Golden Matrix Group, Inc. - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION - Golden Matrix Group, Inc.	gmgi_ex311.htm
EX-32.2 - CERTIFICATION - Golden Matrix Group, Inc.	gmgi_ex322.htm
EX-32.1 - CERTIFICATION - Golden Matrix Group, Inc.	gmgi_ex321.htm
EX-31.2 - CERTIFICATION - Golden Matrix Group, Inc.	gmgi_ex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2017

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 000-54840

Golden Matrix Group, INC.

(Name of small business issuer in its charter)

Nevada		46-1814729
(State of incorporation)		(I.R.S. Employer Identification No.)

3651 Lindell Road, Ste D131

Las Vegas, NV, 89103

(Address of principal executive offices)

(917) 775-9689

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of March 13, 2017, there were 70,387,906 shares of the registrant’s $0.00001 par value common stock issued and outstanding.

GOLDEN MATRIX GROUP, INC.*

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22

ITEM 4.	CONTROLS AND PROCEDURES	22

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	23

ITEM 1A.	RISK FACTORS	23

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	23

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	24

ITEM 4.	MINE SAFETY DISCLOSURES	24

ITEM 5.	OTHER INFORMATION	24

ITEM 6.	EXHIBITS	25

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Golden Matrix Group. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we,""GMGI" "our," "us," the "Company," refers to Golden Matrix Group, Inc.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GOLDEN MATRIX GROUP, INC.
Consolidated Balance Sheets

	As of			As of
	January 31, 2017			July 31, 2016
	(Unaudited)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,797		$	2,296
Accounts receivable – related party		22,500			10,000
Total current assets		36,297			12,296
TOTAL ASSETS	$	36,297		$	12,296

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	38,154		$	35,945
Accounts payable – related party		241,135			78,447
Advance from shareholders		1,000			1,000
Accrued interest		122,073			259,169
Convertible notes payable, net of discount		85,999			1,163,569
Convertible notes payable, net– in default		100,245			515,845
Convertible notes payable – related party		795,712			-
Derivative liabilities- note conversion features		648,370			1,939,753
Total Current liabilities		2,032,638			3,993,738
TOTAL LIABILITIES	$	2,032,638		$	3,993,738

Shareholder's equity (deficit):
Preferred stock, Series A: $0.00001 par value; 19,999,000 shares authorized; none outstanding		-			-
Preferred stock, Series B: $0.00001 par value; 1,000 shares authorized; 1,000 and 1,000 shares issued and outstanding, respectively		-			-
Common stock: $0.00001 par value; 2,480,000,000 shares authorized; 48,587,906 and 2,597,806 shares issued and outstanding, respectively		486			26
Additional paid in capital		25,265,283			24,709,565
Stock payable		3,360			-
Accumulated other comprehensive loss		(683	)		(683	)
Retained earnings (accumulated deficit)		(27,264,786	)		(28,690,350	)
Total shareholders' equity (deficit)		(1,996,341	)		(3,981,442	)
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)	$	36,297		$	12,296

The accompanying notes are an integral part of these financial statements

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GOLDEN MATRIX GROUP, INC. Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

	Three months ended						Six months ended
	January 31,						January 31,
	2017			2016			2017			2016

Sales- related party	$	30,000		$	-		$	60,000		$	-
Costs and expenses
Accounting and audit fees		27,400			1,836			32,400			5,428
Amortization expense		-			9,649			-			9,649
G&A expenses		50,155			565,714			50,299			781,714
G&A expenses- related party		59,702			-			132,286			-
Management fees		-			60,000			-			90,000
Professional fees		13,958			5,518			23,902			7,164
Total operating expenses		(151,215	)		(642,717	)		(238,887	)		(893,954	)
Loss from operations		(121,215	)		(642,717	)		(178,887	)		(893,954	)

Other income (expense)
Other income		-			21,151			-			21,151
Gain on extinguishment of debt		-			-			806,867			-
Fair value change of derivative liability		337,172			(19,523	)		1,144,313			175,399
Interest on convertible notes		(46,066	)		(1,017,539	)		(346,729	)		(2,593,106	)
Total other income (expense)		291,106			(1,015,910	)		1,604,451			(2,396,555	)

Net Income (Loss)	$	169,891		$	(1,658,627	)		1,425,564		$	(3,290,509	)



Weighted average number of common shares outstanding -Basic		9,935,555			615,289			7,472,027			313,432
Weighted average number of common shares outstanding -Diluted		252,443,800			615,289			248,410,283			313,432
Net income/(loss) per common share – Basic	$	0.02		$	(2.70	)	$	0.19		$	(10.50	)
Net income/(loss) per common share – Diluted	$	0.00		$	-		$	0.01		$	-

