10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

Or

  |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 193

For the transition period from                 to                   

Commission file number 333-120120-01

SHOAL GAMES LTD.

(Exact name of registrant as specified in its charter)

ANGUILLA, B.W.I.	98-0206369
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Hansa Bank Building, Ground Floor, Landsome Road

AI 2640, The Valley, Anguilla, B.W.I

(Address of principal executive offices)

(888) 374-2163

(Issuer's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

None

(Title of Each Class & Name of each exchange on which registered)

Securities registered under section 12(g) of the Exchange Act:

COMMON STOCK, NO PAR VALUE PER SHARE

(Title of Class)

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes  [ X ]         No [   ]

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

Form 10-K.                                                                          [   ]

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

Large accelerated filer   [  ]                                             Accelerated filer                      [   ]

Non-accelerated filer     [  ]                                             Smaller reporting company      [ X ]

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

State issuer's revenues for its most recent fiscal year.                                           $106,978

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.

Our common stock was quoted on the Over the Counter Markets - The Venture Marketplace ("OTCQB") operated by OTC Markets Group Inc. (http://www.otcmarkets.com/) under the symbol "SGLDF" until January 7, 2019 at which time it was halted and is quoted on the TSX Venture Exchange in Canada under the symbol "SGW". The closing share price as of March 21, 2019, being CAD$0.56 (approximately US$0.42) per share under symbol SGW on the TSX Venture Exchange : $55,138,058.  

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of the registrant's common stock, no par value per share, was 131,124,989 as of March 21, 2019.

DOCUMENTS INCORPORATED BY REFERENCE

The merger of Bingo.com, Inc. with Shoal Games Ltd., which was approved by the Securities Exchange Commission on March 8, 2005, and is effective on April 7, 2005, is described in the prospectus filed under Rule 424(b) of the Securities Act and the Form S-4, which were filed on March 9, 2005, and March 4, 2005, respectively. The Company filed Form SB2 on September 18, 2007, for the registration of shares originally issued in the private placement. In addition, the Company filed a TSX Venture Exchange Listing Application for the TSX-V listing on June 29, 2015.

 Page 1

TABLE OF CONTENTS

		PAGE
PART I		3
ITEM 1.	BUSINESS	3

ITEM 2.	PROPERTIES	8
ITEM 3.	LEGAL PROCEEDINGS	9
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.	9
PART II		10
ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	10
ITEM 6.	SELECTED FINANCIAL DATA	12
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	18
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	49
ITEM 9A.	CONTROLS AND PROCEDURES	49
ITEM 9B.	OTHER INFORMATION	50
PART III		51
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	51
ITEM 11.	EXECUTIVE COMPENSATION	53
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS	55
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	57
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	58
PART IV		59
ITEM 15.	EXHIBITS	59
SIGNATURES		59
CERTIFICATIONS		60
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002		62
EXHIBIT LIST		64

 Page 2

PART I

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties.  All statements contained herein that are not statements of historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Discussions containing forward-looking statements may be found in the material set forth under "Business," and "Management's Discussion and Analysis or Plan of Operation," as well as in this Annual Report generally.  We generally use words such as "believes," "intends," "expects," "anticipates," "plans," and similar expressions to identify forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could cause actual results to differ materially from this forecast or anticipated in such forward-looking statements. 

You should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report. We undertake no obligation to update these statements or publicly release the result of any revisions to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

ITEM 1. BUSINESS

INTRODUCTION

Shoal Games Ltd. (TSXV : SGW) (www.shoalgames.com) is the parent company of a group of companies, which creates software products focused on the children's digital entertainment and advertising technology markets.  The Company is managed by an experienced team of executives who have a long history in games, enterprise software, mobile software, advertising technology and Internet products. 

Shoal Games has been focused on consumer products with the Rooplay Edtech platform for children and families.  Rooplay is a subscription games system with no ads, no in-app purchases, no long downloads, no instant messaging, and no outbound links of any form.  These characteristics make the product a unique platform of game content that is entirely safe for children.  Rooplay mixes entertainment with education so that long player sessions are created in a safe environment so that children have fun and are challenged in new ways with every session.

On March 4, 2019 the Company completed the acquisition of all of the issued and outstanding equity securities of Kidoz Ltd. ("Kidoz") (www.kidoz.net), a privately held Israeli company engaged in childrens' digital content distribution and monetization.  The Acquisition enables the global reach of Kidoz's content discovery network to be efficiently combined with Shoal Games' Rooplay subscription OTT platform, to create a unique player in the high growth digital kids market.  The combined company is positioned to grow through exclusive ownership of content which the Kidoz network will make accessible to tens of millions of kids each month, utilizing our proprietary OTT subscription platform and a kid-safe monetization platform to attract top kids advertisers.

With more than 6.8 billion mobile phone subscriptions in place globally the demand for mobile content and monetization systems is enormous.  Rooplay and Kidoz fill particular needs in the market with consumers, publishers, and advertisers all demanding safety and engagement from the digital kids' content. 

Shoal Games management believes that through the development of the Rooplay and Kidoz platforms, and the integration of EdTech content into our global network that it can create a unique and defensible position in the market.  Rooplay generates revenue for the Company from consumer subscriptions which customers pay to unlock the Rooplay game catalog.  Kidoz generates revenue through the sale of advertising to brands and the delivery of ads through its global content network.  Kidoz also generates licensing revenue to OEM manufacturers who wish to install the Kidoz safe operating system on their hardware products.  Shoal Games management believes that the development of a platform system that optimizes the strengths of both Rooplay and Kidoz will create multiple sustainable revenue streams for the Company. 

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Shoal Games' other mobile products include Garfield's Bingo (www.garfieldsbingo.com), the first mobile bingo game to feature a mega-brand; and Trophy Bingo (www.trophybingo.com), live across mobile platforms with over 600,000 installs.  Trophy Bingo and Garfield's Bingo are innovative 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.

References in this document to "the Company," "we," "us," and "our" refer to Shoal Games Ltd. and our subsidiaries, which are described below.

Our executive offices are located at Hansa Bank Building, Ground Floor, Landsome Road, The Valley, AI 2640, The Valley, Anguilla, B.W.I.  Our telephone number is (888) 374-2163.

History and Corporate Structure

The Company was originally incorporated in the State of Florida on January 12, 1987.

Effective January 22, 1999, the Company acquired the use of the second level domain name bingo.com and embarked on a strategy to become a leading online provider of bingo based games and entertainment.

Effective April 7, 2005, the shares of Bingo.com, Ltd. by way of a merger between Bingo.com, Inc. and Bingo.com, Ltd., began trading under the new ticker symbol "BNGOF".

Effective December 31, 2014 the URL www.bingo.com and the online bingo business were sold to Unibet, plc.

On January 22, 2015, Bingo.com, Ltd. filed Articles of Amendment with the Anguilla Registrar of Companies changing its name to "Shoal Games Ltd.".  Effective at the open of markets on January 27, 2015, the Common Shares commenced trading under the new trading symbol "SGLDF" on the OTC-QB.

On June 29, 2015, the Company filed a TSX Venture Exchange Listing Application for the TSX-V listing and commenced trading on July 2, 2015, under the symbol "SGW".

We conduct our business through the Anguilla incorporated entity and through our wholly-owned subsidiaries Shoal Media (Canada) Inc. ("Shoal Media Canada"), Shoal Games (UK) plc ("Shoal UK"), Coral Reef Marketing Inc. ("Coral Reef"), Shoal Media Inc. ("Shoal Media"), Rooplay Media Ltd. ("Rooplay Media"), Shoal Media UK Ltd. ("Shoal Media UK"), and Rooplay Media Kenya Limited. ("Rooplay Kenya")

Shoal Media Canada was incorporated under the laws of British Columbia, Canada, on February 10, 1998, as 559262 B.C. Ltd. and changed its name to Bingo.com (Canada) Enterprises Inc. on February 11, 1999. It subsequently changed its name to English Bay Office Management Limited on September 8, 2003. Effective March 11, 2016, it changed it name to Shoal Media (Canada) Inc.  

On August 15, 2002, 99% of the share capital of Shoal UK was acquired. Shoal UK was incorporated under the laws of England and Wales on August 18, 2000, as CellStop plc. and changed its name to Bingo.com (UK) plc. on August 5, 2002. During the year ended December 31, 2015, the Company changed the name of the company to Shoal Games (UK) plc.

On January 21, 2008, Coral Reef Marketing Inc., was incorporated under the laws of Anguilla, British West Indies.

On January 1, 2013, 100% of the share capital of Shoal Media Inc., an Anguillian Company was acquired.

On October 25, 2016, Rooplay Media Ltd., was incorporated under the laws of British Columbia, Canada.

On March 27, 2017, Shoal Media UK Ltd. was incorporated under the laws of England and Wales.

On July 12, 2017, Rooplay Media Kenya Limited was incorporated under the laws of Kenya.

The Company also maintains a number of inactive wholly-owned subsidiaries.  These are:

 Page 4

-   Bingo.com (Antigua), Inc., ("Bingo.com (Antigua)") incorporated as an Antigua International Business Corporation on April 7, 1999, as Star Communications Ltd. and changed its name to Bingo.com. (Antigua), Inc. on April 21, 1999; 

-   Bingo.com (Wyoming), Inc., incorporated in the State of Wyoming on July 14, 1999;

-   Bingo.com Acquisition Corp., incorporated in the State of Delaware on January 9, 2001.

All three of the inactive subsidiaries were incorporated to facilitate the implementation of business plans that we have since modified and refocused and, consequently, there is no activity in these entities.

Subsequent to the year ended December 31, 2018, the Company acquired Kidoz Ltd. a company incorporated under the laws of the State of Israel.

Our common shares are currently quoted on the TSX Venture Exchange in Canada under the symbol "SGW".  We have not been subject to any bankruptcy, receivership or other similar proceedings.

Development of the Business

The focus of Shoal Games is the development and expansion of the Rooplay edugame platform and the Kidoz content discovery network.  It is management's objective to integrate the global distribution capabilities of the Kidoz network with the monetization capacity of the Rooplay content platform to unlock large recurring revenue opportunities.

Shoal Games Domain Names

Shoal Games owns the domain names Rooplay.com, Shoalgames.com, Shoalgames.net, Shoalmedia.com, Garfieldsbingo.com, Trophybingo.com, Trophybingo.ca and Kidoz.net and many other smaller domains. 

BUSINESS OVERVIEW

Shoal Games management believes the global reach of the Kidoz's content discover network should be efficiently combined with Shoal Games' Rooplay subscription OTT platform to create a unique company in the high growth digital kids market.  The combined company is positioned to grow through exclusive ownership of Rooplay content which the Kidoz network will make accessible to tens of millions of kids each month.

Product Strategy

Rooplay is a Netflix of games for children and families.  Kidoz is a leading monetization and discovery system reaching millions of kids and families every month.  Shoal Games' product strategy is to align the synergies of these two systems to bring safe and highly monetizing content to families in every region of the world.

Marketing & Distribution Strategy

Shoal Games pursues both business-to-consumer strategies and a business-to-business strategies with Rooplay and Kidoz.  With the Company's direct to consumer strategy, new users of Rooplay are created via paid performance marketing, search engine marketing, word-of-mouth, and from placements in the Kidoz network.  The Company's business-to-business strategy involves selling advertising to premium brands (Disney, Lego, Crayola, ect) and distributing these ads across the Kidoz network.  Shoal Games intends to link these two strategies to create a global content and monetization system that is a market leader.

Pricing Strategy

Rooplay subscriptions offer a free trial to all users and then a monthly recurring subscription fee is charged directly to customers.  The Kidoz network is a unique discovery platform in the market and commands high prices in top tier markets.  The Company is tasked with growing revenues on the network from other regions in the world that currently do not generate significant revenue for the company despite providing considerable traffic on the network. 

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Growth Strategy

The combination of distribution power and content ownership is one of the most effective business strategies in media and entertainment.  With a focused approach targeted solely on the kids market, Shoal Games intends to grow organically by building a leadership position within the kids digital industry for quality content, global reach, revenue potential and by accretive acquisitions.

International Strategy

While English speaking markets are the number one opportunity for revenues in the short term, they are also the focus of the majority of the competition.  Shoal Games is developing an integrated content strategy that will enable international growth opportunities in the largest non-English regions of the world.

Acquisition of Kidoz Ltd.

Subsequent to the year ended December 31, 2018, the Company acquired all of the issued and outstanding shares of Kidoz Ltd. ("Kidoz"), an Israel-based industry-leader in the global kids' content distribution and monetization marketplace.

The Acquisition enables the global reach of Kidoz's content network to be efficiently combined with Shoal Games' Rooplay subscription OTT platform, to create a unique player in the high growth digital kids market.  The combined company is positioned to grow through exclusive ownership of content which the Kidoz network will make accessible to tens of millions of kids each month, utilizing a proprietary OTT subscription platform and a kid-safe monetization platform to attract top kids advertisers.

Highlights of the Transaction

-           Industry-leading market position: The combined company will provide a unique Kid Safe platform for digital content distribution and monetization that reaches over 50 million children and parents worldwide every month.

-           Established digital edu-game product strategy: Combining the companies will significantly enhance the cost-effectiveness and reach of Shoal Games' distribution strategies for its consumer-focused EdTech games platform, Rooplay.

-           Expanded commercialization of "Rooplay Originals" games library: Shoal Games extensive games library of curated COPPA-compliant games can now be commercialized using Kidoz sponsored promotions with top kids brands like Hasbro, LEGO, Disney, Viacom, Crayola and many others.

-           Distribution of Rooplay over the Kidoz content discovery network: Leveraging Kidoz's distribution capabilities will enable the combined company to bring unique, child safe games to the worldwide market through the thousands of popular kids apps that use the Kidoz Network.

-           Accretive economics on both trailing and forward metrics: Kidoz has lean operations that are highly complementary to those of Shoal Games.  In combination with Shoal Games' extensive management track record in video game development and in the public markets, the combined entity looks forward to rapidly increasing combined revenues and improving overall economic performance.

-           Combined company synergies: The combined company is expected to realize improved management efficiencies, leveraging Shoal Games' cost-effective public company management practices and experience and both companies' combined development knowledge and libraries; the Kidoz worldwide distribution platform; cross-selling and up-selling to customers through a broader content portfolio; integrated operations and controls; and implementation of best practices.

-           Highly experienced management teams with worldwide focus: Kidoz and Shoal Games have been working together for over a year and determined to enter into the Transaction after recognizing that the synergies available from joining together in today's complex technological environment would provide the combined company with a strong global foothold in the continually expanding kids' digital market.

 Page 6

Trophy Bingo & Garfield's Bingo

The Company has completed the social bingo games Trophy Bingo and Garfield's Bingo which are available on Apple's iOS, Google's Android and Amazon Android systems.  Revenue is generated in the games via in-app purchases and advertising.  Shoal Games management continues to support Trophy Bingo and Garfield's bingo to grow revenues and provide cash to the Company.

OPERATIONS

Employees

As of December 31, 2018, we had eight full-time employees, not including temporary personnel, consultants, and independent contractors. Since 2006 it has been, and continues to be, the Company's objective to control its costs by retaining consultants, as needed, to provide special expertise in developing internal strategic, marketing, accounting and technical services. None of our employees or consultants are represented by a labor union, and we believe that our relationship with our employees and consultants is good.

We are substantially dependent upon the continued services and performance of J. M. Williams, Chief Executive Officer; T. M. Williams, Executive Chairman and Eldad Ben Tora Chief Executive Officer of Kidoz Ltd.  The loss of the services of these key individuals would have a material adverse effect on our business, financial condition and results of operations. We do not carry any key man life insurance on any individuals.

Seasonality

We do not believe that seasonality has an effect on our product demand or our revenue realization.

Competition

Rooplay competes with systems such as ABCMouse, Homer, Lingokids, and other learning products that are based on subscription.  Rooplay differs in that it is not only an educational system, but an entertainment system with hundreds of games both for fun and learning.  ABCMouse raised US$150 million at a valuation of more than US$1Billion.  The Company views the success of ABCMouse as proof of the size of the market and is developing Rooplay to be a superior and differentiated product.

