Notes to the Consolidated Financial Statements
June 30, 2018 and 2017
(Expressed in U.S. dollars)
1.
Nature of Operations and Going Concern
Esports Entertainment Group, Inc. (formerly VGambling Inc.) (the Company) was incorporated in the state of Nevada on July 22, 2008.
On April 18, 2017, the majority of the shareholders of the Companys common stock voted to approve a change of the name of the Company from VGambling, Inc. to Esports Entertainment Group, Inc.
The Companys activities are subject to significant risks and uncertainties, including failing to obtain the licenses required to operate its gambling business, failing to secure the additional funding required to fully operationalize the Companys business, and the risk of existing or future competitors offering similar or more advanced technology.
The Company is in the development stage and has not yet realized profitable operations and has relied on non-operational sources to fund operations. The Company has incurred recurring losses and additional future losses are anticipated as the Company has not yet been able to generate revenue.
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets and discharge its liabilities in the normal course of business. As at June 30, 2018, the Company had an accumulated deficit of $3,802,822 and working capital of $112,728. The Company has not generated any revenues during the period ended June 30, 2018. The Company is licensed to conduct online gambling. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations.
These factors raise substantial doubt regarding the Companys ability to continue as a going concern. Managements evaluations are based on relevant conditions and events that are known and reasonably to be knowable as of October 12, 2018. Based on the following, management believes that it is probable that management will be unable to meet its obligations as they come due within one year that the financial statements are issued.
These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
2.
Presentation of Financial Statements
Basis of Presentation
The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (US GAAP). All adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows as of June 30, 2018 have been included.
The Companys financial statements are prepared using the accrual basis of accounting in accordance and the Companys functional and reporting currency is the U.S. dollar.
Use of Estimates and Assumptions
The preparation of the financial statements in accordance with US GAAP 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. Actual amounts could materially differ from these estimates. The significant areas requiring the use of management estimates are related to provision for doubtful accounts, accrued liabilities, contingencies, the valuation of deferred taxes, stock based compensation, warrants, convertible debt and intangible assets. Although
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these estimates are based on managements knowledge of current events and actions management may undertake in the future, actual results may ultimately differ materially from those estimates.
3.
Summary of Significant Accounting Policies
Consolidation
The consolidated statements include the accounts of the Company and its wholly owned subsidiaries Esports Services Antigua Ltd., Vie Esports Services B.V., Esport Services (Malta) Limited and Esports Entertainment (Malta) Ltd. All material intercompany transactions and balances have been eliminated on consolidation.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, and all highly liquid debt instruments purchased with an original maturity of three months or less. As at June 30, 2018 and 2017 there were no cash equivalents.
Prepaid Expenses
Prepaid expenses consist of services paid, for which the Company has not yet received the benefit.
Equipment
Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of an asset is derecognized when replaced.
Repairs and maintenance costs are charged to the statements of operations, during the year in which they are incurred.
Depreciation is provided for over the estimated useful life of the asset as follows:
Furniture and Equipment
5 years
Computer Equipment
3 years
Useful lives and residual values are reviewed and adjusted, if appropriate, at the end of each reporting period. An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount. The cost and accumulated depreciation of assets retired or sold are removed from the respective accounts and any gain or loss is recognized in operations.
Intangible Assets
Intangible assets are comprised of online gaming website development costs and software are capitalized and amortized over an estimated useful life of 3 years. Costs related to the design or maintenance of internal-use software and website development are expensed as incurred.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset might not be recoverable. An impairment loss, measured as the amount by which the carrying amount exceeds the fair value, is recognized if the carrying amount exceeds estimated undiscounted future cash flows.
Income Taxes
The Company accounts for income taxes under ASC 740 "Income Taxes," which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
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FASB issued ASC 740-10 Accounting for Uncertainty in Income Taxes. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.
Fair Value of Financial Instruments
ASC 820 Fair Value Measurement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:
Level 1 unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 inputs other than quoted prices that are observable for the asset or liability or indirectly; and
Level 3 inputs that are not based on observable market data.
The carrying amounts of the Companys financial instruments including cash, amounts receivable, accounts payable, accrued liabilities, and due to shareholder approximate their fair values due to their short-term nature.
Loss per Share
Basic loss per share is calculated by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted loss per share is calculated using the treasury stock method and reflects the potential dilution of securities by including stock options, warrants and contingently issuable shares, if any, in the weighted average number of common shares outstanding for a year, if dilutive. In a loss year, dilutive common shares are excluded from the loss per share calculation as the effect would be anti-dilutive. Accordingly, for the years ended June 30, 2018 and 2017, the basic loss per share was equal to diluted loss per share as there were no dilutive securities.
Foreign Currency Translation
Monetary assets and liabilities are translated into Canadian dollars, which is the functional currency of the Company, at the year-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The resultant gains or losses are included in the statement of operations. Non-monetary items are translated at historical rates.
Stock-based Compensation
ASC 718 Compensation - Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period), on a graded vesting basis.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
The estimated fair value of the options and warrants that are ultimately expected to vest based on performance related conditions, as well as the options and warrants that are expected to vest based on future service, is recorded over the instruments requisite service period and charged to stock-based compensation. In determining the amount
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of options and warrants that are expected to vest, the Company takes into account, voluntary termination behavior as well as trends of actual option and warrant forfeitures.
