER will be profitable, able to successfully develop, manage or market its products and services, be able to attract or retain qualified executives and personnel, able to obtain customers for its products or services, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, the exercise of outstanding warrants and stock options, or the conversion of convertible promissory notes, and other risks inherent in GMER’s businesses.
Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. GMER cautions you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that GMER or persons acting on its behalf may issue. GMER does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-Q, or to reflect the occurrence of unanticipated events.
| 4 |
Overview
The Company, incorporated on November 3, 2008, under the laws of the State of Nevada, aimed to become a leading tournament gaming provider and an online destination for over 250 million esports players worldwide looking to compete at the high school or college level. Operating as a developmental stage business with limited revenues and a history of operating losses, Good Gaming established the Good Gaming platform in early 2014 to address the need for a structured organization for amateur gamers.
Distinguishing itself by focusing on over 250 million “amateur” gamers, falling between professional and casual levels, Good Gaming became the first company to offer multi-game, multi-console services at the amateur esports level. The company completed its first closed public beta testing of its 2.0 tournament platform on May 4, 2016, and on February 18, 2016, acquired the assets of Good Gaming, Inc. from CMG Holdings Group, Inc., leading to executive changes with Vikram Grover as CEO and David Dorwart joining the Board.
David B. Dorwart became the Chairman and CEO on June 27, 2017, bringing over 35 years of start-up entrepreneurism and executive-level management. The Board further expanded with additions like Jordan Axt, enhancing expertise in finance and branding. Eric Brown joined as the Chief Operating Officer on August 29, 2017.
Shifting focus to the Minecraft server in September 2017, the company explored partnerships related to LAN centers and Virtual Reality centers in December 2017. The acquisition of Crypto Strategies Group, Inc. in March 2018 marked Good Gaming’s entry into the cryptocurrency market, but it dissolved Crypto Strategies Group, Inc. on December 12, 2018.
In March 2019, the company discontinued Minecade and Olimpo servers, deciding to concentrate on core Good Gaming servers. Notably, in March 2021, the company formulated a plan for a new game, “MicroBuddies™,” combining Ethereum ERC721 NFTs and ERC20 tokens, launching the beta version in May 2021 and officially on December 17, 2021.
Several corporate changes occurred in 2021, including uplisting to OTCQB, a private placement to institutional investors, and amendments to the Articles of Incorporation. Notably, David Sterling was appointed as Chief Operating Officer on January 10, 2022.
In 2022, the Company diversified its development efforts by entering the Roblox gaming platform. As the year concluded, the Company launched Roblox adaptations of well-received Minecraft titles, namely Treasure Island,” incorporating the unique elements of “MicroBuddies™”. The strategic release allowed the Company to collect valuable player feedback, aiding in the ongoing refinement of both titles’ features and functionality.
The beta version of “Treasure Island,” a Microbuddies-themed Simulator game on Roblox. The Company has embarked on a robust development schedule, unveiling beta versions of its SCBB franchise on both the Minecraft™ PC platform and Roblox, a Prison variant for Minecraft™ PC, and various Microbuddies themed games on the Roblox platform.
However, the Company encountered substantial challenges related to developers, leading to missed updates, development complexities, and postponed product launches. Consequently, the Company has decided to temporarily halt Roblox and Minecraft development to conduct comprehensive reviews of platforms, developers, and marketing efforts. These evaluations aim to identify and address pain points in processes, paving the way for realistic expectations and enhanced gaming experiences that align with both the Company’s and customers’ expectations, ultimately contributing to improved financial performance and shareholder value.
In response to these challenges, the Company initiated an in-depth business development research project, exploring opportunities in the mobile gaming industry. Following the review, the Company forged a multi-year strategic partnership with ViaOne Services Inc. to distribute Good Gaming mobile games to the Assist Wireless® and enTouch Wireless® customer bases. Simultaneously, the Company plans to release its new mobile gaming experiences on popular platforms like the Apple App Store® and Google Play™ Store.