Kidoz competes with other advertising technology providers that offer safe, COPPA compliant, products.  These companies include Super Awesome and Google's Admob.  Kidoz offers a highly customized and targeted offering to advertisers that management believes will enable the Company to grow and succeed in the market.

Costs and Effects of Compliance with Environmental Laws

The Company is in the business of developing and marketing Rooplay, Kidoz, Garfield's Bingo, and Trophy Bingo. To the best of our knowledge, no federal, state or local environmental laws are applicable to our business.

BRITISH COLUMBIA SECURITIES COMMISSION

Effective September 15, 2008, the British Columbia Securities Commission ("BCSC") issued rule 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets. Rule 51 - 509 requires all Over-the-Counter Companies that have connections to British Columbia (BC) to comply with BC securities law and certain public disclosure requirements. The Company is deemed to have connection to BC due to the fact that administration and a director are located in BC. The Company has complied with rule 51-509 and registered and filed the necessary documents on SEDAR. The Company is deemed, due to the fact that there are less than 50% of the Company's shareholders located in BC, to be a foreign reporting issuer in accordance with NI 71-102 "Continuous Disclosure and Other Exemptions Relating to Foreign Issuers". Therefore the Company is only required to file what it files with the Securities and Exchange Commission on SEDAR.

 Page 7

FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

The equipment of the Company to operate the operations of the Company is located in Anguilla, United Kingdom, and Canada. The revenue from in-app purchases is worldwide, with the majority from Europe and the USA.

AVAILABLE INFORMATION

The Company makes available through the Corporate Shoal Games section of its internet website at http://investor.shoalgames.com its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Press Releases, Research Reports, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the Securities and Exchange Commission.

You may read and copy any reports, statements or other information that we file with the Securities and Exchange Commission at the Securities and Exchange Commission's Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the Securities and Exchange Commission. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.

We file our reports with the Securities and Exchange Commission electronically through the Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system. The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding companies that file electronically with the Securities and Exchange Commission through EDGAR. The address of this Internet site is http://www.sec.gov.

In addition, we file our reports on SEDAR, for TSX Venture companies. The address of this Internet site is http://www.sedar.com.

ITEM 2. PROPERTIES.

Since 2005 our executive office is located in The Valley, Anguilla, British West Indies. We commenced the present lease agreement on April 1, 2010, for a period of one year. Unless 3 month's notice is given it automatically renews for a future 3 months until notice is given. To date no notice has been given. The monthly rental is $250.

Our primary development facility is located in leased space in Vancouver, British Columbia.  During the year ended December 31, 2016, the Company signed a lease expiring December 31, 2016. After December 31, 2016, unless 30 day notice is given this lease is extended on a month-to-month basis. Notice has been given to April 30, 2019 has been given. This facility comprises approximately 1,651 square feet. The monthly rental is approximately $1,130.

Our primary administrative facility is located in leased space in Vancouver, British Columbia.  During the year ended December 31, 2018, the Company signed a 30 day lease and unless 30 day notice is given this lease is extended on a month-to-month basis. Notice has been given to April 30, 2019 has been given. This facility comprises approximately 1,090 square feet. The monthly rental is approximately $866.

Subsequent to the year ended December 31, 2018, the Company signed a five year lease ending March 2024. This facility comprises approximately 1,459 square feet. The monthly rental is approximately $3,331.

Subsequent to the year ended December 31, 2018, the Company acquired Kidoz Ltd. Kidoz Ltd. has an annual office lease in Netanya, Israel, with rent payable on a quarterly basis.

We operate a sales and marketing office in London, United Kingdom.  There are no direct monthly rental fees associated with the London office.

We believe that these facilities will be adequate to meet our requirements for the near future and that suitable additional space will be available if needed. Other than described above, neither we, nor any of our subsidiaries presently own or lease any other property or real estate.

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ITEM 3. LEGAL PROCEEDINGS.

We are not currently a party to any legal proceedings and were not a party to any other legal proceeding, during the fiscal year ended December 31, 2018. We are currently not aware of any legal proceedings proposed to be initiated against us. However, from time-to-time, we may become subject to claims and litigation generally associated with any business venture.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We held our Annual Meeting of Stockholders in Anguilla on November 14, 2018. The Annual Meeting is for the purposes of electing our directors and to ratify the appointment of Davidson & Company LLP, Chartered Professional Accountants, as our independent auditors for the 2018 fiscal year, to ratify our Rolling Stock Option plan and for any other regular business. The Company issued a schedule 14A proxy statement to the shareholders on September 26, 2018.

All nominees for directors were elected; the appointment of auditors was ratified; and the Rolling Stock Option plan was ratified. The voting on each matter is set forth below:

a)         Elected to set the number of directors at 4.

For	Against	Abstain	Not Voted
45,711,168	14,918	-	8,629,906

b)         Elected the following persons to serve as directors until the next annual meeting or until their successors are duly qualified:

T. M. Williams

J. M. Williams

F. Curtis (Non Executive Director)

C. Kalborg (Non Executive Director)

Mr. W. Moore did not stand for re-election and resigned as a director on November 14, 2018.

Election of the Directors of the Company.

Nominee	For	Against	Abstain	Not Voted
T. M. Williams	45,693,793	-	32,293	8,629,906
J. M. Williams	45,690,793	-	35,293	8,629,906
F. Curtis	45,693,131	-	32,955	8,629,906
C. Kalborg	45,693,356	-	32,730	8,629,906

(c)        Approved the selection of Davidson & Company LLP, Chartered Professional Accountants as the Company's independent auditors for the fiscal year ending December 31, 2018.

For	Against	Abstain	Not Voted
54,310,812	-	45,180	-

(d)        The ratification of the existing Rolling Stock Option plan was approved.

For	Against	Abstain	Not Voted
45,695,351	30,735	-	8,629,906

Mr. Jason Williams will continue as President and CEO of the Shoal Games Ltd. organization and Mr. T. M.  Williams, will continue to serve as Executive Chairman.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is currently quoted on the TSX Venture Exchange in Canada under the symbol "SGW".

On March 19, 1997, our common stock was approved for trading on the National Association of Securities Dealers OTC Bulletin Board (the "OTCBB") under the symbol "PGLB".  In January 1999, when we changed our name to Bingo.com, Inc., our OTCBB symbol was changed to "BIGG".  On July 26, 1999, we changed our trading symbol from "BIGG" to "BIGR". On April 7, 2005, Bingo.com, Inc. completed a merger with its wholly- owned subsidiary Bingo.com, Ltd. The principal reason for Bingo.com, Inc.'s merger with its subsidiary Bingo.com, Ltd. was to facilitate Bingo.com, Inc.'s reincorporation under the International Business Companies Act of Anguilla, B.W.I. Effective April 7, 2005, the shares of Bingo.com, Ltd. began trading under the new ticker symbol "BNGOF". In 2011, we transferred to the Over the Counter Markets - The Venture Marketplace ("OTCQB") operated by OTC Markets Group Inc., whilst continuing our ticker symbol "BNGOF". The bid quotations set forth below, reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not reflect actual transactions. During the year ended December 31, 2015, the Company changed its name to Shoal Games Ltd. and changed our trading symbol on the OTCQB from "BNGOF" to "SGLDF".

Effective July 2, 2015, the Company additionally commenced trading on the TSX Venture Exchange in Canada ("TSXV") under the symbol "SGW". On December 31, 2018 our shares were Halt Traded on the TSXV pending completion of our acquisition of Kidoz Ltd.  The Halt Trade was rescinded on March 7, 2019, after our announcement on March 4, 2019 that we had successfully completed the acquisition of all of the Kidoz Ltd. shares.  Effective January 7, 2019, our shares ceased to be quoted on and traded through the OTCQB due to the TSXV Halt Trade.  The Company has decided not to reinstate the quotation of its shares on the OTCQB, due to the small number of trades effected through the OTCQB subsequent to our shares being listed on the TSXV on July 2, 2015.

	OTCQB - SGLDF		TSX-V - SGW
Quarter Ended	High (1) US$	Low (1) US$	High (2) CAD$	Low (2) CAD$
December 31, 2018	$0.48	$0.29	$0.52	$0.35
September 30, 2018	$0.55	$0.24	$0.59	$0.40
June 30, 2018	$0.60	$0.30	$0.67	$0.42
March 31, 2018	$0.60	$0.29	$0.67	$0.35
December 31, 2017	$0.45	$0.25	$0.60	$0.35
September 30, 2017	$0.49	$0.38	$0.61	$0.35
June 30, 2017	$0.48	$0.34	$0.62	$0.53
March 31, 2017	$0.40	$0.33	$0.54	$0.39

1.             Prices as per Yahoo! ^TM Finance

2.             Prices as per TMX Money

On March 21, 2019, the last reported sale price of our common stock, as reported by the TSX Venture Exchange, was CAD$0.56 per share.

As of March 21, 2019, we believe there are approximately 934 shareholders (including nominees and brokers holding street accounts) of our shares of common stock.

Other than described above, our shares of common stock are not and have not been listed on any other exchange.

Dividend Policy

We have not declared or paid any cash dividends on our common stock since our inception.  The Board of Directors is presently reviewing the Company's dividend policy. Any future payment of dividends

 Page 10

will depend upon our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

Recent Sales of Unregistered Securities

During the quarter ended June 30, 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling CAD$1.045 million ($790,281). The private placement consisted of 2,323,779 units priced at CAD$0.45 ($0.34) per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is CAD$0.55 per share for the first six months following closing and CAD$0.65 per share for the period which is 7-12 months following closing.

During the quarter ended September 30, 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling $1,010,763. The private placement consisted of 2,887,895 units priced at $0.35 per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is $0.44 per share for the first six months following closing and $0.52 per share for the period which is 7-12 months following closing.

During the quarter ended December 31, 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling $45,011. The private placement consisted of 128,600 units priced at $0.35 per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is $0.44 per share for the first six months following closing and $0.52 per share for the period which is 7-12 months following closing.

During the quarter ended December 31, 2017, two warrants holders exercised their warrants for 121,111 shares at CAD$0.55 (approximately US$0.43) per share raising a total of US$52,310.

During the period ended March 31, 2018, a warrant holder exercised their warrant for 15,000 shares at $0.44 per share raising a total of $6,600.

During the period ended March 31, 2018, the Company closed a TSX Venture Exchange approved private placement financing totaling $2,551,500. The private placement consisted of 7,290,000 shares priced at $0.35 per share. Pursuant to the private placement the Company paid a commission of $253,750 and incurred share issuance expense of $17,608.

During the period ended June 30, 2018, the related party warrant holders exercised their warrants for 1,200,000 shares at CAD$0.65 (US$0.50) per share through the settlement of the promissory notes, in a non-cash transaction.

Subsequent to the year ended December 31, 2018, the Company issued 52,450,286 shares for total consideration of $20,603,656 in the acquisition of all of the issued and outstanding ordinary and preferred shares in the capital stock of Kidoz Ltd., a company incorporated under the laws of the State of Israel. The Company paid a commission of $130,000 and incurred share issuance expense of $85,135.

Subsequent to the year ended December 31, 2018, the Company closed a TSX Venture Exchange approved private placement financing totaling $2,000,000. The private placement consisted of 5,000,000 shares priced at $0.40 per share. Pursuant to the private placement the Company paid a commission of $200,000 and incurred share issuance expense of $13,546.

Securities authorized for issuance under equity compensation plans.

In 2015, the shareholders approved the 2015 plan. Under the 2015 plan we have reserved 10% of the number of Shares of the Company issued and outstanding as of each Award Date. Pursuant to this plan we have 3,575,000 stock purchase options (2017 - 1,605,000) outstanding at December 31, 2018. During the year ended December 31, 2018, there were nil (2017 - nil) options exercised and 160,000 (2017 - 130,000) options cancelled, issued under this plan.

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Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options and rights	Weighted average exercise price of outstanding options and rights	Number of securities remaining available for future issuance
	(a)	(b)	(c)
Equity compensation plans approved by security holders	3,575,000	0.45	3,792,470
Equity compensation plans not approved by security holders	0	0	0
Total	3,575,000	0.45	3,792,470

As of the date of this report no further options have been awarded and 110,000 options were cancelled unexercised subsequent to the year ended December 31, 2018.

ITEM 6. SELECTED FINANCIAL DATA.

Consolidated Statement of Operations Data for continuing operations:

				Year Ended December 31,
		2018		2017		2016		2015		2014
Revenue		106,978		93,475		278,921		111,610		32,470
Trophy Bingo amortization		-		-		482,013		482,012		482,013
Gross (loss) profit		106,978		93,475		(203,092)		(370,402)		(449,543)
Operating expenses excluding interest and other income (expenses)		(2,805,446)		(1,860,785)		(2,447,298)		(2,612,194)		(2,221,663)
Gain on derivative liability - warrants		44,572		78,712		-		-		-
Interest and other income		8,634		18		155		1,089		510
Income tax recovery / (expense)		89,521		30,761		(1,294)		(480)		(848)
Promissory note accretion and interest		(37,090)		(84,132)		(5,982)		-		-
Loss on prepaid development		-		-		(498,791)		-		-
Net loss from continuing operations	$	(2,592,831)	$	(1,741,951)	$	(3,156,302)	$	(2,981,987)	$	(2,671,544)
Discontinued Operations
Gaming revenue		-		-		-		-		1,684,047
Cost of producing revenue		-		-		-		-		-
Gain from the sale of the domain name		-		-		-		16,305		6,677,759
Selling and marketing		-		-		-		-		(628,029)
Net (loss) profit		(2,592,831)		(1,741,951)		(3,156,302)		(2,965,682)		5,062,233
Basic and diluted net loss per share from continuing operations	$	(0.04)	$	(0.03)	$	(0.05)	$	(0.05)	$	(0.04)
Weighted average common shares outstanding		72,111,456		61,730,928		58,227,957		55,812,511		67,165,374

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				Year Ended December 31,
		2018		2017		2016		2015		2014
Consolidated Balance Sheet Data:
Cash	$	641,536	$	478,397	$	60,190	$	570,086	$	2,876,386
Total assets		769,633		557,853		129,093		1,129,526		3,996,745
Total liabilities		90,805		705,262		444,680		177,792		156,579
Total stockholders' (deficit) equity		678,828		(147,409)		(315,587)		951,734		3,840,166
Working capital		662,573		345,184		13,896		454,447		2,856,230

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The information contained in this Management's Discussion and Analysis or Plan of Operation contains "forward looking statements." Actual results may materially differ from those projected in the forward looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be materially different from the expectations expressed in this Annual Report. The following discussion should be read in conjunction with the audited Consolidated Financial Statements and related Notes thereto included in Item 7 and with the Special Note regarding forward-looking statements included in Part I.

OVERVIEW

The focus of Shoal Games is the development and expansion of the Rooplay edugame platform and the Kidoz content discovery network.  It is management's objective to integrate the global distribution capabilities of the Kidoz network with the monetization capacity of the Rooplay content platform to unlock large recurring revenue opportunities.  Shoal Games management believes the global reach of the Kidoz's content discover network should be efficiently combined with Shoal Games' Rooplay subscription OTT platform to create a unique company in the high growth digital kids market.  The combined company is positioned to grow through exclusive ownership of Rooplay content which the Kidoz network will make accessible to tens of millions of kids each month.'

Rooplay is a Netflix of games for children and families.  Shoal Games has been focused on consumer products with the Rooplay Edtech platform for children and families.  Rooplay is a subscription games system with no ads, no in-app purchases, no long downloads, no instant messaging, and no outbound links of any form.  These characteristics make the product a unique platform of game content that is entirely safe for children.  Rooplay mixes entertainment with education so that long player sessions are created in a safe environment so that children have fun and are challenged in new ways with every session. Rooplay is live on Google Play, web version of www.rooplay.com and shortly on iOS and is live in 27 languages and over 135 countries.

The games on the Rooplay platform are designed to both entertain and educate.  Children engaging with Rooplay learn technology, solve puzzles, paint pictures, practice language, learn math, and much more.  Shoal Games is developing a content system with Rooplay that builds tech literacy and encourages early learning.  The Company believes that to be able to teach children, they must first hold their attention.  Rooplay mixes entertainment with education so that long player sessions are created in a safe environment so that children have fun and are challenged in new ways with every session.  Rooplay has hundreds of interactive games in every imaginable format. 

