Notes to Condensed
Financial Statements
NOTE 1 – ORGANIZATION
Empire Global Gaming, Inc. (the “Company”)
was incorporated in the State of Nevada on May 11, 2010 in order to acquire certain U.S Patent license agreements pertaining to
roulette and actively engage in the gaming business worldwide and commenced operations in June, 2010. The Company was founded
to develop, manufacture and sell Class II & Class III Casino electronic and table games for the general public and casinos
worldwide. The Company owns exclusive rights through license agreements to four U.S. Patents consisting of 14 roulette games patents.
We also sells 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. These patents are certified by Gaming Laboratories International
to minimize any unfairness in the multi-number bets in roulette (American double 0 & European single 0) to both players and
casinos. One of the patents controlled by the Company is for a “new number pattern and board layout” that will insure,
the various gaming control boards and commissions in the United States and eventually worldwide, that the highest standards of
security and integrity are met.
The Company developed a website (www.lottopick3.com)
which provides analytical data to consumers on several different lottery type games. This program is not a gambling/consulting
program. It is strictly an analysis program. The website does not offer any advice one way or the other. It offers an in depth
breakdown of all the previous numbers that have been drawn in all states that have the pick 3 games. The software breaks things
down into all the possible categories and shows any types of trends that may occur.
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 10 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 three months ended March 31, 2019 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2019 or any other period. For further information, refer to the financial statements and footnotes
thereto, included in the Company’s Annual Report on Form 10K for the year ending December 31, 2018.
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.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed
Financial Statements
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.
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.
NEW ACCOUNTING PRONOUNCEMENTS
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.
ACCOUNTS RECEIVABLE
Accounts receivable are presented net
of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company
reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors,
including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection. At March 31, 2019 and December 31, 2018, the Company
has established, based on a review of its outstanding balances, that no allowance is necessary.
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 March 31, 2019 and December 31, 2018. 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 March 31, 2019 and December 31, 2018, 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 Financial Accounting
Standards Board (“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
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 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.
Foreign
Currency
Monetary assets and liabilities of the
Company's foreign operations are translated into U.S. dollars at period-end exchange rates. Non-monetary assets and liabilities
are translated at historical rates. Net exchange gains or losses resulting from such translation are excluded from net loss but
are included in comprehensive income and accumulated in a separate component of stockholders' equity. Income and expenses are
translated at weighted average exchange rates for the period. Foreign currency transactions denominated in a currency other than
the US Dollar, which is the Company’s functional currency, are included in determining net income for the period.
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 March 31, 2019. There were no uncertain tax positions that would require recognition
in the unaudited condensed financial statements through March 31, 2019.
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, 2018.
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.
LONG LIVED ASSETS
The Company evaluates the carrying value
and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of ASC 360-35,
Property, Plant and Equipment, Subsequent Measurement
(“ASC 360-35”). ASC 360-35 requires that long-lived assets
be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets.
Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds
the fair value.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed
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).
The Company accounts for stock-based compensation
issued to non-employees and consultants in accordance with the provisions of FASB 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.
For the three months ended March 31, 2019
and 2018, 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 net losses of $3,379 and $3,748 during the three months ended March 31, 2019 and 2018, respectively.
Cash on hand will not be sufficient to cover debt repayments, operating expenses and capital expenditure requirements for at least
twelve months from the unaudited condensed balance sheet date. As of March 31, 2019 and December 31, 2018, the Company had working
capital deficits of $198,565 and $195,186, respectively. 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. 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.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed
Financial Statements
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.
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
March 31, 2019 as it is anti-dilutive. For the three months ended March 31, 2019 and 2018, the Company had no dilutive securities.
NOTE 5 – 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 Note 8), and the other note was extended to December 31, 2019.
The notes payable had unpaid balance of $161,020 as of March 31, 2019 and $159,020 as of December 31, 2018.
The Company borrowed $2,000 and $1,400
from stockholders during the three months ended March 31, 2019 and 2018, respectively.
The Company recorded interest expense
of $1,580 and $1,528 for the three months ended March 31, 2019 and 2018, respectively, for these notes payable. Accrued interest
related to these notes payable were $24,140 and $22,561 as of March 31, 2019 and December 31, 2018, respectively.
NOTE 6 – NOTES PAYABLE - OTHER
On December 1, 2018 the Company issued
a grid note payable to a third party for $13,500 which were used for audit and legal fees. The note bears interest at 10% per
annum and is due on December 31, 2019. The note payable had an unpaid balance of $13,500 and $13,500, and accrued interest of
$448 and $115 as of March 31, 2019 and December 31, 2018, respectively.
NOTE 7 – EQUITY
Common Stock
On December 6, 2018, the Company approved
the issuance of 200,000,000 shares of its common stock, par value $0.001, for the appointment of the Company’s Chief Executive
Officer. The Company has recorded this transaction as Stock Compensation Expense at a value of $200,000, or $0.001 per share.
As of March 31, 2019 and December 31,
2018, the Company has 980,000,000 authorized shares of common stock, par value $0.001, of which 257,301,000 and 257,301,000 shares
are issued and outstanding, respectively.
EMPIRE
GLOBAL GAMING, INC.
Notes to Condensed
Financial Statements
NOTE 8 – SUBSEQUENT EVENTS
Management has evaluated all transactions
and events after the balance sheet date through the date on which these financials were available to be issued, and except as
already included in the notes to these unaudited condensed financial statements, has determined that no additional disclosures
are required.
On June 1, 2019, the Company issued a
grid note payable to a third party for $10,118 which were used for audit and filing fees. The note bears interest at 10% per annum
and is due on December 31, 2019.
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 will be added to his note balance.