A significant development partnership with Arcadia Studios, a division of the Coeus Group of Companies, was also announced. Coeus Solutions, a leading German software development group, collaborated with the Company in this endeavor. The first mobile game resulting from this partnership, titled “Galactic Acres,” launched on February 16, 2024.
On April 19, 2024, the Board of Directors of Good Gaming, Inc. accepted the resignation of chief financial officer and principal accounting officer Mr. Domenic Fontana. Mr. Fontana’s resignation was not the result of any dispute or disagreement with the Company or the Company’s Board of Directors on any matter relating to the operations, policies, or practices of the Company.
Simultaneously, on April 19, 2024, John D. “JD” Hilzendager, was appointed as Chief Financial Officer of the Company. Mr. Hilzendager in his role as Chief Financial Officer will report to David Dorwart, the Company’s Chief Executive Officer. Mr. Hilzendager has been designated as the Company’s Principal Accounting Officer.
The terms of Mr. Hilzendager’s employment will be covered under the Second Amendment to the Amended Employee Services Agreement Dated January 14, 2022, with ViaOne Services, LLC.
| 5 |
Technology
In 2016, the Company successfully launched its 2.0 tournament platform, conducting extensive internal tests and hosting large-scale tournaments in collaboration with The Syndicate, a renowned online gaming guild. With two closed public beta tournaments in May 2016 and numerous system refinements, the platform demonstrated smooth operation and scalability for up to 512,000 concurrent competitors. The system was further updated to accommodate team tournaments and cross-platform play among Gaming PC, Microsoft Xbox, and Sony PlayStation.
Throughout 2017, the Company hosted hundreds of tournaments, cultivating a dedicated customer base exceeding 30,000 members. The website expanded to include relevant content, generating nearly 100,000 unique visits per month. However, the decision was made to shift away from free tournaments and custom content, focusing on growing and monetizing the Minecraft server, which experienced substantial popularity.
In 2018, the acquisition of Minecade and Olimpo Minecraft servers significantly boosted revenues and traffic. A partnership with a prominent Minecraft influencer led to the highest monthly earnings within the Minecraft division by year-end.
Facing a downturn in the Minecraft sector in 2019, the Company temporarily suspended Minecade and Olimpo networks, concentrating efforts on upgrading the core Good Gaming server. The year involved infrastructure overhauls, innovations in SkyBlock and Prison game modes, and plans for a complete recode of the Minecade server.
By 2020, infrastructure upgrades were finalized, leading to the launch of the experimental Prison MMO mode and successful releases of new SkyBlock game modes. The implementation of a new workflow management style and consistent updates resulted in robust revenue growth, with the fall release of Prison marking the highest revenue-producing month of the year.
In 2021, the Company continued to enhance SkyBlock and Prison editions, experimenting with new release schedules and mechanics. The introduction of “MicroBuddies™,” a game combining NFTs and strategic gameplay on the Polygon Network, marked a significant milestone, launching in December 2021 after successful beta testing.
Expanding its development portfolio in 2022, the Company ventured into the Roblox gaming platform, releasing Roblox versions of popular Minecraft titles. Gathering crucial player feedback, the Company planned further development for both titles in 2023. Additional agreements, including a publishing deal with Roblox creator Joshua Mckittrick, were signed, and a family-themed brand, “Family Games presented by Good Gaming,” was established for the Roblox platform. Development partnerships with Meraki Studios and multiple releases were planned for 2023, featuring updates to the Minecraft 1.19 software version.
In 2024, the Company takes a significant step forward by entering the mobile gaming market with a focus on creating character and story driven, connected blockchain powered experiences. Our expansion into blockchain enhanced mobile gaming experiences will allow us to capitalize on the rapidly growing blockchain gaming player community. In 1Q 2024, the company launched a new intellectual property on mobile called “Galactic Acres™”. “Galactic Acres™” marks the beginning of a series of mobile games designed to not only offer engaging gameplay but also integrate blockchain experiences, fostering a deeper level of player engagement and exploring innovative revenue models within the mobile gaming space. By combining our existing initiatives with a focus on mobile gaming, and strategic utilization of blockchain technology, the Company is committed to a multi-pronged revenue model that diversifies our revenue streams across multiple platforms and technologies. We believe this diversified model will solidify Good Gaming’s position as a leader in the ever-evolving interactive entertainment landscape and create long tail revenue and profit opportunities.