Kidoz is a leading monetization and discovery system reaching millions of kids and families every month.  Kidoz generates revenue through the sale of advertising to brands and the delivery of ads through its global content network.  Kidoz also generates licensing revenue to OEM manufacturers who wish to install the Kidoz safe operating system on their hardware products.

Shoal Games' product strategy is to align the synergies of these two systems to bring safe and highly monetizing content to families in every region of the world. Shoal Games pursues both business-to-consumer strategies and a business-to-business strategies with Rooplay and Kidoz.  With the

 Page 13

Company's direct to consumer strategy, new users of Rooplay are created via paid performance marketing, search engine marketing, word-of-mouth, and from placements in the Kidoz network.  The Company's business-to-business strategy involves selling advertising to premium brands (Disney, Lego, Crayola, ect) and distributing these ads across the Kidoz network.  Shoal Games intends to link these two strategies to create a global content and monetization system that is a market leader.

Shoal Games' other mobile products include Garfield's Bingo (www.garfieldsbingo.com), the first mobile bingo game to feature a mega-brand; and Trophy Bingo (www.trophybingo.com), live across mobile platforms with over 590,000 installs.  Trophy Bingo and Garfield's Bingo are innovative 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.

CRITICAL ACCOUNTING POLICIES

The following discussion of critical accounting policies is intended to supplement the Summary of Significant Accounting Policies presented as Note 2 to our audited consolidated financial statements presented elsewhere in this report.  Note 2 summarize the accounting policies and methods used in the preparation of our consolidated financial statements. The policies discussed below were selected because they require the more significant judgments and estimates in the preparation and presentation of our financial statements. On an ongoing basis, management evaluates these judgments and estimates, including whether there are any uncertainties as to compliance with the revenue recognition criteria described below, and recoverability of long-lived assets, as well as the assessment as to whether there are contingent assets and liabilities that should be recognized or disclosed for the consolidated financial statements to fairly present the information required to be set forth therein. We base our estimates on historical experience, as well as other events and assumptions that are believed to be reasonable at the time. Actual results could differ from these estimates under different conditions.

We consider the following accounting policies to be both those most important to the portrayal of our financial condition and require the most subjective judgment:

- Revenue recognition; 

- Software development

Revenue Recognition

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 and Garfield's Bingo, have been recognized when collection of the amounts are reasonably assured.

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

Rooplay Original's revenue have been recognized from the sale of premium purchases, at the time of purchase by the player.

Research revenue have been recognized when the services have been delivered and collection of the amounts are reasonably assured.

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.

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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 Rooplay, Garfield's Bingo, and Trophy Bingo were $6,716,810 as at December 31, 2018 (2017 - $5,768,476).

SOURCES OF REVENUE AND REVENUE RECOGNITION

We generate our revenue from the following:

-   The sale of in-app purchases in, Garfield's Bingo and Trophy Bingo in the Google play, Apple iOS and Amazon App stores.

-   In-game advertising, whereby players watch advertising to gain in-game currency.

-   The sale of advertising on our websites. We recognize revenue on this basis based on the amount paid to us upon the delivery and fulfillment of advertising, provided that the collection of the resulting receivable is probable.

-   Consumer subscription from players paying to unlock the Rooplay game catalog.

-   The sale of premium purchases of Rooplay Originals (Branded EdTEch games for children and families) in the Google play and Apple iOS stores.

-   Research revenue from the sale of data and industry information.

SUPPLEMENTARY FINANCIAL INFORMATION

Quarterly Results of Operations

The following tables present our unaudited consolidated quarterly results of operations for each of our last eight quarters.  This data has been derived from unaudited consolidated financial statements that have been prepared on the same basis as the annual audited consolidated financial statements and, in our opinion, include all normal recurring adjustments necessary for the fair presentation of such information. These unaudited quarterly results should be read in conjunction with our audited consolidated financial statements, included in Item 8 of this report.

				Three Months Ended
		December 31, 2018		September 30 2018		June 30 2018		March 31 2018
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue		17,342		40,942		24,343		24,351
Cost of sales		-		-		-		-
Gross profit		17,342		40,942		24,343		24,351
Operating expenses and other income / (expenses)		(477,677)		(438,118)		(1,211,209)		(669,808)
Gain on derivative liability - warrants		-		-		215,687		(171,115)
Promissory note accretion and interest		-		-		(18,294)		(18,796)
Loss before income taxes		(460,335)		(397,176)		(989,473)		(835,368)
Income tax recovery		89,521		-		-		-
Loss after tax	$	(370,814)	$	(397,176)		(989,473)		(835,368)
Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.01)
Weighted average common shares, basic and diluted		73,674,703		73,674,703		72,764,813		68,254,870

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				Three Months Ended
		December 31, 2017		September 30 2017		June 30 2017		March 31 2017
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue		18,587		18,853		22,776		33,259
Cost of sales		-		-		-		-
Gross profit		18,587		18,853		22,776		33,259
Operating expenses and other income / (expenses)		(537,533)		(484,121)		(439,949)		(399,164)
Gain on derivative liability - warrants		54,043		24,669		-		-
Promissory note accretion and interest		(22,110)		(22,111)		(21,869)		(18,042)
Loss before income taxes		(487,013)		(462,710)		(439,042)		(383,947)
Income tax recovery		30,761		-		-		-
Loss after tax	$	(456,252)	$	(462,710)		(439,042)		(383,947)
Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.01)	$	(0.00)
Weighted average common shares, basic and diluted		65,025,158		62,063,832		60,069,795		59,708,318

Our financial statements and related schedules are described under "Item 8. Financial Statements".

RESULTS OF OPERATIONS

Years Ended December 31, 2018 and 2017

            Revenue

Total revenue from operations were $106,978 for the year ended December 31, 2018, an increase of 14% from revenue of $93,475 for the same period in the prior year. The increase in total revenue compared to fiscal 2017, is due to research revenue earned.

            Selling and marketing expenses

Sales and marketing expenses from operations were $352,770 for the year ended December 31, 2018, an increase of 44% over expenses of $244,810 for the same period in the prior year. This increase in sales and marketing expenses was due to larger test marketing campaigns to acquire new subscribers for Rooplay. Selling and marketing expenses principally include publishing services and user acquisition costs to acquire players for the Rooplay platform.

We expect to incur increased sales and marketing expenses to bring new players to Rooplay and our bingo games now that all three products are commercially viable.   There can be no assurances that these expenditures will result in increased traffic or significant additional revenue.

            General and administrative expenses

General and administrative expenses were $271,277 for the year ended December 31, 2018, an increase of 6% over costs of $256,303 for the previous year. This increase in general and administrative expenses is due to the increased expenditures incurred in raising capital in 2018, including travel and conferences. In addition, in 2018, the Company leased a second office facility in Vancouver, Canada.  General and administrative expenses consist primarily of legal and professional fees, premises costs for our offices, and other general corporate and office expenses.

We expect to continue to incur general and administrative expenses to support the business, and there can be no assurances that we will be able to generate sufficient revenue to cover these expenses.

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Salaries, wages, consultants and benefits

Salaries, wages, consultants and benefits expenses, excluding salaries incurred for the development of our products increased to $618,279 during the year ended December 31, 2018, an increase of 34% over expenses of $461,416 for the previous year. This increase compared to fiscal 2017, is due to higher consulting charges incurred for financing and brand marketing of the Company.

Depreciation and amortization

Equipment is depreciated using the declining balance method over the useful lives of the assets, ranging from three to five years.  Depreciation increased to $5,614 during the year ended December 31, 2018, over depreciation of $4,068 during the prior year. This increase in depreciation and amortization compared to fiscal 2017, is due to the disposal of old obsolete equipment and the depreciation on new equipment.

Development and amortization

The Company expensed $948,334 in development costs during the year ended December 31, 2018, an increase of 14% over $833,202 of development costs in the prior year. This increase in development costs is due to higher software development expenses incurred in the development of Rooplay Originals and related technology, including developing Rooplay on additional platforms in order to achieve the Companies objective of becoming fully operational on all recent digital devices.

            Stock-based compensation expense

During the year ended December 31, 2018, the Company incurred non-cash stock compensation expenses of $595,580 from the issuance of 855,000 stock options at CAD$0.54 per option and the issuance of 1,275,000 stock options at USD$0.50 per option compared to stock compensation expenses of $43,212 in fiscal 2017 from the issuance of 725,000 stock options at CAD$0.54 per option.  The options are issued to consultants and employees as per the Companies 2015 Stock Option Plan.

Other income and expenses

During the year ended December 31, 2018, the Company has a foreign exchange loss of $9,092 compared to foreign exchange loss of $12,274 in the prior year. These losses are due to the exchange rate movements of the US Dollar compared to the Pound Sterling and the Canadian Dollar.

During the year ended December 31, 2018, we received interest income of $8,634 compared to interest income of $18 in the prior year. The interest income is received from bank term deposits from investing our cash. The increase in interest income is due to higher bank account balances in fiscal 2018 compared to fiscal 2017 as a result of the private placement in fiscal 2018.

During the year ended December 31, 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling CAD$1.045 million. The private placement consisted of 2,323,779 units priced at CAD$0.45 ($0.34) per unit. Each Unit was comprised of one common share and one share purchase warrant. The warrants had 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 no effect on the cashflow of the Company and does not represent a cash payment of any kind. During the year ended December 31, 2018, the Company recognized a gain of $44,572 compared to a gain $78,712 on this derivative liability in the prior year.

            Income taxes

During the year ended December 31, 2018 and 2017, a subsidiary of the Company applied for a Canadian tax credit in relation to fiscal 2017 and 2016. The Company received a tax credit of $89,521 in fiscal 2018 and $30,761 in fiscal 2017. 

During the year ended December 31, 2005, the Bingo.com, Inc. merged with its subsidiary Bingo.com, Ltd. in Anguilla, British West Indies. Anguilla is a zero-tax jurisdiction.  

 Page 17

            Net loss and loss per share

The net loss after taxation for the year ended December 31, 2018, amounted to $2,592,831 a loss of $0.04 per share, compared to a net loss of $1,741,951, a loss of $0.03 per share, in year ended December 31, 2017. 

LIQUIDITY AND CAPITAL RESOURCES

We had cash of $641,536 and working capital of $662,573 at December 31, 2018. This compares to cash of $478,397 and working capital of $345,184 at December 31, 2017.

During the year ended December 31, 2018, we used cash of $2,108,797 in operating activities compared to using cash of $1,638,837 in the prior year.

Net cash generated by financing activities was $2,284,085 in the year ended December 31, 2018, which compares to cash generated by financing activity of $2,060,684 in fiscal 2017. This cash generated by financing activity is due to the cash raised from the private placements and warrant exercise during the year ended December 31, 2018 compared to the cash raised from the private placements and warrant exercise during the year ended December 31, 2017.

Cash of $12,149 was used in investing activities in fiscal 2018, compared to $3,640 in the prior year. This increase in cash used in investing activities is due to the acquisition of equipment and furniture in fiscal 2018.

Our future capital requirements will depend on a number of factors, including costs associated with the further development of Rooplay, Garfield's Bingo and Trophy Bingo; the cost of marketing and player acquisition costs for Rooplay, Garfield's Bingo and Trophy Bingo and Kidoz; the acquisition of Kidoz Ltd.; the integration of Kidoz Ltd. into the Shoal Games group and the success of Rooplay, Garfield's Bingo and Trophy Bingo and Kidoz.

            Off Balance Sheet Arrangements

We did not have any Off Balance sheet arrangements for the year ended December 31, 2018 and 2017.

AUDIT COMMITTEE

Our audit committee consists of four directors and reports to the Board of Directors. The audit committee meets regularly throughout the year and met with the independent auditors on March 20, 2019, and approved the financial statements for the year ended December 31, 2018.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 Page 18

SHOAL GAMES LTD. and subsidiaries

Consolidated Financial Statements

Years ended December 31, 2018 and 2017

Report of Independent Registered Public Accounting Firm for the year ended December 31, 2018 and 2017	20
Consolidated Financial Statements
Balance Sheets	21
Statements of Operations	22
Statements of Stockholders' Equity (Deficiency)	23
Statements of Cash Flows	24
Notes to Consolidated Financial Statements	25

 Page 19

DAVIDSON & COMPANY LLP                        Chartered Professional Accountants                       

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Directors of

Shoal Games Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Shoal Games Ltd. (the "Company"), as of December 31, 2018 and 2017, and the related consolidated statements of operations, changes in stockholders' equity (deficiency), and cash flows for the years ended December 31, 2018 and 2017, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Shoal Games Ltd. as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years ended December 31, 2018 and 2017 in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

We have served as the Company's auditor since 2010.

	"DAVIDSON & COMPANY LLP"
Vancouver, Canada	Chartered Professional Accountants
March 21, 2019

A member of

NEXIA

INTERNATIONAL

1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, B.C., Canada, V7Y 1G6

Telephone (604) 687-0947 Davidson-co.com

 Page 20

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Consolidated Balance Sheets

As at December 31,		2018		2017
Assets
Current assets:
Cash	$	641,536	$	478,397
Accounts receivable, less allowance for doubtful accounts    $27,666 (2017 - $27,666) (Note 3)		12,103		15,022
Prepaid expenses (Note 4)		99,739		54,714
Total Current Assets		753,378		548,133
Equipment, net (Note 5)		16,255		9,720
Deferred tax asset, less valuation allowance of $275,846 (December 31, 2017 - $102,809) (Note 10)		-		-
Total Assets	$	769,633	$	557,853
Liabilities and Stockholders' Equity (Deficiency)
Current liabilities:
Accounts payable	$	15,404	$	30,111
Accrued liabilities		64,937		84,081
Accounts payable and accrued liabilities - related party    (Note 11)		10,464		44,185
Derivative liability - warrants (Note 2j and 8)		-		44,572
Total Current Liabilities		90,805		202,949
Promissory notes (note 7)		-		502,313
Total Liabilities		90,805		705,262
Commitments (Note 9)
Subsequent events (Note 8, 9, 15)
Stockholders' Equity (Deficiency) (Note 8):
Common stock, no par value, unlimited shares    Authorized 73,674,703 shares issued and outstanding    (December 31, 2017 - 65,169,703)		26,552,468		23,133,400
Accumulated deficit		(25,898,220)		(23,305,389)
Accumulated other comprehensive income:      Foreign currency translation adjustment		24,580		24,580
Total Stockholders' Equity (Deficiency)		678,828		(147,409)
Total Liabilities and Stockholders' Equity (Deficiency)	$	769,633	$	557,853

See accompanying notes to consolidated financial statements.

Page 21

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Consolidated Statements of Operations

Years ended December 31,		2018		2017
Total revenue	$	106,978	$	93,475
Cost of sales:
Total cost of sales		-		-
Gross profit		106,978		93,475
Operating expenses:
Depreciation and amortization (Note 5)		5,614		4,068
Directors fees		4,500		5,500
General and administrative		271,277		256,303
Promissory note accretion and interest (Note 7)		37,090		84,132
Salaries, wages, consultants and benefits		618,279		461,416
Selling and marketing		352,770		244,810
Stock-based compensation (Note 8)		595,580		43,212
Software development (Note 6)		948,334		833,202
Total operating expenses		2,833,444		1,932,643
Loss before other income (expense) and income taxes		(2,726,466)		(1,839,168)
Other income (expense):
Gain on derivative liability - warrants (Note 8)		44,572		78,712
Foreign exchange loss		(9,092)		(12,274)
Interest and other income		8,634		18
Loss before income taxes		(2,682,352)		(1,772,712)
Income tax recovery (Note 10)		89,521		30,761
Loss after tax	$	(2,592,831)	$	(1,741,951)
Other comprehensive income (loss)		-		-
Comprehensive loss	$	(2,592,831)	$	(1,741,951)
Basic and diluted loss per common share (Note 2)	$	(0.04)	$	(0.03)
Weighted average common shares outstanding, basic (Note 2)		72,111,456		61,730,928
Weighted average common shares outstanding, diluted (Note 2)		72,111,456		61,730,928

See accompanying notes to consolidated financial statements.