The accompanying notes are an integral part of these financial statements

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GOLDEN MATRIX GROUP, INC.
Consolidated Statements of Cash Flows
(Unaudited)

	Six months ended
	January 31,
	2017			2016
Operating activities:
Net Income (Loss)		1,425,564			(3,290,509	)
Adjustment to reconcile net loss to net cash in operating activities
Amortization expense		303,170			2,394,699
Gain from change in fair value of derivative liability		(1,144,313	)		(175,399	)
Gain on extinguishment of debt		(806,867	)		-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(12,500	)		-
(Increase) decrease in loans receivable		-			13,576
(Decrease) increase in accounts payable and accrued liabilities		4,427			(22,136	)
(Decrease) increase in accounts payable – related party		162,688			-
(Decrease) increase in accrued interest		41,332			208,056
Net cash provided (used) in operating activities	$	(26,499	)	$	(871,714	)

Investing activities:
Purchase of intangible assets		-			(140,351	)
Net cash flows used in investing activities		-			(140,351	)

Financing activities:
Bank overdraft		-			35
Proceeds from convertible notes payable		38,000			845,000
Due to related party		-			12,000
Proceeds from loan payable		-			5,030
Common stock issued for asset purchase		-			150,000
Net cash provided by financing activities		38,000			1,012,065

Change in cash and cash equivalents		11,501			-
Cash and cash equivalents at the beginning of the period		2,296			-
Cash and cash equivalents at the end of the period	$	13,797		$	-

Supplementary disclosure for non-cash investing and financing activities
Common stock issued for conversion of debt	$	559,538		$	60,971
Debt discount from derivative liability	$	38,000		$	1,375,000

The accompanying notes are an integral part of these financial statements

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GOLDEN MATRIX GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Golden Matrix Group, Inc. (“GMGI” or “Company”) was incorporated in the State of Nevada on June 4, 2008, under the name Ibex Resources Corp. The Company business at the time was mining and exploration of mineral properties. On August 31, 2009, the Company changed its name to Source Gold Corp. in order to reflect the focus of the Company. In April 2016, the Company changed its name to Golden Matrix Group, Inc., reflected the changing direction of the Company business to software technology.

The accompanying unaudited interim consolidated financial statements of Golden Matrix Group, Inc. (“GMGI” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report for the year ended July 31, 2016 on Form 10-K filed on November 15, 2016.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended July 31, 2016 have been omitted.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.

Cash and Cash Equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Revenues

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.

Foreign Currency Translation

The Company’s functional currency is the US dollar as a substantial part of the Company’s operations is based in Arizona. IRC’s and NBI’s functional currency is the Canadian dollar. The functional currency of SB and Vulture is the US dollar as its activities are in the USA. The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (“SEC”).

Assets and liabilities denominated in a foreign currency are translated into US dollar reporting currency at the exchange rate in effect at the balance sheet date and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in other comprehensive loss.

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Diluted and Basic Loss per Share

Basic loss per share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed similar to basic income per share except that the denominator is increased to include the number of c. Common stock equivalents represent the dilutive effect of the assumed exercise of any outstanding stock equivalents, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

Derivative Instruments

We review the terms of the common stock, warrants and convertible debt we issue to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any are then allocated to the host instruments themselves, usually resulting in those instruments being recorded as a discount from their face value.

Derivatives are measured at their fair value on the balance sheet. Changes in fair value are recorded in the statement of operation.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards 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. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Comprehensive Loss

The Company is required to report comprehensive loss, which includes net loss as well as changes in equity from non-owner sources.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities at fair value. Fair value is defined as 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. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

·	Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

·	Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

·	Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable.

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Our financial instruments include cash, accounts payable and accrued liabilities, notes payable, convertible notes payable, advances from shareholder, and derivative liabilities. The carrying values of these financial instruments approximate their fair value due to their short-term nature. The derivative liabilities are stated at their fair value as a level 3 measurement. The Company used a Black-Scholes model to determine the fair values of these derivative liabilities.

Stock-Based Compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expense related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

Stock based compensation for non-employees is accounted for using the Stock Based Compensation Topic of the FASB ASC 505. We use the fair value method for equity instruments granted to non-employees and will use the Black-Scholes model for measuring the fair value of options, if issued. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

Subsequent Events

The Company evaluated subsequent events through the date these financial statements were issued for disclosure purposes.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation.

Recent Issued Accounting Pronouncements

In May 2014, a pronouncement was issued that creates common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with an option to adopt the standard one year earlier. The new standard is to be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of the new pronouncement on its financial statements.

