0001080319
EMGL:GoldStreetCapitalCorpMember
2016-03-31
0001080319
EMGL:GoldStreetCapitalCorpMember
2015-12-31
0001080319
2014-12-31
0001080319
2016-05-06
0001080319
EMGL:DorianaGianfeliciMember
2016-03-31
0001080319
EMGL:GoldStreetCapitalCorpMember
2016-01-01
2016-03-31
0001080319
EMGL:Investment2336414OntarioIncMember
2014-12-31
0001080319
us-gaap:WarrantMember
2016-01-01
2016-03-31
0001080319
us-gaap:WarrantMember
us-gaap:MinimumMember
2016-03-31
0001080319
EMGL:Investment2336414OntarioIncMember
2014-01-01
2014-12-31
0001080319
EMGL:Investment2336414OntarioIncMember
2016-01-01
2016-03-31
0001080319
2015-01-01
2015-12-31
0001080319
2015-12-31
0001080319
EMGL:DorianaGianfeliciMember
2015-12-31
0001080319
EMGL:WebBasedMember
2015-01-01
2015-03-31
0001080319
EMGL:WebBasedMember
2016-01-01
2016-03-31
0001080319
EMGL:LandBasedMember
2015-01-01
2015-03-31
0001080319
EMGL:LandBasedMember
2016-01-01
2016-03-31
0001080319
us-gaap:AffiliatedEntityMember
2015-01-01
2015-12-31
0001080319
EMGL:February292016WarrantMember
2016-03-31
0001080319
us-gaap:WarrantMember
2015-12-31
0001080319
EMGL:April22015Member
2016-01-01
2016-03-31
0001080319
EMGL:April22015Member
2015-12-31
0001080319
EMGL:April272015Member
2016-01-01
2016-03-31
0001080319
EMGL:April272015Member
2015-12-31
0001080319
EMGL:June182015Member
2016-01-01
2016-03-31
0001080319
EMGL:June182015Member
2016-03-31
0001080319
EMGL:April22015Member
EMGL:CDNMember
2016-01-01
2016-03-31
0001080319
EMGL:April22015Member
EMGL:CDNMember
2016-03-31
0001080319
EMGL:April272015Member
EMGL:CDNMember
2016-01-01
2016-03-31
0001080319
EMGL:April272015Member
EMGL:CDNMember
2016-03-31
0001080319
EMGL:BraydonCapitalCorpMember
2016-03-31
0001080319
EMGL:NewbridgeAdditionalMember
2016-01-01
2016-03-31
0001080319
EMGL:July92015Member
2016-01-01
2016-03-31
0001080319
EMGL:July92015Member
2015-12-31
0001080319
EMGL:Multigioco1Member
2016-03-31
0001080319
EMGL:RifaSrlMember
2016-03-31
0001080319
EMGL:NewbridgeMember
2016-01-01
2016-03-31
0001080319
EMGL:NewbridgeMember
2016-03-31
0001080319
EMGL:TypenexMember
2016-01-01
2016-03-31
0001080319
EMGL:April22015Member
2016-03-31
0001080319
EMGL:April272015Member
2016-03-31
0001080319
EMGL:July92015Member
2016-03-31
0001080319
EMGL:February292016Member
2016-03-31
0001080319
EMGL:February292016Member
2016-01-01
2016-03-31
0001080319
EMGL:BraydonCapitalCorpMember
2015-12-31
0001080319
EMGL:BraydonCapitalCorpMember
2016-03-31
0001080319
EMGL:OntarioIncMember
2015-12-31
0001080319
EMGL:OntarioIncMember
2016-03-31
0001080319
EMGL:OntarioIncMember
2015-01-01
2015-12-31
0001080319
EMGL:OntarioIncMember
2015-01-01
2015-01-31
0001080319
EMGL:OntarioIncMember
2015-02-02
2015-02-28
0001080319
us-gaap:WarrantMember
2016-03-31
0001080319
2016-01-01
2016-03-31
0001080319
2016-03-31
0001080319
2015-01-01
2015-03-31
0001080319
2015-03-31
0001080319
us-gaap:LicensingAgreementsMember
2016-03-31
0001080319
us-gaap:LicensingAgreementsMember
2015-12-31
0001080319
us-gaap:ContractualRightsMember
2016-03-31
0001080319
us-gaap:ContractualRightsMember
2015-12-31
0001080319
us-gaap:CustomerRelationshipsMember
2016-01-01
2016-03-31
0001080319
us-gaap:CustomerRelationshipsMember
2016-03-31
0001080319
us-gaap:CustomerRelationshipsMember
2015-12-31
0001080319
us-gaap:TrademarksMember
2016-01-01
2016-03-31
0001080319
us-gaap:TrademarksMember
2016-03-31
0001080319
us-gaap:TrademarksMember
2015-12-31
0001080319
us-gaap:InternetDomainNamesMember
2016-01-01
2016-03-31
0001080319
us-gaap:InternetDomainNamesMember
2016-03-31
0001080319
us-gaap:InternetDomainNamesMember
2015-12-31
0001080319
us-gaap:LicensingAgreementsMember
us-gaap:MinimumMember
2016-01-01
2016-03-31
0001080319
us-gaap:LicensingAgreementsMember
us-gaap:MaximumMember
2016-01-01
2016-03-31
0001080319
us-gaap:ContractualRightsMember
us-gaap:MinimumMember
2016-01-01
2016-03-31
0001080319
us-gaap:ContractualRightsMember
us-gaap:MaximumMember
2016-01-01
2016-03-31
0001080319
EMGL:TypenexMember
2016-03-31
0001080319
EMGL:Investment2336414OntarioIncMember
2014-12-09
0001080319
EMGL:BraydonCapitalCorpMember
2016-01-13
0001080319
EMGL:BraydonCapitalCorpMember
2016-01-12
2016-01-13
0001080319
us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember
2016-01-01
2016-03-31
0001080319
us-gaap:DerivativeFinancialInstrumentsLiabilitiesMember
2016-03-31
0001080319
us-gaap:MinimumMember
2016-03-31
0001080319
us-gaap:MaximumMember
2016-03-31
0001080319
EMGL:Investment2336414OntarioIncMember
2016-03-31
0001080319
us-gaap:SubsequentEventMember
2016-04-02
0001080319
us-gaap:SubsequentEventMember
2016-04-27
0001080319
us-gaap:SubsequentEventMember
2016-04-03
2016-04-04
0001080319
us-gaap:SubsequentEventMember
2016-04-04
0001080319
EMGL:DorianaGianfeliciMember
2016-01-01
2016-03-31
iso4217:USD
xbrli:shares
iso4217:EUR
iso4217:USD
xbrli:shares
xbrli:pure
iso4217:CAD
237
319530
344530
450000
50000
106000
150
138228
55425
191675
53447
55662
24336473
0.05
0.95
0.90
0.97
0.97
0.95
107589
137612
500000
294368
186233
276983
108135
115590
392573
436796
150000
25000
20000
18400
15224
55000
233
256
170
P15Y
P14Y
P5Y
P1Y6M
P7Y
P5Y
P7Y
53000
5 debentures issued
4 debentures issued
5000
5000
5000
5000
500
500
1.15
0.80
0.75
1.00
1.50
2.0038
1.9479
P3Y0M3D
P2Y5M1D
0.00
0.00
0.0091
0.0091
0.00
0.00
0.15
0.15
0.12
0.01
1304334
1097677
1.25
1.25
1.25
1.25
1.15
1.15
138225
16754945
26463158
634810
1472198
27935356
17389755
220000
130435
1.15
30700
161135
1.32
1.18
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> a 25% discount to the offering price of common
shares</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> a 25% discount to the offering price of common
shares</p>
0.10
112848
40336
31602
40910
43876
35100
113730
192706
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Note is convertible to shares
of common stock of the Company at a price equal to the lower of $0.80 or 60% of the lowest trading price of the Company’s
common stock during the 20 consecutive trading days prior to the date on which the Investor elects to convert all or part of the
Note.</p>
8000
4000
60000
15000
P3Y0M0D
P1Y0M2D
P2Y6M0D
145500
14885
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">2. Going concern</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying consolidated financial statements
have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction
of liabilities in the normal course of business.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company had a working capital deficit of
$1,690,192 as of March 31, 2016, and reported operating losses for the past two years. There are no assurances that management
will be successful in achieving sufficient cash flows to fund the Company's working capital needs, or whether the Company will
be able to refinance or renegotiate its obligations when they become due or raise additional capital through future debt or equity.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. No adjustments
have been made to the carrying value of assets or liabilities as a result of this uncertainty.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management plans to mitigate its losses in
future years by significantly reducing its operating expenses, seeking out new business opportunities and attempting to raise debt
or equity financing. However, there is no assurance that the Company will be able to obtain additional financing, reduce its operating
expenses or be successful in maintaining a viable business.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
28375
464843
-4428
440896
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">5. Line of Credit – Bank</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company currently maintains an operating
line of credit for a maximum amount of EUR 450,000 (approximately U.S. $510,030) for Multigioco and EUR 50,000 (approximately U.S.
$56,670) for Rifa from Banca Veneto in Italy. The line of credit is secured by restricted cash on deposit at Banca Veneto and guaranteed
by certain shareholders of the Company and bears a fixed rate of interest at 5% per annum on the outstanding balance and is fully
open with no minimum payment, maturity or due date.</p>
510030
56670
0.05
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">7. Related party transactions and balances</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Advances from stockholders represent non-interest
bearing loans that are due on demand. Interest was imputed at 5% per annum. Balances of Advances from stockholders are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; text-align: justify; padding-left: 5.4pt">Gold Street Capital Corp.</td><td style="width: 4%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">237</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">138,228</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Doriana Gianfelici</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">55,425</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">53,447</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Total advances from stockholders</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">55,662</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">191,675</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the three months ended March 31, 2016,
Gold Street Capital Corp. ("Gold Street"), the major stockholder of the Company, advanced $233 net of repayment of $53,000.
On March 31, 2016, the Company issued 145,500 shares to Gold Street to pay $138,225 of the debt at the market price of $0.95 per
share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Also, Doriana Gianfelici advanced EUR 150 (approximately