Page 22

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Consolidated Statements of Stockholders' Equity (DEFICIENCY)

Years ended December 31, 2018 and 2017

	Common stock			Accumulated Other Comprehensive income
	Shares	Amount	Accumulated Deficit	Foreign currency translation adjustment	Total Stockholders' Equity (Deficiency)
Balance, December 31, 2016	59,708,318	$21,223,271	($21,563,438)	$ 24,580	($315,587)
Discount on promissory note	-	23,461	-	-	23,461
Gain on extinguishment and    reissuance of promissory notes    with related parties	-	94,191	-	-	94,191
Private placements	5,340,274	1,846,055	-	-	1,846,055
Exercise of warrants	121,111	52,310	-	-	52,310
Share issuance costs	-	(25,816)	-	-	(25,816)
Stock-based compensation	-	43,212	-	-	43,212
Derivative liability - warrants	-	(123,284)	-	-	(123,284)
Net loss	-	-	(1,741,951)	-	(1,741,951)
Balance, December 31, 2017	65,169,703	23,133,400	(23,305,389)	24,580	(147,409)
Exercise of warrants	1,215,000	610,035	-	-	610,035
Private placement	7,290,000	2,551,500	-	-	2,551,500
Share issuance costs	-	(272,092)	-	-	(272,092)
Stock-based compensation	-	595,580	-	-	595,580
Extinguishment of promissory note		(65,955)			(65,955)
Net loss	-	-	(2,592,831)	-	(2,592,831)
Balance, December 31, 2018	73,674,703	$26,552,468	($25,898,220)	$ 24,580	$678,828

See accompanying notes to consolidated financial statements.

Page 23

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Consolidated Statements of Cash Flows

Years ended December 31,		2018		2017
Cash flows from operating activities:
Net loss	$	(2,592,831)	$	(1,741,951)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		5,614		4,068
Accretion of promissory note		31,966		84,132
Gain on derivative liability - warrants		(44,572)		(78,712)
Promissory note - accrued interest		5,124		-
Stock-based compensation		595,580		43,212
Changes in operating assets and liabilities:
Accounts receivable		2,919		2,172
Prepaid expenses		(45,025)		(21,220)
Security deposits		-		8,067
Accounts payable and accrued liabilities		(67,572)		61,395
Net cash used in operating activities		(2,108,797)		(1,638,837)
Cash flows from investing activities:
Acquisition of equipment		(12,149)		(3,640)
Net cash used in investing activities		(12,149)		(3,640)
Cash flows from financing activities:
Private placements		2,551,500		1,846,055
Promissory note		(1,923)		188,135
Share issuance costs		(272,092)		(25,816)
Warrant exercised		6,600		52,310
Net cash provided by financing activities		2,284,085		2,060,684
Change in cash		163,139		418,207
Cash, beginning of year		478,397		60,190
Cash, end of year	$	641,536	$	478,397
Supplementary information:
Interest paid	$	-	$	-
Income taxes recovery	$	(89,521)	$	(30,761)
Non-cash financing activity - Extinguishment and reissuance of promissory notes	$	(65,955)	$	94,191
Non-cash financing activity - Discount on related party loans	$	-	$	23,461
Non-cash financing activity - settlement of promissory notes through exercise of 1,200,000 warrants	$	603,435	$	-
Non-cash investing activity	$	-	$	-

See accompanying notes to consolidated financial statements.
 

Page 24

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

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 system 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, 2018 and 2017, and has an accumulated deficit of $25,898,220 as at December 31, 2018.  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 discharge 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.
 

Page 25

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    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 year ended December 31, 2017, Shoal Media UK Ltd. was incorporated under the laws of England and Wales and Rooplay Media Kenya Limited was incorporated under the laws of Kenya.

Subsequent to the year ended December 31, 2018, the Company acquired Kidoz Ltd. a company incorporated under the laws of the State of Israel. (Note 15)

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 collectability of accounts receivable, the valuation of promissory notes, stock-based compensation and the estimated market rate of 15%, the derivative liability - warrants valuation, the valuation of deferred tax assets and the subsequent valuation of the acquisition of Kidoz Ltd.  Actual results may differ significantly from these estimates.

Page 26

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(c)    Revenue recognition:

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

Rooplay Original's revenue have been recognized from the sale of premium purchases, at the time of purchase by the player.

Research revenue have been recognized when the services have been delivered and collection of the amounts are reasonably assured.

(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 operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in earnings.

(e)  Accounts receivable:

Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable includes receivables from online platforms and trade receivables from customers. The Company estimates doubtful accounts on an item-by-item basis and includes over-aged accounts as part of allowance for doubtful accounts, which are generally ones that are ninety-days overdue.  Bad debt expense, for the year ended December 31, 2018, was $nil (2017 - $nil).

Page 27

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(f)  Equipment:

Equipment is recorded at cost less accumulated depreciation. Depreciation is provided for annually on the declining balance method over the following periods:

                  Equipment and computers                      3 years

            Furniture and fixtures                             5 years

Expenditures for maintenance and repairs are charged to expenses as incurred. Major improvements are capitalized. Gains and losses on disposition of equipment are included in operations as realized.

(g)  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 Rooplay, Rooplay Originals, Garfield's Bingo, Trophy Bingo, and related technologies were $6,716,810 as at December 31, 2018 (December 31, 2017 - $5,768,476).

(h)  Advertising:

The Company expenses the cost of advertising in the period in which the advertising space or airtime is used. Advertising costs from continuing operations charged to selling and marketing expenses in 2018 totaled $352,770 (2017 - $244,810). 

(i)   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.

Page 28

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(i)   Stock-based compensation: (Continued)

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	109%	25%
Weighted average volatility	96%	25%
Risk-free interest rate	1.97%	1.56%
Expected life of options	5 years	5 years
Forfeiture rate	5%	5%

(j) Derivative liability - warrants

The warrants had 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 no 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 was estimated on the date of the subscription using the Binomial Lattice pricing model. During the year ended December 31, 2018, there was a gain on derivative liability - warrants of $44,572 (2017 - $78,712) and the derivative liability - warrants value reduced to $nil with the following assumptions:

	2018	2017
Average stock price	-	CAD$0.65
Expected dividend yield	-	-
Expected stock price volatility	-	93.74%
Risk-free interest rate	-	1.66%
Expected life of warrants	-	0.5 year

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

(k) Impairment of long-lived assets and long-lived assets to be disposed of::

The Company accounts for long-lived assets in accordance with the provisions of ASC 360, Property, Plant and Equipment and ASC 350, Intangibles-Goodwill and Others. During the periods presented, the only long-lived assets reported on the Company's consolidated balance sheet are equipment, and security deposits.  These provisions require that long-lived assets and certain identifiable recorded intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.

Page 29

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(k) Impairment of long-lived assets and long-lived assets to be disposed of:: (Continued)

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.

(l)   Income taxes:

The Company follows the asset and liability method of accounting for income taxes.  Under this method, current income taxes are recognized for the estimated income taxes payable for the current period.  The Company recognizes the income tax recovery from the receipt of tax credits upon receipt of funds. Deferred income taxes are provided based on the estimated future tax effects of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as the benefit of losses available to be carried forward to future years for tax purposes.

Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered and settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.  A valuation allowance is recorded for deferred tax assets when it is not more likely than not that such future tax assets will be realized.

(m) Net (loss) income per share:

ASC 260, "Earnings Per Share", requires presentation of basic earnings per share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if outstanding options or warrants were exercised and converted into common stock. In computing diluted earnings per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period.

Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. A total of 3,575,000 (2017 - 1,605,000) stock options and nil (2017 - 5,219,163) warrants were excluded as at December 31, 2018.

Page 30

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(m) Net (loss) income per share: (Continued)

The earnings per share data for the year ended December 31, 2018 and 2017 are summarized as follows:

		2018		2017
Loss for the year	$	(2,592,831)	$	(1,741,951)
Basic and diluted weighted average number of common shares outstanding		72,111,456		61,730,928
Basic and diluted loss per common share outstanding	$	(0.04)	$	(0.03)

(n)  New accounting pronouncements and changes in accounting policies:

In 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 2016-11 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 adopted ASC 2014-09 as of January 1, 2018 using the modified retrospective method. The new standard was applied to all contracts not completed as of January 1, 2018 and had no material impact to its results of operations or cash flows.

Page 31

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(n)  New accounting pronouncements and changes in accounting policies: (Continued)

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): 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 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 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 2016-01 as of January 1, 2018 and ASU 2016-01 has not had a material impact on the consolidated financial statements.

In 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 12 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. The Company has evaluated the impact of the amended guidance on the Company's Consolidated Financial Statements and determined the impact to assets and liabilities is not significant to the consolidated financial statements for the existing lease. 

In 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. 2016-13 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. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses ( " ASU 2018-19") . ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20.

Page 32

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(n)  New accounting pronouncements and changes in accounting policies: (Continued)

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. The Company is currently evaluating the impact of the amended guidance and has not yet determined the effect of the standard on its ongoing financial reporting.

In 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. 2016-15 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 2014-09 as of January 1, 2018 and it has not had a material impact on the consolidated financial statements.

In 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 2016-16 on January 1, 2018 and it did not have an impact on its consolidated financial statements.

In January of 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. The Company adopted ASU 2017-01 on January 1, 2018 and the adoption did not have a material impact on the Company's consolidated financial statements.

In 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 2017-09 on 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.

Page 33

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(n)  New accounting pronouncements and changes in accounting policies: (Continued)

In 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 adoption of this guidance will not have a material impact on the Company's financial position, results of operations and liquidity.

In 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 2018-02 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 adopted ASU-2018-02 in the first quarter of 2018 and the impact of the adoption was not material to our Consolidated Financial Statements.

Page 34

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(n)  New accounting pronouncements and changes in accounting policies: (Continued)

In February 2018, FASB issued ASU 2018-03, "Technical Corrections and Improvements to Financial Instruments (Subtopic 825-10) - 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 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities". This includes an amendment to clarify that anentity 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 adopted ASC 2018-03 as of January 1, 2018 and it has not had a material impact on the consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted.  Entities must transition to the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of this guidance had an immaterial impact on the Company's financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement: Disclosure Framework (Topic 840) - Changes to the Disclosure Requirements for Fair Value Measurement", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring Level 1, Level 2 and Level 3 instruments in the fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the impact this standard will have on the Company's consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires implementation costs in a hosting arrangement that is a service contract to be capitalized consistent with the rules in ASC 350-40, Intangibles-Goodwill

Page 35

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(n)  New accounting pronouncements and changes in accounting policies: (Continued)

and Other-Internal-Use Software. This aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs incurred during the application development stage are to be capitalized and expensed according to their nature, while costs incurred during the preliminary project and post- implementation stages are to be expensed. This ASU also contains guidance with regard to the amortization period, impairment and presentation within the financial statements. The ASU is required to be adopted by the Company during 2020, however early adoption is allowed in an interim period before then, and may be applied retrospectively or prospectively to applicable costs on the Company's condensed consolidated financial statements. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

There have been no other recent accounting standards, or changes in accounting standards, during the year ended December 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.

(o)  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 1 fair value measurement.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.

Fair values determined by Level 3 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 1 inputs. Stock-based compensation and derivative liability - warrants were measured using Level 2 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 3 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.

Page 36

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

2.    Summary of significant accounting policies: (Continued)

(o)  Financial instruments: (Continued)

(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.

3.    Accounts Receivable:

The accounts receivable as at December 31, 2018, is summarized as follows:

		2018		2017
Accounts receivable	$	39,769	$	42,688
Provision for doubtful accounts		(27,666)		(27,666)
Net accounts receivable	$	12,103	$	15,022

The Company had bank accounts with the National Bank of Anguilla. During the year ended December 31, 2016, the National Bank of Anguilla filed for chapter 11 protection. The Company expensed the balance on account of $27,666 in fiscal 2016 as a doubtful debt.

4.    Prepaid expenses

The Company has other prepaid expenses of $99,739 (2017 - $54,714) including prepaid licenses fees of $65,387 (2017 - $33,502) for the year ended December 31, 2018.

5.   Equipment:

2018		Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	128,097	$	112,845	$	15,252
Furniture and fixtures		8,037		7,034		1,003
	$	136,134	$	119,879	$	16,255

2017		Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	116,444	$	107,444	$	9,000
Furniture and fixtures		7,541		6,821		720
	$	123,985	$	114,265	$	9,720

Depreciation expense was $5,614 (2017 - $4,068) for the year ended December 31, 2018.

Page 37

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

6.   Software development assets:

The Company has developed Trophy Bingo, a social bingo game, which was launched in the year ended December 31, 2014.

During the year ended December 31, 2016, the Company obtained the license to develop Garfield's Bingo. The game was launched in November 2016.

During the year ended December 31, 2016, the Company obtained the license for Rooplay. The Company commenced development of the Rooplay platform and was initially launched in March 2017, with the full release on the Android platform only in November 2017.

In addition, during the year ended December 31, 2016, the Company commenced development of the 'Rooplay Originals'.

During the year ended December 31, 2018 and 2017, the Company has expensed the development costs of all products as incurred and has expensed the following development costs.

		2018		2017
Opening total software development costs	$	5,768,476	$	4,935,274
Software development during the year		948,334		833,202
Closing total Software development costs	$	6,716,810	$	5,768,476

7.   Promissory notes:

The Company has issued unsecured promissory notes from shareholders of the Company. The notes were repayable on March 31, 2018. The interest on the notes are 2% per annum, calculated and compounded annually and paid annually.  Interest in arrears shall accrue interest. The unpaid principal amount due hereunder may be reduced to zero from time to time without affecting the validity of this note.

The promissory notes are accounted for 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 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. The cash flow stream from the coupon interest payments and the final principal payment were discounted at 15% to arrive at the valuations. The Company used a deemed rate of 15% as the appropriate discount rate after examining the interest rates for similar instruments issued in the same time frame for similar companies without the conversion feature.

On March 31, 2017, the maturity date on the promissory notes was extended to April 1, 2020. The Company treated the change as an extinguishment and reissuance of the notes. The Company recognized a discount on the promissory notes of $94,191 from the extinguishment and reissuance of the notes.

During the year ended December 31, 2018, the promissory notes were settled in exchange for the exercise of warrants and the notes were extinguished. Since the extinguishment of the

Page 38

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

7.   Promissory notes: (Continued)

promissory note is with related parties, then in accordance with ASC 470-50-40-2, the extinguishment transactions is in essence a capital transaction. Therefore, the Company recognized a reduction of $65,955 from equity of the Company.

During the year ended December 31, 2017, the Company issued $188,135 promissory notes and recognized a discount on the promissory notes of $23,461.

The Company recognized interest accretion of $31,966 (2017 - $72,844) of interest accretion.

		2018		2017
Opening balance	$	502,313	$	347,698
Promissory note issued		-		188,135
Discount on promissory note		-		(23,461)
Gain on extinguishment and reissuance of promissory notes with related parties		-		(94,191)
Reduction of capital on extinguishment of promissory notes with related parties		65,955		-
Extinguishment of promissory notes to related parties		(605,358)		(418,181)
Reissuance of promissory notes to related parties		-		418,181
Accrued interest		5,124		11,288
Interest accretion		31,966		72,844
Closing balance	$	-	$	502,313

8.   Stockholders' Equity (Deficiency):

The holders of common stock are entitled to one vote for each share held.  There are no restrictions that limit the Company's ability to pay dividends on its common stock.  The Company has not declared any dividends since incorporation.  The Company's common stock has no par value per common stock.

(a)  Common stock issuances:

Fiscal 2018

In June 2018, the related party warrant holders exercised their warrants for 1,200,000 shares at CAD$0.65 (US$0.50) per share through the settlement of the promissory notes, in a non-cash transaction.

Page 39

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

8.   Stockholders' Equity (Deficiency): (Continued)

(a)  Common stock issuances: (Continued)

In February 2018, a warrant holder exercised their warrant for 15,000 shares at $0.44 per share raising a total of $6,600.

In February 2018, the Company closed a TSX Venture Exchange approved private placement financing totaling $2,551,500. The private placement consisted of 7,290,000 common shares priced at $0.35 per share. Pursuant to the private placement the Company paid a commission of $253,750 and incurred share issuance expense of $18,342.

