The accompanying notes are an integral part of these consolidated financial
statements
The accompanying notes are an integral part of these consolidated financial
statements
The accompanying notes are an integral part of these consolidated financial
statements
Notes to Condensed Consolidated Financial Statements
NOTE 1 – ORGANIZATION
Empire Global Gaming, Inc. (“EGG”)
was incorporated in the State of Nevada on May 11, 2010 in order to actively engage in the gaming business worldwide. EGG is developing
a complete line of public and casino grade gaming products for roulette, blackjack, craps, baccarat, mini baccarat, pinwheels, Sic Bo,
slot machines, poker tables and bingo games. EGG also provides advice to consumers on several different lottery type games.
On March 3, 2021 the Company created two new subsidiaries,
Empire Mobile Apps, Inc. and Empire IP, Inc (collectively with EGG, the “Company”). The Company plans to use these subsidiaries
for services with mobile applications. As of September 30, 2021, these subsidiaries had no activity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BASIS OF PRESENTATION
The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information
and with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles
generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting
of normal recurring accruals considered necessary for a fair presentation, have been included, operating results for the nine months ended
September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any other
period. For further information, refer to the financial statements and footnotes thereto, included in the Company’s Annual Report
on amended Form 10K-A for the year ending December 31, 2020, filed with the SEC on August 20, 2021.
USE OF ESTIMATES
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires management to make estimates and assumptions which affect
the reporting of assets and liabilities as of the dates of the financial statements and revenues and expenses during the reporting period.
These estimates primarily relate to the sales recognition, allowance for doubtful accounts, inventory obsolescence and asset valuations.
Actual results could differ from these estimates. Management’s estimates and assumptions are reviewed periodically, and the effects
of revisions are reflected in the unaudited condensed financial statements in the periods they are determined to be necessary.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Generally Accepted Accounting Principles (“GAAP”)
requires certain disclosures regarding the fair value of financial instruments. The fair value of financial instruments is made as of
a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates
are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes
in assumptions can significantly affect estimated fair values.
GAAP defines fair value as the price that would
be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the
Company considers the principal, or most advantageous market in which it would transact, and it considers assumptions that market participants
would use when pricing the asset or liability.
GAAP establishes a fair value hierarchy that requires
an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the degree of subjectivity that is necessary to estimate the
fair value of a financial instrument. GAAP establishes three levels of inputs that may be used to measure fair value:
Level 1 – Level 1 applies to assets or liabilities
for which there are quoted prices in active markets for identical assets or liabilities.
EMPIRE GLOBAL GAMING,
INC.
Notes to Condensed Consolidated Financial Statements
Level 2 – Level 2 applies to assets or liabilities
for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient
volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can
be derived principally from, or corroborated by, observable market data.
Level 3 – Level 3 applies to assets or liabilities
for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the
assets or liabilities.
As of September 30, 2021 and December 31, 2020,
the Company did not have any Level 2 or Level 3 financial instruments.
NEW ACCOUNTING PRONOUNCEMENTS
In August 2020, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU simplifies
the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible
preferred stock. This will result in more convertible debt instruments being accounted for as a single liability instrument and more convertible
preferred stock being accounted for as a single equity instrument with no separate accounting for embedded conversion features. The ASU
also simplifies the diluted earnings per share calculation in certain areas. This standard will be effective for the Company in the fiscal
year beginning December 15, 2021. The Company is currently evaluating the effect the standard will have on its financial statements.
There are various updates recently issued, most
of which represented technical corrections to the accounting literature or application to specific industries and are not expected to
a have a material impact on the Company’s financial position, results of operations or cash flows.
CASH AND CASH EQUIVALENTS
The Company considers highly liquid investments
with original maturities of three months or less when purchased as cash equivalents. The Company had no cash equivalents as of September
30, 2021 and December 31, 2020. At times throughout the year, the Company might maintain bank balances that may exceed Federal Deposit
Insurance Corporation insured limits. Periodically, the Company evaluates the credit worthiness of the financial institutions, and has
not experienced any losses in such accounts. At September 30, 2021 and December 31, 2020, the Company had $0 over the insurable limit.
CONVERTIBLE INSTRUMENTS
The Company evaluates and accounts for conversion
options embedded in its convertible instruments in accordance with professional standards for FASB Accounting Standards Codification (“ASC”)
815, Derivatives and Hedging (“ASC 815”).
Professional standards generally provides three
criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing
derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the
embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b)
the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under
otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a
separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional
standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards
as “The Meaning of Conventional Convertible Debt Instrument”.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed Consolidated Financial Statements
The Company accounts for convertible instruments
(when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with
professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional
standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible
notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of
the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt
discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also
records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences
between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price
embedded in the note.
ASC 815 provides that, among other things,
generally, if an event that is not within the entity’s control could or require net cash settlement, then the contract shall
be classified as an asset or a liability.