Beneficial Conversion Feature
From time to time, the Company may issue convertible notes that may contain an imbedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements.
ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes was issued to simplify the classification of deferred taxes on the balance sheet. The new guidance would require that deferred taxes be classified as non-current assets and liabilities based on the tax paying jurisdiction. Application of the standard, which can be applied prospectively or retrospectively, is required for fiscal years beginning on or after December 15, 2016 and for interim periods within that year. The adoption of the amended guidance did not have a material impact on the Companys financial statements.
ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The areas of simplification in the update involve several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows, however, some of the areas for simplification apply only to non-public entities. This guidance is effective for The guidance did not have a material impact on the Companys financial statements.
The following are new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ASU No. 2016-02, Leases (Topic 842), On February 25, 2016, the FASB issued a new standard which requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. The new guidance will require the asset and liability to be initially measured at the present value of the lease payments in the statement of financial position. The new guidance will also require the company to recognize interest expense on the lease liability separately from the amortization of the right-use-asset for finance leases and recognize a single lease cost allocated on a straight-line basis over the lease term for operating leases, in the statement of comprehensive income. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early application permitted. The Company is currently evaluating this guidance to determine the impact it may have on the Companys financial statements.
ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU provides clarity to preparers on the treatment of eight specific items within an entitys statement of cash flows. The guidance becomes effective for all public entities in fiscal years beginning after December 15, 2017, including interim periods therein. Early adoption of the guidance, including within an interim period, is permitted. The Company is currently evaluating this guidance to determine the impact it may have on the Companys financial statements.
ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The ASU amends the scope of modification accounting for share-based arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. The guidance becomes effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is
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permitted, including adoption in any interim period. The Company is currently evaluating this guidance to determine the impact it may have on the Companys financial statements.
In March 2018, FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. ASU 2018-05 amends SEC paragraphs in ASC 740 to reflect SEC Staff Accounting Bulletin (SAB) No.118. When the 2017 Tax Cuts and Jobs Act (the "Act") was signed into law, the SEC staff released SAB 118 for applying Topic 740 as it relates to the Act. SAB 118 outlines the approach companies may take if they determine that the necessary information is not available (in reasonable detail) to evaluate, compute, and prepare accounting entries to recognize the effect(s) of the Act by the time the financial statements are required to be filed. Companies may use this approach when the timely determination of some or all of the income tax effect(s) from the Act is incomplete by the due date of the financial statements. SAB 118 also prescribes disclosures that reporting entities must provide in these circumstances. The amendments to the Accounting Standards Codification became effective upon issuance. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Companys financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customers accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Companys financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The ASU eliminates such disclosures as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. The ASU adds new disclosure requirements for Level 3 measurements. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for any eliminated or modified disclosures. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Companys financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718). This ASU eliminated most of the differences between accounting guidance for share-based compensation granted to nonemployees and the guidance for share-based compensation granted to employees. The ASU supersedes the guidance for nonemployees and expands the scope of the guidance for employees to include both. This ASU is effective for annual periods beginning after December 15, 2018, and interim periods within those years. The Company is evaluating the effect of adopting this new accounting guidance to determine the impact it may have on the Companys financial statements.
4.
Intangible Assets
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|
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|
|
| |
|
|
June 30, 2018
|
|
|
June 30, 2017
|
|
|
|
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|
|
Accumulated
|
|
|
|
|
|
Accumulated
|
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|
|
Cost
|
|
|
Depreciation
|
|
|
Cost
|
|
|
Depreciation
|
|
Online gaming website
|
|
$
|
127,133
|
|
|
$
|
3,532
|
|
|
$
|
71,578
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total
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$
|
127,133
|
|
|
$
|
3,532
|
|
|
$
|
71,578
|
|
|
$
|
-
|
|
Net carrying amount
|
|
|
|
|
|
$
|
123,601
|
|
|
|
|
|
|
$
|
71,578
|
|
During the year ended June 30, 2018, the Company recorded total depreciation expense of $3,532. As at June 30, 2017, the online gaming website was still under development and accordingly, no depreciation was recorded during the year ended June 30, 2017.
The Company wrote off online gambling website costs of $22,614 (2017 - $Nil) during the year ended June 30, 2018, as it was determined that the future benefit of those costs was negligible.
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5.
Equipment
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|
|
|
|
|
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|
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|
|
June 30, 2018
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|
|
June 30, 2017
|
|
|
|
|
|
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Accumulated
|
|
|
|
|
|
Accumulated
|
|
|
|
Cost
|
|
|
Depreciation
|
|
|
Cost
|
|
|
Depreciation
|
|
Computer equipment
|
|
$
|
14,450
|
|
|
$
|
4,863
|
|
$
|
|
11,805
|
|
|
$
|
328
|
|
Furniture and equipment
|
|
|
20,241
|
|
|
|
4,385
|
|
|
|
20,241
|
|
|
|
337
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|
Total
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$
|
34,691
|
|
|
|
9,248
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|
$
|
|
32,046
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|
|
|
665
|
|
Net carrying amount
|
|
|
|
|
|
$
|
25,443
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|
|
|
|
|
|
$
|
31,381
|
|
During the year ended June 30, 2018, the Company recorded depreciation expense of $8,583 (2017 - $665).