Fiscal 2017

In December 2017, two warrant holders exercised their warrants and acquired 121,111 common shares of the Company at CAD$0.55 (approximately $0.43) per share totaling $52,310.

In October 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling $45,011. The private placement consisted of 128,600 units priced at $0.35 per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is $0.44 per share for the first six months following closing and $0.52 per share for the period which is 7-12 months following closing.

In September 30, 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling $1,010,763. The private placement consisted of 2,887,895 units priced at $0.35 per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is $0.44 per share for the first six months following closing and $0.52 per share for the period which is 7-12 months following closing.

In ended June 2017, the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling CAD$1.045 million (approximately $790,281). The private placement consisted of 2,323,779 units priced at CAD$0.45 ($0.34) per unit. Each Unit was comprised of one common share and one share purchase warrant.  Each share purchase warrant is exercisable into one common share of the Company for 12 months following closing.  The exercise price of the warrants is CAD$0.55 per share for the first six months following closing and CAD$0.65 per share for the period which is 7-12 months following closing.

The Company incurred issuance costs of $25,816 from the private placements and warrant exercise.

Page 40

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

8.   Stockholders' Equity (Deficiency): (Continued)

(a)  Common stock issuances: (Continued)

Fiscal 2019

Subsequent to the year ended December 31, 2018, the Company closed a TSX Venture Exchange approved private placement financing totaling $2,000,000. The private placement consisted of 5,000,000 shares priced at $0.40 per share. Pursuant to the private placement the Company paid a commission of $200,000 and incurred share issuance expense of $13,546.

(b)  Warrants

A summary of warrant activity for the warranty for the years ended December 31, 2018 and 2017 are as follows:

	Number of warrants		Weighted average exercise price
Outstanding, December 31, 2016	-	$	-
Granted	2,323,779		0.43 - 0.49
Granted	2,887,895		0.44 - 0.52
Granted	128,600		0.44 - 0.52
Exercised	(121,111)		(0.43)
Outstanding, December 31, 2017	5,219,163		0.48
Granted	-		-
Exercised	(1,215,000)		(0.50)
Expired, unexercised	(4,004,163)		(0.51)
Outstanding December 31, 2018	-	$	-

(c)  Stock option plans:

2015 stock option plan

In the year ended December 31, 2015, the shareholders approved the 2015 stock option plan and the 1999, 2001 and the 2005 plans were discontinued. The 2015 stock option plan is intended to provide incentive to employees, directors, advisors and consultants of the Company to encourage proprietary interest in the Company, to encourage such employees to remain in the employ of the Company or such directors, advisors and consultants to remain in the service of the Company, and to attract new employees, directors, advisors and consultants with outstanding qualifications. The maximum number of shares issuable under the Plan shall not exceed 10% of the number of Shares of the Company issued and outstanding as of each Award Date unless shareholder approval is obtained in advance in accordance unless shareholder approval is obtained in advance in accordance. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule. The maximum term possible is 10 years. Under the 2015 plan we have reserved 10% of the number of Shares of the Company issued and outstanding as of each Award Date.

Page 41

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

8.   Stockholders' Equity (Deficiency): (Continued)

(c)  Stock option plans: (Continued)

During the year ended December 31, 2018, the Company granted 2,130,000 options, of which 710,000 options were fully vested expiring on June 4, 2023, with an exercise price of CAD$0.54 (US$0.42), 1,275,000 options were fully vested expiring on June 4, 2023, with an exercise price of $0.50 and 145,000 options were issued where 10% vests on grant date, 15% one year following grant date and 2% per month thereafter, with an exercise price of CAD$0.54 (US$0.42) to employees and consultants.

During the year ended December 31, 2017, the Company granted 725,000 options of which 350,000 options were fully vested expiring on November 8 , 2022, with an exercise price of CAD$0.54 (US$0.42) and 375,000 options were issued where 10% vests on grant date, 15% one year following grant date and 2% per month thereafter, with an exercise price of CAD$0.54 (US$0.42).

As at December 31, 2018, there were a total of 3,575,000 stock options (2017 - 1,605,000) outstanding. During the year ended December 31, 2018, there were nil options exercised (2017 - nil) and 160,000 options expired unexercised (2017 - 130,000).

Of the options outstanding at December 31, 2018, a total of 3,190,000 (2017 -1,230,000) were fully vested and a total of 385,000 (2017 - 375,000) were issued where 10% vests at the grant date, 15% one year following the grant date and 2% per month starting 13 months after the grant date. A total of 3,273,550 (2017 - 1,267,500) of these common stock purchase options had vested at December 31, 2018.

A summary of stock option activity for the stock option plans for the years ended December 31, 2018 and 2017 are as follows:

	Number of options		Weighted average exercise price
Outstanding, December 31, 2016	1,010,000	$	0.42
Granted	725,000		0.42
Exercised	-		-
Cancelled	(130,000)		(0.42)
Outstanding, December 31, 2017	1,605,000		0.42
Granted	2,130,000		0.47
Exercised	-		-
Cancelled	(160,000)		(0.42)
Outstanding December 31, 2018	3,575,000	$	0.45

The aggregate intrinsic value for options as of December 31, 2018 was $nil (2017 - $nil).

Page 42

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

8.   Stockholders' Equity (Deficiency): (Continued)

(c)  Stock option plans: (Continued)

The following table summarizes information concerning outstanding and exercisable stock options at December 31, 2018:

Range of exercise prices per share		Number outstanding	Number exercisable	Expiry date
	$        0.42	855,000	855,000	December 20, 2021
	0.42	615,000	421,550	November 8, 2022
	0.42	830,000	722,000	June 4, 2023
	0.50	1,275,000	1,275,000	June 4, 2023
		3,575,000	3,273,550

The Company recorded stock-based compensation of $595,580 on the 2,130,000 options granted and vested (2017 - $43,212 on the 725,000 options granted and vested) and as per the Black-Scholes option-pricing model, with a weighted average fair value per option of $0.29 (2017 - $0.13).

Subsequent to the year ended December 31, 2018, 110,000 options were cancelled unexercised.

9.   Commitments:

The Company leases office facilities in Vancouver, British Columbia, Canada, and The Valley, Anguilla, British West Indies. These office facilities are leased under operating lease agreements. One of the Canadian operating lease expired on December 31, 2016, but unless 30 day notice is given this lease automatically renews on a month to month basis until notice is given. The second operating lease in Vancouver, Canada is on a month to month basis until notice is given.

The Anguillan operating lease expired on April 1, 2011 but unless 3 month's notice is given it automatically renews for a further 3 months.

Minimum lease payments under these operating leases are approximately as follows:

2019	$	2,246
2020		-

The Company paid rent expense totaling $28,287 for the year ended December 31, 2018 (2017 - $19,018).

Subsequent to the year ended December 31, 2018, the Company signed a five year lease ending March 2024. This facility comprises approximately 1,459 square feet. The Company will account for the lease in accordance with ASU 2016-02 (Topic 842) and will recognize an asset and liability.

Page 43

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

9.   Commitments: (Continued)

The minimum lease payments under this operating lease are approximately as follows:

2019	$	30,225
2020		40,769
2021		41,840
2022		42,910
2023		43,980
2024		11,062

The Company has a management consulting agreement with T.M. Williams (Row), Inc., an Anguilla incorporated company, and Mr. T. M. Williams. During the year ended December 31, 2014, the Company amended a previous agreement with Mr. T. M. Williams to provide for a consultancy payment of 2.5% of the monthly social bingo business with a minimum of $11,000 and a maximum of $25,000 per month.

During the year ended December 31, 2014, the Company entered into an agreement with Jayska Consulting Ltd. and Mr. J. M. Williams, Co-Chief Executive Officer of the Company for the provision of services of Mr. J. M. Williams as Chief Executive Officer of the Company. The Consulting agreement provides for a consultancy payment of GBP5,000 per month. In addition, during the year ended December 31, 2014, the Company entered into an agreement with LVA Media Inc. and Mr. J. M. Williams, for the provision of services of Mr. J. M. Williams as Chief Executive Officer of the Company. The Consulting agreement provides for a consultancy payment of 2.5% of the monthly social bingo business with a minimum of $7,500 and a maximum of $25,000 per month.

As at December 31, 2018, the Company had a number of renewable license commitments with large brands, including, Garfield, Moomins, Mr Men and Little Miss, Mr. Bean, Peter Rabbit, Pororo and the Winx club. These agreements have commitments to pay royalties on the revenue from the licenses subject to the following minimum guarantee payments:

2019	$	26,364
2020		3,000
2021		-

The Company expensed the minimum guarantee payments over the life of the agreement and recognized license expense of $32,009 (2017 - $12,888) for the year ended December 31, 2018.

10.  Income taxes:

Shoal Games Ltd. is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. However certain of the Company's subsidiaries incur income taxation.

Page 44

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

10.  Income taxes: (Continued)

The Tax Cuts and Jobs Act ("Tax Act") was signed into law on December 22, 2017. Included as part of the law, was a permanent reduction in the U.S. federal corporate income tax rate from 34% to 21% effective January 1, 2018.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017, are presented below:

		2018		2017
Computed "expected" tax benefit (expense)	$	544,495	$	592,264
Reduction in income taxes resulting from income taxes in other tax jurisdictions		(337,087)		(494,697)
Other		(403)		(30)
Change in taxation rates in other jurisdictions		(2,933)		-
Change in exchange rates		58,486		21,016
Change in valuation allowance		(173,037)		(87,792)
	$	89,521	$	30,761

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are presented below:

		2018		2017
Deferred tax assets:
Net operating loss carry forwards	$	275,846	$	102,809
Valuation Allowance		(275,846)		(102,809)
	$	-	$	-

The valuation allowance for deferred tax assets as of December 31, 2018 and 2017, was $275,846 and $102,809, respectively.  The net change in the total valuation allowance was an increase of $173,037 for the year ended December 31, 2018 (2017 - $87,792).

As at December 31, 2018, the Company's had $618,204 of non-capital losses expiring through December 31, 2038.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the realizability of deferred tax assets.

During the year ended December 31, 2018, Shoal Media (Canada) Inc., a subsidiary of Shoal Games Ltd., received the British Columbia Interactive Digital Media Tax Credit of CAD$116,085 ($89,521) (2017 - CAD$39,919 ($30,761)) from the British Columbia Provincial Government. The Company recognized this tax credit as a recovery of income tax expense on the statement of operations upon receipt of funds. 

Page 45

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

11. Related party transactions:

The Company has a liability of $nil (2017 - $33,000) to a company owned by a current director and officer of the Company for payment of consulting fees of $132,000 (2017 - $132,000) by the current director and officer of the Company.

The Company has a liability of $nil (2017 - $97) to a current director and officer of the Company for expenses incurred.

The Company has a liability of $1,647 (2017 - $3,982) to a current director and officer of the Company for expenses incurred.

The Company has a liability of $nil (2017 - $nil) to a company owned by a current director and officer of the Company for payment of consulting fees of $80,128 (2017 - $77,310) by the current director and officer of the Company.

The Company has a liability of $nil (2017 - $nil) to a company owned by a current director and officer of the Company for payment of consulting fees of $90,000 (2017 - $90,000) by the current director and officer of the Company.

The Company has a liability of $1,500 (2017 - $1,000), to independent directors of the Company for payment of consulting fees. During the year ended December 31, 2018, the Company paid $4,500 (2017 - $5,500) to the independent directors in director fees.

The Company has a liability of $7,317 (2017 - $6,106), to an officer of the Company for payment of consulting fees and expenses incurred of $109,079 (2017 - $93,078) by the officer of the Company.

The Company has promissory notes totaling $nil (2017 - $600,235), including interest, from shareholders holding more than 10% of the Company. The interest on the notes are 2% per annum, calculated and compounded annually and paid annually. During the quarter ended June 30, 2018, these promissory notes were settled through a warrant exercise for 1,200,000 shares, in a non-cash transaction.

During the year ended December 31, 2017, the directors and shareholders holding more than 10% of the Company's shares subscribed for 1,200,000 units totaling CAD$540,000 ($408,102) in the private placement.

During the year ended December 31, 2018, the Company granted 700,000 (2017 - 125,000) options with an exercise price of CAD$0.54 (approximately $0.42) for both fiscal 2018 and fiscal 2017 per share and 275,000 (2017 - nil) with an exercise price of $0.50 for fiscal 2018, to related parties. The Company expensed $281,492 (2017 - $13,110) in stock-based compensation for these options granted to related parties.

The Company has a receivable of $2,305 (2017 - $2,630) from a company of which a previous director of the Company is a director.

Page 46

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

11. Related party transactions: (Continued)

The related party transactions are in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related party.

12. Segmented information:

The Company operates in one reportable business segment, the sale of in-app purchases on Trophy Bingo and Garfield's Bingo; the premium purchase for Rooplay Originals and recurring subscription revenues from Rooplay.

The Company had the following revenue by geographical region.

		2018		2017
Total revenue from continuing operations
Western Europe	$	13,994	$	10,940
Central, Eastern and Southern Europe		864		486
Nordics		982		875
North America		73,618		63,155
Other		17,520		18,019
Total revenue	$	106,978	$	93,475

Equipment

The Company's equipment is located as follows:

Net Book Value		2018		2017
Anguilla	$	368	$	552
Canada		12,911		8,353
United Kingdom		2,976		815
	$	16,255	$	9,720

13. Concentrations:

      Major customers

During the year ended December 31, 2018 and 2017, the Company sold subscriptions on its site Rooplay and sold in-app purchases on its social bingo sites, Trophy Bingo and Garfield's Bingo and premium purchases of Rooplay Originals. There was no single player who had purchased more than 10% of the Rooplay, Trophy Bingo and Garfield's Bingo revenue. The Company is reliant on the Google App, iOS App and Amazon App Stores to provide a platform for Rooplay, Trophy Bingo and Garfield's Bingo to be played thereon.

During the year ended December 31, 2018 and 2017, the Company offered limited advertising. The Company is reliant on one sales customer who provides the advertising revenue.  

14. Concentrations of credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.  The Company places its cash with high quality financial institutions and limits the amount of credit exposure with any one institution.

Page 47

SHOAL GAMES LTD. and subsidiaries

(Expressed in United States Dollars)

Notes to Consolidated Financial Statements

Years ended December 31, 2018 and 2017

14. Concentrations of credit risk: (Continued)

The Company currently maintains a substantial portion of its day-to-day operating cash balances at financial institutions.  At December 31, 2018, the Company had total cash balances of $641,536 (2017 - $478,397) at financial institutions, where $489,235 (2017 - $336,756) is in excess of federally insured limits. 

The Company has concentrations of credit risk with respect to accounts receivable, the majority of its accounts receivable are concentrated geographically in the United States amongst a small number of customers.

As of December 31, 2018, the Company had three customers, totaling $8,814 who accounted for greater than 10% of the total accounts receivable. As of December 31, 2017, the Company had four customers, totaling $9,066 who accounted for greater than 10% of the total accounts receivable.

The Company controls credit risk through monitoring procedures and receiving prepayments of cash for services rendered.  The Company performs credit evaluations of its customers but generally does not require collateral to secure accounts receivable.

15.  Subsequent event:

Subsequent to the year ended December 31, 2018, the Company issued 52,450,286 shares for total consideration of $20,603,656 in the acquisition of all the issued and outstanding ordinary and preferred shares in the capital stock of Kidoz Ltd., a company incorporated under the laws of the State of Israel. Kidoz Ltd. is a global kids' content distribution and monetization marketplace. The Company paid a commission of US$130,000 and incurred share issuance costs of $85,135. The acquisition closed with the effective date of acquisition being February 28, 2019.

The acquisition enables the global reach of Kidoz's content network to be efficiently combined with the Company's Rooplay subscription OTT platform.

This acquisition is accounted for as a business combination. As at the date of this report, the Company is unable to accurately determine the assets and liabilities of Kidoz Ltd. effective February 28, 2019, since a portion of the revenue / receivables and expenses / payables are based on their customer and suppliers reports which are not yet available from third party sources. On acquisition of Kidoz Ltd., the Company allocated the purchase price to the fair value of the net assets acquired. However, as certain information regarding Kidoz's Ltd.'s working capital, intangible assets and resulting goodwill is not yet finalized, these figures are subject to change. The provisional measurements of assets and liabilities may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On February 4, 2010, we engaged Davidson & Company LLP, as its independent registered public accounting firm, to audit our financial statements. The decision to engage Davidson & Company LLP was approved by our Board of Directors at a Board meeting called for such purpose.

