SocialPlay USA, Inc. - FORM 10-K

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - SocialPlay USA, Inc.	ex32_1.htm
EX-31.2 - EXHIBIT 31.2 - SocialPlay USA, Inc.	ex31_2.htm
EX-31.1 - EXHIBIT 31.1 - SocialPlay USA, Inc.	ex31_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2017

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

	For the transition period from _________ to ________

	Commission file number: 333-193736

SocialPlay USA, Inc.

(Exact name of registrant as specified in its charter)

Nevada	46-4412037
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8275 S. Eastern Avenue, Suite 200, Las Vegas, NV	89123
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code: (702) 430-2850

Securities registered under Section 12(b) of the Exchange Act:
Title of each class	Name of each exchange on which registered
none	not applicable
Securities registered under Section 12(g) of the Exchange Act:
Title of class
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 [ ] No [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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

[ ] Large accelerated filer

[ ] Non-accelerated filer

[ ] Accelerated filer

[X] Smaller reporting company
[ ] Emerging growth company

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed third fiscal quarter. $1,771,561 as of September 30, 2017

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 11,870,003 as of May 21 2018.

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SocialPlay USA, Inc.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	3
Item 1A	Risk Factors	5
Item 1B	Unresolved Staff Comments	5
Item 2.	Properties	5
Item 3.	Legal Proceedings	6
Item 4.	Mine Safety Disclosures	6
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6	Selected Financial Data	8
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 8.	Financial Statements and Supplementary Data	11
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	12
Item 9A.	Controls and Procedures	12
Item 9B.	Other Information	13
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	14
Item 11.	Executive Compensation	16
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	18
Item 13.	Certain Relationships and Related Transactions, and Director Independence	19
Item 14.	Principal Accountant Fees and Services	19
PART IV
Item 15.	Exhibits, Financial Statement Schedules	20

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PART I

Item 1. Business

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.

Description of Our Company

Company Overview

We were incorporated in the State of Nevada on December 31, 2013 as Artesanias Corp. Our original business plan involved distribution of the arts and crafts of the indigenous tribes of Panama via the Internet. On January 20, 2015, we underwent a change in control when our former majority shareholder and sole officer, Jose Soto, sold his controlling interest and resigned after appointing our current CEO and Director, Chitan Mistry, and our former CFO and Director, Lucie Lettelier. Following the change in control, we are no longer pursuing our original business plan. On June 12, 2015, the Board of Directors of the Company changed the name from Artesanias Corp. to SocialPlay USA, Inc. to reflect the business focus of the Company.

On April 27, 2015, we entered into an Exclusive License Agreement (the “Agreement”) with Social Play, Inc. (“Social Play”). Under the Agreement, we have been granted the exclusive rights within the U.S. and Canada to develop, market and sell products and services based upon Social Play’s patent-pending “SP Cloud Goods” system. SP Cloud Goods is cloud-based game hosting and management system where video game developers can add and remove virtual goods from the game, manage players, manage virtual store pricing, and view vital game and player statistics. Using this system, game developers can affect their games in real-time, without the need to rebuild or republish the game. The SP Cloud Goods intellectual property also includes a system for game developers to collect payments for virtual goods sold to players in their games, as well as a marketplace component that will allow advertisers and game developers to choose where, when, and how advertisements are placed in games. The system will also facilitate the transfer of funds from advertisers to game developers.

The Agreement runs for an initial term of five (5) years, with an optional extension for an additional five years. In consideration for the license, we agreed to issue Social Play 1,000,000 (200,000 after reverse split) shares of common stock and an additional 1,000,000 (200,000 after reverse split) shares on each anniversary of the Agreement for so long as it is in effect. Further, we agreed to make cash payments to Social Play in the total amount of $120,000, payable in monthly payments of not less than $20,000 until paid in full.

On August 22, 2016, the board of directors appointed Robert Rosner as our new President, CEO, CFO and Director. Following these appointments, the board accepted the resignation of Chitan Mistry as our former sole officer and director.

Letter of Intent with Spot and Play, Inc.

On March 11, 2017, we entered into a binding Letter of Intent (the “LOI”) with Spot and Play, Inc. (“Spot and Play”) and its sole shareholder, Karthik Mani. Spot and Play is developing the “Spot and Pay” application, which provides a way to centralize payment or donate money using a unique business code in form of a visual code at location, or using business name if remote. The LOI contemplates our acquisition of up to 100% of Spot and Play for a total purchase price of $1,000,000. Our initial investment will consist of $300,000 in cash, to be paid for a 30% ownership interest in Spot and Play. These funds are to be paid as follows: (i) $50,000 to be paid upon execution of the LOI, (ii) an additional $100,000 to be paid upon certain development milestones for Spot and Play’s business, and no later than 15 days after the execution of a definitive agreement, and (iii) the final $150,000 upon Spot and Play’s achievement of certain additional milestones, and no later than 75 days after the execution of a definitive agreement.

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Further, we will be granted the exclusive option to purchase the remaining 70% of Spot and Play to be paid as follows: (i) issuance of shares of our common stock valued at $200,000, no later than 150 days from execution of a definitive agreement, in order to purchase an additional 19% of Spot and Play, and (ii) issuance of shares of our common stock valued at $500,000, no later than 180 days from execution of a definitive agreement, in order to purchase the remaining 51% of Spot and Play. Shares issued as purchase consideration will be valued based on the five-day average trading price of our common stock immediately preceding their issuance. Shares to be issued as consideration for our acquisition of Spot and Play will be subject to a one (1) year lock-up, with certain leak-out restrictions on their re-sale thereafter. Upon our acquisition of 100% of the ownership interests in Spot and Play, Mr. Mani will be granted a royalty based on the gross profits of Spot and Play, with specific royalty terms to be negotiated.

On April 9, 2018, we entered into a definitive Share Exchange and Funding Agreement (the “Agreement”) with Spot and Pay, Inc., a Nevada corporation (“Spot and Pay”). Under the Agreement, the Company is acquiring a 90% ownership stake in Spot and Pay.

Under the Agreement, we acquired 90% of the outstanding capital stock of Spot and Pay from its founder and sole shareholder, Karthikeyan Mani. In exchange, the Company has agreed to issue Mr. Mani 500,000 shares of the common stock of the Company. The Company has agreed to provide a total of $300,000 in funding for development of the Spot & Pay platform. The $300,000 includes $50,000 paid previously to Spot and Pay, together with an additional $250,000 to be paid in one or more tranches over the next 180 days. The Spot & Pay platform as developed after the Agreement will be considered work-for-hire belonging to SocialPlay USA, Inc. Mr. Mani and Spot and Pay will use their best efforts to develop the mobile payment platform, with Mr. Mani to be bound by a two-year non-competition agreement following the conclusion of such efforts. In the event that the Company fails to fund the full $300,000 within 180 days from the Agreement, the Spot and Pay shares acquired by the Company and the Company’s shares issued to Mr. Mani will be returned in part based on a sliding scale set forth in the Agreement.