6.
Accounts Payable
Accounts payable were $248,356 as at June 30, 2018 (2017 - $29,017). Accounts payable are primarily comprised of trade payables of $210,380 (2017 - $29,017) and payroll liabilities of $37,976 (2017 - $Nil).
7.
Related Party Transactions
a) On May 20, 2013, the Company appointed Grant Johnson as President and a Director of the Ccompany. Mr. Johnson is paid $120,000 per year for serving as President. During the year ended June 30, 2018, the Company incurred salary of $120,000 (2017 - $65,000) to the President of the Company. As of June 30, 2018, the Company owed the President $30,975 (2017 - $Nil). As at June 30, 2018, the President had received an advance of $10,000 (2017 - $Nil) towards his next months salary, included in prepaid expense.
b) During the year ended June 30, 2018, the Company incurred rent of $6,000 (2017 - $4,563), charged by the President of the Company. As of June 30, 2018, the Company owed $1,551 (2017 - $1,229) to the President related to rent payments.
c) On January 30, 2015, the Company appointed Chul Woong Alex Lim as a Director of the Company for which he receives annual compensation of $20,000. Mr. Lim left the Company as of October 26, 2016. On March 15, 2018, the Company re-appointed Mr. Lim as a Director of the Company. During the year ended June 30, 2018, the Company paid $8,507 (2017 - $5,000) for directors fees. During the year ended June 30, 2018, the Company issued 20,000 stock options (2017 Nil) to Mr. Lim and recorded stock-based compensation expense of $2,447 (2017 - $Nil). The Company owed $1,667 to Mr. Lim for his directors fees as of June 30, 2018 (2017 - $Nil).
d) On March 9, 2015, the Company appointed Yan Rozum as a Director of the Company for which he receives annual compensation of $20,000. Directors fees for Mr. Rozum for the year ended June 30, 2018 totaled $5,000 (2017 - $20,000). On November 22, 2017, the Company appointed Yan Rozum as Chief Technical Officer (CTO) of the Company for which he receives annual compensation of $75,000. CTO fees for Mr. Rozum for the year ended June 30, 2018 totaled $50,000 (2017 - $Nil). During the year ended June 30, 2018, the Company issued 75,000 stock options (2017 Nil) to Mr. Rozum and recorded stock-based compensation expense of $9,175 (2017 - $Nil). The Company owed $Nil to Mr. Rozum as of June 30, 2018 (2017 - $25,000). The Company issued 80,000 shares on March 1, 2017 and 31,250 shares on June 30, 2017 to Mr. Rozum, valued at $45,000 for directors fees.
e) On October 26, 2016, the Company appointed David Watt as a Director for which he receives annual compensation of $25,000. Directors fees for Mr. Watt for the year ended June 30, 2018 totaled $25,000 (2017 - $25,000). The Company owed $23,059 to Mr. Watt as of June 30, 2018 (2017 - $1,107). During the year ended June 30, 2018, the Company issued 20,000 stock options (2017 Nil) to Mr. Watt and recorded stock-based compensation expense of $2,447 (2017 - $Nil). The Company issued 29,190 shares on June 30, 2017 valued at $12,352 for directors fees. The Company had provided an expense advance of $11,331 to Mr. Watt, which was included in amounts receivable as at June 30, 2018.
f) On December 11,
2017, the Company appointed Michał Kozłowski as Vice President of Finance. Mr. Kozłowski was paid 20,000 Polish Zloty ($5,367) per month before March 15, 2018 and 25,000 Polish Zloty ($6,709) per month after March 15, 2018. The Company owed $Nil to Mr. Kozłowski as of June 30, 2018 (2017 - $Nil).During the year ended June 30, 2018, the Company incurred salary of $43,389 (2017 - $Nil) to the Vice President of
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Accounting. During the year ended June 30, 2018, the Company issued 80,000 stock options (2017 Nil) to Mr. Kozlowski and recorded stock-based compensation of $4,670 (2017 - $Nil).
g) During the year ended June 30, 2018,
Swiss Interactive Software GmbH (Swiss)
charged the Company software consulting fees of $71,135 (2017 - $50,000) related to the development of the Companys online gaming website (see Note 4). Mr. Rozum is the controlling shareholder of Swiss and a director and the CTO of the Company. The Company owed $20,000 to Swiss as of June 30, 2018 (2017 - $Nil).
h) During the year ended June 30, 2018,
Ardmore Software SP.Z.O.O. (Ardmore)
charged the Company IT consulting fees of $183,204 (2017 - $Nil) and $16,334 (2017 - $Nil) in rent expense. Mr. Rozum is the controlling shareholder of Ardmore and a director and the CTO of the Company. The Company owed $84,869 to
Ardmore
as of June 30, 2018 (2017 - $Nil).
Amounts payable to related parties as disclosed above, are unsecured, non-interest bearing and due on demand.
Amounts due to shareholder are unsecured, non-interest bearing and due on demand. The shareholder is also a director and officer of the Company.