There have not been any changes in accountants for the years ended December 31, 2018 and 2017.

ITEM 9A.  CONTROLS AND PROCEDURES

(a)        Management's responsibility

Our management acknowledges its responsibility for establishing and maintaining adequate internal control over financial reporting of the Company.

(b)        Evaluation of disclosure controls and procedures.

Our management, including the Executive Chairman, Chief Executive Officer and the Chief Financial Officer, evaluated the disclosure controls and procedures of the Company within 90 days prior to the date of this report, and found them to be operating efficiently and effectively to ensure that information required to be disclosed by us under the general rules and regulations promulgated under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified by rules and regulations of the SEC.

These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management, including our principal executive officers and principal financial officer as appropriate to allow timely decisions regarding required disclosure. However our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management evaluated of the effectiveness of the Company's design and operation of its disclosure controls and procedures as defined in Exchange Act Rule 13a-15(f), based on the framework set forth in the Internal Control-Integrated Framework (1992) issued by the by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on our evaluation, we believe that, as of December 31, 2018, the Company's internal control over financial reporting is effective under the COSO framework.

(c)        Changes in internal controls.

There were no significant changes in our internal controls or other factors that could significantly affect our internal controls during the year ended December 31, 2018, and to the date of filing this annual report.

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ITEM 9B - OTHER INFORMATION

None

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PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers as at December 31, 2018, are as follows: 

Name	Age	Position	Audit Committee	Governance Committee	Compensation Committee
T. M. Williams	78	Executive Chairman	X		X
J. M. Williams	43	Chief Executive Officer	X	X
F. Curtis	54	Non Executive Director	X	X*	X*
C. Kalborg	57	Non Executive Director	X*	X	X
H. W. Bromley	48	Chief Financial Officer

X* - Chairman of Committee

Mr. W. Moore did not stand for re-election at the November 14, 2018 AGM.

T. M. Williams has served as President, Chief Executive Officer and Chairman from August 20, 2001 until June 16, 2011.  Since June 16, 2011, Mr. Williams has served as the Executive Chairman.  Since 1984, Mr. Williams has served as a principal of T.M. Williams (ROW), Inc., a private consulting firm, and from 1993 until 2008, was Adjunct Professor, Faculty of Commerce and Business Administration at the University of British Columbia.  From 1988 to 1991, he was President and Chief Executive Officer of Distinctive Software, Inc. in Vancouver, BC, and, upon the acquisition of that company by Electronic Arts Inc., North America's largest developer of entertainment software, he became President and Chief Executive Officer of Electronic Arts (Canada) Inc., where he continued until 1993. From 1995 to 2012, Mr. Williams was a director of YM Biosciences, Inc., a biotechnology company, until its acquisition by Gilead Sciences, Inc.  In addition, he is a director of several other private corporations.

Mr. J. M. Williams has served as Vice President, Business Development and Marketing Director from September 2001 until June 16, 2011. Mr. J.M. Williams has been a director since July 26, 2007.  Since June 16, 2011, Mr. J. M. Williams has served as the President and Chief Executive Officer.  Prior to his employment with Shoal Games Ltd., he was a Business Analyst with Blue Zone Inc. (a technology company) and RBC Dominion Securities. Mr. J. M. Williams has a bachelor of Commerce degree from the University of Victoria and a Masters of Business Administration degree, specializing in strategic marketing, from the University of Warwick.  Mr. J. M. Williams is the son of Mr. T. M. Williams, the Company's Executive Chairman.

Ms. F. Curtis has served as a director since June 10, 2009. She has served as Compliance Officer and General Corporate Secretary for Counsel Limited, an Anguillian financial services corporation, since 2006.  Ms. Curtis has been working in the financial services industry since 1990.  She started at the brokerage firm, Burns Fry, in Toronto (now Nesbitt Burns, Bank of Montreal). She completed her Canadian Securities Course and became a licensed Securities Broker in 1992. She was educated in England, and attended the University of Toronto, Canada for her undergraduate degree. Ms. Curtis's MBA in Finance & International Affairs was granted by the Rotman School of Business, University of Toronto.

Mr. C. Kalborg is a 20-year licensing veteran with experience from leading game companies such as Rovio (the makers of Angry Birds) and King.com (the makers of Candy Crush). Taking on the aptly named role of licensing guru, Kalborg has gathered close to 50 licensees and established a network of regional agents for Candy Crush around the world. Those agents include Striker Entertainment in the U.S. and Canada; Tycoon Enterprises in Latin America (except Argentina and Brazil); Tycoon 360 in Brazil; IMC in Argentina; Mediogen in Israel; Sinerji in Turkey; Pacific Licensing Studio in Southeast Asia; Wild Pumpkin Licensing in Australia and New Zealand; PPW in greater China; and Voozclub in Korea. Claes brings a wealth of experience and a deep network in licensing and technology to Shoal Games.

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Mr. H. W. Bromley has served as our Chief Financial Officer since July 2002. From 2000 to 2001, Mr. Bromley was a Director and the Group Financial Officer for Agroceres & Co. Ltd. From 1995 - 1999, he was an employee of Ernst & Young working in South Africa and in the United States of America. Mr. Bromley has in addition worked for CitiBank, Unilever PLC, Gerrard and CellStop Systems Inc. Mr. Bromley is a Chartered Accountant.

COMPOSITION OF OUR BOARD OF DIRECTORS

We currently have four directors.All directors currently hold office until the next annual meeting of stockholders or until their successors have been elected and qualified. Our officers are appointed annually by the Board of Directors and hold office until their successors are appointed and qualified. Pursuant to the Company's by-laws, the number of directors shall be increased or decreased from time-to-time by resolution of the Board of Directors or the shareholders. Mr. J. M. Williams is the son of Mr. T. M. Williams. There are no other family relationships between any of the officers and directors of the Company.

Subsequent to the year ended December 31, 2018, Mr. E. Ben Tora, Mr. M. David and Mr. J. Mendelbaum have been invited to join the board of directors of Shoal Games Ltd.

COMMITTEES OF OUR BOARD OF DIRECTORS

We currently have three committees of our Board of Directors.

-     Audit Committee - This committee will review the financial statements of the Company and propose to the board to approve the financial statements. The Committee meets quarterly to review and approve the quarterly financial statements and to discuss the affairs of the company with the auditors.

-    Governance Committee - This committee reviews the ethics policy of the Company and ensures compliance. It will make recommendations to the board for improvement in Corporate Governance. In addition it will be this committee to whom a whistle blower will report.

-    Compensation Committee - This committee will propose the appointment and remuneration of the Chief Executive Officer including salary, stock options, and bonuses.

BOARD OF DIRECTORS MEETINGS

Our Board of Directors met, in person or by phone, five times during the last fiscal year and it regularly approves all material actions required by consent resolutions.

CODE OF ETHICS

On December 21, 2006, the Board of Directors of Shoal Games Ltd.  (the "Board") adopted a new Code of Business Conduct and Ethics (the "Code"), which applies to the Company's directors, officers and employees. The Code was adopted to further strengthen the Company's internal compliance program. The Code addresses among other things, honesty and integrity, fair dealing, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, and administration of the code. The code is available at the Company's website at http://investor.shoalgames.com/ under Corporate Governance. A copy of our Code of Ethics is available upon request at no charge to any shareholder.

DIRECTOR COMPENSATION

The Non Executive Directors receive a cash compensation for their services as members of the Board of Directors based on a compensation per meeting. During the year ended December 31, 2018, the Non Executive Directors collectively received compensation of $4,500 (Fiscal 2017 - $5,500). The Executive directors currently do not receive cash compensation for their services as members of the Board of Directors. In addition, both the Non Executive and the Executive Directors are reimbursed for expenses in connection with attendance at Board of Directors meetings and specific business meetings.  Directors are eligible to participate in our stock option plans. Option grants to directors are at the discretion of the Board of Directors acting upon the recommendation of the Compensation committee. 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Our officers, directors and greater than ten percent beneficial owners filed in a timely manner in accordance with Section 16(a) filing requirements.

ITEM 11.  EXECUTIVE COMPENSATION

The following table describes the compensation we paid to our Chief Executive Officer and directors (the "Named Executive Officer").

SUMMARY COMPENSATION TABLE

		Annual Compensation			Long-term Compensation
Name and Principal Position	Year	Fees	Bonus	Other Annual Compensation	Restricted Stock Awards	Securities Underlying Options /	All Other Compensation
		$	$	$	$	SARs  (#)	$
T.M. Williams -	2018	132,000	-	-	-	175,000	-
Executive	2017	132,000	-	-	-	25,000	-
Chairman (1)	2016	132,000	-	-	-	100,000	-
J. M. Williams	2018	170,128	-	-	-	175,000	-
CEO (2)	2017	167,310	-	-	-	25,000	-
	2016	171,285	-	-	-	100,000	-
H. W. Bromley	2018	109,079	-	-	-	175,000	-
CFO (3)	2017	93,078	-	-	-	25,000	-
	2016	63,655	-	-	-	100,000	-

(1) All of the compensation paid to the Named Executive Officer is paid to T.M. Williams (Row), Ltd. for the services of Mr. T. M. Williams.  See additional discussion in Employment Arrangements section of Item 11 of this report.

(2)  All of the compensation paid to the Named Executive Officer is paid to LVA Media Inc. for the services of Mr. J. M. Williams as CEO of the Company and Jayska Consulting Ltd for the marketing services of Mr. J. M. Williams.  See additional discussion in Employment Arrangements section of Item 11 of this report.

(3)  All of the compensation paid to the Named Executive Officer is paid to Bromley Accounting Services Ltd. for the services of Mr. H. W. Bromley.

OPTION GRANTS IN THE LAST FISCAL YEAR

During the year ended December 31, 2018, the Company granted 2,130,000 options, of which 710,000 options were fully vested, 5 year, options granted with an exercise price of CAD$0.54 (US$0.42), 1,275,000 options were fully vested, 5 year options granted with an exercise price of $0.50 and 145,000 options were vesting, 5 year options granted with an exercise price of CAD$0.54 (US$0.42) to employees and consultants.

During the year ended December 31, 2018, nil (2017 - nil) options were exercised. During the year ended December 31, 2018, 160,000 (2017 - 130,000) options were cancelled.

STOCK OPTION PLANS

In the year ended December 31, 2015, the 1999, 2001 and 2005 Stock Option Plans were discontinued and replaced with the 2015 Stock Option Plan.

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Our Board of Directors administers the 2015 Stock Option Plan. Our Board is authorized to construe and interpret the provisions of the Stock Option Plans, to select employees, directors and consultants to whom options will be granted, to determine the terms and conditions of options and, with the consent of the grantee, to amend the terms of any outstanding options. The 2015 Stock Option Plan provides for the granting of stock options to the employees, directors, advisors and consultants of the Corporation to encourage proprietary interest in the Corporation, to encourage such employees to remain in the employ of the Corporation or such directors, advisors and consultants to remain in the service of the Corporation, and to attract new employees, directors, advisors and consultants with outstanding qualifications.

Our Board determines the terms and provisions of each option granted under the Stock Option Plans, including the exercise price, vesting schedule, repurchase provisions, rights of first refusal and form of payment.  The Plan shall not exceed 10% of the number of Shares of the Company issued and outstanding as of each Award Date, inclusive of all Shares presently reserved for issuance pursuant to previously granted stock options, unless shareholder approval is obtained in advance. The Exercise Price shall be that price per Share, as determined by the Board in its sole discretion, and announced as of the Award Date, at which an Option Holder may purchase a Share upon the exercise of an Option, provided that it shall not be less than the closing price of the Company's Shares traded through the facilities of the Exchange on the day preceding the Award Date, less any discount permitted by the Exchange, or such other price as may be required or permitted by the Exchange.

The term of options under the Stock Option Plans will be determined by our Board; however, the term of the stock option may not be for more than ten years.  Where the award agreement permits the exercise of an option for a period of time following the recipient's termination of service with us, disability or death, that option will terminate to the extent not exercised or purchased on the last day of the specified period or the last day of the original term of the option, whichever occurs first.

If a third party acquires the Company through the purchase of all or substantially all of our assets, a merger or other business combination, except as otherwise provided in an individual award agreement, all unexercised options will terminate unless assumed by the successor corporation.

EMPLOYMENT ARRANGEMENTS

We entered into a management consulting agreement with T.M. Williams (Row), Inc., an Anguilla incorporated company and Mr. Williams dated August 20, 2001, (the "Williams Agreement"), amended February 28, 2002, in connection with the provision of services by Mr. Williams as President and Chief Executive Officer of the Company. During the year ended December 31, 2010, the agreement was amended to include a consultancy payment of $11,666 per month payable in arrears. This contract is for the provision of services by Mr. T. M. Williams as Executive Chairman of the Company. During the year ended December 31, 2013, the agreement was amended to provide for a consultancy payment of 2.5% of the monthly social bingo business with a minimum of $11,000 and a maximum of $25,000 per month.

The term of the amended Williams Agreement is for a period of one year, unless terminated sooner by any of the parties under the terms and conditions contained in the amended Williams Agreement. If the amended Williams Agreement is not terminated by any of the parties, the term may be renewed for a further one year period at the option of T.M. Williams (Row), Ltd., on substantially the same terms and conditions, by giving three months notice in writing to the Company.

During the year ended December 31, 2014, the Company entered into an agreement with Jayska Consulting Ltd. and Mr. J. M. Williams, Chief Executive Officer of the Company for the provision of services of Mr. J. M. Williams as Marketing director of the Company. The Consulting agreement provides for a consultancy payment of GBP5,000 per month payable in arrears. In addition, during the year ended December 31, 2014, the Company entered into an agreement with LVA Media Inc. and Mr. J. M. Williams, for the provision of services of Mr. J. M. Williams as Chief Executive

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Officer of Shoal Games Ltd.  The Consulting agreement provides for a consultancy payment equaling of 2.5% of the monthly social bingo business with a minimum of $7,500 and a maximum of $25,000 per month.

During the year ended December 31, 2012, the Company entered into a management consulting agreement with Bromley Accounting Services Limited for the services of Mr. H. W. Bromley as the Chief Financial Officer.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of March 21, 2019, by:

-     each person known by us to beneficially own 5% or more of our outstanding common stock;

-     each of our directors;

-     each of the Named Executive Officers; and

-     all of our directors and Named Executive Officers as a group.

In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or direct the disposition of such security. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or debentures held by that person that are currently exercisable or convertible or exercisable or convertible within 60 days of March 21, 2019, are deemed outstanding.

Percentage of beneficial ownership is based upon 131,124,989  shares of common stock outstanding at March 21, 2019. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to the shares set forth opposite such person's name. 

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Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Percent of Class
T. M. Williams Suite 4501 1011 West Cordova Street Vancouver, BC V6C 0B2 Canada	17,731,816	(1)	13.52%
J. M. Williams Flat 16 Bridgewater square London, EC2Y 8AG United Kingdom	708.200	(2)	0.54%
F. Curtis Ard Na Mara, Box 1127 Anguilla, B.W. I.	350,000	(3)	0.27%
C. Kalborg Tattbyvagen 11 Saltsjobaden Sweden	300,000	(4)	0.23%
H. W. Bromley 3851 Edgemont Boulevard North Vancouver BC, V7R 2P9 Canada	675,000	(5)	0.51%
W. G. Moore Clare Hall Clare, Nr Sudbury Suffolk CO10 8PJ United Kingdom	125,000	(6)	0.16%
All directors and Named Executive Officers as a group (5 persons)	19,182,524		15.23%
Pendinas Limited Ballacarrick, Pooilvaaish Road Castletown, IM9 4PJ Isle of Man	27,704,464	(7)	21.13%
Wydler Global Equity Fund Claridenstrasse 20 Zurich, 8002 Switzertland	12,200,000	(8)	9.30%
Ordan Enterprises Ltd. (c/o Aryeh Mergi, RTCapital) 54 Ehad Haam Street Tel Aviv, 6520216, Israel	8,670,807	(9)	6.61%
Gai Havkin 14 Hahadas Street Hadera, 38246, Israel	8,156,590	(10)	6.22%

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Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Percent of Class
Lool Ventures Limited Partnership 2 Tushiya Street Tel Aviv, 6721802, Israel	7,946,755	11	6.06%
Norma Investment Ltd. 4/1 Sadovnicheskaya Street,115035 Moscow, Russia	7,700,752	12	5.87%

(1)  Includes 17,431,816 shares held directly by Mr. T. M. Williams and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share.