The Company's software development plan has evolved to include a substantially more robust proprietary platform wallet feature that will allow users to create their own wallet so that they may buy and sell bitcoin and other cryptocurrencies directly from the Spot&Pay platform. It also provides seamless abilities to transfer money within the Spot&Pay user network instantly from one account to another without any processing delays. As part of its strategy going forward, SocialPlay will focus significant development efforts on the integration of cryptocurrency and blockchain technologies into its product offerings.

Working with Spot and Pay, we have recently integrated Bitcoin payments into the Spot&Pay mobile payment platform. Bitcoin is the first digital currency to be added to the existing Spot&Pay payment system infrastructure and allows users an additional choice when it comes to paying for goods and services. In addition to the current method of paying by credit card or direct debit, users can scan a QR code and choose the Bitcoin payment option on the checkout screen. If Bitcoin is selected, Spot&Pay will connect to our gateway and generate the URL for the user to complete the transaction by opening their Bitcoin wallet and providing payment for the purchase.

The Spot&Pay platform is now integrated with Bitpay, a leading Bitcoin payment gateway and digital currency wallet service and is available on both IOS and Android apps. As the digital currency market continues to grow, Spot and Pay plans to add other cryptocurrencies such as Ethereum, Ripple, and Speedcoin options to its payment solutions.

Additionally, we are in the initial stages of planning and developing our own reward based cryptocurrency, which will form the basis of a planned strategic User Loyalty Program.

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Letter of Intent with Friendship Socks, Inc.

On May 30, 2017, we entered into a binding Letter of Intent (the “LOI”) with Friendship Socks, Inc., a British Columbia corporation (“Friendship Socks”). Friendship Socks is a company that manufactures a line of unique designer socks in the USA and markets its products online. The company leverages social media to connect people through the gifting of a pair of socks. The LOI contemplates our acquisition of a 33% ownership interest in Friendship Socks for a total purchase price of $150,000. Our initial investment will consist of $50,000 in cash to be delivered immediately for an 11% ownership interest in Friendship Socks. Upon the parties’ execution of a definitive acquisition agreement, we have agreed to acquire an additional 11% interest in exchange for an additional $50,000 upon Friendship Socks achievement of certain business milestones within 30 days of the execution of the definitive agreement. The final 11% ownership interest will be acquired for a final $50,000 upon Friendship Socks achievement of certain additional business milestones within 60 days of the execution of the definitive agreement. Upon completion of all payments as set forth above, Friendship Socks shall immediately issue sufficient shares of its capital in the name of the Company equal to 33% of its issued and outstanding stock. Should the definitive acquisition agreement not be entered into, we shall receive 11% equity interest in Friendship Socks as a result of the initial $50,000 Investment. In the event that the definitive agreement is executed but Friendship Socks does not achieve the specified milestones, we will have the option to waive the milestones and proceed with acquisition of the additional 22% ownership interest or, in the alternative, to terminate the agreement without penalty. Finally, the LOI specifies that will have the right of first refusal with regard to any additional equity investment, loan, or other financing for Friendship Socks. On November 8, 2017 we advanced $30,000 to Friendship Socks.

Although the agreements with Spot and Play and Friendship Socks have not been extended in writing or amended, the parties to both agreements remain verbally committed to moving forward, and we are working toward completing these acquisitions.

Employees

Other than our officer and director, Robert Rosner, we currently have no other employees.

Compliance with Environmental Laws

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We do not own or lease any real property. Our sole officer and director provides office space free of charges.

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Item 3. Legal Proceedings

We are not currently involved in any legal or administrative proceedings, and we are not aware of any pending or potential legal or administrative actions.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is currently quoted on the OTC - Pink tier of the electronic quotation system operated by OTC Markets Group, Inc. under the symbol “SPLY.”

The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by OTC Markets Group, Inc. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Year Ending December 31, 2017
Quarter Ended	High $	Low $
December 31, 2017	$2.69	$0.32
September 30, 2017	$1.08	$0.37
June 30, 2017	$1.25	$0.48
March 31, 2017	$1.45	$0.54

Fiscal Year Ending December 31, 2016
Quarter Ended	High $	Low $
December 31, 2016	$0.80	$0.81
September 30, 2016	$1.13	$0.33
June 30, 2016	$1.69	$0.51
March 31, 2016	$2.20	$0.26

As of June 1, 2018, the last trading price of our common stock was $0.64 per share

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.

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In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Outstanding Options, Warrants or Convertible Debt

We have no outstanding options or warrants. For a description of our outstanding convertible debt, please see the discussion under Liquidity and Capital Resources.

Holders of Our Common Stock

As of June 1, 2018 there were 11,870,003 shares of our common stock issued and outstanding held by 10 stockholders of record. Our transfer agent is Globex Transfer, LLC, located at 780 Deltona Blvd., Suite 202, Deltona, FL 32725. Their telephone number is (813) 344-4490.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where after giving effect to the distribution of the dividend:

1.	we would not be able to pay our debts as they become due in the usual course of business, or;
2.	our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

We have not adopted any policy regarding payment of dividends. We did not declare any dividends in the fiscal year ended December 31, 2016, and we do not plan to declare any dividends in the foreseeable future.

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Securities Authorized for Issuance under Equity Compensation Plans

We have not established any equity compensation plans authorizing security issuances.

Recent sales of unregistered securities

1. On December 31, 2013, we issued a total of 3,000,000 shares of $0.001 par value common stock to Jose Soto, founder and former sole officer and former sole director, for a total amount of $20,000 in cash.

2. During the last quarter of 2015, we issued 200,000 shares of common stock, valued at $510,000, pursuant to the Exclusive License Agreement (the “Agreement”) with Social Play, Inc. regarding the “SP Cloud Goods” system.

3. On February 17, 2016, we issued 50,000 shares of common stock to Ten West Holding, Inc. as compensation under a Corporate Advisory Services Agreement.

4. On April 15, 2016, we issued 50,000 shares of common stock to Ten West Holding, Inc. as compensation under a Corporate Advisory Services Agreement.

5. On April 3, 2017, we issued 50,000 shares of common stock to Ten West Holding, Inc. as compensation under a Corporate Advisory Services Agreement.

6. As discussed in Liquidity and Capital Resources herein, we have issued a series of Convertible Promissory Notes to CMGT, Inc. (“CMGT”), each of which has been consolidated into a new Convertible Promissory Note issued January 11, 2016.

Each of the issuances set forth above did not involve any public offering of securities and was exempt from registration under Section 4(2) of the Securities Act.

