Good Gaming, Inc.: Form 10-K for the period ended Dec 31, 2023

General

The Company, incorporated on November 3, 2008, under the laws of the State of Nevada, aimed to become a leading tournament gaming provider and an online destination for over 250 million esports players worldwide looking to compete at the high school or college level. Operating as a developmental stage business with limited revenues and a history of operating losses, Good Gaming established the Good Gaming platform in early 2014 to address the need for a structured organization for amateur gamers.

Distinguishing itself by focusing on over 250 million “amateur” gamers, falling between professional and casual levels, Good Gaming became the first company to offer multi-game, multi-console services at the amateur esports level. The company completed its first closed public beta testing of its 2.0 tournament platform on May 4, 2016, and on February 18, 2016, acquired the assets of Good Gaming, Inc. from CMG Holdings Group, Inc., leading to executive changes with Vikram Grover as CEO and David Dorwart joining the Board.

David B. Dorwart became the Chairman and CEO on June 27, 2017, bringing over 35 years of start-up entrepreneurism and executive-level management. The Board further expanded with additions like Domenic Fontana and Jordan Axt, enhancing expertise in finance and branding. Eric Brown joined as the Chief Operating Officer on August 29, 2017.

Shifting focus to the Minecraft server in September 2017, the company explored partnerships related to LAN centers and Virtual Reality centers in December 2017. The acquisition of Crypto Strategies Group, Inc. in March 2018 marked Good Gaming’s entry into the cryptocurrency market, but it dissolved Crypto Strategies Group, Inc. on December 12, 2018.

In March 2019, the company discontinued Minecade and Olimpo servers, deciding to concentrate on core Good Gaming servers. Notably, in March 2021, the company formulated a plan for a new game, “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.

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.

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.

Intellectual Property

We announced “Galactic Acres™ “ as a new intellectual property for our first mobile game. “Galactic Acres™ “ features new characters, settings and stories to be featured throughout our mobile game releases and connected Web3 experiences.

Insurance Policies

We have an insurance policy through AXIS Insurance Company with the insurance coverage of up to $1,000,000.

Employees

We have three full-time consultants and four part-time contractors working on various Good Gaming initiatives. The full-time consultants consist of one Chief Operating Officer, one Gaming Director, and one Operations Manager. The part-time consultant team includes two QA staff, one Video Engineer, and a Marketing Coordinator. Pursuant to our Management Services Agreement with ViaOne Services LLC, certain ViaOne employees are considered consultants of the Company.

Offices

Our executive offices are at 415 McFarlan Rd, Suite 108, Kennett Square, PA 19501. Our phone is (844) 419-7445.

Corporate Information

Good Gaming, Inc. was incorporated in the State of Nevada on November 3, 2008. Our principal business address is 415 McFarlan Rd, Suite 108, Kennett Square, PA 19501. Our website address is www.good-gaming.com (http://www.good-gaming.com). The references to our website in this annual report are inactive textual references only. The information on our website is neither incorporated by reference into this annual report nor intended to be used in connection with this annual report.

Available Information

We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”). These filings are available to the public through the SEC’s website at http://www.sec.gov. All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included unless otherwise specified, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

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

We do not currently rent, lease, or own any real property.

ITEM3. LEGAL PROCEEDINGS

We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

This Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact including, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, may be deemed to be forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Our auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2023. This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next twelve months from the date of issuance of these financial statements unless we obtain additional capital to pay our bills. This is because we have generated little revenue although revenue is anticipated to grow as we have completed the development of our website, sourced out suppliers for products to sell and sourced out customers to buy our products. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by others in our company and the revenue we generate from the sales of our products. We must raise cash to continue our project and build our operations.

Plan of Operation – Milestones

We are at an early stage of our new business operations focusing on integrated mobile and Web3 gaming experiences. Over the next twelve months, our primary target milestones include:

Limited operating history and need for additional capital

There is limited historical financial information about us upon which to base an evaluation of our performance relating to our new business direction. We have generated little revenue. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

Results of Operations

December 31, 2023 as compared to December 31, 2022

• Working Capital

• Operating Revenues

We have generated $3,443 in revenue in 2023 and $9609 in revenue in the fiscal year of 2022, which reflects an decrease of $6,166 or 64.17%. The decline in revenue is attributable to the Company’s focus on developing a new game, Galactic Acres, and reduced activity on the Microbuddies game by customers.

