Summary of significant accounting policies:

(a) Basis of presentation:

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") applicable to annual financial information and with the rules and regulations of the United States Securities and Exchange Commission. The financial statements include the accounts of the Company's subsidiaries,

Company	Registered	% Owned
Shoal Media (Canada) Inc.	British Columbia, Canada		100%
Coral Reef Marketing Inc.	Anguilla		100%
Rooplay Media Ltd.	British Columbia, Canada		100%
Rooplay Media Kenya Limited	Kenya		100%
Shoal Media Inc.	Anguilla		100%
Shoal Games (UK) Plc	United Kingdom		99%
Shoal Media (UK) Ltd.	United Kingdom		100%

In addition, there are the following dormant subsidiaries; Bingo.com (Antigua) Inc., Bingo.com (Wyoming) Inc., and Bingo Acquisition Corp.

During the quarter ended

March 31, 2017,

Shoal Media UK Ltd. was incorporated under the laws of England and Wales.

During the quarter ended

September 30, 2017,

Rooplay Media Kenya Limited was incorporated under the laws of Kenya.

All inter-company balances and transactions have been eliminated in the consolidated financial statements.

(b) Use of estimates:

The preparation of consolidated financial statements in conformity with US GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and recognized revenues and expenses for the reporting periods.

Significant areas requiring the use of estimates include the collectibility of accounts receivable, the valuation of promissory notes and the estimated market rate of

15%,

stock-based compensation, the derivative liability - warrants valuation and the valuation of deferred tax assets. Actual results

may

differ significantly from these estimates.

Trophy Bingo and Garfield's Bingo revenues have been recognized from the sale of in-game purchases, net of platform fees, at the time of purchase by the player. The revenue from in-game advertising is recognized when advertising is served to the player.

Advertising revenues,

not

generated in Trophy Bingo or Garfield's Bingo, have been recognized when collection of the amounts are reasonably assured.

Rooplay revenue have been recognized when collection of the subscriptions are reasonably assured and the provision of service has occurred.

(d) Foreign currency:

The consolidated financial statements are presented in United States dollars, the functional currency of the Company and its subsidiaries. The Company accounts for foreign currency transactions and translation of foreign currency financial statements under Statement ASC

830,

Foreign Currency Matters. Transaction amounts denominated in foreign currencies are translated at exchange rates prevailing at the transaction dates. Carrying values of monetary assets and liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-monetary assets and liabilities are translated at the exchange rate on the original transaction date.

Gains and losses from restatement of foreign currency monetary and non-monetary assets and liabilities are included in net income. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in earnings.

(e) Software Development Costs:

Software development costs incurred in the research and development of new software products and enhancements to existing software products for external use are expensed as incurred until technological feasibility has been established. After technological feasibility is established, any software development costs are capitalized and amortized at the greater of the straight-line basis over the estimated economic life of the related product or the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for the related product.

If a determination is made that capitalized amounts are

not

recoverable based on the estimated cash flows to be generated from the applicable software, any remaining capitalized amounts are written off. Although the Company believes that its approach to estimates and judgments as described herein is reasonable, actual results could differ and the Company

may

be exposed to increases or decreases in revenue that could be material.

Total software development costs for the development of all

three

games; Rooplay, Garfield's Bingo and Trophy Bingo, were

$6,039,095

as at

March 31, 2018 (

December 31, 2017 -

$5,768,476

(f) Stock-based compensation:

The Company recognizes all stock-based compensation as an expense in the financial statements and that such cost be measured at the fair value of the award.

The fair value of each option grant has been estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions:

	2018			2017
Expected dividend yield		-			-
Expected stock price volatility		25	%		-
Weighted average volatility		25	%		-
Risk-free interest rate		1.56	%		-
Expected life of options (in years)	5				-
Forfeiture rate		5	%		-

(g) Derivative liability - warrants

Some of the warrants have an exercise price in Canadian dollars whilst the Company's functional currency is US Dollars. Therefore, in accordance with ASU

815

- Derivatives and Hedging, the warrants have a derivative liability value. This liability value has

effect on the cashflow of the Company and does

not

represent a cash payment of any kind.