U.S. $170) to the Company during the three months ended March 31, 2016.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The amounts due to Gold Street and Doriana
Gianfelici at March 31, 2016 were non-interest bearing and due on demand.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 13, 2016, the Company issued a Promissory
Note for $90,750 to Braydon Capital Corp, a company owned by Claudio Ciavarella, the brother of our CEO, that bears interest at
a rate of 1% per month due in full on the maturity date of January 13, 2017. (See Note 10).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company currently maintains an operating
line of credit for its subsidiaries secured by restricted cash on deposit at Banca Veneto and guaranteed by certain shareholders
of the Company. See also Note 5 Line of Credit - Bank.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td><td> </td>
<td colspan="3" style="text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; text-align: justify; padding-left: 5.4pt">Gold Street Capital Corp.</td><td style="width: 4%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">237</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">138,228</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Doriana Gianfelici</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">55,425</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">53,447</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Total advances from stockholders</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">55,662</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">191,675</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">8. Stockholders’ Equity</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 8, 2016, the Company entered into
a non-exclusive advisory agreement with Newbridge Securities Corp. (“Newbridge”). As consideration for these services,
the Company agreed to pay Newbridge advisory fees of $15,000 and issue 50,000 restricted shares of common stock upon signing the
agreement and 50,000 restricted shares of common stock upon the presentation of a Term Sheet. The Company paid $7,500 and issued
50,000 shares of common stock which were valued at the market price of $0.97 per share on March 8, 2016 and amortized over the service period of two months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 14, 2016, the Company entered into
a Mutual Release Agreement with Typenex Co-Investment, LLC to extinguish future “true-up” provisions contained within
the Convertible Note dated June 18, 2015 and the Transfer Agent Reserve shares related to the Note. Pursuant to the agreement,
the Company issued 14,885 shares of common stock to Typenex Co-Investment, LLC. Those shares were valued at market price on issuance
date of $0.97 per share and recorded as an expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Please see Note 7 for additional common share
transactions in repayment of debt.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">9. Debentures and Convertible Notes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Debentures and convertible notes outstanding
include the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt">April 2, 2015 Debentures, net of discount of $58 and $2,687</td><td style="width: 2%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">43,876</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">40,336</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">April 27, 2015 Debentures, net of discount of $644 and $2,816</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">35,100</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">31,602</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">July 9, 2015 Debentures net of discount of $0 and $14,090</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">40,910</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1pt">February 29, 2016 Convertible Note, net of discount of $486,269</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">113,730</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">192,706</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">112,848</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Less: unamortized debt issuance costs</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(55,094</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(5,259</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">137,612</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">107,589</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">April 2, 2015 Debentures</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 2, 2015, the Company issued debentures
to a group of accredited investors to purchase 5 unsecured Debenture Units for gross proceeds of $25,000 and 5 Debenture Units
for gross proceeds of CDN $25,000 (approximately U.S. $18,400). Each Debenture Unit is comprised of (i) a $5,000 and CDN $5,000
debenture, respectively, bearing interest at a rate of 15% per annum, maturing one year from the date of issuance and (ii) 500
warrants to receive one common share per warrant prior to April 2, 2017, which may be exercised at the lower of (a) $1.25 and CDN
$1.25, respectively, and (b) a 25% discount to the offering price of common shares of the Company in the next equity financing
of the Company. On April 2, 2016, the maturity date, the Company paid the amounts due in full of $28,770 and CDN $28,770 (approximately
US $22,141)  including principle and accrued interest. See also Note 15 Subsequent Events.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">April 27, 2015 Debentures</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 27, 2015, the Company issued debentures
to a group of accredited investors to purchase 4 unsecured Debenture Units for gross proceeds of $20,000 and 4 unsecured Debenture
Units for gross proceeds of CDN$20,000 (approximately U.S. $15,224). Each Debenture Unit is comprised of (i) a $5,000 and CDN$5,000
debenture, respectively, bearing interest at a rate of 15% per annum, maturing one year from the date of issuance and (ii) 500
warrants to receive one common share per warrant prior to April 27, 2017, which may be exercised at the lower of (a) $1.25 and
CDN$1.25, respectively, and (b) a 25% discount to the offering price of common shares of the Company in the next equity financing
of the Company.  On April 27, 2016, the maturity date, the Company paid the amounts due in full of $23,088 and CDN $23,088
(approximately U.S. $18,200) including principle and accrued interest. See also Note 15 Subsequent Events.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">July 9, 2015 Convertible Promissory Note</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 9, 2015, the Company issued a convertible
promissory note (the “Note”) bearing an interest of 10% per annum to purchase a gross amount of $220,000 which includes
an Original Issue Discount (“OID”) of 10% to an accredited investor. The Note was convertible to shares of common stock
of the Company at a price equal to the lower of $0.80 or 60% of the lowest trading price of the Company’s common stock during
the 20 consecutive trading days prior to the date on which the Investor elects to convert all or part of the Note. On July 21,
2015, the closing date, the Company received an initial consideration of $55,000, which includes an OID of $5,000. This initial
consideration is a debenture. The Note was pre-paid on January 14, 2016. The total amount of pre-payment was $90,750, including
interest and penalties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">February 29, 2016 Convertible Promissory Note</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 29, 2016, the Company closed a
Securities Purchase Agreement with an unaffiliated private investor, to raise up to $750,000. The Company received gross proceeds
from the initial private placement of $600,000, bearing an interest rate of 12% per annum and due on February 28, 2017. The Note
is convertible to shares of common stock of the Company at the price of $0.85 per share with certain price adjustment clauses.
The convertible promissory note was guaranteed by Confidi Union Impresa, an unrelated party. As part of purchase agreement, the
Company also issued a warrant to purchase 130,435 shares of Company’s common stock at $1.15 per share which may be exercised
by the warrant holder between August 28, 2016 and February 28, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has determined that the conversion
feature embedded in the notes constitutes a derivative and has been bifurcated from the note and recorded as a derivative liability,
with a corresponding discount recorded to the associated debt, on the accompanying balance sheet, and revalued to fair market value
at each reporting period. (See Note 12).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company paid commissions of $8,000, $4,000,
and $60,000 for the June 18, July 9, 2015, and February 29, 2016 Notes, respectively. The Company also paid commissions of 7,500
shares of common stock at a price of $0.80 per share or $6,000 and 4,000 shares of common stock at a price of $0.75 per share or
$3,000 related to the June 18 and July 9, 2015 Notes, respectively. The commissions related to the notes were amortized over the
life of the notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Warrants issued in relation to the debentures
