Note 1 - Introduction

12 Months Ended

Dec. 31, 2017

Business Description and Basis of Presentation [Text Block]

1.	Introduction:

Nature of business

The

primary focus of Shoal Games Ltd. (the "Company") is the development and marketing of the Rooplay edugame system for children and families. Rooplay is an advertising free platform of game content that is directed at children.

The games on the Rooplay sys

tem are designed to both entertain and educate. Children engaging with Rooplay learn technology, solve puzzles, paint pictures, practice language, learn math, and other educational games. Shoal Games is developing a content system with Rooplay that builds tech literacy and encourages early learning.

Rooplay will generate revenue for the Company from consumer subscriptions which customers pay to unlock the Rooplay game catalog.

Shoal Games' other mobile products Garfield's Bingo (www.garfieldsbingo.

com), and Trophy Bingo (www.trophybingo.com), are free-to-play mobile games live in the Apple, Google and Amazon App Stores. The Company has generated its main source of revenue to-date from players making in-app purchases in Trophy Bingo and Garfield's Bingo.

Continuing operations

These consolidated financial statements have been prepared on the going concern basis, which presumes the realization of assets and the settlement of liabilities in the normal course of operations.

The application of the going concern basis is dependent upon the Company achieving profitable operations to generate sufficient cash flows to fund continued operations, or, in the absence of adequate cash flows from operations, obtaining additional financing. The Company has reported losses from operations for the year ended

December 31, 2017

and

2016,

and has an accumulated deficit of

$23,305,389

as at

December 31, 2017.

This raises substantial doubt about the Company's ability to continue as a going concern.

In view of the matters

described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts and settlement of the liability amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to succeed in its future operations. The financial statements do

not

include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

Management continues to review operations in order to identify additional strategies designed to generate cash flow, improve the Company's financial position, and enable the timely d

ischarge of the Company's obligations. If management is unable to identify sources of additional cash flow in the short term, it

may

be required to further reduce or limit operations.