Item 6. Selected Financial Data

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Years Ended December 31, 2017 and 2016

We have not earned any revenues since our inception. During the fiscal year ended December 31, 2017, we incurred operating expenses of $228,731, which consisted of legal and professional fees of $43,364, advertising and promotion of $90,998, consulting fees for investor relations of $51,059, transfer agent fees of $19,985, and other operating expenses of $20,868. In addition, we incurred interest and bank charges of $51,387, accretion of discount on convertible notes of $150,746, day one derivative loss of $30,579, licensing fee of $120,000, a gain on extinguishment of debt of $550,962, and a loss on change in the fair value of derivatives in the amount of $423,908. Our net loss for the year ended December 31, 2017 was $451,932.

During the fiscal year ended December 31, 2016, we incurred operating expenses of $338,360, which consisted of legal and professional fees of $44,188, advertising and promotion of $5,000, consulting fees for investor relations of $245,087, transfer agent fees of $19,339, directors’ fees and other charges of $15,000, and other operating expenses of $9,746. In addition, we incurred a gain as a result of forgiveness of debt of $62,500, interest and bank charges of $29,170, accretion of discount on convertible notes of $52,512, licensing fee of $228,000, a gain on extinguishment of debt of $11,462, and a loss on change in the fair value of derivatives in the amount of $18,819. Our net loss for the year ended December 31, 2016 was $592,899.

Our results of operations for the fiscal year ended December 31, 2017 and December 31, 2016 relate to the development of our current business. We anticipate our operating expenses will increase as we move toward developing more active operations in our current line of business.

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Liquidity and Capital Resources

At December 31, 2017, we had cash of $6,157. Our total current liabilities as of December 31, 2017, were $470,610, and consisted of accounts payable of $144,874, accrued liabilities of $63,182 and payable to related parties of $133,817. We had negative working capital of $334,453 as of December 31, 2017. Long term liabilities comprised convertible promissory notes net of discount in the amount of $128,737.

At December 31, 2016, we had cash of $2,865. Our total current liabilities as of December 31, 2016, were $322,164, and consisted of accounts payable of $127,956, accrued liabilities of $60,391 and payable to related parties of $133,817. We had negative working capital of $319,299 as of December 31, 2016. Long term liabilities comprised convertible promissory notes net of discount in the amount of $107,629, and derivative liabilities of $318,234. We had no long term liabilities as of December 31, 2016.

Cash Used in Operating Activities. Operating Activities used $201,208 in cash for the fiscal year ended December 31, 2017. Operating Activities used $107,654 in cash for the fiscal year ended December 31, 2016.

Cash Used in Investing Activities. Investing Activities used $130,000 in cash for the fiscal year ended December 31, 2017. Investing Activities used $Nil in cash for the fiscal year ended December 31, 2016.

Cash Flows from Financing Activities. During the year ended December 31, 2017, financing activities provided $334,500 in cash, all from the issuance of convertible promissory notes. During the year ended December 31, 2016, financing activities provided $110,450 in cash, all from the issuance of convertible promissory notes.

In 2015, we relied upon financing in the form of Convertible Promissory Notes (the “Notes”) from CMGT, Inc. (“CMGT”). Each of the Notes bears interest at a rate of ten percent (10%) per year, with the principal and accrued interest being due one year from the date of issue. We may prepay the Notes in whole or in part without penalty. The Notes are convertible at a price equal to sixty percent (60%) of the market price for our common stock, which is defined as the average of the lowest three closing bid prices for our common stock in the ten trading days preceding the conversion. The conversion price of the Notes is also subject to adjustment in the event of certain stock issuances which are lower than the conversion price otherwise in effect at the time of the conversion. In addition, CMGT’s right to convert is limited such that no conversion can be made which would result in CMGT or its affiliates owning more than 4.99% of our issued and outstanding common stock following the conversion. This limit may be waived at CMGT option with 61 days’ prior notice.

On January 11, 2016, the Company consolidated all of its obligations to CMGT under a single Convertible Promissory Note due June 1, 2018 (the “Note”) and recognized gain on extinguishment of debt amounting to $11,462. The Note bears interest at a rate of ten percent (10%) per year, with all principal and interest due on or before June 1, 2018. Under the Note, the Company is obligated to pay quarterly payments of interest only commencing March 31, 2016. The Company may prepay the Note in whole or in part without penalty. CMGT’s right to convert is limited such that no conversion can be made which would result in CMGT or its affiliates owning more than 4.99% of the issued and outstanding common stock of the Company following the conversion.

Effective February 17, 2017, the Company entered into a First Amendment to Convertible Promissory Note (the “Amendment”) with CMGT. Under the Amendment, the Company modified the conversion feature of the Note so that the conversion price for all amounts owing thereunder is now $0.10 per share of common stock. In addition, the Amendment waives the Company’s prior defaults in payment of interest under the Note in the amount of $44,289, and adds such sum to the principal balance of the Note. The Company is now required to make quarterly interest payments commencing September 30, 2017. The amendment resulted in the extinguishing of the old notes and re-issuance according to the new terms and discounts.

On April 28, 2017 the Company made an amendment on all its outstanding notes having face value of $436,141, removing all dilutive and reset provisions from these notes, therefore ending derivative treatment. The notes issued subsequent to amendment did not require derivative valuations.

As of June 1, 2018, we had received the advances under from CMGT, each of which is covered by the Consolidated Note. :

Issue Date	Maturity Date	Note Amount $	Interest Rate Per Annum
January 11, 2016	June 1, 2018*	241,047	10%
February 12, 2016	June 1, 2018*	9,000	10%
February 23, 2016	June 1, 2018*	10,850	10%
May 5, 2016	June 1, 2018*	10,000	10%
June 2, 2016	June 1, 2018*	22,000	10%
June 17, 2016	June 1, 2018*	11,000	10%
July 5, 2016	June 1, 2018*	4,000	10%
August 5, 2016	June 1, 2018*	15,000	10%
August 19, 2016	June 1, 2018*	5,000	10%
September 8, 2016	June 1, 2018*	5,000	10%
October 3, 2016	June 1, 2018*	8,500	10%
December 12, 2016	June 1, 2018*	10,000	10%

February 7, 2017	June 1, 2018*	16,000	10%
February 17, 2017	June 1, 2018*	32,744	10%
February 27, 2017	June 1, 2018*	6,000	10%
March 29, 2017	June 1, 2018*	15,000	10%
April 20, 2017	June 1, 2018*	15,000	10%
May 3, 2017	June 1, 2018*	56,000	10%
May 12, 2017	June 1, 2018*	15,500	10%
May 25, 2017	June 1, 2018*	51,000	10%
September 1, 2017	June 1, 2018*	15,000	10%
October 16, 2017	June 1, 2018*	40,000	10%
November 3, 2017	June 1, 2018*	40,000	10%
December 18, 2017	June 1, 2018*	65,000	10%
January 5, 2018	June 1, 2018*	60,000	10%
March 22, 2018	June 1, 2018*	75,000	10%
		853,641
*On or before June 1, 2018.

