Quarterly report pursuant to Section 13 or 15(d)

Deposit On Acquisition

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Deposit On Acquisition
9 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
Deposit on Acquisition

NOTE 4 – DEPOSIT ON ACQUISITION

 

In January 2016, the Company started publishing an electronic game called Pocket Starships through an exclusive publishing agreement (the “Publishing Agreement”) with Spectacle Games Publishing (“Spectacle”). The exclusive Publishing Agreement runs for a term of five years, expiring on December 17, 2020. Spectacle is a California corporation, holding the exclusive rights to publish and market Pocket Starships, including the ability to sublicense these rights to other parties, pursuant to an agreement with MMOJoe UG. MMOJoe UG, a German limited liability company (“MMOJoe”) is the owner and developer of all intellectual property that relates or pertains to the real-time, cross-platform, massively multiplayer on-line electronic game know as Pocket Starships.

 

In June 2016, the Company obtained an exclusive option to purchase all of MMOJoe’s assets including but not limited to all assets pertaining to Pocket Starships (the “Option”). Should the Company decide to exercise the Option, it will purchase MMOJoe for cash of $5,000,000 plus $10,000,000 worth of shares of the Company’s common stock, valued at the time of closing of the purchase. This exclusive Option is exercisable by the Company at any time, in the Company’s sole discretion, through December 31, 2020.

 

In exchange for the Option, the Company granted MMOJoe stock options to purchase an aggregate of 3.75 million shares of the Company’s common stock. The stock options are fully vested, exercisable at a price per share of $1.00, $2.50 and $5.00 and will expire starting in December 31, 2017 through December 31, 2019. Total fair value of the options amounted to $471,574 using the Black-Scholes Option Pricing Model.

 

The Company accounted for the entire fair value of $471,574 at grant date as a deposit on acquisition based upon the Company’s determination that the acquisition of MMOJoe will occur on or before June 30, 2017, otherwise, the amount will be reflected as an expense if the acquisition will not occur.