| 6 |
Business Strategy
In the past, our management team’s business strategy was to be a full-service company providing best-in-class Esports gaming tournaments and Minecraft experiences. With the onset of the pandemic, the Esports industry has suffered a considerable amount of lost business opportunities. We were not immune to the effects of the pandemic on our Esports business. In addition, the size of the PC-based Minecraft gaming community has shrunk considerably. We have taken a hard look at both the Esports and Minecraft business verticals and determined that both strategies are no longer in the best interest of the company and our shareholders. We feel that both the Esports and Minecraft verticals do not have a significant upside in the future. As such, the Esports and Minecraft business verticals will not comprise a meaningful segment of our ongoing business strategy. We will not designate any future investment in either of these verticals for the foreseeable future.
With the rise in the popularity of cryptocurrency and blockchain technologies, the Company has decided to invest in the creation of its new game, “MicroBuddies™,” which combines Ethereum ERC721 NFTs (Non-fungible tokens), non-standard ERC20 tokens (GOO™), and strategic, long-tail web browser gameplay to replicate and create unique and collectible NFTs. ERC20 “GOO™” tokens are limited to use as in-game currency only. This strategy will enable us to enter the emerging NFT and blockchain gaming space. Initial revenues from “MicroBuddies™” will come from the sale of Nano Factory Tokens that will be used to synthesize generation 0 of “MicroBuddies™.” Ongoing “MicroBuddies™” revenues will be generated from a 5% royalty on all sales of “MicroBuddy™” NFTs in third-party marketplaces and a 0.01 MATIC per “MicroBuddy™” replication. In 2022, we will introduce additional initiatives around the “MicroBuddies™” intellectual property. We expect the ancillary “MicroBuddies™” initiatives to create consistent, recurring revenue over the life of the project.
In 2023, the Company encountered significant challenges related to Roblox™ and Minecraft™ game development and publishing initiative including developer issues, publishing delays due to platform integrations and functionality, and marketing strategy lapses. Consequently, the Company has decided to halt Roblox and Minecraft development until publishing to both platforms makes sense.
In 2023, the Company announced a strategic partnership with ViaOne Services Inc. to distribute Good Gaming mobile games to the Assist Wireless® and enTouch Wireless® the Company is committed to building connected mobile gaming experiences. We believe our pivot to mobile games featuring integrated Web3 experiences will lead to ongoing revenue and profit generation. The Company plans to integrate its intellectual properties into our mobile games in order to continue to build long lasting awareness across a global audience.
Our initial partnership with ViaOne Services, will feature integrated Web3 opportunities. These dynamic gaming experiences position us to capitalize on the vast potential of the evolving mobile gaming audience. Our initial strategic partnership with ViaOne Services allows us to embed our mobile games on over 80,000 phones per month by the end of 2024. Player acquisition is the most difficult aspect of game publishing. Our partnership with ViaOne Services will produce considerable exposure for our games to a massive player base and should supercharge our player acquisition effort.
Creating great games is all about telling compelling stories. We are continuing our “MicroBuddies™” story on mobile. We are expanding the “MicroBuddies™” brand beyond the initial browser based game by creating engaging mobile experiences featuring the “MicroBuddies™” IP. Our ambition doesn’t stop there! We’ve launched a brand-new IP on mobile. “Galactic Acres™” is our new IP featuring unique characters, stories, and Web3 enhanced experiences. “Galactic Acres™” is just the beginning – as we have announced a series of mobile games designed with dynamic player engagements through integrated blockchain experiences and innovative revenue models are planned for 2024 and beyond.
Employees
We have three full-time consultants and four part-time contractors working on various Good Gaming initiatives. The full-time consultants consist of one Chief Operating Officer, one Gaming Director, and one Operations Manager. The part-time consultant team includes a Marketing Coordinator. Pursuant to our Management Services Agreement with ViaOne Services LLC, certain ViaOne employees are considered consultants of the Company.