Our ability to continue operations and to develop our planned business will be contingent upon us obtaining additional financing through the issuance of debt or equity. The debt and/or equity financing arrangements available to us, if any, may be insufficient to fund significant capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

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Off Balance Sheet Arrangements

As of December 31, 2017, there were no off balance sheet arrangements.

Going Concern

Our financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred a loss of $451,932 for the fiscal year ended December 31, 2017 and have not yet developed a reliable source of revenue. To date, we have been dependent on funding operations through the sale of debt and equity securities. These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

At this time, we do not have any accounting policies which we believe meet this definition.

Recently Issued Accounting Pronouncements

In May 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-09, Compensation – Stock Compensation (Topic 718). The amendments in this ASU require that the company apply modification accounting when the company changes the terms or conditions of a share-based payment award. The amendments in this Update apply to all companies. They became effective for public business entities in the annual period ending after December 15, 2017, and interim periods within those fiscal years, with early application permitted. Management does not expect to have a significant impact of this ASU on the Company’s financial statements.

In July 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815).

Accounting for Certain Financial Instruments with Down Round Features

II.

Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments.

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

The amendments in this Update apply to all companies. Part I becomes effective for public business entities in the annual period ending after December 15, 2018, and interim periods within those fiscal years, with early application permitted. Management does not expect to have a significant impact of this ASU on the Company’s financial statements. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect

In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on the consolidated financial position and/or results of operations.

In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company adopted this pronouncement on January 1, 2017, and the adoption did not have a material impact on the financial position and/or results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item.

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Item 8. Financial Statements and Supplementary Data

Index to Financial Statements Required by Article 8 of Regulation S-X:

Audited Financial Statements:
Reports of Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2017 and 2016	F-2
Statements of Operations for the years ended December 31, 2017 and 2016	F-3
Statement of Stockholders’ Deficit as of December 31, 2017 and 2016	F-4
Statements of Cash Flows for the years ended December 31, 2017 and 2016	F-5
Notes to Financial Statements	F-6

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Sohail Raza, CPA, CA, CPA (Colorado, USA)

Chartered Accountant, Licensed Public Accountant

Park Place Corporate Centre

15 Wertheim Court, Suite 409

Richmond Hill, ON L4B 3H7

Tel: 416 671 7292 & 905 882 9500

Fax: 905 882 9580

Email: info@srco.ca

www.srco.ca

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of SocialPlay USA, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of SocialPlay USA, Inc. (the “Company”) as of December 31, 2017 and 2016 and the related statements of operations and comprehensive loss, stockholders’ deficiency, and cash flows for each of the years in the two-year period ended December 31, 2017 and related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2017 and 2016 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has experienced recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2015.

Richmond Hill, Ontario, Canada

June 15, 2018

/s/ SRCO Professional Corporation

CHARTERED PROFESSIONAL ACCOUNTANTS

Authorized to practise public accounting by the

Chartered Professional Accountants of Ontario

F-1

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SocialPlay USA, Inc.

BALANCE SHEETS

	December 31, 2017			December 31, 2016

Current assets
Cash		6,157			2,865
Deposits for investments [Note 6]		130,000			—
Total assets		136,157			2,865

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Accounts Payable		144,874			127,956
Accrued liabilities		63,182			60,391
Payable to related parties [Note 10]		133,817			133,817
Convertible promissory notes [Note 8]		128,737
Total Current Liabilities		470,610			322,164
Convertible promissory notes [Note 8]					107,629
Derivative Liabilities [Note 8]		—			318,234
Total Liabilities		470,610			748,027

Stockholders' deficiency
Preferred stock, $0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively [Note 9]
Common stock, $0.001 par value, 200,000,000 shares authorized, 11,870,003 and 11,820,003 common shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively [Note 9]		11,870			11,820
Additional paid-in capital		1,421,271			678,680
Shares to be issued [Note 9]		348,000			228,000
Accumulated deficit		(2,115,594	)		(1,663,662	)
Total stockholders' deficiency		(334,453	)		(745,162	)
Total Liabilities and stockholders deficiency		136,157			2,865

Commitments [Note 13]

Subsequent events [Note 14]

See accompanying notes

F-2

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SocialPlay USA, Inc.

STATEMENTS OF OPERATIONS

	December 31, 2017			December 31, 2016

Revenue		—			—

Expenses
Legal and professional fees		43,364			44,188
Advertising and promotion		90,998			5,000
Consulting fees - Investor relations		51,059			245,087
Transfer agent fees		19,985			19,339
Directors' fees		—			15,000
Other operating expenses		20,868			9,746
Total operating expenses		226,274			338,360
Forgiveness of debt [Note 11]		—			(62,500	)
Interest and bank charges		51,387			29,170
Accretion of discount on convertible notes [Note 8]		150,746			52,512
Day-one derivative loss [Note 8 and 9]		30,579			—
Licensing fees [Note 7]		120,000			228,000
Gain on extinguishment of debt [Note 8]		(550,962	)		(11,462	)
Change in fair value of derivatives [Note 8 and 9]		423,908			18,819
Loss before income taxes		(451,932	)		(592,899	)
Income taxes		—			—
Net loss for the year		(451,932	)		(592,899	)
Loss per share, basic and diluted		(0.0381	)		(0.0503	)
Weighted average number of common shares outstanding		11,857,480			11,798,962

See accompanying notes

F-3

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SocialPlay USA, Inc.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016

	Common Stock				Additional paid in capital		Shares to be issued				Accumulated deficit			Total
	Shares		Amount				Shares		Amount
As at December 31, 2015		11,720,000	$	11,720	$	545,280		—	$	—	$	(1,070,76	3)		(513,763	)
Shares issued to Ten West Holding as consideration for advisory services [Note 9]		100,003		100		133,400		—		—		—			133,500	)
Shares to be issued [Note 9]		—		—		—		200,000		228,000		—			228,000
Loss for the year		—		—		—		—		—		(1,592,899	)		(1,592,899	)
As at December 31, 2016		11,820,003	$	11,820	$	678,680		200,000	$	228,000	$	(1,663,662	)	$	(745,162	)

Shares issued to Ten West Holding as consideration for advisory services [Note 9]		50,000		50		23,950		—		—		—			24,000

Shares to be issued [Note 9]		—		—		—		200,000		120,000		—			120,000

Beneficial conversion features transferred to equity		—		—		718,641		—		—		—			718,641
Loss for the year		—		—		—		—		—		(451,932	)		(451,932	)
As at December 31, 2017		11,870,003		11,870		1,421,271		400,000		348,000		(2,115,594)			(334,453)

See accompanying notes

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SocialPlay USA, Inc.