and promissory notes are discussed in Note 11.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-size: 10pt">April 2, 2015 Debentures, net of discount of $58 and $2,687</td><td style="width: 2%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">43,876</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 13%; font-size: 10pt; text-align: right">40,336</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">April 27, 2015 Debentures, net of discount of $644 and $2,816</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">35,100</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">31,602</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">July 9, 2015 Debentures net of discount of $0 and $14,090</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">40,910</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1pt">February 29, 2016 Convertible Note, net of discount of $486,269</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">113,730</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">192,706</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">112,848</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Less: unamortized debt issuance costs</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(55,094</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(5,259</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">137,612</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">107,589</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
-5259
5000
-55094
22141
18200
28770
23088
90750
22141
18200
130435
75000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">10. Promissory Notes Payable</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Promissory Notes include the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; font-size: 10pt; text-align: left">Braydon Capital Corp</td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">276,983</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">186,233</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">2336414 Ontario Inc.</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">115,590</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">108,135</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">392,573</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">294,368</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 9, 2014, the Company obtained a
promissory note for CDN $500,000 (approximately U.S. $436,796) Paymobile Inc., a subsidiary of 2336414 Ontario Inc. (“2336414”)
of which the Company owns 666,664 common shares, that bears interest at a rate of 1% per month on the outstanding balance to be
paid in installments as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 42.55pt; text-align: justify">- CDN $200,000 on December 31,
2014</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 42.55pt; text-align: justify">- CDN $150,000 on January 31, 2015</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 42.55pt; text-align: justify">- CDN $150,000 on February 28,
2015</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of the date of this filing, the final payment
of CDN $150,000 plus accrued interest remains due. The Company and 2336414 have agreed in writing to extend the due date until
June 30, 2016 unless further extended by mutual consent.  Interest expense of $4,475 and $6,984 were recorded for the three months ended March 31, 2016 and 2015,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 13, 2016, the Company issued a Promissory
Note for $90,750 to Braydon Capital Corp, a company owned by Claudio Ciavarella, the brother of our CEO that bears interest at
a rate of 1% per month due in full on the maturity date of January 13, 2017. Interest expense of $7,869 was recorded for the three months ended March 31, 2016.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">December 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; font-size: 10pt; text-align: left">Braydon Capital Corp</td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">276,983</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">186,233</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">2336414 Ontario Inc.</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">115,590</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">108,135</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">392,573</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">294,368</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">11. Warrants</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 29, 2016, as per a Securities Purchase
Agreement, the Company issued a warrant to purchase 130,435 shares of the Company’s common stock at $1.15 per share which
may be exercised by the warrant holder between August 28, 2016 and February 28, 2019 (See Note 9). The fair value of the warrants
of $106,583 was calculated using the Black-Scholes model on the date of issuance and was recorded as a debt discount, which has
been amortized as interest expense over the life of the debt.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following assumptions were used to calculate
the fair value of warrants at February 29, 2016:</p>
<p style="font: 10pt Calibri, Helvetica, Sans-Serif; margin: 0; color: #1F497D"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 50%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 77%; font-size: 10pt">Exercise price</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">1.15</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Common stock price per share</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.90</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200.38</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Life</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3.0</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Dividend yield</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.91</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Forfeiture risk</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A summary of warrant transactions during the
three months ended March 31, 2016 is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Warrant <br />Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Weighted Average <br />Exercise Price <br />Per Common Share</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Weighted <br />Average <br />Life</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 39%; font-size: 10pt">Outstanding at December 31, 2015</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 15%; font-size: 10pt; text-align: right">30,700</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">1.32</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 14%; font-size: 10pt; text-align: right">1.02</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Issued</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">130,435</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">1.15</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3.00</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1pt">Expired</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Outstanding March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">161,135</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1.18</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2.51</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">13. Revenues</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth the breakdown
of gaming revenues for the three months ended March 31, 2016 and 2015:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Three Months Ended <br />March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Three Months Ended <br />March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Turnover</td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 15.25pt">Turnover web-based</td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">26,463,158</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">16,754,945</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Turnover land-based</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,472,198</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">634,810</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Total Turnover</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">27,935,356</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">17,389,755</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Winnings/Payouts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 15.25pt">Winnings web-based</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">24,618,293</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,452,519</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Winnings land-based</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,147,386</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">474,699</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Total Winnings/payouts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">25,765,679</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,927,218</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Gross Gaming Revenues</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,169,677</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,462,537</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Less: ADM Gaming Taxes</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">454,460</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">235,406</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Net Gaming Revenues</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,715,217</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,227,131</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Add: Commission Revenues</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">31,969</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Total Revenues</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,747,186</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,227,131</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Turnover represents the total bets processed