See also Notes 9 and 16(f).
8.
Convertible Promissory Notes
On June 3, 2016, the Company entered into a convertible promissory note agreement with an arms-length individual whereby the Company has borrowed $60,000. The convertible note was issued at a discount of $5,000 and the Company paid a finders fee of $5,000.
The note was interest bearing at 8% per annum commencing June 3, 2016. If the note was paid off in full within 90 days following the effective date, the interest would be waived. The Company was obligated to repay the principal with any interest by March 3, 2017. In the event of default, additional interest would accrue from the date of the event of default at the rate equal to the lower of 18% per annum or the highest rate permitted by law.
As an investment incentive, the Company issued 427,777 five-year cashless warrants, exercisable at $0.14 per share. The exercisable warrants were cancelled, and the Company settled the warrants with 230,300 common shares.
The Company assessed the terms of the convertible debenture in accordance with 470-20-55,
Debt with Conversion and Other Options
. On issuance, the Company recognized $38,432 for the fair value of the incentive warrants as additional paid-in capital based on the relative fair values of the convertible debenture and the incentive warrants. In addition, the Company assessed whether there was a beneficial conversion feature associated with the convertible debenture and recognized a debt discount of $11,568 for the full fair value of the convertible debenture with a corresponding adjustment to additional paid-in capital. The debt discount was accreted over the term of the debenture. During the year ended June 30, 2017, the Company amortized the debt discount to interest expense. The debt was repaid on June 8, 2017.
9.
Commitments and Contingencies
Management Agreements
On May 20, 2013, the Company appointed Grant Johnson as President and a Director of the Company. Mr. Johnson is paid $120,000 per year for serving as President. In addition, the Company may pay a performance bonus of up to 50% of his base salary. The Company must pay three months salary for terminating the President without cause.
On December 7, 2017, the Company appointed Yan Rozum as Chief Technology Officer of the Company. Mr. Rozum will be paid $75,000 per year before the Companys common stock is listing on the NASDAQ stock exchange, and $120,000 per year after the Companys common stock is listed on the NASDAQ stock exchange. The Company must pay three months
salary for terminating the Chief Technology Officer without cause and an additional one month
s salary for each full year of service.
On December 11,
2017, the Company appointed Michał Kozłowski as Vice President Accounting. Mr. Kozłowski will be paid 25,000 Polish Zloty ($6,664) per month for serving as Vice President Accounting. The Company must
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pay three months
salary for terminating the Vice President Accounting without cause and an additional one months salary for each full year of service.
Consultant Agreements
The Company has entered into various consulting agreements with minimum termination commitments totalling $91,000.
On
June 12, 2014, the Company
entered into
a Betting Gaming Platform Software Agreement with Swiss Interactive Software GmbH.
The monthly fees due under the agreement are based on the percentage of total revenues per month ranging from 5.0% to 10.0%. Monthly fees for platform support and maintenance services are set at a minimum of 2,500 Euros ($2,912) and a maximum of 25,000 Euros ($29,120). The Company must provide 30 days notice to terminate the agreement.
On August 1, 2017, the Company entered into a consulting agreement for compensation of $48,000 per year. If the Companys generates revenues exceeding $1,000,000 per month for three consecutive months the base annual salary will increase to $72,000.
Lease Agreements
The Company entered into a five year lease agreement with Polskie Nieruchomości Sp. Z.O.O. to rent office space starting on July 1, 2018 and terminating on November 20, 2022. Minimum payments for successive years are as follows:
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2019
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$
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49,300
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2020
|
|
49,300
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2021
|
|
49,300
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2022
|
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49,300
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2023
|
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20,500
|
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$
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217,700
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The Company entered into a three-year lease agreement with Caribbean Developments (Antigua) Ltd. to rent commercial space starting on May 1, 2017 terminating on April 30, 2020. After the first twelve months, either party can terminate the lease agreement. Minimum payments for successive years are as follows:
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2019
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$
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20,974
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2020
|
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17,478
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$
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38,452
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Service Agreements
On September 6, 2016, the Company entered into an affiliate marketing agreement for a six month period from launch of the website, www.vie.gg. Affiliate fees under this agreement range from 20% to 40% of monthly revenue. The Company must provide thirty days written notice for termination.
On February 26, 2018, the Company entered into a one year service agreement expiring on March 1, 2019. Minimum monthly commitment of 7,500 Euros ($8,736) of which the Company must pay three months notice if terminated.
Contingency
Boustead Securities, LLC (Boustead) has notified the Company that it owes Boustead $192,664, as well as warrants to purchase 1,417,909 common shares of the Company, as compensation for their acting as the placement agent for the sale of Company securities between June 2017 and 2018. Unless this matter is settled, Boustead has notified us that they plan to file an arbitration claim to resolve this dispute. Management believes this claim to be without merit as it is managements position that Boustead has been paid in full for the services provided and that no further cash or warrants are owed.
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10.