STATEMENTS OF CASH FLOWS

Statement of Cash Flows	December 31, 2017			December 31, 2016

Operating Activities
Net loss for the year		(451,932	)		(592,899	)
Shares issued for services		24,000			133,500
Interest expense - accretion of convertible notes		150,746			52,512
Day-one derivative loss [Note 8]		30,579			—
License fees [Note 7]		120,000			228,000
Change in fair value of derivatives [Note 8]		423,908			18,819
Forgiveness of debt		—			(62,500	)
Gain on extinguishment of debt		(550,962	)		(11,462	)
Net change in non-cash working capital balances:
Prepaid expenses		—			26,210
Accounts payable and accrued liabilities		52,453			98,166
Payable to related parties		—			2,000
Cash used in operating activities		(201,208	)		(107,654	)

Investing Activities
Deposits made for investments		(130,000	)		—
Cash used in investing activities		(130,000	)		—

Financing Activities
Proceeds from issuance of convertible promissory notes		334,500			110,450
Cash provided by financing activities		334,500			110,450

Net increase in cash during the year		3,292			2,796
Cash, beginning of year		2,865			69
Cash, end of year		6,157			2,865
Supplemental disclosure with respect to cash flows:
Cash paid for income taxes
Cash paid for interest

See accompanying notes

F-5

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

1. NATURE OF OPERATIONS

The Company was incorporated on December 31, 2013 (Date of Inception) under the laws of the State of Nevada, as Artesanias Corp. (the “Company”). On June 12, 2015, the Board of Directors of the Company changed the name from Artesanias Corp. to SocialPlay USA, Inc. to reflect the business focus of the Company. The Company plans to develop a business that provides marketing, monetization, and support services for the companies in gaming and mobile application markets. On January 10, 2017, the former majority shareholder sold 7,082,000 shares of common stock to the Company’s current President and CEO, Robert Rosner, in a private transaction. As result of this transaction, a change in control of the company occurred.

The Company has limited operations and is considered to be in the development stage.

2. BASIS OF PRESENTATION

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements.

3. GOING CONCERN

The Company’s financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs. The Company had an accumulated deficit of $2,115,594 and a working capital deficit of $334,453 as of December 31, 2017. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

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. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Areas involving significant estimates and assumptions include valuation of certain financial instruments, valuation allowance for deferred tax assets, accruals, and going concern assessment. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. Actual results could materially differ from those estimates.

F-6

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have cash equivalents as of December 31, 2017 and 2016.

Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of December 31, 2017 and 2016.

Income Taxes

The Company provides for federal and provincial income taxes payable, as well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities 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. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2017 and 2016, there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

Loss Per Common Share

Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of December 31, 2017 and 2016, there are no outstanding dilutive securities.

Convertible Notes Payable and Derivative Instruments

The Company accounts for conversion options embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments. ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined by ASC 815-40.

The Company accounts for convertible notes deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815, in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion options 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.

Valuation of Derivatives

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. The Company analyzed the derivative financial instruments (the Convertible Notes), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard ASC 820 set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

The derivative liabilities result in a reduction of the initial carrying amount (as unamortized discount) of the Convertible Notes. This derivative liability is marked-to-market each quarter with the change in fair value recorded in the income statement. Unamortized discount is amortized to interest expense using the effective interest method over the life of the Convertible Note. If the Note is converted or the warrants are exercised, the derivative liability is released and recorded as additional paid in capital.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

Fair Value of Financial Instruments

Accounting Standards Codification Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 - Valuation based on quoted market prices in active markets for identical assets or liabilities.

Level 2 - Valuation based on quoted market prices for similar assets and liabilities in active markets.

Level 3 - Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash, accounts payable and accrued liabilities and convertible promissory notes. The Company’s bank accounts are maintained with financial institutions of reputable credit, and therefore, bear minimal credit risk and are carried at amortized costs which approximates the fair value.

Contingencies

The Company is not currently a party to any pending or threatened legal proceedings. Based on information currently available, management is not aware of any matters that would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

5. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Standards

In July 2017, the FASB issued Accounting Standards Update (ASU) No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815).

Accounting for Certain Financial Instruments with Down Round Features

II.

In May 2014, an accounting pronouncement was issued by the FASB to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers 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. This pronouncement is effective for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The guidance permits the use of one of two retrospective transition methods. The Company will adopt the standard on March 1, 2018 using the modified retrospective method. The adoption of this pronouncement is not expected to have a material impact on the combined financial position and/or results of operations.

6. DEPOSITS FOR INVESTMENT

On March 11, 2017, the Company entered into a binding Letter of Intent (LOI) with Spot and Pay, Inc., a Nevada Corporation (“Spot and Pay”). The LOI contemplated provision of an option to the Company, to purchase 100% equity of such company. The Company has made a deposit of $50,000 as the first stage in the acquisition. On April 9, 2018, the Company entered into a definitive Share Exchange and Funding Agreement (See Note 14 – Subsequent Events) with Spot and Pay. Under the Agreement, the Company is acquiring a 90% ownership stake in Spot and Pay.

On May 30, 2017, the Company entered into a binding LOI with a certain corporation. The LOI contemplates acquisition of a 33% ownership interest in the corporation for an agreed total purchase price. The Company has made a deposit of $50,000 as the first stage in the acquisition, however, no formal and definitive acquisition agreement has been entered into yet.

On November 8, 2017, the Company entered into a binding LOI with a certain corporation. The LOI contemplates acquisition of a 33% ownership interest in the corporation for an agreed total purchase price. The Company has made a deposit of $30,000 as the first stage in the acquisition, however, no formal and definitive acquisition agreement has been entered into yet.

When the Company signs definitive acquisition agreements, the above two deposits will be treated as investments under the guidance available in US GAAP.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

7. LICENSING FEES

Pursuant to Exclusive License Agreement dated May 21, 2015 with a related party, the Company acquired an exclusive license to develop, market and sell products and services based upon any and all intellectual property. The initial term of this Agreement was five years. This Agreement may be renewed for an additional five year term upon written notice to be given by the Company no later than thirty days prior to the expiration of the initial term. In consideration for the license granted hereunder, the Company issued to the related party 1,000,000 (200,000 after reverse split) shares of common stock. In addition, the Company shall issue 1,000,000 (200,000 after reverse split) shares of common stock on or before each anniversary of this Agreement for so long as it shall remain in effect. The Company also agreed to make payments totaling $120,000 to the third party through an agreed payment schedule.

As technological feasibility has not been achieved, the Company recognizes expense at the end of each anniversary (triggering event) for the shares to be issued, the fair value of which to be determined based on the market price of the share on anniversary day as further explained in note 9 to the financial statements.

The Company has recorded 400,000 common shares to be issued and the related license fee expense as explained in Note 9.