In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the new pronouncement on its financial statements.

GMGI’s management does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

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NOTE 2 - GOING CONCERN

The accompanying unaudited consolidated financial statements of GMGI have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained a loss from operation of $178,887 for the six months ended January 31, 2017. The Company had a working capital deficit and stockholders’ deficit of $1,996,341 and $1,996,341 respectively, at January 31, 2017. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Without realization of additional capital, it would be unlikely for GMGI to continue as a going concern. GMGI's management plans on raising cash from public or private debt or equity financing, on an as needed basis, and in the longer term, revenues from the gambling business. GMGI's ability to continue as a going concern is dependent on these additional cash financings, and, ultimately, upon achieving profitable operations through the development of its gambling business.

NOTE 3 - CONVERTIBLE NOTES PAYABLES

Convertible notes payable at January 31, 2017 and July 31, 2016 consisted of the following:

	January 31,		July 31,
	2017		2016
Promissory Note #2		30,000		30,000
Promissory Note #31- in default		10,320		23,741
Promissory Note #39 - in default		-		12,969
Promissory Note #42 - in default		430		13,955
Promissory Note #44 - in default		13,400		25,000
Promissory Note #45 - in default		28,285		28,285
Promissory Note #46 - in default		33,000		33,000
Promissory Note #50 - in default		-		313,145
Promissory Note #52		14,810		211,945
Promissory Note #59		54,460		219,460
Promissory Note #68-Related party		795,712		1,045,712
Promissory Note #69		38,000		-
Notes payable, principal	$	1,018,417	$	1,957,212
Debt discount		36,511		(277,798	)
Notes payable, net of discount		981,906		1,679,414
Accrued interest		122,073		259,169
Total notes payable	$	1,103,979	$	1,938,583

Promissory Note #2

On March 19, 2012, the Company received $30,000 cash from the issuance of a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 3,000,000 common shares of the Company.

The Company determined that this Promissory note should be accounted for in accordance with FASB ASC 470-20 which addresses “Accounting for Convertible Securities with Beneficial Conversion Features". The beneficial conversion feature is calculated at its intrinsic value (that is, the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (per share being $0.08), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature recorded cannot be greater than the face value of the note issued.

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Promissory Note #31

On March 17, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $26,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 17, 2015. Any principal amount not paid by the maturity date bears interest at 24% per annum. During the six months ended January 31, 2017, the Company accrued $2,041 (January 31, 2016 $3,206) in interest expense. This note is currently in default.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $42,329 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $8,453(six months ended January 31, 2016 a gain of $0) due to the change in value of the derivative liability during the period, and debt discount of $0 (three months ended October 31, 2015$ 0 ) was accreted to the statement of operations.

During three months ended January 31, 2017, the Company issued 4,733,877 common shares upon the conversion of $13,421 in principal and $6,514 in interest, $28,281 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of January 31, 2017, principal balance of $10,320 (January 31, 2016 $26,500), accrued interest of $5,484 (January 31, 2016 $6,696), debt discount of $0 (January 31, 2016 $0) and derivative liability of $6,000 (January 31, 2016 $53,000) was recorded.

Promissory Note #39

On May 19, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 19, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the six months ended O January 31, 2017, the Company accrued $325 (October 31, 2015 $1,905) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $32,007 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $7,375 (six months ended January 31, 2016 a loss of $6,672) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.

During six months ended January 31, 2017, the Company issued 620,473 common shares upon the conversion of $12,969 in principal and $4,771 in interest, and $15,969 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of January 31, 2017, principal balance of $0 (January 31, 2016 $22,969), accrued interest of $0 (January 31, 2016 $4,636) and derivative liability of $0 (January 31, 2016 $38,282) was recorded.

Promissory Note #42

On June 6, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 6, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the six months ended January 31, 2017, the Company accrued $298 (January 31, 2016 $1,926) in interest expense. This note is currently in default.

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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $33,550 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $3,580 (six months ended January 31, 2016 a loss of $580) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.

During the six months ended January 31, 2017, the Company issued 1,054,799 common shares upon the conversion of $13,525 in principal and $3,466 in interest, $21,253 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of January 31, 2017, principal balance of $430 (January 31, 2017 $23,000), accrued interest of $1,841 (January 31, 2016 $4,472 and derivative liability of $286 (January 31, 2016 $38,333) was recorded.

Promissory Note #44

On July 2, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 2, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the six months ended January 31, 2017, the Company accrued $1,282 (January 31, 2016 $2,016) in interest expense. This note is currently in default.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $40,725 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $12,516 (six months ended January 31, 2016 a gain of $1) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.