for the period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">14. Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is incorporated in the United States
of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company had no
U.S. taxable income for the three months ended March 31, 2016 and March 31, 2015.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company periodically evaluates whether
it is more likely than not that it will generate sufficient taxable income to realize the deferred income tax asset. The ultimate
realization of this asset is dependent upon the generation of future taxable income sufficient to offset the related deductions.
At the present time, management cannot presently determine when the Company will be able to generate sufficient taxable income
to realize the deferred tax asset; accordingly, a valuation allowance has been established to offset the asset.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company's Italian subsidiaries are governed
by the income tax laws of Italy. The corporate tax rate in Italy is 32.32% (IRES at 27.5% plus IRAP ordinary at 4.85%) on income
reported in the statutory financial statements after appropriate tax adjustments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The reconciliation of income tax expense at
the U.S. statutory rate of 35% to the Company’s effective tax rate is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">U.S. Statutory rate</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">(124,831</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">(96,871</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Tax rate difference between Italy and U.S.</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">22,457</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(5,613</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Change in Valuation Allowance</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">127,222</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">102,484</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Permanent difference</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">10,375</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Effective tax rate</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">35,223</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has accumulated a net operating
loss carry forward ("NOL") of approximately $9.3 million as of March 31, 2016. This NOL may be offset against future
taxable income through the year 2035. The use of these losses to reduce future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the NOL. No tax benefit has been reported in the consolidated financial statements for
the three months ended March 31, 2016 because it has been fully offset by a valuation allowance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Utilization of NOLs is subject to
limitation due to any ownership change (as defined under Section 382 of the Internal Revenue Code of 1986) which resulted in
a change in business direction. Unused limitations may be carried over to future years until the NOLs expire. Utilization of
NOLs may also be limited in any one year by alternative minimum tax rules.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under Italian tax law, the operating loss carryforwards
available for offset against future profits can be used indefinitely. Operating loss carryforwards are only available for offset
against national income tax, in the limit of 80% of taxable annual income (this restriction does not apply to the operating loss
incurred in the first three years of the Company's activity, which are therefore available for 100% offsetting).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The provisions for income taxes consist of
currently payable Italian income tax.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0">The tax effects of temporary differences that give rise to the Company’s
net deferred tax asset are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Net loss carryforward - US</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,276,183</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,641,407</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,276,183</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,641,407</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr></table>
200000
150000
150000
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Warrant <br />Shares</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Weighted Average <br />Exercise Price <br />Per Common Share</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Weighted <br />Average <br />Life</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 39%; font-size: 10pt">Outstanding at December 31, 2015</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 15%; font-size: 10pt; text-align: right">30,700</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">1.32</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 14%; font-size: 10pt; text-align: right">1.02</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Issued</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">130,435</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">1.15</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3.00</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercised</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 1pt">Expired</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Outstanding March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">161,135</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1.18</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2.51</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Three Months Ended <br />March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">Three Months Ended <br />March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Turnover</td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 48%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 15.25pt">Turnover web-based</td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">26,463,158</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 8%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">16,754,945</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Turnover land-based</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,472,198</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">634,810</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Total Turnover</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">27,935,356</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">17,389,755</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Winnings/Payouts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 15.25pt">Winnings web-based</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">24,618,293</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,452,519</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Winnings land-based</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,147,386</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">474,699</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Total Winnings/payouts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">25,765,679</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15,927,218</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Gross Gaming Revenues</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,169,677</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,462,537</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Less: ADM Gaming Taxes</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">454,460</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">235,406</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Net Gaming Revenues</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,715,217</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,227,131</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 15.25pt">Add: Commission Revenues</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">31,969</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Total Revenues</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,747,186</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,227,131</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">U.S. Statutory rate</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">(124,831</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">(96,871</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Tax rate difference between Italy and U.S.</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">22,457</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(5,613</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Change in Valuation Allowance</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">127,222</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">102,484</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Permanent difference</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">10,375</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Effective tax rate</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">35,223</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
-3276183
-2641407
3276183
2641407
600000
750000
-124831
-96871
22457
-5613
127222
102484
10375
35223
EMPIRE GLOBAL CORP.