Common Stock
Issued
a) On September 21, 2016, the Company issued 200,000 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before December 1, 2019.
b) On November 30, 2016, the Company issued 66,680 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before December 31, 2019.
c) On December 31, 2016, the Company issued 550,000 common shares at $0.25 per share for consulting services in the amount of $137,500. The shares were valued at the quoted market vale at the time of issue.
d) On February 21, 2017, the Company issued 100,000 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before February 28, 2020.
e) On March 1, 2017, the Company issued 100,000 common shares at $0.25 per share for director fees. The shares were valued at the quoted market vale at the time of issue.
f) On March 8, 2017, the Company issued 360,000 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before March 8, 2022.
g) On March 31, 2017, the Company issued 4,136,667 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one
common share at $0.15. The warrants are exercisable before March 31, 2020. The warrants are callable by the Company any time after 12 months from the date the equity investment was completed with 30 days notice at a price of $0.05 per warrant.
h) On April 1, 2017, the Company issued 400,000 common shares at $0.15 per share for investor relations services. The shares were valued at the quoted market vale at the time of issue.
i) On April 1, 2017, the Company issued 2,896,857 units at $0.15 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before April 1, 2020.
The Company did not receive the $30,000 until July 2017. Accordingly, this amount was reflected as subscription receivable within equity as at June 30, 2017.
j) On April 22, 2017, the Company issued 92,000 common shares at $0.25 per share.
The shares were valued at the quoted market vale at the time of issue.
k) On May 16, 2017, the Company issued 600,000 units at $0.25 per unit. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.25. The warrants are exercisable before May 16, 2020. The warrants are callable by the Company any time after November 16, 2018 with 30 days notice at a price of $0.05 per warrant.
l) On May 24, 2017, the Company issued 250,000 common shares at $0.25 per share to a consultant as a finders fee.
m) On June 30, 2017, the Company issued 40,440 common shares at $0.80 per share for director fees. The shares were valued at the quoted market vale at the time of issue.
n) On July 5, 2017, the Company issued 800,000 units at $0.25 per unit for cash proceeds of $200,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at
F-14
$0.25. The warrants are exercisable before July 5, 2020. The warrants are callable by the Company any time after July 5, 2018 with 30 days notice at a price of $0.05 per warrant.
o) On July 6, 2017, the Company issued 400,000 units at $0.25 per unit for cash proceeds of $100,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.25. The warrants are exercisable before July 6, 2020. The warrants are callable by the Company any time after July 6, 2018 with 30 days notice at a price of $0.05 per warrant.
p)
On July 16, 2017, the Company issued 100,000 units at $0.25 per unit for cash proceeds of $25,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.25. The warrants are exercisable before July 16, 2020. The warrants are callable by the Company any time after July 16, 2018 with 30 days notice at a price of $0.05 per warrant.
q) On July 17, 2017, the Company issued 290,000 units at $0.25 per unit for cash proceeds of $72,500. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.25. The warrants are exercisable before July 17, 2020. The warrants are callable by the Company any time after July 17, 2018 with 30 days notice at a price of $0.05 per warrant.
r) On July 19, 2017, the Company issued 200,000 units at $0.15 per unit to an arms length consultant in exchange for services of $30,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.15. The warrants are exercisable before July 19, 2020. The warrants are callable by the Company any time after July 19, 2018 with 30 days notice at a price of $0.05 per warrant.
s) On July 20, 2017, the Company issued 100,000 units at $0.25 per unit for cash proceeds of $25,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $0.25. The warrants are exercisable before July 19, 2020. The warrants are callable by the issuer any time after July 20, 2018 with 30 days notice at a price of $0.05 per warrant.
t) On July 24, 2017, the Company issued 5,000 units at $0.50 per unit for cash proceeds of $2,500. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $2.00. The warrants are exercisable before July 24, 2018.
u) On August 8, 2017, the Company issued 10,000 units at $1.25 per unit for cash proceeds of $12,500. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $2.00. The warrants are exercisable before February 8, 2019.
v) On August 27, 2017, the Company issued 300,000 common shares at $0.25 per share for cash proceeds of $75,000.
w) On September 7, 2017, the Company issued 20,000 units at $1.25 per unit for cash proceeds of $25,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $4.00. The warrants are exercisable before March 6, 2019.
x) On September 21, 2017, the Company issued 156,667 common shares upon the exercise of 166,667 warrants exercised at $0.15 on a cashless basis. 10,000 common shares were held back by the Company as consideration for the exercise.
y) On September 26, 2017, the Company issued 101,000 common shares at $0.15 per share upon the exercise of 101,000 warrants.
z) On September 27, 2017, the Company issued 44,800 units at $1.25 per unit for cash proceeds of $56,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to purchase one common share at $4.00. The warrants are exercisable before March 30, 2019.
aa) On September 29, 2017, the Company issued 4,000 units at $1.25 per unit for cash proceeds of $5,000. Each unit consists of one common share, one warrant and one piggyback warrant. Each warrant entitles the holder to purchase one common share at $2.00. Each piggyback warrant entitles the holder to purchase one common share at $4.00.