During the six months ended January 31, 2017, the Company issued 1,531,458 common shares upon the conversion of $11,600 in principal and $2,183 in interest, $10,567 of the derivative liability was re-classified as additional paid in capital upon conversion

As of January 31, 2017, principal balance of $13,400 (January 31, 2016 $25,000), accrued interest of $5,427 (January 31, 2016 $4,334), and derivative liability of $21,916 (January 31, 2016 $41,666) was recorded.

Promissory Note #45

On July 9, 2014, the Company arranged a debt swap for $75,000 which was transferred to LG Capital Funding, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on July 9, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. The note also contains customary events of default. During the six months ended January 31, 2017, the Company accrued $2,282 (January 31, 2016 $3,045) in interest expense. This note is currently in default.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $202,937 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

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During the six months ended January 31, 2017, the Company recorded a gain of $22,628 (six months ended January 31, 2016 a loss of $11,407) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $75,000 was accreted to the statement of operations.

As of January 31, 2017, principal balance of $28,285 (January 31, 2016 $32,000) accrued interest of $9,846 (January 31, 2016 $5,725), and a derivative liability of $28,284 (January 31, 2016 $79,812) was recorded.

Promissory Note #46

On July 9, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $33,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 9, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the six months ended January 31, 2017, the Company accrued $2,662 (January 31, 2016 $1,331) in interest expense. This note is currently in default.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $130,556 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $26,400 (six months ended January 31, 2016 a gain of $0) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $33,000 was accreted to the statement of operations.

As of October 31, 2016, principal balance of $33,000 (January 31, 2016 $33,000), accrued interest of $10,915 (January 31, 2016 $5,620), and derivative liability of $33,000 (January 31, 2016 $66,000) was recorded.

Promissory Note #50

On December 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On April 27, 2016, the Company transferred the note to N600PG, LLC. (“N600PG”).

On September 22, 2016, the Company entered into a Cancellation and Release Agreement with Direct Capital Group, Inc. (“Direct”) and N600PG, LLC. (“N600PG”). As of September 22, 2016, principal balance of $313,145 accrued interest of $96,092 was recorded.

In terms of Cancellation and Release Agreement, Direct and N600PG agreed to cancel the convertible promissory note with the Company. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.

Promissory Note #52

On April 30, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 30, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par$0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. This note is currently in default.

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A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

On April 30, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.

On January 19, 2016, the note was reassigned to Rockwell Capital Partners. At any time the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the lowest closing price on any day with a fifteen day look back”. On 18th April 2016, Rockwell Capital Partners reassigned $165,000 of the original note back to Direct Capital Group, Inc.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $479,999 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $264,700 (January 31, 2016 $0) due to the change in value of the derivative liability during the period, and debt discount of $0 (six months ended January 31, 2016 $0) was accreted to the statement of operations.

During the six months ended January 31, 2017, the Company issued 3,933,334 common shares upon the conversion of $32,135 in principal, and $82,485 of the derivative liability was re-classified as additional paid in capital upon conversion.

On September 22, 2016, the Company entered into a Cancellation and Release Agreement with Direct Capital Group, Inc. (“Direct”). In terms of Cancellation and Release Agreement Direct agreed to cancel the convertible promissory note with the Company totaling $198,530. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.

As of January 31, 2017, principal balance of $14,810 (January 31, 2016 $236,000) and accrued interest of $3,689 (January 31, 2016 $21,252), and derivative liability of $34,319 (January 31, 2016 $471,995) was recorded.

Promissory Note #59

On July 31, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 31, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On July 21, 2016, $25,000 was reassigned to Istvan Elek. At any time the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the lowest closing price on any day with a fifteen day look back”. This note is currently in default.

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On July 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.

On September 22, 2016, the Company entered into a Cancellation and Release Agreement with Direct Capital Group, Inc. (“Direct”). In terms of Cancellation and Release Agreement Direct agreed to cancel the convertible promissory note with the Company totaling $183,157. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.

As of January 31, 2017, principal balance of $54,460 (October 31, 2015 $240,000) and accrued interest of $2,014 (January 31, 2016 $9,679), and derivative liability of $23,171 (January 31, 2016 $0) was recorded

Promissory Note #68

On March 1, 2016 the Company entered into a convertible promissory note with Luxor Capital, LLC in the amount of $2,374,712. The promissory note is unsecured, bears interest at 6% per annum, and matures on March 1, 2017. During the six months ended January 31, 2017, the Company accrued $31,458 (January 31, 2016 $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $2,330,680 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months ended January 31, 2017, the Company recorded a gain of $830,072 (six months ended January 31, 2016 $0) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $1,662,243 was accreted to the statement of operations.