0001080319
10-Q
2016-03-31
false
--12-31
No
No
Yes
Smaller Reporting Company
Q1
2016
310407
295008
36725
35380
682646
772045
232013
240501
88705
90844
2376540
2259154
260318
260318
6729
6975
2964305
2857792
3646951
3629837
312483
242063
571501
454868
165166
221212
28375
464843
1450
2275085
2462237
67532
69923
2342617
2532160
2413
2434
10472501
10765877
-9294845
-9777684
178151
263469
274942
274026
327536
219378
124265
107050
3646951
3629837
0.0001
0.0001
80000000
80000000
24126088
24336473
24126088
24336473
422276
157363
178188
171923
1747186
1227131
1228220
896971
870846
577302
2099066
1474273
98544
5821
4428
-4393
1620
983
40952
95736
52149
-447616
-299291
35223
-482839
-299291
-17215
-63557
-500054
-362848
24336473
21225427
-351880
-247142
-0.02
-0.02
123460
96076
18982
2589
64023
2194
40952
15772
116939
63308
-79672
59741
-26476
172519
138225
1620
983
12010
1704
-55781
-128949
6541
37489
600000
90750
-168430
55000
556334
-146178
20825
-250353
34487
396
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">1. Basis of Presentation and Nature of Business</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basis of Presentation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The unaudited financial statements have been
prepared in accordance with accounting principles generally accepted in the United States for interim financial information and
the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements
have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial position as of March 31, 2016 and the results of operations and
cash flows for the three months ended March 31, 2016 and 2015. The financial data and other information disclosed in these notes
to the interim financial statements related to these periods are unaudited. The results for the three months ended March 31, 2016
are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December
31, 2016. The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31,
2015 as included in our Annual Report on form 10-K.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Nature of Business</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Empire Global Corp. ("Empire" or
the “Company") was incorporated in the state of Delaware on August 26, 1998 as Pender International Inc. On September
30, 2005, the Company changed its name to Empire Global Corp. and maintains its principal executive offices headquartered in Toronto,
Canada.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company, through its wholly owned subsidiaries, Multigioco Srl (“Multigioco”) which was acquired
on August 15, 2014, and Rifa Srl (“Rifa”) which was acquired on January 1, 2015, provides web-based and land-based
gaming services, including a variety of online and offline lottery and casino gaming, as well as sports betting through locations
situated throughout Italy.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
1690192
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">a) Basis of consolidation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include
the financial statements of the Company and its subsidiaries, all of which are wholly owned. All significant inter-company transactions
are eliminated upon consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain amounts of prior periods were reclassified
to conform with current period presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">3. Summary of Significant Accounting Policies</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">a) Basis of consolidation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements include
the financial statements of the Company and its subsidiaries, all of which are wholly owned. All significant inter-company transactions
are eliminated upon consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain amounts of prior periods were reclassified
to conform with current period presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">b) Use of estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of the financial statements
in conformity with Generally Accepted Accounting Principles ("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 dates of
the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ
from those estimates. These estimates and assumptions include valuing equity securities issued in share based payment arrangements,
determining the fair value of our common stock, the collectability of receivables and advances and deferred taxes and related valuation
allowances. Certain estimates, including evaluating the collectability of receivables and advances, could be affected by external
conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors
could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting
estimates at least quarterly based on these conditions and record adjustments when necessary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">c) Goodwill</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill is recognized for the excess of the
purchase price over the fair value of tangible and identifiable intangible net assets of businesses acquired. Goodwill is not being
amortized, but is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative
assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If the qualitative assessment is not conclusive, we proceed to a two-step process to test goodwill for impairment including comparing
the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair value for our reporting units
is determined using an income or market approach incorporating market participant considerations and management's assumptions on
revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include
both internal and third-party valuations. Unless circumstances otherwise dictate, we perform our annual impairment testing in the
fourth quarter.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We perform the allocation based on our knowledge
of the market in which we operate, and our overall knowledge of the gaming industry.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">d) Business Combinations</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We allocate the fair value of purchase consideration
to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the
fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Such valuations require management to make
significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible
assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from
a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from
estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">e) Long-Lived Assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We evaluate the carrying value of our long-lived
assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets
when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted
future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value
will be charged to earnings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fair value is based upon discounted cash flows
of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate,
current estimated net sales proceeds from pending offers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">f) Derivative Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
convertible notes and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as
charges or credits to income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For option-based simple derivative financial
instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent
valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
or as equity, is re-assessed at the end of each reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">g) Earnings Per Share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FASB ASC 260, "Earnings Per Share"
provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding
for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an
entity similar to fully diluted earnings per share. These potentially dilutive securities were not included in the calculation
of loss per share for the three months ended March 31, 2016 and 2015, thus the effect would have been anti-dilutive. Accordingly,
basic and diluted loss per common share is the same for all periods presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">h) Currency translation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Since the Company's subsidiaries operates in
Italy, the subsidiaries functional currency is the Euro. In the consolidated financial statements, revenue and expense accounts
are translated at the average rates during the period, and assets and liabilities are translated at period-end rates and equity
accounts are translated at historical rate. Translation adjustments arising from the use of different exchange rates from period
to period are included as a component of stockholders' equity. Gains and losses from foreign currency transactions are recognized
in current operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">i) Revenue Recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenues from sports-betting, casino, cash
and skill games; slots, bingo and horse race wagers represent the gross pay-ins (also referred to as Turnover) from customers less
gaming taxes and payouts to customers. Revenues are recorded when the game is closed. In addition, the Company receives commissions
from the sale of scratch tickets and other lottery games. Commissions are recorded when the ticket for scratch off tickets and
lottery tickets are sold.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">j) Gaming accounts receivable & allowance
for doubtful accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Gaming accounts receivable represents
gaming deposits made by customers to their gaming accounts either directly by credit card, bank wire, e-wallet or other
accepted method through one of our websites or indirectly in cash at the cashier of a betting shop but not yet credited to
our bank accounts and subject to normal trade collection terms without discounts. The Company periodically evaluates the
collectability of its gaming accounts receivable and considers the need to record or adjust an allowance for doubtful
accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the
recorded estimates. The Company has determined that an allowance  EUR 344,530 (approximately U.S. $390,490) and EUR
319,530 (approximately U.S. 349,374) for doubtful accounts was needed for the gaming accounts receivable balances as of
March 31, 2016 and December 31, 2015, respectively. The Company does not require collateral to support customer receivables.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">k) Gaming account balances</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Gaming account balances represent customer
balances, including winnings and deposits, that are held as credits in gaming accounts and have not as of yet been used or withdrawn
by the customers. Customers can request payment from the Company at any time and the payment to customers can be made through bank