F-15
The warrant is exercisable before September 24, 2018 and the piggyback warrant is exercisable before September 24, 2019.
bb) On September 29, 2017, the Company issued 16,000 units at $1.25 per unit for cash proceeds of $20,000. Each unit consists of one common share, one warrant and one piggyback warrant. Each warrant entitles the holder to purchase one common share at $2.00. Each piggyback warrant entitles the holder to purchase one common share at $4.00. The warrant is exercisable before September 28, 2018 and the piggyback warrant is exercisable before September 28, 2019.
cc) On October 17, 2017, the Company issued 66,667 common shares at $0.15 per share upon the exercise of 66,667 warrants.
dd) On October 31, 2017, the Company issued 315,500 common shares at $0.15 per share upon the exercise of 315,500 warrants.
ee) On November 7, 2017, the Company issued 15,500 common shares at $0.25 per share for cash proceeds of $3,875.
ff) On March 2, 2018, the Company issued 120,000 common shares at $0.75 per share to an arms length consultant for marketing services provided, of which $84,706 was reflected as a prepaid expense at June 30, 2018. The share value was based on the quoted value of the stock at the time of issue.
gg) On April 4, 2018, the Company issued 16,000 common shares at $0.25 per share upon the exercise of 16,000 warrants.
hh) On April 26, 2018, the Company issued 100,000 common shares at $0.20 per share for cash proceeds of $20,000.
ii) On April 26, 2018, the Company issued 166,667 common shares at $0.20 per share for cash proceeds of $33,333.
jj) On May 21, 2018, the Company issued 170,000 common shares at $0.15 per share upon the exercise of 170,000 warrants.
kk) On June 11, 2018, the Company issued 250,000 common shares at $1.00 per share to an arms length consultant for referral services of which, $185,625 was reflected as a prepaid expense at June 30, 2018. The share value was based on the quoted value of the stock at the time of issue.
ll) On June 18, 2018, the Company issued 25,000 common shares at $0.20 per share for cash proceeds of $5,000.
mm) On June 20, 2018, the Company issued 20,000 common shares at $0.80 per share to an arms length consultant for advisory services provided. The share value was based on the quoted value of the stock at the time of issue.
Equity to be Issued
nn) As of June 30, 2018, the Company had received subscription proceeds of $31,000 for shares and $220,602 for warrant exercise with respect to 1,666,667 common shares issued subsequent to June 30, 2018 as a result of warrant exercise at $0.15 per share. See Note 16.
oo) As of June 30, 2018, the Company was committed to issue 150,000 common shares valued at $127,500 based on the quoted value of the stock at the time of the commitment, pursuant to a consulting agreement dated June 19, 2018. These common shares were issued subsequent to June 30, 2018 (Note 16(d)).
Warrants
A summary of the Companys warrant activities is as follows:
F-16
|
|
|
|
|
|
|
|
|
|
| |
|
|
Number of Warrants
|
|
Weighted-Average Exercise Weighted Average Exercise Price
|
Weighted Average Weighted Average Remaining Life
|
Intrinsic
value
|
Outstanding, June 30, 2016
|
|
427,777
|
|
$
0.14
|
4.93 years
|
$
111,222
|
Granted
|
|
8,350,205
|
|
0.15
|
|
|
Cancelled
|
|
(94,610)
|
|
0.15
|
|
|
Outstanding, June 30, 2017
|
|
8,683,372
|
|
$
0.15
|
3.67 years
|
$
5,653,393
|
Granted
|
|
2,009,800
|
|
0.43
|
|
|
Exercised
|
|
(825,834)
|
|
0.15
|
|
|
Expired
|
|
(1,000)
|
|
0.25
|
|
|
Outstanding and Exercisable at June 30, 2018
|
|
9,866,338
|
|
$
0.21
|
2.60 years
|
$
6,064,913
|
The intrinsic value of the warrants exercised during the year ended June 30, 2018 was $1,825,730. There were no warrants exercised during the year ended June 30, 2017.
As at June 30, 2018, the following warrants were outstanding:
|
| |
Expiry Date
|
Number of Warrants Issued and Exercisable
|
Weighted Average Exercise Price
$
|
July 2018
|
109,000
|
0.39
|
September 2018
|
16,000
|
2.00
|
February 2018
|
10,000
|
2.00
|
March 2019
|
64,800
|
4.00
|
July 2019
|
4,000
|
4.00
|
September 2019
|
216,000
|
0.44
|
December 2019
|
66,680
|
0.15
|
February 2020
|
683,000
|
0.15
|
March 2020
|
2,113,525
|
0.15
|
June 2020
|
750,000
|
0.17
|
July 2020
|
740,000
|
0.22
|
August 2020
|
900,000
|
0.25
|
March 2022
|
4,000,000
|
0.15
|
May 2022
|
193,333
|
0.15
|
|
9,866,338
|
0.21
|
11.
Stock Options
On August 1, 2017, the Company adopted the 2017 Stock Incentive Plan (the 2017 Plan) whereby incentive stock options issued to employees, officers, and directors of the Company shall not exceed 2,500,000 of which the purchase price of the stock options shall not be less than 100% of the fair market value of the Companys common stock and the period for exercising the stock options not exceed 10 years from the date of grant. The option price per share with respect to each option shall be determined by the committee for non-qualified stock options.
F-17
During the year ended June 30, 2018, the Company issued 819,120 stock options to employees, officers and directors of the Company. The stock options are exercisable at $0.70 per share for a period of two to five years, and vest over a period of one to three years from the date of grant.