During the six months ended January 31, 2017, the Company issued 34,113,061 common shares upon the conversion of $250,000 in principal, and $50,399 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of January 31, 2017, principal balance of $795,712 (January 31, 2017 $0) and accrued interest of $82,027 (January 31, 2017 $0), and derivative liability of $413,269 (January 31, 2016 $0) was recorded.

Promissory Note #69

On January 11, 2017 the Company entered into a convertible promissory note with in the amount of $38,000. The promissory note bears interest at 8% per annum, and matures on October 28, 2017. During the six months ended January 31, 2017, the Company accrued $92 (January 31, 2016 $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $61,883 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

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During the six months ended January 31, 2017, the Company recorded a loss of $24,240 (six months ended January 31, 2016 $0) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $38,000 was accreted to the statement of operations.

As of January 31, 2017, principal balance of $38,000 (January 31, 2017 $0) and accrued interest of $92 (January 31, 2017 $0), and derivative liability of $86,123 (January 31, 2016 $0) was recorded.

NOTE 4 - DERIVATIVE LIABILITIES

The Company issued financial instruments in the form of convertible notes with embedded conversion features. Some of the convertible notes payable have conversion rates, which are indexed to the market value of the Company’s stock price.

During the six months ended January 31, 2017 and 2016, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $61,883 and $2,023,606 respectively. During the six months ended January 31, 2017 and 2016, $349,421 and $73,628 respectively of convertible notes payable principal and accrued interest was converted into common stock of the Company. For the six months ended January 31, 2017 and 2016, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $208,954 and $46,036 respectively, was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the six months ended January 31, 2017 and 2016, the Company recognized a gain of $1,146,313 and $175,399 respectively, based on the change in fair value (mark-to-market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.

These derivative liabilities have been measured in accordance with fair value measurements, as defined by ASC 820. The valuation assumptions are classified within Level 1 and Level 2 inputs. The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above.

The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above:

	January 31,			July 31,
	2017			2016
Balance, beginning of period	$	1,939,753		$	322,029
Initial recognition of derivative liability		61,883			3,754,182
Conversion of derivative instruments to Common Stock		(208,954	)		(5,095,929	)
Mark-to-Market adjustment to fair value		(1,146,312	)		2,959,473
Balance, end of period	$	646,370		$	1,939,753

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, we may be party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not involved currently in legal proceedings other than those detailed below that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

NOTE 6 - RELATED PARTY TRANSACTIONS

All related party transactions have been recorded at the exchange value which was the amount of consideration established and agreed to by the related parties.

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On February 22, 2016, the Company entered into an Asset Purchase Agreement with Luxor Capital, LLC, which is wholly owned by Anthony Goodman. The Company purchased a Certain Gaming IP, along with the “know how” of that Gaming IP from Luxor. Pursuant to the Asset Purchase Agreement, 11,112 shares of common stock have been issued to Luxor Capital, LLC and its designed party.

On April 1, 2016, the Company entered into a Services Agreement with Articulate Pty Ltd, which is wholly owned by the director of the Company, for consulting services. Pursuant to the agreement Articulated would receive $4,500 per month ending for services rendered plus reimbursement of the Company's expenses. The agreement may be terminated by either party upon 30 days written notice. During six months ended January 31, 2017 and 2016, general and administrative expense related to this service was $132,286 and $0, respectively. As of January 31, 2017, the Company has a $152,668 payable to Articulate.

On June 1, 2016, the Company entered a distribution usage rights agreement with Globaltech Software Services LLC. (“Globaltech”), a company in which the chief executive officer has an interest, the Company agreed to provide the rights of usage to its Credit Management system, Social Gaming systems and Technology. During six months ended January 31, 2017 and 2016, revenue from Globaltech was $60,000 and $0, respectively. As of January 31, 2017, the Company had a $22,500 accounts receivable to Globaltech.

NOTE 7 - EQUITY

Preferred Stock

The Company authorized the creation of 20,000,000 shares of it $0.00001 par value preferred stock.

On August 10, 2015, the Company’s Board of Directors authorized the creation of 1,000 shares of Series B Voting Preferred Stock. The holder of the shares of the Series B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter or action that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series B Voting Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Company’s (i) common stock, and (ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of the Company regarding each and every matter submitted to the shareholders of the Company for approval.

On August 10, 2015, the Company filed a Certificate of Designation with the Nevada Secretary of State creating the 1,000 shares of Series B Voting Preferred Stock

On August 14, 2015, the Company issued 1,000 shares of Series B Voting Preferred Stock to Santa Rosa Resources, representing 100% of the total issued and outstanding shares of the Company’s Series B Voting Preferred Stock.