A fair value of the derivative liability of

$215,687

has been estimated on the date of the subscription using the Binomial Lattice pricing model. During the quarter ended

March 31, 2018,

there was a loss on derivative liability - warrants of

$171,115

and the derivative liability - warrants value increased to

$215,687

with the following assumptions:

	March 31, 2018			December 31, 2017
Average stock price		CAD $0.67			CAD$ 0.65
Expected dividend yield		-			-
Expected stock price volatility		97.57	%		93.74	%
Risk-free interest rate		1.09	%		1.66	%
Expected life of warrants	76 days			0.5 year

The average stock price is calculated on the probability weighted average price of the exercise of the warrants.

(h) New accounting pronouncements and changes in accounting policy:

May 2014,

the Financial Accounting Standards Board ("FASB") issued ASU

No.

2014

09,

Revenue from Contracts with Customers and issued subsequent amendments to the initial guidance in

August 2016,

March 2016,

April 2016,

and

May 2016

within ASU

2016

04,

ASU

2016

08,

ASU

2016

10,

ASU

2016

and ASU

2016

12,

respectively. The guidance in this update supersedes the revenue recognition requirements in ASC

605,

Revenue Recognition, and most industry-specific guidance throughout the Codification. Additionally, this update supersedes some cost guidance included in ASC

605

35,

Revenue Recognition - Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are

not

in a contract with a customer (for example, assets within the scope of ASC

360,

Property, Plant, and Equipment, and intangible assets, within the scope of ASC

350,

Intangibles - Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement in this update. The guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity should also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard was to be effective for the Company as of

January 1, 2017,

but in

August 2016,

the FASB delayed the effective date of the new revenue accounting standard to

January 1, 2019,

and would permit early adoption as of the original effective date. Earlier adoption is

not

otherwise permitted for public entities. An entity can apply the revenue standard retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings (modified retrospective method). The Company is currently assessing the impact of this update on its consolidated financial statements. The Company adopted ASC

2014

as of

January 1, 2018

using the modified retrospective method. The new standard will therefore be applied to all contracts

not

completed as of

January 1, 2018.

The adoption of ASC

606

has

not

had a material impact to its results of operations or cash flows.

January 2016,

the FASB issued ASU

2016

01,

Financial Instruments - Overall (Subtopic

825

): Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU

2016

01"

), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity

may

choose to measure equity investments that do

not

have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU

2016

also impacts the presentation and disclosure requirements for financial instruments. ASU

2016

is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017.

Early adoption is permitted only for certain provisions. The Company adopted ASU

2016

as of

January 1, 2018

and ASU

2016

has

not

had a material impact on the consolidated financial statements.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

), which requires lessees to recognize most leases on the balance sheet. This ASU requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than

months. Lessees are permitted to make an accounting policy election to

not

recognize the asset and liability for leases with a term of

twelve

months or less. The ASU does

not

significantly change the lessees' recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors' accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. The provisions of this guidance are effective for annual periods beginning after

December 15, 2018,

and interim periods within those years, with early adoption permitted. Management is evaluating the requirements of this guidance and has

not

yet determined the impact of the adoption on the Company's financial position or results of operations.

June 2016,

the FASB issued ASU

No.

2016

13,

"Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments". The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU

No.

2016

is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2019.

Early adoption is permitted for fiscal years, and interim periods within those years, beginning after

December 15, 2018.

The Company is currently evaluating the impact of ASU

No.

2016

on its financial position, results of operations and liquidity.

August 2016,

the FASB issued ASU

No.

2016

15,

"Statement of Cash Flows (Topic

230

)". The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU

No.

2016

is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2017.

Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company adopted ASC

2014

as of

January 1, 2018

and it will have

material impact on the consolidated financial statements.

October 2016,

FASB issued ASU

No.

2016

16,

Income Taxes (Topic

740

). The standard improves the accounting for income tax consequences of intra-entry transfers of assets other than inventory. This pronouncement is effective for annual reporting periods beginning after

December 15, 2017.

The amendments in this ASU should be applied using a modified retrospective approach. The Company adopted ASU

2016

January 1, 2018

and it did

not

have an impact on its consolidated financial statements.

January

2017,

the FASB issued ASU

2017

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business. The new standard provides a screen to determine when a set of assets and activities is

not

a business. The screen requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is

not

a business. This standard is effective for annual periods beginning after

December 15, 2017

and interim periods within those periods, with early adoption permitted, and should be applied prospectively on or after the effective date. Upon the adoption of ASU

2017

01,

it is expected that the majority of the Company's acquisitions will be accounted for as asset acquisitions, whereas under the current guidance the majority of the Company's acquisitions have been accounted for as business combinations. The most significant difference between the

two

accounting models that will impact the Company's consolidated financial statements is that in an asset acquisition, property acquisition costs are generally a component of the consideration transferred to acquire a group of assets and are capitalized as a component of the cost of the assets, whereas in a business combination, property acquisition costs are expensed and

not

included as part of the consideration transferred. The Company adopted ASU

2017

January 1, 2018

and the adoption did

not

have a material impact on the Company's consolidated financial statements.