• Operating Expenses and Net Loss

Operating expenses for the year ended December 31, 2023 were $694,363 compared with $1,657,407 for the year ended December 31, 2022. The decrease in operating expenses in the amount of $963,044 or 58.11% is primarily attributed to strategic adjustments in professional fees, advertising and promotional expenditures, along with the reversal of insurance accrual.

During the year ended December 31, 2023, the Company recorded a net loss of $864,979 compared with a net loss of $2,107,901 for the year ended December 31, 2022. The decrease in net loss in the amount of $1,242,922 or 58.96% is attributed to a decrease in revenue and an increase in cost of revenue as the Company directed its efforts toward the development of a new game, Galactic Acres, partially offset by gains realized from the sale of digital assets.

• Liquidity and Capital Resources

As of December 31, 2023, the Company’s cash balance consisted of $304,225 compared to cash balance of $931,868 as of December 31, 2022. The decrease in cash balance is attributed to the payment of operating expenses associated with day-to-day activities. As of December 31, 2023, the Company had $484,394 in assets compared to total assets of $1,055,996 as at December 31, 2022. The decrease in total assets is primarily attributed to the sale of digital assets and the utilization of cash for ongoing operational activities partially offset by acquisition of intangible assets.

As of December 31, 2023, the Company had total liabilities of $520,277 compared with total liabilities of $426,385 as of December 31, 2022. The increase in liabilities is attributed to operating expenses incurred for the day-to-day activities necessary to sustain and run the business.

As of December 31, 2023, the Company has a working deficit of $122,427 compared with a working capital of $514,963 as of December 31, 2022. The decrease in the working capital ascribed to the utilization of cash for operational needs and the sale of digital assets to support the ongoing sustainability of the business.

Cash flow from Operating Activities

During the year ended December 31, 2023, the Company used $783,879 of cash for operating activities as compared to the cash usage of $1,513,674 for operating activities during the year ended December 31, 2022. The decrease of cash usage by $729,796 or 48.21% is attributed to the company’s decision to curtail expenditures on advertising and promotions, professional fee, and contracted labor so the Company can focus on developing a new game, Galactic Acres.

Cash flow from Investing Activities

During the years ended December 31, 2023, the Company had $146,381 in cash from the investing activities compared to $39,400 in cash for the year ended December 31, 2022. The increase of $106,981 or 271.53% in cash in investing activities is ascribed to the sale of digital assets partially offset by acquisition of intangible assets.

Cash flow from Financing Activities

During the year ended December 31, 2023, the Company received $8,876 of proceeds from financing activities compared to $768 during the year ended December 31, 2022. The increase of $8,106 or 1053% in proceeds from financing activities is credited to the issuance of common stock to certain ViaOne Services employees 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 December 31, 2023, 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 preferred shares to continue to fund our business operations. Issuance of additional shares will cause 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 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.

Recently Issued Accounting Pronouncements

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

Smaller Reporting Company Status

We are a “smaller reporting company”, meaning that the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of the IPO is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. We may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K, and have reduced disclosure obligations regarding executive compensation.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023.

We believe we have applied procedures and processes as necessary to ensure the reliability of our financial reporting regarding this annual report. Accordingly, the Company believes, based on its knowledge, that: (i) this annual 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 they were made, not misleading with respect to the period covered by this report; and (ii) the financial statements, and other financial information included in this annual report, fairly present in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in this annual report.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 using the criteria established in “Internal Control - Integrated Framework (2013) “ issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2023, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

1. We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is the important entity-level control over the Company’s financial statements. Currently, the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

2. We did not maintain appropriate cash controls – Until June 30, 2017, we did not maintain sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on our bank accounts. From June 30, 2017 through December 31, 2023, due to the change in corporate officers and board of directors, we have implemented appropriate cash controls and enforced separation of accounting functions to appropriately maintain cash controls.

3. We implemented appropriate information technology controls – As of December 31, 2023, we retain copies of all financial data and material agreements. There is a formal procedure or evidence of normal backup of our data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.

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Accordingly, we have concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

Due to the material weaknesses described above, we did not maintain effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

Continuing Remediation Efforts to address deficiencies in Company’s Internal Control over Financial Reporting

The Company has engaged in a merit business and has sufficient personnel available. Our Board of Directors, in particular, has established the following remediation measures in connection with the aforementioned deficiencies:

1. Our Board of Directors has nominated a financial expert on our Board of Directors.

2. We have appointed additional personnel to assist with the preparation of our monthly financial reporting, which includes preparation of the monthly bank reconciliations.

Changes in Internal Control over Financial Reporting

There are no recent changes in internal controls.