On April 3, 2016, the Company cancelled 1,000 shares of Series B Voting Preferred Stock to Santa Rosa Resources and a new certificate issued in the name of Luxor Capital LLC in the amount of 1,000 Series B shares.

As of January 31, 2017, 19,999,000 Series A preferred shares and 1,000 Series B preferred shares of par value $0.00001 were authorized, of which 0 Series A shares were issued and outstanding, ( 0 shares as of October 31, 2015), 1,000 Series B shares were issued and outstanding, (1,000 preferred shares issued and outstanding as of January 31, 2016).

Common Stock

The Company authorized the creation of 2,480,000,000 shares of its $0.00001 par value common stock.

On October 15, 2015, the Company effectuated a 1 for 2,000 reverse stock split, thereby reducing the issued and outstanding shares of common stock from 3,472,433,130 prior to the reverse split to 1,736,217 following the reverse split. An additional 1,043 shares were issued due to no fractional shares used as a result of the reverse stock split.

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On November 6, 2015, the Company purchased all data and rights to the “We Buy Gold” website from Santa Rosa Resources. The Company issued 223 shares of common stock on November 6, 2015 and 223 shares of common stock on December 7, 2015, with a total value equal to $1,800,000.

On March 9, 2016, the Company’s Board of Directors approved 1 for 1,500 reverse split for the Company’s authorized, issued and outstanding shares of common stock. The reverse stock split was effective on April 7, 2016 upon approval of shareholders holding a majority of the voting stock.

On December 5, 2016, the Company’s Board of Directors approved 1 for 150 reverse split for the Company’s authorized, issued and outstanding shares of common stock, reducing the number of authorized shares to 19,866,667. The reverse stock split was effective on January 9, 2017 upon approval of shareholders holding a majority of the voting stock. On January 17, 2017, the authorized number of shares of common stock was increased to 2,480,000,000.

During the six months ended January 31, 2017, the Company issued 46,341,281 shares of common stock for the conversion of various convertible notes of $333,650 in principal and $16,934 in interest (see Note 4).

As of January 31, 2017, 2,480,000,000 common shares of par value $0.00001 were authorized, of which 48,587,906 shares were issued and outstanding.

NOTE 8 - CONCENTRATION

The Company’s revenues for the six months ended January 31, 2017 were from one related party. As of January 31, 2017, the aggregate amount due from this related party was $22,500.

All of the Company’s revenues for the six month ended January 31, 2017 were from Globaltech Software Services LLC, a Company owned by the chief executive officer in which the Company agreed to provide the rights of usage to its credit management system, social gaming systems and technology.

NOTE 9 - SUBSEQUENT EVENTS

On March 3, 2017, the Company’s Board of Director approved the engagement of M&K CPAS, PLLC (“M&K”), as the Company’s new independent registered public accounting firm.

Subsequent to January 31, 2017, the Company issued 21,800,000 common shares to Rockwell for conversion of $18,171 note principal and $ 379 accrued interest.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

The following discussion and analysis summarizes the significant factors affecting our consolidated results of operations, financial condition and liquidity position for the three months ended January 31, 2017. This discussion and analysis should be read in conjunction with our audited financial statements and notes thereto included in our Annual Report on Form 10-K for our year-ended July 31, 2017 and the consolidated unaudited financial statements and related notes included elsewhere in this filing. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward looking statements, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources. Investors are cautioned that such forward-looking statements involve risks and uncertainties including without limitation the following: (i) our plans, strategies, objectives, expectations and intentions are subject to change at any time at our discretion; (ii) our plans and results of operations will be affected by our ability to manage growth; and (iii) other risks and uncertainties indicated from time to time in our filings with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terminology such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential,’’ or ‘‘continue’’ or the negative of such terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We are under no duty to update any of the forward-looking statements after the date of this Report.

Overview

Golden Matrix Group, Inc. (“GMGI” or “Company”) was incorporated in the State of Nevada on June 4, 2008, under the name Ibex Resources Corp. The Company business at the time was mining and exploration of mineral properties. In October 2009, the Company changed its name to Source Gold Corp. remaining in the business of acquiring exploration and development stage mineral properties. In April 2016, the Company changed its name to Golden Matrix Group, Inc., changing the direction of the Company business to focus on software technology.

On February 18, 2016, Edward Aruda, our Chief Executive Officer, Secretary, Treasurer and Director tendered his resignation as CEO, Secretary and Treasurer. On April 8, 2016 Edward Aruda announced his resignation as a Director of the Company. Mr. Aruda’s resignation was not due to any disagreement on any matter relating to the operations, policies, or practices of the Company. Also on February 18, 2016, the Board of Directors appointed Mr. Anthony Brian Goodman Chief Executive Officer, President, Secretary, Treasurer, and Chairman of the Board of Directors, and appointed Ms. Weiting Feng as Chief Financial Officer and Director of the Company.