A summary of the Companys stock option activity is as follows:
|
| |
|
Number of
Options
|
Weighted average exercise price
$
|
|
|
|
Outstanding, June 30, 2016 and 2017
|
-
|
-
|
Granted
|
819,120
|
0.70
|
|
|
|
Outstanding, June 30, 2018
|
819,120
|
0.70
|
As at June 30, 2018, the following options were outstanding:
|
|
| |
Expiry Date
|
Number of Options Issued
|
Number of Options Exercisable
|
Weighted Average Exercise Price
$
|
August 18, 2020
|
50,000
|
-
|
0.70
|
August 1, 2023
|
529,120
|
-
|
0.70
|
May 29, 2020
|
240,000
|
-
|
0.70
|
|
819,120
|
-
|
0.70
|
As at June 30, 2018, the weighted average remaining life of the options was 4 years.
The grant date fair value of the stock options granted was determined using the Black-Scholes option pricing model based on the following assumptions:
| |
Expected Life
|
2-5 years
|
Expected Volatility
|
268 - 289%
|
Risk-Free Rate
|
2.57-2.94%
|
Exercise Price
|
$0.70
|
Expected Dividend Rate
|
0%
|
Stock Price
|
$0.53
|
The Companys computation of expected volatility during the year ended June 30, 2018 is based on historical prices of comparable entities. The Companys computation of expected life is calculated using the contractual life.
During the year ended June 30, 2018, the Company recorded stock-based compensation expense of $79,328 (2017 - $Nil) which has been recorded as stock based compensation in the statements of operations. As of June 30, 2018, there was $347,952 of unrecognized expense related to non-vested stock-based compensation arrangements (2017 - $Nil).
The following table provides the details of the total stock-based payments expense during the years ended June 30, 2018 and 2017:
|
|
|
|
|
|
|
| |
|
|
2018
|
|
|
2017
|
|
Employees and directors stock-based payments
|
|
$
|
79,328
|
|
|
$
|
-
|
|
Non-employee awards
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
79,328
|
|
|
$
|
-
|
|
F-18
12.
Income Taxes
At June 30, 2018 and 2017, deferred tax assets at a tax rate of 35% (2017 35%) consisted of the following:
|
| |
|
2018
$
|
2017
$
|
Deferred tax assets
|
654,000
|
603,000
|
Less: valuation allowance
|
(654,000)
|
(603,000)
|
Net deferred tax asset
|
|
-
|
The deferred tax assets have not been recognized because at this stage of the Companys development, it is not determined that future taxable profits will be available against which the Company can utilize such deferred tax assets. The Company incurred a net operating loss of $2,028,662 (2017 - $837,932) for the year ended June 30, 2018, which will start to expire in 2038 (2017 2037). Tax years 2009 through 2018 remain open to examination by the taxing jurisdictions to which the Company is subject. The Company has not been notified by any taxing jurisdictions of any proposed or planned examination.
13.
Segmented Information
The following table summarizes financial information by geographic segment for the year ended June 30, 2018:
|
|
|
|
| |
|
Antigua
|
Malta
|
Curacao
|
U.S.
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
Net loss
|
663,819
|
102,946
|
25,846
|
1,236,051
|
2,028,662
|
Assets
|
183,650
|
9,639
|
1,153
|
415,243
|
609,685
|
The following table summarizes financial information by geographic segment for the year ended June 30, 2017:
|
|
|
|
| |
|
Antigua
|
Malta
|
Curacao
|
U.S.
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
Net loss
|
204,109
|
Nil
|
Nil
|
633,823
|
837,932
|
Assets
|
663,425
|
Nil
|
Nil
|
95,625
|
759,050
|
14.
General and Administrative Expenses
The following table summarizes general and administrative expenses for the years ended June 30, 2018 and 2017:
|
| |
|
2018
$
|
2017
$
|
Advertising and promotion
|
225,565
|
14,140
|
Wages and benefits
|
187,601
|
87,794
|
Rent and utilities
|
97,366
|
11,678
|
Travel
|
64,648
|
23,462
|
Licensing and filing fees
|
50,235
|
-
|
Office expenses
|
46,777
|
10,337
|
Bank charges
|
12,236
|
4,147
|
Depreciation
|
12,115
|
665
|
Total General and Administrative Expenses
|
696,543
|
152,223
|
15.
Financial Instruments
(a) Liquidity risk
F-19
Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Companys liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities and advances from shareholders. As at June 30, 2018, the Company had cash of $100,167 (2017 - $546,110) to settle current liabilities of $343,567 (2017 - $87,105). All of the Companys financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as liquidity.
In the normal course of business, management considers various alternatives to ensure that the Company can meet some of its operating cash flow requirements through financing activities, such as private placements of common stock, offerings of debt and convertible debt instruments as well as through merger or acquisition opportunities. Management may also consider strategic alternatives, including strategic investments and divestitures. As future operations may be financed out of funds generated from financing activities, the ability to do so is dependent on, among other factors, the overall state of capital markets and investor appetite for investments in the esports industry and the Companys securities in particular. Should the Company elect to satisfy its cash commitments through the issuance of securities, by way of either private placement or public offering or otherwise, there can be no assurance that the efforts to obtain such additional funding will be successful, or achieved on terms favorable to the Company or its existing shareholders. If adequate funds are not available on favorable terms, the Company may have to reduce substantially or eliminate expenditures or obtain funds through other sources such as divestiture or monetization of certain assets or sublicensing (where permitted) of certain rights to certain of the Companys technologies or products.