INCOME TAXES
The Company is deemed a corporation and thus is
a taxable entity. No provision for income taxes was reflected in the accompanying unaudited condensed financial statements, as the Company
did not have income through September 30, 2021. There were no uncertain tax positions that would require recognition in the unaudited
condensed financial statements through September 30, 2021.
Generally, federal, state and local authorities
may examine the Company’s tax returns for three years from the date of filing, and the current and prior three years remain subject
to examination as of December 31, 2020.
The Company’s conclusions regarding uncertain
tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations
thereof as well as other factors.
The Company accounts for income taxes under ASC
740-10-30, Income Taxes. Deferred income tax assets and liabilities are determined based upon differences between the financial
reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is
more likely than not that the assets will not be realized. 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. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment
date.
INTANGIBLE ASSETS
The Company’s intangible assets represent definite lived intangible
assets, which will be amortized on a straight- line basis over their estimated useful life of three years. The Company periodically evaluates
the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances warrant a revision to the
remaining period of amortization.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed Consolidated Financial Statements
RECOGNITION OF REVENUE
The Company recognizes revenue under ASC 606,
Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company
expects to be entitled in exchange for those goods or services.
ASC 606 prescribes a five step process to achieve
its core principle. The Company recognizes revenue from product sales as follows:
I. Identify the contract with
the customer.
II. Identify the contractual
performance obligations.
III. Determine the amount
of consideration/price for the transaction.
IV. Allocate the determined
amount of consideration/price to the contractual obligations.
V. Recognize revenue when
or as the performing party satisfies performance obligations.
The consideration/price for the transaction (performance
obligation(s)) is determined as per the invoice for the products.
The Company derives its revenue from sale of gaming
products and from fees earned for the use of its online lottery number selecting application. The Company recognizes revenue from product
sales only when there is persuasive evidence of an arrangement, delivery has occurred, the sale price is determinable and collectability
is reasonably assured and from fees as paid for in an online transaction.
STOCK BASED COMPENSATION
The Company follows FASB ASC 718, Compensation
– Stock Compensation, which 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 unaudited condensed 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).
For the nine months ended September 30, 2021 and
2020, the Company had no stock based compensation.
NOTE 3 – GOING CONCERN
The Company’s unaudited condensed financial
statements have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred
a net loss of $116,712 during the nine months ended September 30, 2021. Cash on hand will not be sufficient to cover debt repayments,
operating expenses and capital expenditure requirements for at least twelve months from the date of issuance of the unaudited condensed
consolidated financial statements. As of September 30, 2021, the Company had a working capital deficit of $215,765. These factors raise
substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date the unaudited condense
consolidated financials statements are issued. In order to continue as a going concern, the Company will need, among other things, additional
capital resources. Management’s plan is to seek equity and/or debt financing, along with potential acquisitions. However, management
cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
There are no assurances that the Company will
be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional
financing through either private placements, public offerings and/or bank financing necessary to support the Company’s working capital
requirements. To the extent that funds generated from operations, any private placements, public offerings and/or bank financing are insufficient,
the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if
available, will be on terms acceptable to the Company.
The ability of the Company to continue as a going
concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure
other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.
EMPIRE GLOBAL GAMING, INC.
Notes to Condensed Consolidated Financial Statements
NOTE 4 –LOSS PER SHARE
The Company utilizes the guidance per ASC 260,
Earnings Per Share. Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding,
and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period.
Diluted earnings per share, which is calculated by dividing net income available to common stockholders by the weighted average number
of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion
of all potentially dilutive securities outstanding, is not presented separately as of September 30, 2020 as it is anti-dilutive. Such
securities, shown below, presented on a common share equivalent basis and outstanding as of years ended September 30, 2021 and 2020 have
been excluded from the per share computations:
|
|
|
September 30,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Convertible notes payable
|
|
|
162,706,400
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total diluted shares
|
|
|
162,706,400
|
|
|
|
-
|
|
NOTE 5 – INTANGIBLE ASSETS
In January 2021, the Company invested $30,000
to develop a mobile gaming application Blackjack Plus, which is currently available on the Apple iStore, and is exclusively owned by the
Company. The Company recorded this as an intangible asset on the accompanying condensed balance sheet and has determined a useful life
of three years for this asset.
For the nine months ended September 30, 2021 the
Company had $2,521 in amortization expense towards intangible assets arriving at a net value of $27,479 as of September 30, 2021.
As of September 30, 2021, the Company determined
that no impairment of intangible assets was deemed necessary.