On February 22, 2016, the Company entered into an Asset Purchase Agreement with Luxor Capital, LLC, a Nevada limited liability corporation. The Company purchased a certain Gaming IP, along with the “know how” of that Gaming IP from Luxor. In consideration for the purchase, the Company agreed to issue 11,112 shares of the Company’s Common Stock and a Convertible Promissory Note in the amount of $2,374,712. On February 26, 2016, 11,112 shares were issued to Luxor Capital, LLC.

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On March 9, 2016, the Company's Board of Directors approved 1 for 1,500 reverse split for the Company's issued and outstanding shares of common stock. The reverse stock split was effective on April 7, 2016 upon approval of shareholders holding a majority of the voting stock.

On April 1, 2016, the Company entered a services agreement with Articulate Pty Ltd (“Articulate”), to assist the Company in developing, marketing, and supporting services.

On May 25, 2016, the Company entered into a Cancellation and Release Agreement with the Note Holders, whom held notes pursuant to agreements made with previous management, in the amount totaling $ 2,693,697, and in exchange for the return of mining claims held by the Company.

On June 1, 2016, the Company entered a distribution usage rights agreement with Globaltech Software Services LLC. (“Globaltech”), the Company agreed to provide the rights of usage to its Credit Management system, Social Gaming systems and Technology. This agreement not only brings operating revenue to the Company, but also solidifies the expertise in the social gaming market.

On September 22, 2016, the Company entered into a Cancellation and Release Agreement with the Note Holders, whom held notes pursuant to agreements made with previous management, in the amount totaling $709,336, and in exchange for the return of mining claims held by the Company. The Company no longer has any mining Assets. All Mining Claims and Assets were disposed of, or transferred in exchange of the cancellation of Convertible Notes held by various Note Holders.

On January 9, 2017, the Company effectuated a 1 for 150 reverse stock split, thereby reducing the issued and outstanding shares of common stock to 10,164,065 following the reverse split.

On January 17, 2017, the authorized number of shares of common stock was increased to 2,480,000,000.

On January11, 2017, the Company entered into a convertible promissory note with Power Up Lending Group Ltd (“Power Up”) for $38,000. The note bears interest at 8% and matures on October 28, 2017.

Plan of Operation

GMGI has changed the direction of the Company business to focus on software technology.

Whilst there are a number of companies that provide similar products for social online gaming operators, the Company has unique IP and is focused on the Asian market. The unique technology, company’s location, focused resources and experience in this market provide the Company with a distinct advantage over other company’s located in other parts of the world and having limited experience in Asia.

Results of Operations

Three months ended January 31, 2017 compared to the three months ended January 31, 2016.

Revenues

We generated $30,000 revenues during the three months ended January 31, 2017 compared to $0 for the three months ended January 31, 2016. Revenues for the three months ended January 31, 2017 was related to the social online gaming systems provided to customers.

Operating Expenses

Operating expenses for the three months ended January 31, 2017 and January 31, 2016 were $151,215 and $642,717 respectively. Operating expenses consisted primarily of consulting fees, management fees, legal fees and accounting and audit fees. The decrease was primarily attributable to the change of business direction from mining to software technology.

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Interest Expense

During the three months ended January 31, 2017 and 2016, interest expense was $46,066 and $1,017,539, respectively. The decrease of interest expense was mainly due to cancellation on convertible debt.

Unrealized Gain on Derivative Liabilities - Note Conversion Feature

Unrealized gain on derivative liabilities - note conversion feature was $337,172 for the three months ended January 31, 2017 compared to loss of $19,523 for the three months ended January 31, 2016. The change was primarily resulted from the fluctuation of the Company’s stock price.

Net Loss

We had net income of $169,891 and a net loss of $1,658,627 for the three months ended January 31, 2017 and 2016, respectively. The decrease of net loss in 2017 was as a result of the items discussed above.

Six months ended January 31, 2017 compared to the six months ended January 31, 2016.

Revenues

We generated $60,000 revenues during the six months ended January 31, 2017 compared to $0 for the six months ended January 31, 2016. Revenues for the six months ended January 31, 2017 was related to the social online gaming systems provided to customers.

Operating Expenses

Operating expenses for the six months ended January 31, 2017 and January 31, 2016 were $238,887 and $893,954, respectively. Operating expenses consisted primarily of consulting fees, management fees, legal fees and accounting and audit fees. The decrease was primarily attributable to the change of business direction from mining to software technology.