(b) Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Cash deposits with a chartered bank in Antigua are uninsured. Cash deposits with a major U.S. chartered bank are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As at June 30, 2018, the Company held $19,217 (2017 - $546,110) with an Antigua chartered bank, and $80,950 (2017 - $Nil) with a U.S. chartered bank through a trust account with the Companys legal counsel.
(c) Foreign exchange risk
The Company principally operates within Antigua, Malta and the U.S. The Companys functional currency is the U.S. dollar and major purchases are transacted in U.S. dollars. Management believes the foreign exchange risk derived from currency conversions is negligible and therefore does not hedge its foreign exchange risk.
(d) Interest rate risk
As at June 30, 2018, the Company does not have any non-fixed interest-bearing debt.
16.
Subsequent Events
a) On July 26, 2018, the Company issued 360,000 common shares at $0.15 per share upon the exercise of 360,000 warrants. As of June 30, 2018, 193,333 of the warrants exercised had been reflected as shares to be issued. See Note 10(nn).
b) On July 26, 2018, the Company issued 15,000 common shares to a consultant for advisory services provided.
c) On July 26, 2018, the Company issued 206,667 common shares at $0.15 per share. As of June 30, 2018, this had been reflected as shares to be issued. See Note 10(nn).
d) On July 31, 2018, the Company issued 150,000 common shares to a consultant for advisory services pursuant to an agreement dated June 19, 2018. As of June 30, 2018, this had been reflected as shares to be issued. See Note 10(oo).
e) On August 3, 2018, the Company issued 333,333 common shares at $0.15 per share upon the exercise of 333,333 warrants.
F-20
f) On August 13, 2018, the Company signed a promissory note with a shareholder, for principal of $50,000 bearing interest at 2% per month repayable by September 30, 2018. As a result of failure to repay the note by September 30, 2018, interest increased to 5% per month.
g) On August 16, 2018, the Company issued 1,566,667 common shares at $0.15 per share upon the exercise of 1,566,667 warrants. As of June 30, 2018, 1,266,667 of the warrants exercised had been reflected as shares to be issued. See Note 10(nn).
h) On August 27, 2018, the Company issued 100,000 common shares at $0.15 per share for exercise of warrants.
i) On September 5, 2018, the Company issued 66,667 common shares at $0.15 per share upon the exercise of 66,667 warrants.
j) On September 6, 2018, the Company issued 300,000 common shares at $0.25 per share upon the exercise of 300,000 warrants.
k) On September 6, 2018, the Company issued 200,000 common shares at $0.15 per share upon the exercise of 200,000 warrants.
l) On September 24, 2018, the Company entered into an agreement to issue senior secured convertible promissory notes bearing interest at 5% per annum (the Notes). The Notes, with a principal value of $2,200,000, would be purchased at a 10% discount for $2,000,000 and mature 12 months from the closing date. As at October 12, 2018, these Notes had not been issued.
If the Company defaults, the holders would have the right to be paid 130% of the outstanding principal balance and accrued interest immediately due prior to such event of default. Following an event of default, interest would accrue at rate of 1.5% per month until paid.
The Notes may be prepaid at any time in an amount equal to 110% of the outstanding principal and accrued interest for the first 180 days and 125% of the outstanding principal and accrued interest for days 181-365 days after issuance. In order to prepay the Notes, the Company must give at least 20 trading days written notice to the Investors, during which time the holders may convert the Notes in whole or in part.
The holder of the Note would be entitled at any time after the requisite 144 holding period, to convert all or any amount of the principal face amount of the Notes then outstanding into common shares at a price of $0.60 per share. In the event of default, the conversion price would be equal to 80% of the lowest trading price of the common stock as reported on the OTCQB or other principal market where the Company's common stock is traded for the twenty prior trading days.
100% warrant coverage would be exercisable for a period of 3 years post issuance at an exercise price of $0.75 per share. The warrants would contain a cashless exercise provision if not covered by a registration statement. The Company may call the warrants if the stock trades at $1.25 for a period of 10 straight trading days and are covered by an effective registration statement and the average daily volume of the common stock for the previous 10 trading days must be greater than $75,000. The Company would pay legal fees at the closing of up to $20,000.
m) On October 4, 2018, the Company issued 15,000 common shares to a consultant for advisory services pursuant to an agreement dated June 15, 2018.
n) On October 12, 2018, the Company issued 100,000 shares to a consultant for advisory services pursuant to an agreement dated September 15, 2018.
o) On October 12, 2018, the Company cancelled 120,000 options that were granted during the year ended June 30, 2018 to a consultant of the Company.
p) Subsequent to June 30, 2018, 25,000 warrants exercisable at $2.00 and 100,000 warrants exercisable at $0.25 expired, unexercised.
F-21