wire, credit card, or actual cash disbursement from one of our locations. Gaming account credit balances are non-interest bearing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">l) Fair Value Measurements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 820, Fair Value Measurement and Disclosures,
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. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable
inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1: Observable inputs such as quoted prices
(unadjusted) in active market for identical assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2: Inputs other than quoted prices that
are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets
and quoted prices for identical or similar assets or liabilities in markets that are not active.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3: Unobservable inputs in which little
or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market
participant would use.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company's short term
investments, prepaid expenses, accounts receivables, other current assets, accounts payable and accrued liabilities, gaming account
balance, and advances from shareholder approximate fair value because of the short term maturity of these financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The derivative liability in connection with
the conversion feature of the convertible debt and warrants is classified as a level 3 liability, and is the only financial liability
measured at fair value on a recurring basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The change in the Level 3 financial instrument
is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 77%; font-size: 10pt">Balance at December 31, 2015</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">28,375</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Issued during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">440,896</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercised during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,428</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Balance at March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">464,843</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">m) Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We use the asset and liability method of accounting
for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized
for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences
resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred
tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion
or all of the deferred tax assets will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has elected to include interest
and penalties related to uncertain tax positions, if determined, as a component of income tax expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In Italy, tax years beginning 2010 forward
are open and subject to examination. The Company is not currently under examination and it has not been notified of a pending examination.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">n) Recent Accounting Pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the FASB issued guidance to
simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability
be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts.
The Company adopted this guidance with the annual and the interim period beginning January 1, 2016, and applied the standard on
a retrospective basis as of December 31, 2015. As of March 31, 2016, and December 31, 2015, we had $55,094 and $5,259, respectively,
of unamortized debt issuance costs that were reclassified from prepaid expenses to a reduction in the carrying amount of the debentures
and convertible notes payable. The adoption of this standard did not have a material impact on our financial position and did not
impact our results of operations or cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There are no other recently issued accounting standards
that are expected to have a material effect on our financial condition, results of operations or cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">b) Use of estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of the financial statements
in conformity with Generally Accepted Accounting Principles ("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 dates of
the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ
from those estimates. These estimates and assumptions include valuing equity securities issued in share based payment arrangements,
determining the fair value of our common stock, the collectability of receivables and advances and deferred taxes and related valuation
allowances. Certain estimates, including evaluating the collectability of receivables and advances, could be affected by external
conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors
could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting
estimates at least quarterly based on these conditions and record adjustments when necessary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">c) Goodwill</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Goodwill is recognized for the excess of the
purchase price over the fair value of tangible and identifiable intangible net assets of businesses acquired. Goodwill is not being
amortized, but is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative
assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If the qualitative assessment is not conclusive, we proceed to a two-step process to test goodwill for impairment including comparing
the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair value for our reporting units
is determined using an income or market approach incorporating market participant considerations and management's assumptions on
revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include
both internal and third-party valuations. Unless circumstances otherwise dictate, we perform our annual impairment testing in the
fourth quarter.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We perform the allocation based on our knowledge
of the market in which we operate, and our overall knowledge of the gaming industry.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">d) Business Combinations</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We allocate the fair value of purchase consideration
to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the
fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Such valuations require management to make
significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible
assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from
a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions
believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from
estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">e) Long-Lived Assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We evaluate the carrying value of our long-lived
assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets
when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted
future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value
will be charged to earnings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fair value is based upon discounted cash flows
of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate,
current estimated net sales proceeds from pending offers.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">f) Derivative Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
convertible notes and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as
charges or credits to income.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For option-based simple derivative financial
instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent
valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
or as equity, is re-assessed at the end of each reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">g) Earnings Per Share</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FASB ASC 260, "Earnings Per Share"
provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no
dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding
for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an
entity similar to fully diluted earnings per share. These potentially dilutive securities were not included in the calculation
of loss per share for the three months ended March 31, 2016 and 2015, thus the effect would have been anti-dilutive. Accordingly,
basic and diluted loss per common share is the same for all periods presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">h) Currency translation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Since the Company's subsidiaries operates in
Italy, the subsidiaries functional currency is the Euro. In the consolidated financial statements, revenue and expense accounts
are translated at the average rates during the period, and assets and liabilities are translated at period-end rates and equity
accounts are translated at historical rate. Translation adjustments arising from the use of different exchange rates from period
to period are included as a component of stockholders' equity. Gains and losses from foreign currency transactions are recognized
in current operatio</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">i) Revenue Recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenues from sports-betting, casino, cash
and skill games; slots, bingo and horse race wagers represent the gross pay-ins (also referred to as Turnover) from customers less
gaming taxes and payouts to customers. Revenues are recorded when the game is closed. In addition, the Company receives commissions
from the sale of scratch tickets and other lottery games. Commissions are recorded when the ticket for scratch off tickets and
lottery tickets are sold.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">j) Gaming accounts receivable & allowance
for doubtful accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Gaming accounts receivable represents
gaming deposits made by customers to their gaming accounts either directly by credit card, bank wire, e-wallet or other
accepted method through one of our websites or indirectly in cash at the cashier of a betting shop but not yet credited to
our bank accounts and subject to normal trade collection terms without discounts. The Company periodically evaluates the
collectability of its gaming accounts receivable and considers the need to record or adjust an allowance for doubtful
accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the
recorded estimates. The Company has determined that an allowance  EUR 344,530 (approximately U.S. $390,490) and EUR
319,530 (approximately U.S. 349,374) for doubtful accounts was needed for the gaming accounts receivable balances as of