NOTE 6 – CONVERTIBLE NOTES
On December 1, 2018, the Company issued a grid
note payable to a third party for $13,500 which was used for audit and legal fees. The note bears interest at 10% per annum and is due
on December 31, 2019. This note was extended to December 31, 2020. Through December 31, 2020, the Company borrowed an additional $102,255
relating to this note payable. On November 20, 2020 the Company received a forbearance letter amending the terms of the grid promissory
note by adding a conversion feature to the note, thereby making the note a convertible note. The amended note is due on December 31, 2022,
bearing interest at 10% per annum. The holder has the option to lend additional amounts to the borrower from time to time in the future,
on the terms set forth in this agreement. This grid promissory note contains a provision for conversion at the holder’s option of any
outstanding principal balance including accrued interest, into the Company’s common stock at a conversion price equal to par value, $0.001
per share. The Company analyzed if the changes to this note were considered a modification or an extinguishment of debt, and determined
it was an extinguishment of debt. The Company recognized there was a beneficial conversion feature associated with this note, and recorded
a debt discount of $115,755, and for the year ended December 31, 2020 amortization of debt discount associated with this note was $3,458.
For the nine months ended September 30, 2021, debt discount for this note was $61,471 and the amortization of the debt discount associated
with this note was $38,326.
On March 24, 2021 the note holder converted $12,500
of principal from their convertible note into 12,500,000 shares of common stock at a rate of $0.001 per share in accordance with the terms
of the convertible note. The principal amount of the note at September 30, 2021 and December 31, 2020 is $103,255 and $115,755 and the
related accrued interest is $8,748 and $744, respectively.
EMPIRE GLOBAL GAMING, INC.
Notes to Condensed Consolidated Financial Statements
On June 1, 2019, the Company issued a grid note
payable to a third party for $10,118 which was used for audit and filing fees. The note bears interest at 10% per annum and is due on
December 31, 2019. This note was extended to December 31, 2020. Through December 31, 2020, the Company borrowed an additional $32,600
relating to this note payable. On November 20, 2020 the Company received a forbearance letter amending the terms of the grid promissory
note by adding a conversion feature to the note, thereby making the note a convertible note. The amended note is due on December 31, 2022,
bearing interest at 10% per annum. The holder has the option to lend additional amounts to the borrower from time to time in the future,
on the terms set forth in this agreement. This grid promissory note contains a provision for conversion at the holder’s option of any
outstanding principal balance including accrued interest, into the Company’s common stock at a conversion price equal to par value, $0.001
per share. The Company analyzed if the changes to this note were considered a modification or an extinguishment of debt, and determined
it was an extinguishment of debt. The Company recognized there was a beneficial conversion feature associated with this note, and recorded
a debt discount of $46,718, and for the year ended December 31, 2020 amortization of debt discount associated with this note was $2,277.
For the nine months ended September 30, 2021, debt discount for this note was $27,819 and the amortization of the debt discount associated
with this note was $16,622.
The principal amount of the note at September
30, 2021 and December 31, 2020 is $46,718 and the related accrued interest is $3,986 and $492, respectively.
NOTE 7 – NOTES PAYABLE – RELATED PARTIES
The Company had notes payable to stockholders
who are our chief executive officer and chief financial officer. The notes bear interest at 4% per annum and are due on December 31, 2018.
One of these notes was paid in full in June 2019 (see below), and the other note was extended to December 31, 2020. The notes payable
had an unpaid balance of $167,393 as of September 30, 2021 and December 31, 2020.
The Company borrowed $0 and $0 from stockholders
during the nine months ended September 30, 2021 and 2020, respectively.
On June 6, 2019, the President of the Company
assumed the debt of a related party note totaling $29,273, of which $25,100 was principal and $4,173 was accrued interest. The related
party note was paid in full by the President and was added to his note balance.
The Company recorded interest expense of $5,008
and $5,008 for the nine months ended September 30, 2021 and 2020, respectively, for these notes payable. Accrued interest related to these
notes payable were $36,676 and $31,668 as of September 30, 2021 and December 31, 2020, respectively.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
The Company evaluates contingencies on an ongoing
basis and is not currently a party to any legal proceeding that management believes could have a material adverse effect on our results
of operations.
NOTE 9 – EQUITY
Common Stock
On November 20, 2020, in accordance with a notice
of forbearance regarding a grid promissory note issued on December 1, 2018, the Company granted 100,000 shares of common stock to a third
party note holder as finance costs, valued at fair market value of $0.06 per share, or $6,000.
On November 20, 2020, in accordance with a notice
of forbearance regarding a grid promissory note issued on June 1, 2019, the Company granted 100,000 shares of common stock to a third
party note holder as finance costs, valued at fair market value of $0.06 per share, or $6,000.
On March 24, 2021 a note holder converted $12,500
of principal from their convertible note into 12,500,000 shares of common stock at a rate of $0.001 per share in accordance with the terms
of their convertible note.
As of September 30, 2021 and December 31, 2020,
the Company has 980,000,000 authorized shares of common stock, par value $0.001, of which 270,001,000 and 257,301,000 shares are issued
and outstanding, respectively.
NOTE 10 – SUBSEQUENT EVENTS
Management has evaluated all transactions and
events after the balance sheet date through the date on which these financials were issued and has determined that no additional disclosures
are required.