(2)  Includes, 408,200 shares held directly by Mr. J. M. Williams and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share.

(3)   Includes 50,000 shares held directly by Ms. F. Curtis and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share.

(4)  Includes 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share.

(5)  Includes, 375,000 shares held directly by Mr. H. W. Bromley and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share.

(6)  Includes, 125,000 shares held directly by Mr. W. Moore and 125,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per share. Mr. W. Moore did not stand for re-election at the AGM on November 14, 2018.

(7)   Includes 27,704,464 shares held directly by Pendinas Ltd., a company wholly owned by Mr. G. R. Williams. Mr. G. R. Williams is not related to Mr. T. M. Williams nor Mr. J. M. Williams.

(8)   Includes 12,200,000 shares held directly by Wydler Global Equity Fund.

(9)   Includes 8,670,807 shares held directly by Ordan Enterprises Ltd.

(10) Includes 8,156,590 shares held directly by Gai Havkin.

(11) Includes 7,946,755 shares held directly by Lool Ventures Limited Partnership.

(12) Includes 7,700,752 shares held directly by Norma Investment Limited.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company has a liability of $nil (2017 - $33,000) to a company owned by a current director and officer of the Company for payment of consulting fees of $132,000 (2017 - $132,000) by the current director and officer of the Company.

The Company has a liability of $nil (2017 - $97) to a current director and officer of the Company for expenses incurred.

The Company has a liability of $1,647 (2017 - $3,982) to a current director and officer of the Company for expenses incurred.

The Company has a liability of $nil (2017 - $nil) to a company owned by a current director and officer of the Company for payment of consulting fees of $80,128 (2017 - $77,310) by the current director and officer of the Company.

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The Company has a liability of $nil (2017 - $nil) to a company owned by a current director and officer of the Company for payment of consulting fees of $90,000 (2017 - $90,000) by the current director and officer of the Company.

The Company has a liability of $1,500 (2017 - $1,000), to independent directors of the Company for payment of consulting fees. During the year ended December 31, 2018, the Company paid $4,500 (2017 - $5,500) to the independent directors in director fees.

The Company has a liability of $7,317 (2017 - $6,106), to an officer of the Company for payment of consulting fees and expenses incurred of $109,079 (2017 - $93,078) by the officer of the Company.

The Company has promissory notes totaling $nil (2017 - $600,235), including interest, from shareholders holding more than 10% of the Company. The interest on the notes are 2% per annum, calculated and compounded annually and paid annually. During the quarter ended June 30, 2018, these promissory notes were settled through a warrant exercise for 1,200,000 shares, in a non-cash transaction.

During the year ended December 31, 2017, the directors and shareholders holding more than 10% of the Company's shares subscribed for 1,200,000 units totaling CAD$540,000 ($408,102) in the private placement.

uring the year ended December 31, 2018, the Company granted 700,000 (2017 - 125,000) options with an exercise price of CAD$0.54 (approximately $0.42) for both fiscal 2018 and fiscal 2017 per share and 275,000 (2017 - nil) with an exercise price of $0.50 for fiscal 2018, to related parties. The Company expensed $281,492 (2017 - $13,110) in stock-based compensation for these options granted to related parties.

The Company has a receivable of $2,305 (2017 - $2,630) from a company of which a previous director of the Company is a director.

The related party transactions are in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related party.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the year ended December 31, 2018, the Company incurred fees of $43,352 (2017 - $39,115) from the principal accountant during fiscal 2018 -  Davidson & Company LLP, $43,352 of these fees related to audit fees (2017 - $39,115).

Our Audit Committee reviewed the audit and non-audit services rendered by Davidson & Company LLP, during the periods set forth above and concluded that such services were compatible with maintaining the auditors' independence. All audit and non-audit services performed by our independent accountants are pre-approved by our Audit Committee to assure that such services do not impair the auditors' independence from us.

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PART IV

ITEMS 15.  EXHIBITS

The exhibits required by Item 601 of Regulation S-K are listed in the accompanying Exhibit Index at the end of this report.  Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K has been identified.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SHOAL GAMES LTD.

By:       /s/ J. M. Williams

J. M. Williams

Chief Executive Officer

Date:    March 21, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

By:       /s/ J. M. Williams                      Chief Executive Officer             March 21, 2019

J. M. Williams                          

By:       /s/ H. W. Bromley                     Chief Financial Officer              March 21, 2019

H. W. Bromley                         (Principal Financial and

Principal Accounting Officer)                            

 

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EXHIBIT 31.1

CERTIFICATIONS

I, J. M. Williams, certify that:

1.   I have reviewed this annual report on Form 10-K of Shoal Games Ltd.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Shoal Games Ltd. as of, and for, the periods presented in this annual report;

4.  Shoal Games Ltd.'s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Shoal Games Ltd., including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of Shoal Games Ltd.'s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of as of December 31, 2018, covered by this annual report based on such evaluation; and

(d)   Disclosed in this report any change Shoal Games Ltd.'s internal control over financial reporting that occurred during Shoal Games Ltd.'s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Shoal Games Ltd.'s internal control over financial reporting; and

5.  Shoal Games Ltd.'s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Shoal Games Ltd.'s auditors and the audit committee of Shoal Games Ltd.'s  board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Shoal Games Ltd.'s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Signed :            /s/ J. M. Williams                                                                      Date : March 21, 2019

J. M. Williams,

Chief Executive Officer,

(Principal Executive Officer)

 

Page 60

EXHIBIT 31.2

CERTIFICATIONS

I, H. W. Bromley, certify that:

1. I have reviewed this annual report on Form 10-K of Shoal Games Ltd.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Shoal Games Ltd. as of, and for, the periods presented in this annual report;

4.  Shoal Games Ltd.'s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Shoal Games Ltd., including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of Shoal Games Ltd.'s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of as of December 31, 2018, covered by this annual report based on such evaluation; and

(d)   Disclosed in this report any change Shoal Games Ltd.'s internal control over financial reporting that occurred during Shoal Games Ltd.'s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Shoal Games Ltd.'s internal control over financial reporting; and

5.  Shoal Games Ltd.'s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Shoal Games Ltd.'s auditors and the audit committee of Shoal Games Ltd.'s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Shoal Games Ltd.'s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Signed : /s/ H. W. Bromley                                                                   Date : March 21, 2019

H.W. Bromley,

Chief Financial Officer

(Principal Accounting Officer)
 

Page 61

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Shoal Games Ltd. (the "Company") on Form 10-K for the period ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, J. M. Williams, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

a)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b)      The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

                                                            /s/ J. M. Williams

                                                            J. M. Williams

                                                            Chief Executive Officer

                                                                        March 21, 2019

A signed original of this written statement required by Section 906 has been provided to Shoal Games Ltd. and will be retained by the company and furnished to the Securities and Exchange Commission or its staff upon request.

Page 62

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Shoal Games Ltd. (the "Company") on Form 10-K for the period ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, H. W. Bromley, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

a)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b)      The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

                                                            /s/ H. W. Bromley

                                                            H. W. Bromley

                                                            Chief Financial Officer

                                                                        March 21, 2019

A signed original of this written statement required by Section 906 has been provided to Shoal Games Ltd. and will be retained by the company and furnished to the Securities and Exchange Commission or its staff upon request.

Page 63

EXHIBIT LIST

The following instruments are included as exhibits to this Report.  Exhibits incorporated by reference are so indicated.

Exhibit Number	Description
4.4	Convertible Debenture between the Company and unrelated parties dated July 2, 2002. (b)
4.5	Common Stock Purchase Warrant between the Company and unrelated parties dated July 2, 2002. (b)
10.2	Asset Purchase Agreement by and between Bingo, Inc. and Progressive Lumber, Corp. dated January 18, 1999. (a)
10.24	Amended Consulting Agreement dated February 28, 2002, between the Company, T.M. Williams (Row), Ltd., and T.M. Williams. (c)
10.32	Code of Business Conduct and Ethics dated December 22, 2006. (d)
10.33	Amended Consulting Agreement dated June 16, 2010, between the Company, T.M. Williams (Row), Ltd., and T.M. Williams. (e)
10.37	Amended Consulting Agreement dated August 1, 2013, between the Company, T.M. Williams (Row), Ltd., and T.M. Williams. (f)
10.38	Consulting Agreement dated January 1, 2014, between the Company, Jayska Consulting Ltd., and J.M. Williams. (f)
10.39	Consulting Agreement dated January 1, 2014, between the Company, LVA Media Inc., and J.M. Williams. (f)
10.41	Consulting Agreement dated January 1, 2014, between the Company, Bromley Accounting Services Limited, and H. W. Bromley. (f)
10.42	Share Purchase Agreement for the purchase of Kidoz Ltd. (g)
31.1	Certificate of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a-15(e) and 15d -15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated March 21, 2019.
31.2	Certificate of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-15(e) and 15d -15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 dated March 21, 2019.
32.1	Certification from the Chief Executive Officer of Shoal Games Ltd.  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated March 21, 2019.
32.2	Certification from the Chief Financial Officer of Shoal Games Ltd.  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated March 21, 2019.

(a) Previously filed with the Registrant's registration statement on Form 10 on June 9, 1999.

(b) Previously filed with the Company's quarterly report on Form 10-Q for the period ended September 30, 2002, on November 14, 2002.

(c) Previously filed with the Company's quarterly report on Form 10-Q for the period ended June 30, 2002, on August 14, 2002.

(d) Previously filed with the Company's report on Form 8-K on December 26, 2006.

(e) Previously filed with the Company's report on Form 8-K on June 17, 2010.

(f) Previously filed with the Company's report on Form 8-K on March 24, 2014.

(g) Previously filed with the Company's report on Form 8-K on March 12, 2019.

Page 64

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Mar. 21, 2019
Document Information [Line Items]
Entity Registrant Name	SHOAL GAMES LTD.
Entity Central Index Key	0001318482
Trading Symbol	sgldf
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		131,124,989
Entity Public Float		$ 55,138,058
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 641,536	$ 478,397
Accounts receivable, less allowance for doubtful accounts $27,666 (2017 - $27,666) (Note 3)	12,103	15,022
Prepaid expenses (Note 4)	99,739	54,714
Total Current Assets	753,378	548,133
Equipment, net (Note 5)	16,255	9,720
Deferred tax asset, less valuation allowance of $275,846 (December 31, 2017 - $102,809) (Note 10)	0	0
Total Assets	769,633	557,853
Current liabilities:
Accounts payable	15,404	30,111
Accrued liabilities	64,937	84,081
Accounts payable and accrued liabilities - related party (Note 11)	10,464	44,185
Derivative liability - warrants (Note 2j and 8)		44,572
Total Current Liabilities	90,805	202,949
Promissory notes (note 7)		502,313
Total Liabilities	90,805	705,262
Commitments (Note 9)
Stockholders' Equity (Deficiency) (Note 8):
Common stock, no par value, unlimited shares Authorized 73,674,703 shares issued and outstanding (December 31, 2017 - 65,169,703)	26,552,468	23,133,400
Accumulated deficit	(25,898,220)	(23,305,389)
Accumulated other comprehensive income: Foreign currency translation adjustment	24,580	24,580
Total Stockholders' Equity (Deficiency)	678,828	(147,409)
Total Liabilities and Stockholders' Equity (Deficiency)	$ 769,633	$ 557,853

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands	Dec. 31, 2018	Dec. 31, 2017
Allowance for doubtful accounts	$ 27,666	$ 27,666
Valuation allowance for deferred tax asset	$ 275,846	$ 102,809
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares issued (in shares)	73,674,703	65,169,703
Common stock, shares outstanding (in shares)	73,674,703	65,169,703

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Total revenue	$ 106,978	$ 93,475
Cost of sales:
Total cost of sales
Gross profit	106,978	93,475
Operating expenses:
Depreciation and amortization (Note 5)	5,614	4,068
Directors fees	4,500	5,500
General and administrative	271,277	256,303
Promissory note accretion and interest (Note 7)	37,090	84,132
Salaries, wages, consultants and benefits	618,279	461,416
Selling and marketing	352,770	244,810
Stock-based compensation (Note 8)	595,580	43,212
Software development (Note 6)	948,334	833,202
Total operating expenses	2,833,444	1,932,643
Loss before other income (expense) and income taxes	(2,726,466)	(1,839,168)
Other income (expense):
Gain on derivative liability - warrants (Note 8)	44,572	78,712
Foreign exchange loss	(9,092)	(12,274)
Interest and other income	8,634	18
Loss before income taxes	(2,682,352)	(1,772,712)
Income tax recovery (Note 10)	89,521	30,761
Loss after tax	(2,592,831)	(1,741,951)
Other comprehensive income (loss)
Comprehensive loss	$ (2,592,831)	$ (1,741,951)
Basic and diluted loss per common share outstanding (in dollars per share)	$ (0.04)	$ (0.03)
Weighted average common shares outstanding, basic (Note 2) (in shares)	72,111,456	61,730,928
Weighted average common shares outstanding, diluted (Note 2) (in shares)	72,111,456	61,730,928

XML

Consolidated Statements of Stockholders' Equity (DEFICIENCY) - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Accumulated Foreign Currency Adjustment Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2016	59,708,318
Balance at Dec. 31, 2016	$ 21,223,271	$ (21,563,438)	$ 24,580	$ (315,587)
Discount on promissory note	23,461			23,461
Gain on extinguishment and reissuance of promissory notes with related parties	$ 94,191			94,191
Private placements (in shares)	5,340,274
Private placements	$ 1,846,055			1,846,055
Exercise of warrants (in shares)	121,111
Exercise of warrants	$ 52,310			52,310
Share issuance costs	(25,816)			(25,816)
Stock-based compensation	43,212			43,212
Derivative liability - warrants	$ (123,284)			(123,284)
Net loss		(1,741,951)		(1,741,951)
Balance (in shares) at Dec. 31, 2017	65,169,703
Balance at Dec. 31, 2017	$ 23,133,400	(23,305,389)	24,580	(147,409)
Private placements (in shares)	7,290,000
Private placements	$ 2,551,500			2,551,500
Exercise of warrants (in shares)	1,215,000
Exercise of warrants	$ 610,035			610,035
Share issuance costs	(272,092)			(272,092)
Stock-based compensation	595,580			595,580
Net loss		(2,592,831)		(2,592,831)
Extinguishment of promissory note	$ (65,955)			(65,955)
Balance (in shares) at Dec. 31, 2018	73,674,703
Balance at Dec. 31, 2018	$ 26,552,468	$ (25,898,220)	$ 24,580	$ 678,828

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (2,592,831)	$ (1,741,951)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,614	4,068
Accretion of promissory note	31,966	84,132
Gain on derivative liability - warrants	(44,572)	(78,712)
Promissory note - accrued interest	5,124
Share-based Compensation, Total	595,580	43,212
Changes in operating assets and liabilities:
Accounts receivable	2,919	2,172
Prepaid expenses	(45,025)	(21,220)
Security deposits		8,067
Accounts payable and accrued liabilities	(67,572)	61,395
Net cash used in operating activities	(2,108,797)	(1,638,837)
Cash flows from investing activities:
Acquisition of equipment	(12,149)	(3,640)
Net cash used in investing activities	(12,149)	(3,640)
Cash flows from financing activities:
Private placements	2,551,500	1,846,055
Promissory note	(1,923)	188,135
Share issuance costs	(272,092)	(25,816)
Warrant exercised	6,600	52,310
Net cash provided by financing activities	2,284,085	2,060,684
Change in cash	163,139	418,207
Cash, beginning of year	478,397	60,190
Cash, end of year	641,536	478,397
Supplementary information:
Interest paid	0	0
Income taxes recovery	(89,521)	(30,761)
Non-cash financing activity - Extinguishment and reissuance of promissory notes	(65,955)	94,191
Non-cash financing activity - Discount on related party loans		23,461
Non-cash financing activity - settlement of promissory notes through exercise of 1,200,000 warrants	603,435
Non-cash investing activity	$ 0	$ 0

XML

Consolidated Statements of Cash Flows (Parentheticals) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Warrants exercised (in shares)	1,200,000

XML

Note 1 - Introduction

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

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 system 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, 2018

and

2017,

and has an accumulated deficit of

$25,898,220

as at

December 31, 2018. 