March 31, 2016 and December 31, 2015, respectively. The Company does not require collateral to support customer receivables.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">k) Gaming account balances</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Gaming account balances represent customer
balances, including winnings and deposits, that are held as credits in gaming accounts and have not as of yet been used or withdrawn
by the customers. Customers can request payment from the Company at any time and the payment to customers can be made through bank
wire, credit card, or actual cash disbursement from one of our locations. Gaming account credit balances are non-interest bearing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">l) Fair Value Measurements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 820, Fair Value Measurement and Disclosures,
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. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable
inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 1: Observable inputs such as quoted prices
(unadjusted) in active market for identical assets or liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 2: Inputs other than quoted prices that
are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets
and quoted prices for identical or similar assets or liabilities in markets that are not active.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Level 3: Unobservable inputs in which little
or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market
participant would use.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of the Company's short term
investments, prepaid expenses, accounts receivables, other current assets, accounts payable and accrued liabilities, gaming account
balance, and advances from shareholder approximate fair value because of the short term maturity of these financial instruments.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The derivative liability in connection with
the conversion feature of the convertible debt and warrants is classified as a level 3 liability, and is the only financial liability
measured at fair value on a recurring basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The change in the Level 3 financial instrument
is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 77%; font-size: 10pt">Balance at December 31, 2015</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">28,375</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Issued during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">440,896</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercised during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,428</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Balance at March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">464,843</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0pt"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 77%; font-size: 10pt">Balance at December 31, 2015</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">28,375</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Issued during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">440,896</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercised during the three months ended March 31, 2016</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">—  </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Change in fair value recognized in operations</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(4,428</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Balance at March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">464,843</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">m) Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We use the asset and liability method of accounting
for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized
for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences
resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred
tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion
or all of the deferred tax assets will not be realized.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC Topic 740.10.30 clarifies the accounting
for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has elected to include interest
and penalties related to uncertain tax positions, if determined, as a component of income tax expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In Italy, tax years beginning 2010 forward
are open and subject to examination. The Company is not currently under examination and it has not been notified of a pending examination.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">n) Recent Accounting Pronouncements</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In April 2015, the FASB issued guidance to
simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability
be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts.
The Company adopted this guidance with the annual and the interim period beginning January 1, 2016, and applied the standard on
a retrospective basis as of December 31, 2015. As of March 31, 2016, and December 31, 2015, we had $55,094 and $5,259, respectively,
of unamortized debt issuance costs that were reclassified from prepaid expenses to a reduction in the carrying amount of the debentures
and convertible notes payable. The adoption of this standard did not have a material impact on our financial position and did not
impact our results of operations or cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There are no other recently issued accounting standards
that are expected to have a material effect on our financial condition, results of operations or cash flows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">4) Intangible Assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Intangible assets consist of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">December 31, 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">Life</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 36%; font-size: 10pt">Licenses</td><td style="width: 5%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">960,652</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">956,632</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 15%; font-size: 10pt; text-align: right">1.5 - 7</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Location contracts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5 - 7</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Customer relationships</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">786,931</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">786,931</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Trademarks/names</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">14</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1pt">Website</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">40,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">40,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right">5</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,897,583</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,893,563</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Accumulated amortization</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(638,429</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(517,023</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Balance</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,259,154</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,376,540</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates intangible assets for impairment on an annual
basis during the last month of each year and at an interim date if indications of impairment exist. Intangible asset
impairment is determined by comparing the fair value of the asset to its carrying amount with an impairment being recognized only
when the fair value is less than carrying value. The amortization expense was $121,405 and $93,753 in the three months ended March
31, 2016 and 2015, respectively.</p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 70%">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">March 31, 2016</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">December 31, 2015</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">Life</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 36%; font-size: 10pt">Licenses</td><td style="width: 5%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">960,652</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 15%; font-size: 10pt; text-align: right">956,632</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 4%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"> </td><td style="width: 15%; font-size: 10pt; text-align: right">1.5 - 7</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Location contracts</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">1,000,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">5 - 7</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Customer relationships</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">786,931</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">786,931</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">15</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Trademarks/names</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">110,000</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">14</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; padding-bottom: 1pt">Website</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">40,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">40,000</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right">5</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,897,583</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2,893,563</td><td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Accumulated amortization</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(638,429</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(517,023</td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; padding-bottom: 2.5pt">Balance</td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,259,154</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">2,376,540</td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; padding-bottom: 2.5pt"> </td>
<td style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> </td></tr>
</table>
2893563
2897583
960652
956632
1000000
1000000
786931
786931
110000
110000
40000
40000
-517023
-638429
93753
121405
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">6. Liability in connection with acquisition
– due to Newgioco</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Liability in connection with acquisition represent
non-interest bearing amount due by the Company’s subsidiaries toward the purchase price per purchase agreement between Newgioco
and the Company’s subsidiaries. The Company’s shareholder and director, Beniamino Gianfelici, owns 50% shares of Newgioco.