Offices
Our executive offices are at 415 McFarlan Rd, Suite 108, Kennett Square, PA 19501. Our phone is (844) 419-7445.
| 7 |
Recently Issued Accounting Pronouncements
None.
RESULTS OF OPERATIONS
Our auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2023. This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next twelve months from the date of issuance of these financial statements unless we obtain additional capital to pay our bills. This is because we have generated little revenue although revenue is anticipated to grow as we have completed the development of our website, sourced out suppliers for products to sell and sourced out customers to buy our products. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our company and the revenue we generate from the sales of our products. We must raise cash to continue our project and build our operations.
Plan of Operation – Milestones
We are at an early stage of our new business operations focusing on integrated mobile and Web3 gaming experiences. Over the next twelve months, our primary target milestones include:
| 1. | Continue to achieve growth in our Galactic Acres™ mobile game community while launching ancillary mobile gaming experiences. We will have announcements regarding our continuing plans over the next few months. . |
| 2. | Relaunch the NFT Breeding game MicroBuddies™. Expand revenue opportunities in the Web3 gaming segment. In 2024, the Company has plans to expand our player base through strategic partnerships beginning with the ViaOne Services distribution partnership. |
| 3. | The Company has plans to expand our efforts in the connected Web3 gaming space. We will have announcements regarding our efforts in the Web3 gaming space over the coming months. |
Limited operating history and need for additional capital
There is limited historical financial information about us upon which to base an evaluation of our performance relating to our new business direction. We have generated little revenue. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
| 8 |
Results of Operations
The three months ended March 31, 2024 as compared to March 31, 2023
● Working Capital
| March 31, 2024 | March 31, 2023 | |||||||
| Current Assets | $ | 223,221 | $ | 616,058 | ||||
| Current Liabilities | 716,217 | 395,505 | ||||||
| Working Capital (Deficit) | $ | (492,996 | ) | $ | 220,553 | |||
● Operating Revenues
We have generated $183 in revenue in the three months ended March 31, 2024 and $3,261 in revenue in the three months ended March 31, 2023, which reflects a decrease of $3,078 or -94.4%. The decrease in revenue was attributed to the decision to halt Minecraft development.
● Operating Expenses and Net Loss
Operating expenses for the three months ended March 31, 2024 were $282,984 compared with $246,087 for the three months ended March 31, 2023, which reflects an increase of $36,897 or 14.99% The increase in expenses was attributable to a change in advertising and promotion, general administrative fees, and contract labor costs.
During the three months ended March 31, 2024, the Company recorded a net loss of $355,165 compared with a net loss of $371,150 for the three months ended March 31, 2023, which reflects a decrease of $15,985 or 4.31%. The decrease in net loss was attributed to a decrease in cost of Revenue and professional fees, offset by an increase in advertising and promotion and administrative fees.
● Liquidity and Capital Resources
As of March 31, 2024, the Company’s cash balance consisted of $158,316 compared to cash balance of $600,433 as of March 31, 2023. The decrease in the cash balance was attributed to the expenses paid for day to day activities. As of March 31, 2024, the Company had $332,936 in total assets compared to total assets of $731,112 at March 31, 2023. The decrease in total assets was attributed to cash paid for daily operations and the impairment cost associated with the digital assets.
As of March 31, 2024, the Company had total liabilities of $716,217 compared with total liabilities of $395,505 as of March 31, 2023. The increase in liabilities was attributable to the operating expenses to be paid in coming months.
As of March 31, 2024, the Company has a working capital of ($492,996) compared with a working capital of $220,553 as of March 31, 2023. The decrease in working capital is due to a decline in cash expended for day to day activity as well as the impairment cost associated with the digital assets.
| 9 |
Cash flow from Operating Activities
During the three months ended March 31, 2024, the Company used $119,789 of cash for operating activities compared to the use of cash in an amount of $333,158 for operating activities during the three months ended March 31, 2023, which reflects a decrease of $213,369 or -64.04%. The decrease in the use of cash for operating activities was attributed to the company’s decrease in advertising and promotions and management fees.