May 2017,

the FASB issued ASU

2017

09,

Compensation - Stock Compensation (Topic

718

): Scope of Modification Accounting. The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

This pronouncement is effective for annual reporting periods beginning after

December 15, 2017

but early adoption is permitted. The Company adopted ASU

2017

January 1, 2018

and the adoption did

not

have a material impact on the Company's consolidated financial statements because the Company has

not

had significant modifications of its awards.

August 2017,

the FASB issued ASU

2017

12,

Derivatives and Hedging (Topic

850

), the objective of which is to improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. In addition, the amendments in this Update make certain targeted improvements to simplify the application and disclosure of the hedge accounting guidance in current general accepted accounting principles. This pronouncement is effective for public entities for fiscal years beginning after

December 15, 2018.

Early application is permitted in any period after issuance. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively. The Company is currently evaluating the impact of adopting this guidance on its financial position, results of operations and liquidity.

February 2018,

FASB issued Accounting Standards Update ("ASU")

2018

02,

"Income Statement - Reporting Comprehensive Income (Topic

220

): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" to address a narrow-scope financial reporting issue that arose as a consequence of the change in the tax law. On

December 22, 2017,

the U.S. federal government enacted a tax bill,

H.R.1,

An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year

2018

(Tax Cuts and Jobs Act of

2017

). The ASU permits a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of the reclassification would be the difference between the historical corporate income tax rate of

34%

and the newly enacted

21%

corporate income tax rate. ASU

2018

is effective for all entities for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years with early adoption permitted, including adoption in any interim period, for (i) public business entities for reporting periods for which financial statements have

not

yet been issued and (ii) all other entities for reporting periods for which financial statements have

not

yet been made available for issuance. The changes are required to be applied retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of

2017

is recognized. The Company is currently evaluating the impact of adopting this guidance.

February 2018,

FASB issued ASU

2018

03,

"Technical Corrections and Improvements to Financial Instruments (Subtopic

825

) - Recognition and Measurement of Financial Assets and Financial Liabilities". This update was issued to clarify certain narrow aspects of guidance concerning the recognition of financial assets and liabilities established in ASU

No.

2016

01,

"Financial Instruments-Overall (Subtopic

825

): Recognition and Measurement of Financial Assets and Financial Liabilities". This includes an amendment to clarify that an entity measuring an equity security using the measurement alternative

may

change its measurement approach to a fair valuation method in accordance with Topic

820,

Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issued. The update is effective for fiscal years beginning after

December 15, 2017

and interim periods within those fiscal years beginning after

June 15, 2018.

The Company is currently assessing the impact that adopting this new accounting standard will have on our consolidated financial statements.

There have been

other recent accounting standards, or changes in accounting standards, during the quarter ended

March 31, 2018,

as compared to the recent accounting standards described in the Annual Report, that are of material significance, or have potential material significance, to us.

(i) Financial instruments:

(i) Fair values:

The fair value of accounts receivable, accounts payable, accrued liabilities and accounts payable and accrued liabilities - related party approximate their financial statement carrying amounts due to the short-term maturities of these instruments. Cash is carried at fair value using a level

fair value measurement.

In general, fair values determined by Level

inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level

inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.

Fair values determined by Level

inputs are unobservable data points for the asset or liability, and included situations where there is little, if any, market activity for the asset. The Company's cash was measured using Level

inputs. Stock-based compensation and derivative liability - warrants were measured using Level

inputs.

The Company deemed a fair value of the promissory notes by discounting the notes in a manner that reflects the entity's borrowing rate when interest cost is recognized in subsequent periods. The Company applied level

inputs by applying an estimated market rate of

15%

to the promissory notes. In doing so, the Company used the discounted cash flow approach to value the present value of the notes.

(ii) Foreign currency risk:

The Company operates internationally, which gives rise to the risk that cash flows

may

be adversely impacted by exchange rate fluctuations. The Company has

not

entered into any forward exchange contracts or other derivative instrument to hedge against foreign exchange risk.