During the three months ended March 31, 2016, the company paid EUR 106,000 (approximately $120,000) to Newgioco.</p>
<p style="margin: 0pt"></p>
50000
7500
50000
50000
15000
349374
390490
6000
3000
7500
4000
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 50%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 77%; font-size: 10pt">Exercise price</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 18%; font-size: 10pt; text-align: right">1.15</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Common stock price per share</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left">$</td><td style="font-size: 10pt; text-align: right">0.90</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">200.38</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Life</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">3.0</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Dividend yield</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.91</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Forfeiture risk</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
</table>
106583
15452519
24618293
474699
1147386
25765679
15927218
-2169677
-1462537
454460
235406
1715217
1227131
31969
0
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2016</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td colspan="3" style="font: 10pt Times New Roman, Times, Serif; text-align: right; border-bottom: Black 1pt solid">March 31, <br />2015</td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 10pt"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td><td style="font-size: 10pt"> </td>
<td colspan="3" style="font-size: 10pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Net loss carryforward - US</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,276,183</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 5%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="width: 16%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,641,407</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less valuation allowance</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,276,183</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,641,407</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-left: 5.4pt">Deferred tax assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">—  </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
</table>
0.35
9300000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">12. Derivative Liability and Fair Value</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has evaluated the application of
ASC 815 Derivatives and Hedging and ASC 815-40-25 to the warrants to purchase common stock issued with the convertible notes and
debentures. Based on the guidance in ASC 815 and ASC 815-40-25, the Company concluded these instruments were required to be accounted
for as derivatives due to the down round protection feature on the conversion price and the exercise price. The Company records
the fair value of these derivatives on its balance sheet at fair value with changes in the values of these derivatives reflected
in the statements of operations as “Gain (loss) on derivative liabilities.” These derivative instruments are not designated
as hedging instruments under ASC 815 and are disclosed on the balance sheet under Derivative Liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounted for the issuance of the
convertible promissory note on February 29, 2016 in accordance with ASC 815” Derivatives and Hedging.” The note is
convertible into an indeterminate number of shares for which the Company cannot determine if it has sufficient authorized shares
to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through
earnings at the end of each reporting period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The gross proceeds from the sale of the debentures
are recorded net of $440,896 related to the conversion feature of the embedded conversion option and $90,506 allocated to the warrants issued.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following assumptions were used to calculate
the fair value of derivative liabilities at March 31, 2016:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 50%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercise price</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">$1.00-$1.50</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 77%; font-size: 10pt">Common stock price per share</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"></td><td style="width: 18%; font-size: 10pt; text-align: right">$0.95</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">194.79</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Weighted average life</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2.51</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Dividend yield</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.91</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Forfeiture risk</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 50%">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Exercise price</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">$1.00-$1.50</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 77%; font-size: 10pt">Common stock price per share</td><td style="width: 3%; font-size: 10pt"> </td>
<td style="width: 1%; font-size: 10pt; text-align: left"></td><td style="width: 18%; font-size: 10pt; text-align: right">$0.95</td><td style="width: 1%; font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt">Volatility</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">194.79</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt">Weighted average life</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">2.51</td><td style="font-size: 10pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Dividend yield</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 10pt; text-align: left">Interest rate</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0.91</td><td style="font-size: 10pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 10pt; text-align: left">Forfeiture risk</td><td style="font-size: 10pt"> </td>
<td style="font-size: 10pt; text-align: left"> </td><td style="font-size: 10pt; text-align: right">0</td><td style="font-size: 10pt; text-align: left">%</td></tr>
</table>
120000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">15. Subsequent Events</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">a.</font></td><td style="text-align: justify"><font style="font-size: 10pt">On
April 2, 2016, the maturity date, the Company paid the amounts due in full under the April 2, 2015 debentures for $28,770 and
CDN $28,770 (approximately U.S. $22,141), including principle and interest accrued.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">b.</font></td><td style="text-align: justify">On April 27, 2016, the maturity date, the Company paid the amounts due in full under the April 27, 2015 debentures
for $23,088 and CDN $23,088 (approximately U.S. $18,200), including principle and interest accrued.</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">c.</font></td><td style="text-align: justify"><font style="font-size: 10pt">On April 1 and April 4, 2016, the Company received the second tranche
of proceeds of $150,000 less legal expenses of $15,000 due under the Convertible Promissory Note issued February 29, 2016. The
Company paid commissions of $15,000 and issued warrants to the placement agent, to purchase 75,000 shares of the Company,
which may be exercised at $1.15 per share prior to April 4, 2019.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Nature of Business</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Empire Global Corp. ("Empire" or
the “Company") was incorporated in the state of Delaware on August 26, 1998 as Pender International Inc. On September
30, 2005, the Company changed its name to Empire Global Corp. and maintains its principal executive offices headquartered in Toronto,
Canada.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company, through its wholly owned subsidiaries, Multigioco Srl (“Multigioco”) which was acquired
on August 15, 2014, and Rifa Srl (“Rifa”) which was acquired on January 1, 2015, provides web-based and land-based
gaming services, including a variety of online and offline lottery and casino gaming, as well as sports betting through locations
situated throughout Italy.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basis of Presentation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The unaudited financial statements have been
prepared in accordance with accounting principles generally accepted in the United States for interim financial information and
the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements
have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial position as of March 31, 2016 and the results of operations and
cash flows for the three months ended March 31, 2016 and 2015. The financial data and other information disclosed in these notes
to the interim financial statements related to these periods are unaudited. The results for the three months ended March 31, 2016
are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December
31, 2016. The balance sheet at December 31, 2015 has been derived from the audited financial statements at that date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31,
2015 as included in our Annual Report on form 10-K.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
90750
118575
125030
27580
-108333
147748
-126461
58741
-104281
-39325
-10682
-8422
48596
34734
2616
-90759
-1464
-13840
-433036
61803
349374
390490
666664
4475
6984
7869
440896
90506
150000
15000
90750
2687
2816
14090
58
644
0
486269
IRES at 27.5% plus IRAP ordinary at 4.85%