Interest Expense

During the six months ended January 31, 2017 and 2016, interest expense was $346,729 and $2,593,106, respectively. The decrease of interest expense was mainly due to cancellation on convertible debt.

Unrealized Gain on Derivative Liabilities - Note Conversion Feature

Unrealized gain on derivative liabilities - note conversion feature was $1,144,313 for the six months ended January 31, 2017 compared to gain of $175,399 for the six months ended January 31, 2016. The change was primarily resulted from the fluctuation of the Company’s stock price.

Net Loss

We had a net income of $1,425,564 and a net loss of $3,290,509 for the six months ended January 31, 2017 and 2016 respectively. The decrease of net loss in 2017 was as a result of the items discussed above.

Liquidity and Capital Resources

The Company had $13,797 in cash at January 31, 2017.

During the six months ended January 31, 2017, cash provided (used) in operating activities was $26,499 compared to $871,714 for the six months ended January 31, 2016. The change in the amounts of cash used for operating activities was primarily due to the noncash expenses relating to the interest on convertible notes.

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During the six months ended January 31, 2017 cash used in investing activities was $0 compared to $140,351 for the six months ended January 31, 2016.

During the six months ended January 31, 2017, cash provided by financing activities was $38,000 compared to $1,012,065 for the six months ended January 31, 2016.

Material Events and Uncertainties

Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable development stage companies.

There can be no assurance that we will successfully address such risks, expenses and difficulties.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of July 31, 2016, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on November 15, 2016 for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company has no known legal disputes at this time.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1. Quarterly Issuances:

On November 28, 2016, the holder of a convertible note converted $2,050 of principal and $991 of interest into 405,432 shares of common stock.

On November 29, 2016, the holder of a convertible note converted $3,000 of principal and $579 of interest into 397,626 shares of common stock.

On November 30, 2016, the holder of a convertible note converted $2,151 of principal and $1,042 of interest into 425,732 shares of common stock.

On December 6, 2016, the holder of a convertible note converted $2,140 of principal and $1,045 of interest into 424,732 shares of common stock.

On December 7, 2016, the holder of a convertible note converted $3,000 of principal and $584 of interest into 398,210 shares of common stock.

On January 23, 2017, the holder of a convertible note converted $375 of principal into 500,000 shares of common stock.

On January 24, 2017, the holder of a convertible note converted $584 of principal and $304 of interest into 507,502 shares of common stock.

On January 26, 2017, the holder of a convertible note converted $375 of principal into 500,000 shares of common stock.

On January 30, 2017, the holder of a convertible note converted $775 of principal into 500,000 shares of common stock.

On January 30, 2017, the holder of a convertible note converted $250,000 of principal into 34,113,061 shares of common stock.

On January 31, 2017, the holder of a convertible note converted $3,360 of principal into 2,400,000 shares of common stock.

On January 31, 2017, the holder of a convertible note converted $3,016 of principal and $1,585 of interest into 2,300,260 shares of common stock.

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2. Subsequent Issuances:

On February 3, 2017 the holder of a convertible note converted $3,000 of principal into 2,400,000 shares of common stock.

On February 8, 2017 the holder of a convertible note converted $2,470 of principal into 2,600,000 shares of common stock.

On February 10, 2017 the holder of a convertible note converted $2,080 of principal into 2,600,000 shares of common stock.

On February 16, 2017 the holder of a convertible note converted $1,820 of principal into 2,600,000 shares of common stock.

On February 21, 2017 the holder of a convertible note converted $2,100 of principal into 3,000,000 shares of common stock.

On February 27, 2017 the holder of a convertible note converted $1,800 of principal into 3,000,000 shares of common stock.

On March 3, 2017 the holder of a convertible note converted $1,541 of principal and $379 of interest into 3,200,000 shares of common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no senior securities outstanding.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Number		Exhibit Description

3.1		Articles of Incorporation of Golden Matrix Group, Inc.*

3.2		Bylaws of Golden Matrix Group, Inc.*

31.1		Certificate of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certificate of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certificate of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certificate of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

___________

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GOLDEN MATRIX GROUP, INC.

Dated: March 16, 2017	By:	/s/ Anthony Goodman
		Anthony Goodman
		President, Chief Executive Officer, Secretary, Treasurer and Chairman

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Dated: March 16, 2017	By:	/s/ Anthony Goodman
	Name:	Anthony Goodman
	Its:	Chief Executive Officer

Dated: March 16, 2017	By:	/s/ Weiting Feng
	Name:	Weiting Feng
	Its:	Chief Financial Officer

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