Overview
We have built (1) a free-to-play synchronized mobile app and digital gaming platform. The platform is designed to enable WinQuik™ users to have fun, interact and compete in order to win real money and prizes and (2) a language learning app that focuses on "language exchanging" between users around the world. As opposed to quizzes, flash cards and other traditional language studying tools, HeyPal™'s approach to helping its users learn a new language is by matching them together with native speakers of their target language. The platforms support iOS and Android platforms and web and built dynamically so it can expand quickly. (3) Nifter™ is a marketplace for non-fungible tokens on the Ethereum Blockchain. (4) Joey's Animal Kingdom™ is a children's entertainment and education app.
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Results of Operations-Comparison of the Years Ended
Research and Development Expenses
During the years ended
Selling, general and administrative expenses
During the years ended
Loss on impairment
During the year ended
Amortization of debt discount
Amortization of debt discount was
Interest Income
During the year ended
Liquidity and Capital Resources
As of
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Application of Critical Accounting Policies
We believe that our critical accounting policies are as follows:
? Research and Development Costs; ? Stock Based Compensation; ? Fair Value of Financial Instruments ? Equity Method Investments ? Asset Acquisitions
Researchand Development Costs
Research and development costs consist of expenditures for the research and development of new products and technology. These costs are primarily expenses to vendors contracted to perform research projects and develop technology for the Company's mobile gaming applications.Costs incurred for researchand development are expensed asincurred.
Stock-BasedCompensation
Weaccount for ourstock-based compensation to employees and non-employeesunder ASC 718"Compensation - StockCompensation" using the fair value-based method. Under this method, compensation cost ismeasured atthe grantdate basedon thevalue ofthe awardand is recognizedover the requisite service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that maybe settled by theissuance of those equity instruments.
Fair Value Measurements
We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. We base our fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, from time to time, we may be required to record certain assets at fair value on a non-recurring basis, such as certain impaired loans held for investment and securities held to maturity that are other-than-temporarily impaired or goodwill. These non-recurring fair value adjustments typically involve write-downs of individual assets due to application of lower-of-cost or market accounting or other accounting standards.
We have established and documented a process for determining fair value. We maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. Whenever there is no readily available market data, management uses its best estimate and assumptions in determining fair value, but these estimates involve inherent uncertainties and the application of management's judgment. As a result, if other assumptions had been used, our recorded earnings or disclosures could have been materially different from those reflected in these financial statements. For detailed information on our use of fair value measurements and our related valuation methodologies, see Note 2 to the Consolidated Financial Statements of this report.
Equity Method Investment
The equity method is applied to investments in affiliated companies and joint ventures. An affiliated company is an entity which is not controlled by the Company but for which the Company is able to exert significant influence over the decisions on financial and operating business policies. If the Company has 20% or more but not more than 50% of the voting rights of another entity, the Company is presumed to have significant influence over that entity however, if a company has less than 20% of the voting rights and is able to exert significant influence the equity method should be applied. Under the equity method, the investment in an affiliated company or joint venture is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company's share of the net income or loss of the affiliated company or joint venture. When the Company's share of losses of an affiliated company equals or exceeds it interest in the affiliated company or joint venture, the Company discontinues recognizing its share of further losses. All intercompany profits have been eliminated in proportion to interests in affiliated companies or joint ventures.
Asset Acquisitions
The Company accounts for acquisitions of legal entities that do not meet the definition of a business under ASC 805 as asset acquisitions. Assets acquired and liabilities assumed are recorded at their relative fair value and no goodwill is recorded. Contingent consideration for assets acquired is measured and is recognized as an expense on the date the contingency occurs.
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Recently Issued Accounting Standards
See discussion in Note 2 to the consolidated financial statements.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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