Cash flow from Investing Activities
The Company used $26,860 in cash in investing activities during the quarter ended March 31, 2024 and $495 during March 31, 2023. The increase of $26,365 in cash used in investing activities was attributed to the Company’s acquisition of intangible assets.
Cash flow from Financing Activities
During the quarter ended March 31, 2024, the Company received $740 of proceeds from financing activities compared to $2,219 received during the year ended March 31, 2023, which reflects a decrease of $1,479. The decrease in proceeds from financing activities was due to the employee stock issuance in 2023.
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 financial statements that they have substantial doubt that we will be able to continue as a going concern for a period of one year from the issuance of these financial statements without further financing.
Off-Balance Sheet Arrangements
As of March 31, 2024, we had 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 preferred 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 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 as of 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 we use to prepare our consolidated financial statements. 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.
| 10 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based on the evaluation of our disclosure controls and procedures (as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the “Exchange Act”), our principal executive officer and principal financial officer have concluded that as of the end of the three-month period ended March 31, 2024 covered by this quarterly report on Form 10-Q, such disclosure controls and procedures were not effective due to the lack of segregation of duties and lack of a formal review process that includes multiple levels of review to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and accounting functions were performed by an external consultant with no oversight by a professional with accounting expertise. Our Chief Executive Officer and Chief Financial Officer did not possess accounting expertise and our company does not have an audit committee. This weakness was due to the Company’s lack of working capital to hire additional staff. Subsequently, with the completion of transition in the management and Board, the financial management will be led by a certified public accountant with extensive accounting experience who follows the standards of U.S. generally accepted accounting principles and internal controls procedures to ensure the faithful representation of the financial statements, including the results of operations, financial position, and cash flows of the reporting entity.
Changes in Internal Control over Financial Reporting
Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal proceedings
To our best knowledge, we are not currently a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
Item 1–A. 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.
| 11 |
Item 2. Unregistered sales of equity securities and use of proceeds
Other than as described below, there were no issuance of unregistered sales of equity securities during the three months ended March 31, 2024.
On January 26, 2024, the Company issued 739,655 Company’s common stock to ViaOne employees as stock based compensation.
Item 3. Defaults upon senior securities
None.
Item 4. Mine safety disclosures
Not Applicable.
Item 5. Other information
Rule 10b5-1 Trading Arrangement
During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
| 31.1 | Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 | |
| 31.2 | Certification pursuant to Section 302 of the Sarbanes–Oxley Act of 2002 | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 | |
| 32.2 | Certification pursuant to Section 906 of the Sarbanes–Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 12 |
SIGNATURES
In accordance with the requirements 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.
| Good Gaming, Inc. | ||
| (the “Registrant”) | ||
| May 16, 2024 | ||
| BY: | /s/ David B. Dorwart | |
| David B. Dorwart | ||
| Principal Executive Officer | ||
| 13 |
Exhibit 31.1
CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002
I, David B. Dorwart, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10–Q of Good Gaming, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| May 16, 2024 | By: | /s/ David B. Dorwart |
| David B. Dorwart | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO SARBANES–OXLEY ACT OF 2002
I, John Hilzendager, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10–Q of Good Gaming, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| May 16, 2024 | By: | /s/ John Hilzendager |
| John Hilzendager | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES–OXLEY ACT OF 2002
I, David B. Dorwart, Chief Executive Officer of Good Gaming, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of my knowledge:
| 1. | the Quarterly Report on Form 10–Q of the Company for the period ended March 31, 2024 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
| 2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| May 16, 2024 | By: | /s/ David B. Dorwart |
| David B. Dorwart | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES–OXLEY ACT OF 2002
I, John Hilzendager, Chief Financial Officer of Good Gaming, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of my knowledge:
| 1. | The Quarterly Report on Form 10–Q of the Company for the period ended March 31, 2024 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
| 2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| May 16, 2024 | By: | /s/ John Hilzendager |
| John Hilzendager | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) |