8. CONVERTIBLE PROMISSORY NOTES AND DERIVATIVE LIABILITIES

The outstanding convertible promissory notes as at December 31, 2017 represent obligations of the Company to CMGT Inc. (CMGT). On January 11, 2016, the Company consolidated all of its obligations to CMGT under a single Convertible Promissory Note due June 1, 2018 (the “Note”) and recognized gain on extinguishment of debt amounting to $11,462. The Note bears interest at a rate of ten percent (10%) per year, with all principal and interest due on or before June 1, 2018. Under the Note, the Company is obligated to pay quarterly payments of interest only commencing March 31, 2016. The Company may prepay the Note in whole or in part without penalty. The Note is convertible at a price equal to sixty percent (60%) of the market price for its common stock, which is defined as the average of the lowest three closing bid prices for the common stock in the ten trading days preceding the conversion. The conversion price of the Note is also subject to adjustment in the event of certain stock issuances which are lower than the conversion price otherwise in effect at the time of the conversion. In addition, CMGT’s right to convert is limited such that no conversion can be made which would result in CMGT or its affiliates owning more than 4.99% of the issued and outstanding common stock of the Company following the conversion.

Post amendment, the Company carried out beneficial conversion feature analysis of all the notes and concluded that based on the intrinsic value of these notes, 100% face value of the above notes be transferred to additional paid-in-capital and these notes to be amortized using an effective interest rate over the remaining term.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

8. CONVERTIBLE PROMISSORY NOTES AND DERIVATIVE LIABILITIES (continued)

The movement in convertible notes principal amount, accreted value of notes and derivative liabilities are detailed below:

	Face value of notes		Cumulative discount on notes			Accreted value of notes			Derivative liabilities
	$		$			$			$
Balances as at December 31, 2016		351,397		—			107,629			318,234
Issuance of notes during Q1 2017		37,000		—			2,247			34,753
Conversion of accrued interest		32,744		—			32,744			—
Day-one derivative losses		—		—			—			13,486
Adjustment of unamortized discount on extinguishment		—		—			(148,697	)		148,697
Loss on extinguishment of debt		—		—			—			116,703
Accretion expense		—		—			18,228			—
Change in fair value of derivatives		—		—			—			132,387
Balances as at March 31, 2017		421,141					12,151			764,260
Pre-Amendment (End of Derivatives)
Issuance of note		15,000		—			—			—
Full discount recognized on the note		—		—			—			15,000
Day-one derivative loss on the note		—		—			—			17,093
Change in fair value of derivatives		—		—			—			291,521
Accretion expense		—		—			3,781			—
Balance, pre-amendment		436,141		—			15,932			1,087,874
Transfer due to end of derivatives		—		—			420,209			(420,209	)
Gain on extinguishment		—		—			—			(667,665	)
Balance, post-amendment		436,141		—			436,141			—
Issuances of notes after amendment		137,500		—			137,500			—
Beneficial conversion feature – Transferred to equity		—		573,641			(573,641	)		—
Accretion expense		—		(33,402	)		33,402			—
Balances as at September 30, 2017		573,641		540,239			33,402			—

Issuances of notes after amendment		145,000		—			137,500			—
Beneficial conversion feature – Transferred to equity		—		145,000			(145,000	)		—
Accretion expense		—		(95,335	)		95,335			—
Balances as at December 31, 2017		718,641		589,904			128,737

As of December 31, 2017, total principal due under the Note was $718,641, and accrued interest totaled $47,202 (which is included in accrued liabilities) (December 31, 2016: $351,397 and $27,805).

Effective April 28, 2017, the Company entered into a second amendment of Convertible Promissory Note. As a result of the amendment, derivative treatment has ended.

Prior to the amendment on April 28, 2017, the multinomial lattice model was used to value the convertible notes and the embedded derivative liabilities at issuance and period end date, using the following assumptions:

Assumptions
Dividend yield	0.00	%
Risk-free rate for term	1.01% - 1.07	%
Volatility	284.6% - 285.4	%
Remaining terms (years)	1.09 to 1.11
Stock price ($ per share)	0.60-0.75

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

9. STOCKHOLDERS’ DEFICIENCY

Authorized:

On March 14, 2017, the Company designated a new class of Series A Preferred Stock. Series A Preferred Stock consists of 10,000,000 shares, par value $0.001 per share. Series A Preferred stock has no stated value, ranks pari passu with our common stock upon liquidation, and has no special dividend rights. Shares of Series A Preferred Stock are convertible to common stock, at the option of the holder, at a rate of 20 shares of common stock for each share of preferred stock. Shares of Series A Preferred Stock may be voted on an as-of-converted basis on all matters submitted to the vote or consent of the holders of our common stock. The Company has not issued any shares of Series A Preferred Stock at this time.

The Company is authorized to issue up to 200,000,000 shares of its $0.001 par value common stock and up to 100,000,000 shares of its $0.001 par value preferred stock.

Issued and outstanding:

During the year ended December 31, 2014, the Company sold 21,600,000 (4,320,000 after reverse split) shares of its $0.001 par value common stock in a registered public offering for total cash proceeds of $27,000.

On February 25, 2015, the Company executed a 12 for 1 forward stock split of issued shares of common stock. Further, on July 27, 2015, the Company effectuated a 1 for 5 reverse stock split. The accompanying financial statements have been retrospectively adjusted for all periods presented to reflect the effect of the stock split.

On July 1, 2015, the Company issued 1,000,000 (200,000 after reverse split) shares of common stock pursuant to Exclusive License Agreement dated May 21, 2015 as explained in note 6 to the financial statements.

On February 17, 2016, the Company issued 50,000 shares of common stock to Ten West Holdings, Inc. as consideration for corporate advisory services amounting to $56,000 pursuant to agreement dated November 16, 2015. All services have been performed as of February 16, 2016.

On April 15, 2016, the Company issued 50,000 shares of common stock to Ten West Holdings, Inc. as consideration for corporate advisory services amounting to $77,500 pursuant to agreement dated March 9, 2016. All services have been performed as of June 10, 2016.

On February 8, 2017, the Company agreed to issue 50,000 shares of common stock to Ten West Holdings, Inc. as consideration for corporate advisory services pursuant to agreement dated February 8, 2017 for a term of three months. The fair value of the shares amounting to $24,000 was determined based on the market price of $0.48 per share on the date of agreement. The Company recognized the entire amount as consulting expense during the period. The shares were issued on April 3, 2017.

As at December 31, 2017 and December 31, 2016, there were 11,870,003 and 11,820,003 shares of common stock, respectively, issued out of the authorized 200,000,000 common shares.

Shares to be issued:

As at December 31, 2017, shares to be issued amounting to $348,000 (400,000 shares) comprise of:

During the year ended December 31, 2016, the Company recognized as expense, licensing fee of $228,000 representing the fair value of additional 1,000,000 (200,000 after reverse split) shares to be issued under the agreement (as explained in Note 7), valued at the market price of $1.14 per share.

During the year ended December 31, 2017, the Company recognized as expense, licensing fee of $120,000 representing the fair value of additional 200,000 shares to be issued under the agreement (as explained in Note 7), valued at the market price of $0.6 per share on May 19, 2017.

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10. RELATED PARTY TRANSACTIONS

On April 27, 2015, the Company entered into an Exclusive License Agreement (the “License Agreement”) with a related party Social Play, Inc. (“Social Play”). Under the Agreement, the Company has been granted the exclusive rights within the U.S. and Canada to develop, market and sell products and services based upon Social Play’s patent-pending “SP Cloud Goods” system.

On August 22, 2016, the Company entered into a Severance Agreement and Mutual Release (the “Agreement”) with the former President, CEO, and director Chitan Mistry. In connection with Mr. Mistry’s resignation, the Company paid him a severance payment in the amount of $10,000 pursuant to the terms of the Agreement. Under the Agreement, Mr. Mistry and the company also provided mutual general releases of any liability to one another.

Accounts payable and accrued liabilities include the following balances, which are unsecured, non-interest bearing and have no set repayment term, owed to related parties:

	December 31, 2017	December 31, 2016
Owed to former Director Lucie Letellier for Director fees	50,750	50,750
Owed to shareholder company, Social Play, Inc, as remaining balance for license agreement	83,067	83,067
	133,817	133,817

Office space and services are provided without charge by an officer and director of the Company. Such costs are not significant to the financial statements and, accordingly, have not been reflected therein.

Other than disclosed elsewhere in the financial statements, the only related party transaction during the years ended December 31, 2017 and 2016 were fees charged by directors amounting to $nil and $15,000, respectively.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

11. FORGIVENESS OF DEBT

On August 22, 2016, the Company entered into a severance and mutual release agreement with a former President, CEO and Director. The Company made a severance payment in the amount of $10,000 and both the Company and the former President provided mutual general releases of any liability. As a result of the said agreement, the amount of $62,500 owed to the former President was written back.

12. INCOME TAXES

Income taxes

The Tax Cuts and Jobs Act (the “Act”) enacted on December 22, 2017 reduces the US federal corporate tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2017, the Company has not completed the accounting for the tax effects of enactment of the Act; however, as described below, it has made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change.

The provision for income taxes differs from that computed at US corporate tax rate of approximately 21% (2016: 21%) as follows:

	2017			2016
Net loss for the year	$	(124,509	)	$	(94,906	)
Tax effect of expenses not deductible for income tax:
Annual effect of book/tax differences		47,327			36,597
Change in valuation allowance		77,182			58,309
		—			—

Deferred tax assets

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31, 2017:

Deferred Tax Assets - Non-current:	2017			2016
Tax effect of NOL Carryover	$	110,720			262,058
Cumulative change due to reduced rate		104,823			—
Less valuation allowance		(215,543	)		(262,058	)
Deferred tax assets, net of valuation allowance	$	—		$	—

At December 31, 2017, the Company had net operating loss carryforwards of approximately $1,026,397 (2016: $748,736) that may be offset against future taxable income from the year 2018 to 2037. No tax benefit has been reported in the December 31, 2017 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

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SocialPlay USA, Inc.

Notes to Financial Statements

As of December 31, 2017

13. COMMITMENTS

The Company has commitments to issue 1,000,000 (200,000 after reverse split) shares of common stock on or before each anniversary pursuant to Exclusive License Agreement dated May 21, 2015 as explained in note 7 to the financial statements.

14. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to June 15, 2018 the date the financial statements were issued, pursuant to the requirements of ASC Topic 855 and has determined the following subsequent events:

On April 9, 2018, the Company entered into a definitive Share Exchange and Funding Agreement (the “Agreement”) with Spot and Pay, Inc., a Nevada corporation (“Spot and Pay”). Under the Agreement, the Company is acquiring a 90% ownership stake in Spot and Pay. Spot and Pay is developing a mobile payment application that is used in connection with third party QR codes that have been generated for specific uses; i.e. individual consumer products, specific services or group of services offered to the general public, B2B product and service offerings, monetary donations to charitable organizations, and quick and easy bill payments on recurring monthly accounts. Following this acquisition, the Company’s software development plan will include a substantially more robust proprietary platform wallet feature that will allow users to create their own wallet so that they may buy and sell bitcoin and other cryptocurrencies directly from the Spot & Pay platform. The Company’s wallet feature will also provide seamless abilities to transfer money within the Spot & Pay user network instantly from one account to another without any processing delays.

Under the Agreement, the Company acquired 90% of the outstanding capital stock of Spot and Pay from its founder and sole shareholder, Karthikeyan Mani. In exchange, the Company has agreed to issue Mr. Mani 500,000 shares of the common stock of the Company. The Company has agreed to provide a total of $300,000 in funding for development of the Spot & Pay platform. The $300,000 includes $50,000 paid previously to Spot and Pay, together with an additional $250,000 to be paid in one or more tranches over the next 180 days. The Spot & Pay platform as developed after the Agreement will be considered work-for-hire belonging to SocialPlay USA, Inc. Mr. Mani and Spot and Pay will use their best efforts to develop the mobile payment platform, with Mr. Mani to be bound by a two-year non-competition agreement following the conclusion of such efforts. In the event that the Company fails to fund the full $300,000 within 180 days from the Agreement, the Spot and Pay shares acquired by the Company and the Company’s shares issued to Mr. Mani will be returned in part based on a sliding scale set forth in the Agreement.

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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

No events occurred that require disclosure under Item 307 and 308 of Regulation S-K during the fiscal year ending December 31, 2017.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective for the year ended December 31, 2017.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

(1)

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2)

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and

(3)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2017.

This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (ii) inadequate segregation of duties consistent with control objectives; and (iii) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our President in connection with the review of our financial statements as of December 31, 2017.

Management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

There were no changes in our internal control over financial reporting during the year ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following information sets forth the names, ages, and positions of our current directors and executive officers as of June 1, 2018.

Name	Age	Position(s) and Office(s) Held
Robert Rosner	53	Chief Executive Officer, Chief Financial Officer, and Director

Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.

Robert Rosner was appointed our President, Chief Executive Officer and Director on August 22, 2016. From September 2011 to the present, Mr. Rosner has served as President, CEO and currently Secretary of Lyynks Inc., a North Hollywood, California based software development firm. From August of 2003 through May of 2011, Mr. Rosner served as President, CEO, and a Director of Watair, Inc., and atmospheric water technology firm. From June of 1996 through March of 2003, he was President and a Director of Fortuna Silver Mines Inc., a precious metals mining company listed on the TSX and NYSE exchanges. Mr. Rosner has twenty-five continuous years acting as an officer and/or director of numerous U.S. and Canadian public companies, serving primarily in the reporting compliance, oversight and fiduciary capacities, as well as directing corporate activities. He is proficient with all aspects of SEC and Canadian Securities rules and regulations, including filing and reporting requirements with both EDGAR and SEDAR. His public company executive and management experience spans the software development and social media sectors, natural resources and oil and gas, as well as high tech and consumer goods. Mr. Rosner has authored sales and marketing books, and developed and led sales leadership training programs.

Directors

The Company’s Bylaws provide that our number of directors shall be determined by resolution of the board of directors. We currently have one (1) director.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by the Company to become directors or executive officers.

Other Key Personnel

Other than our officers and directors, we currently have no other significant employees.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past ten years, none of the following occurred with respect to our present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading.

Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

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Term of Office

Our Directors are appointed for a one year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Committees of the Board

Audit Committee

We do not have a separately-designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the Board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. Our Board of Directors, which performs the functions of an audit committee, does not have a member who would qualify as an “audit committee financial expert” within the definition of Item 407(d)(5)(ii) of Regulation S-K.

Compensation Committee

We do not have a separately-designated standing compensation committee. The entire Board of Directors performs the functions of a compensation committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by a compensation committee.

Code of Ethics

As of December 31, 2017, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

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Item 11. Executive Compensation

Compensation Discussion and Analysis

We presently do not have employment or compensation agreements with any of our named executive officers and have not established any overall system of executive compensation or any fixed policies regarding compensation of executive officers. We are currently in the process of developing a compensation system, to include both cash and the issuance of stock, for our executive officers.

The following tables set forth certain information about compensation paid, earned or accrued for services by our President and all other executive officers (collectively, the “Named Executive Officers”) in the fiscal years ended December 31, 2017, and 2016:

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to each named executive officer for our last two completed fiscal years ended December 31, 2017 and 2016, for all services rendered to us.

SUMMARY COMPENSATION TABLE
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)³	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Robert Rosner, CEO, CFO, and Director	2017	$0	$0	0	0	0	0	0	$0
Chitan Mistry, CEO, CFO, and Director	2016	$15,000	0	0	0	0	0	0	$15,000

Narrative Disclosure to the Summary Compensation Table

During the fiscal year ended December 31, 2017, our executive officers earned the compensation set forth above. Due to cash constraints, we were unable to pay the salaries earned, and they have been included in our accounts payable and accrued liabilities.

Stock Option Grants

We have not granted any stock options to the executive officers since our inception.

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Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of December 31, 2017.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS						STOCK AWARDS
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date	Number Of Shares or Shares of Stock That Have Not Vested (#)	Market Value of Shares or Shares of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Shares or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Shares or Other Rights That Have Not Vested (#)
Robert Rosner, CEO, CFO, and Director	-	-	-	-	-	-	-	-	-

Director Compensation

The table below summarizes all compensation of our directors as of the fiscal year ended December 31, 2017.

DIRECTOR COMPENSATION

Name

Fees Earned or

Paid in

Cash

($)

Stock Awards

($)

Option Awards

($)

Non-Equity

Incentive

Plan

Compensation

($)

Non-Qualified

Deferred

Compensation

Earnings

($)

All

Other

Compensation

($)

Total

($)

Robert Rosner

Narrative Disclosure to the Director Compensation Table

Our directors do not currently receive any compensation from the Company for their service as members of the Board of Directors of the Company.

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table lists, as of June 1, 2018, the number of shares of common stock of our Company that are beneficially owned. The percentages below are calculated based on 11,870,003 shares of our common stock issued and outstanding as of June 1, 2018.

Name and address of beneficial owner⁽¹⁾	Title of Class	Amount of beneficial ownership	Percent of class
Executive Officers & Directors:
Robert Rosner 9663 Santa Monica Blvd., Ste 134 Beverly Hills, CA 90210	Common	7,082,000	59.66%
Total of All Directors and Executive Officers:	Common	7,082,000	59.66%

Other More Than 5% Beneficial Owners:
n/a	-	-	-

(1)

As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

Except as set forth below, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us.

1. Office space and services are provided without charge by our sole officer and director.

3. Our accounts payable and accrued liabilities as of December 31, 2017 include the following balances owed to related parties:

Owed to former Director Lucie Letellier for Director fees	$	50,750
Owed to shareholder company, Social Play, Inc, as remaining balance for license agreement	$	83,067

Director Independence

We are not a “listed issuer” within the meaning of Item 407 of Regulation S-K and there are no applicable listing standards for determining the independence of our directors. Applying the definition of independence set forth in Rule 4200(a)(15) of The Nasdaq Stock Market, Inc., we do not believe that we currently have any independent directors.

Item 14. Principal Accounting Fees and Services

Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:

Financial Statements for the Year Ended December 31,		Audit and Audit Related Services		Tax Fees		Other Fees
	2017	$	8,800	$	—	$	—
	2016	$	15,800	$	—	$	—

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PART IV

Item 15. Exhibits, Financial Statements Schedules

(a)

Financial Statements and Schedules

The following financial statements and schedules listed below are included in this Form 10-K.

Financial Statements (See Item 8)

(b)

Exhibits

Exhibit Number	Description
3.1	Articles of Incorporation ⁽¹⁾
3.2	Certificate of Amendment to Articles of Incorporation⁽⁴⁾
3.3	Bylaws⁽¹⁾
3.4	Certificate of Designation for Series A Preferred Stock⁽⁶⁾
10.1	Exclusive License Agreement with Social Play, Inc.⁽²⁾
10.2	Investor Relations Consulting Agreement with Robert Farrill⁽³⁾
10.3	Investor Relations Consulting Agreement with DMM Enterprise, LLC⁽³⁾
10.4	Convertible Promissory Note with CMGT, Inc.⁽⁵⁾
10.5*	Corporate Advisory Services Agreement - Ten West Holding Inc.
10.6	Letter of Intent re: Spot and Pay, Inc.⁽⁶⁾
10.7	First Amendment to Convertible Promissory Note with CMGT, Inc.⁽⁷⁾
31.1*	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	Materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 formatted in Extensible Business Reporting Language (XBRL)

⁽¹⁾	Incorporated by reference to Registration Statement on Form S-1 filed February 4, 2014
⁽²⁾	Incorporated by reference to Current Report on Form 8-K filed May 21, 2015
⁽³⁾	Incorporated by reference to Current Report on Form 8-K filed June 12, 2015
⁽⁴⁾	Incorporated by reference to Current Report on Form 8-K filed July 2, 2015
⁽⁵⁾	Incorporated by reference to Current Report on Form 8-K filed April 12, 2016
⁽⁶⁾	Incorporated by reference to Quarterly Report on Form 10-Q filed March 31, 2017
⁽⁷⁾	Incorporated by reference to Current Report on Form 8-K filed February 27, 2017
^*	Filed herewith
^**	These interactive data files are deemed “furnished” and not “filed.”

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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.

SocialPlay USA, Inc.

By: /s/ Robert Rosner Robert Rosner

Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and sole Director
Date: June 18, 2018

In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

By: /s/ Robert Rosner Robert Rosner

Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and sole Director
Date: June 18, 2018

Attached files

SocialPlay USA, Inc. Reports

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