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 discharge 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.  

XML

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2.

    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 year ended

December 31, 2017,

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

Subsequent to the year ended

December 31, 2018,

the Company acquired Kidoz Ltd. a company incorporated under the laws of the State of Israel. (Note

15

)

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 collectability of accounts receivable, the valuation of promissory notes, stock-based compensation and the estimated market rate of

15%,

the derivative liability - warrants valuation, the valuation of deferred tax assets and the subsequent valuation of the acquisition of Kidoz Ltd. Actual results

may

differ significantly from these estimates.

(c)    Revenue recognition:

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

Rooplay Original's revenue have been recognized from the sale of premium purchases, at the time of purchase by the player.

Research revenue have been recognized when the services have been delivered and collection of the amounts are reasonably assured.

(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 operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in earnings.

(e)  Accounts receivable:

Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable includes receivables from online platforms and trade receivables from customers. The Company estimates doubtful accounts on an item-by-item basis and includes over-aged accounts as part of allowance for doubtful accounts, which are generally ones that are

ninety

-days overdue.  Bad debt expense, for the year ended

December 31, 2018,

was

$nil

(

2017

-

$nil

).

(f)  Equipment:

Equipment is recorded at cost less accumulated depreciation. Depreciation is provided for annually on the declining balance method over the following periods:

	years
Equipment and computers		3
Furniture and fixtures		5

Expenditures for maintenance and repairs are charged to expenses as incurred. Major improvements are capitalized. Gains and losses on disposition of equipment are included in operations as realized.

(g)  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 Rooplay, Rooplay Originals, Garfield's Bingo, Trophy Bingo, and related technologies were

$6,716,810

as at

December 31, 2018 (

December 31, 2017 -

$5,768,476

).

(h)  Advertising:

The Company expenses the cost of advertising in the period in which the advertising space or airtime is used. Advertising costs from continuing operations charged to selling and marketing expenses in

2018

totaled

$352,770

(

2017

-

$244,810

). 

(i)   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		109	%		25	%
Weighted average volatility		96	%		25	%
Risk-free interest rate		1.97	%		1.56	%
Expected life of options (years)		5			5
Forfeiture rate		5	%		5	%

(j) Derivative liability - warrants

The warrants had 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

no

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

was estimated on the date of the subscription using the Binomial Lattice pricing model. During the year ended

December 31, 2018,

there was a gain on derivative liability - warrants of

$44,572

(

2017

-

$78,712

) and the derivative liability - warrants value reduced to

$nil

with the following assumptions:

	2018		2017
Average stock price		-		CAD$0.65
Expected dividend yield		-		-
Expected stock price volatility		-		93.74	%
Risk-free interest rate		-		1.66	%
Expected life of warrants (years)		-		0.5

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

(k) Impairment of long-lived assets and long-lived assets to be disposed of:

The Company accounts for long-lived assets in accordance with the provisions of ASC

360,

Property, Plant and Equipment and ASC

350,

Intangibles-Goodwill and Others. During the periods presented, the only long-lived assets reported on the Company's consolidated balance sheet are equipment, and security deposits.  These provisions require that long-lived assets and certain identifiable recorded intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.

(l)   Income taxes:

The Company follows the asset and liability method of accounting for income taxes.  Under this method, current income taxes are recognized for the estimated income taxes payable for the current period.  The Company recognizes the income tax recovery from the receipt of tax credits upon receipt of funds. Deferred income taxes are provided based on the estimated future tax effects of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as the benefit of losses available to be carried forward to future years for tax purposes.

Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered and settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.  A valuation allowance is recorded for deferred tax assets when it is

not

more likely than

not

that such future tax assets will be realized.

(m) Net (loss) income per share:

ASC

260,

"Earnings Per Share", requires presentation of basic earnings per share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if outstanding options or warrants were exercised and converted into common stock. In computing diluted earnings per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period.

Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. A total of

3,575,000

(

2017

-

1,605,000

) stock options and

nil

(

2017

-

5,219,163

) warrants were excluded as at

December 31, 2018.

The earnings per share data for the year ended

December 31, 2018

and

2017

are summarized as follows:

	2018			2017
Loss for the year	$	(2,592,831	)	$	(1,741,951	)
Basic and diluted weighted average number of common shares outstanding		72,111,456			61,730,928
Basic and diluted loss per common share outstanding	$	(0.04	)	$	(0.03	)

(n)  New accounting pronouncements and changes in accounting policies:

In

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

-

11

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 adopted ASC

2014

-

09

as of

January 1, 2018

using the modified retrospective method. The new standard was applied to all contracts

not

completed as of

January 1, 2018

and had

no

material impact to its results of operations or cash flows.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments - Overall (Subtopic

825

-

10

): 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

-

01

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

2016

-

01

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

-

01

as of

January 1, 2018

and ASU

2016

-

01

has

not

had a material impact on the consolidated financial statements.

In

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

12

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. The Company has evaluated the impact of the amended guidance on the Company's Consolidated Financial Statements and determined the impact to assets and liabilities is

not

significant to the consolidated financial statements for the existing lease. 

In

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

-

13

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.

In

November 2018,

the FASB issued ASU

2018

-

19,

Codification Improvements to Topic

326,

Financial Instruments - Credit Losses ( " ASU

2018

-

19"

) . ASU

2018

-

19

clarifies that receivables arising from operating leases are

not

within the scope of Subtopic

326

-

20.

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic

842,

Leases. The Company is currently evaluating the impact of the amended guidance and has

not

yet determined the effect of the standard on its ongoing financial reporting.

In

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

-

15

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

-

09

as of

January 1, 2018

and it has

not

had a material impact on the consolidated financial statements.

In

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

-

16

on

January 1, 2018

and it did

not

have an impact on its consolidated financial statements.

In

January

of

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. The Company adopted ASU

2017

-

01

on

January 1, 2018

and the adoption did

not

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

In

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

-

09

on

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.

In

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 adoption of this guidance will

not

have a material impact on the Company's financial position, results of operations and liquidity.

In

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

-

02

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 adopted ASU-

2018

-

02

in the

first

quarter of

2018

and the impact of the adoption was

not

material to our Consolidated Financial Statements.

In

February 2018,

FASB issued ASU

2018

-

03,

"Technical Corrections and Improvements to Financial Instruments (Subtopic

825

-

10

) - 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

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities". This includes an amendment to clarify that anentity 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 adopted ASC

2018

-

03

as of

January 1, 2018

and it has

not

had a material impact on the consolidated financial statements.

In

June 2018,

the FASB issued ASU

No.

2018

-

07

"Compensation - Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic

718,

Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic

505

-

50,

Equity - Equity-Based Payments to Non-Employees. This ASU is effective for annual and interim reporting periods beginning after

December 15, 2018,

with early adoption permitted.  Entities must transition to the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of this guidance had an immaterial impact on the Company's financial statements and related disclosures.

In

August 2018,

the FASB issued ASU

No.

2018

-

13,

"Fair Value Measurement: Disclosure Framework (Topic

840

) - Changes to the Disclosure Requirements for Fair Value Measurement", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring Level

1,

Level

2

and Level

3

instruments in the fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The Company is evaluating the impact this standard will have on the Company's consolidated financial statements.

In

August 2018,

the FASB issued ASU

No.

2018

-

15,

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires implementation costs in a hosting arrangement that is a service contract to be capitalized consistent with the rules in ASC

350

-

40,

Intangibles-Goodwill and Other-Internal-Use Software. This aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs incurred during the application development stage are to be capitalized and expensed according to their nature, while costs incurred during the preliminary project and post- implementation stages are to be expensed. This ASU also contains guidance with regard to the amortization period, impairment and presentation within the financial statements. The ASU is required to be adopted by the Company during

2020,

however early adoption is allowed in an interim period before then, and

may

be applied retrospectively or prospectively to applicable costs on the Company's condensed consolidated financial statements. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

There have been

no

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

December 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.

(o)  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

1

fair value measurement.

In general, fair values determined by Level

1

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

2

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

Fair values determined by Level

3

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

1

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

2

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

3

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.

XML

Note 3 - Accounts Receivable

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.

   Accounts Receivable:

The accounts receivable as at

December 31, 2018,

is summarized as follows:

	2018			2017
Accounts receivable	$	39,769		$	42,688
Provision for doubtful accounts		(27,666	)		(27,666	)
Net accounts receivable	$	12,103		$	15,022

The Company had bank accounts with the National Bank of Anguilla. During the year ended

December 31, 2016,

the National Bank of Anguilla filed for chapter

11

protection. The Company expensed the balance on account of

$27,666

in fiscal

2016

as a doubtful debt.

XML

Note 4 - Prepaid Expenses

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Prepaid Assets [Text Block]

4.

   Prepaid expenses

The Company has other prepaid expenses of

$99,739

(

2017

-

$54,714

) including prepaid licenses fees of

$65,387

(

2017

-

$33,502

) for the year ended

December 31, 2018.

XML

Note 5 - Equipment

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

5.

  Equipment:

2018	Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	128,097	$	112,845	$	15,252
Furniture and fixtures		8,037		7,034		1,003
	$	136,134	$	119,879	$	16,255

2017	Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	116,444	$	107,444	$	9,000
Furniture and fixtures		7,541		6,821		720
	$	123,985	$	114,265	$	9,720

Depreciation expense was

$5,614

(

2017

-

$4,068

) for the year ended

December 31, 2018.

XML

Note 6 - Software Development Assets

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Other Assets Disclosure [Text Block]

6.

  Software development assets:

The Company has developed Trophy Bingo, a social bingo game, which was launched in the year ended

December 31, 2014.

During the year ended

December 31, 2016,

the Company obtained the license to develop Garfield's Bingo. The game was launched in

November 2016.

During the year ended

December 31, 2016,

the Company obtained the license for Rooplay. The Company commenced development of the Rooplay platform and was initially launched in

March 2017,

with the full release on the Android platform only in

November 2017.

In addition, during the year ended

December 31, 2016,

the Company commenced development of the 'Rooplay Originals'.

During the year ended

December 31, 2018

and

2017,

the Company has expensed the development costs of all products as incurred and has expensed the following development costs.

	2018		2017
Opening total software development costs	$	5,768,476	$	4,935,274
Software development during the year		948,334		833,202
Closing total Software development costs	$	6,716,810	$	5,768,476

XML

Note 7 - Promissory Notes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

7.

  Promissory notes:

The Company has issued unsecured promissory notes from shareholders of the Company. The notes were repayable on

March 31, 2018.

The interest on the notes are

2%

per annum, calculated and compounded annually and paid annually.  Interest in arrears shall accrue interest. The unpaid principal amount due hereunder

may

be reduced to

zero

from time to time without affecting the validity of this note.

The promissory notes are accounted for 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 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. The cash flow stream from the coupon interest payments and the final principal payment were discounted at

15%

to arrive at the valuations. The Company used a deemed rate of

15%

as the appropriate discount rate after examining the interest rates for similar instruments issued in the same time frame for similar companies without the conversion feature.

On

March 31, 2017,

the maturity date on the promissory notes was extended to

April 1, 2020.

The Company treated the change as an extinguishment and reissuance of the notes. The Company recognized a discount on the promissory notes of

$94,191

from the extinguishment and reissuance of the notes.

During the year ended

December 31, 2018,

the promissory notes were settled in exchange for the exercise of warrants and the notes were extinguished. Since the extinguishment of the promissory note is with related parties, then in accordance with ASC

470

-

50

-

40

-

2,

the extinguishment transactions is in essence a capital transaction. Therefore, the Company recognized a reduction of

$65,955

from equity of the Company.

During the year ended

December 31, 2017,

the Company issued

$188,135

promissory notes and recognized a discount on the promissory notes of

$23,461.

The Company recognized interest accretion of

$31,966

(

2017

-

$72,844

) of interest accretion.

	2018			2017
Opening balance	$	502,313		$	347,698
Promissory note issued		-			188,135
Discount on promissory note		-			(23,461	)
Gain on extinguishment and reissuance of promissory notes with related parties		-			(94,191	)
Reduction of capital on extinguishment of promissory notes with related parties		65,955			-
Extinguishment of promissory notes to related parties		(605,358	)		(418,181	)
Reissuance of promissory notes to related parties		-			418,181
Accrued interest		5,124			11,288
Interest accretion		31,966			72,844
Closing balance	$	-		$	502,313

XML

Note 8 - Stockholders' Equity (Deficiency)

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

8.

  Stockholders' Equity (Deficiency):

The holders of common stock are entitled to

one

vote for each share held.  There are

no

restrictions that limit the Company's ability to pay dividends on its common stock.  The Company has

not

declared any dividends since incorporation.  The Company's common stock has

no

par value per common stock.

(a)  Common stock issuances:

Fiscal

2018

In

June 2018,

the related party warrant holders exercised their warrants for

1,200,000

shares at

CAD$0.65

(

US$0.50

) per share through the settlement of the promissory notes, in a non-cash transaction.

In

February 2018,

a warrant holder exercised their warrant for

15,000

shares at

$0.44

per share raising a total of

$6,600.

In

February 2018,

the Company closed a TSX Venture Exchange approved private placement financing totaling

$2,551,500.

The private placement consisted of

7,290,000

common shares priced at

$0.35

per share. Pursuant to the private placement the Company paid a commission of

$253,750

and incurred share issuance expense of

$18,342.

Fiscal

2017

In

December 2017,

two

warrant holders exercised their warrants and acquired

121,111

common shares of the Company at

CAD$0.55

(approximately

$0.43

) per share totaling

$52,310.

In

October 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

$45,011.

The private placement consisted of

128,600

units priced at

$0.35

per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant.  Each share purchase warrant is exercisable into

one

common share of the Company for

12

months following closing.  The exercise price of the warrants is

$0.44

per share for the

first

six

months following closing and

$0.52

per share for the period which is

7

-

12

months following closing.

In

September 30, 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

$1,010,763.

The private placement consisted of

2,887,895

units priced at

$0.35

per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant.  Each share purchase warrant is exercisable into

one

common share of the Company for

12

months following closing.  The exercise price of the warrants is

$0.44

per share for the

first

six

months following closing and

$0.52

per share for the period which is

7

-

12

months following closing.

In ended

June 2017,

the Company closed a TSX Venture Exchange approved non-brokered private placement financing totaling

CAD$1.045

million (approximately

$790,281

). The private placement consisted of

2,323,779

units priced at

CAD$0.45

(

$0.34

) per unit. Each Unit was comprised of

one

common share and

one

share purchase warrant.  Each share purchase warrant is exercisable into

one

common share of the Company for

12

months following closing.  The exercise price of the warrants is

CAD$0.55

per share for the

first

six

months following closing and

CAD$0.65

per share for the period which is

7

-

12

months following closing.

The Company incurred issuance costs of

$25,816

from the private placements and warrant exercise.

Fiscal

2019

Subsequent to the year ended

December 31, 2018,

the Company closed a TSX Venture Exchange approved private placement financing totaling

$2,000,000.

The private placement consisted of

5,000,000

shares priced at

$0.40

per share. Pursuant to the private placement the Company paid a commission of

$200,000

and incurred share issuance expense of

$13,546.

(b)  Warrants

A summary of warrant activity for the warranty for the years ended

December 31, 2018

and

2017

are as follows:

	Number of warrants			Weighted average exercise price
Outstanding, December 31, 2016		-			$-
Granted		2,323,779		0.43	-	0.49
Granted		2,887,895		0.44	-	0.52
Granted		128,600		0.44	-	0.52
Exercised		(121,111	)		(0.43)
Outstanding, December 31, 2017		5,219,163			0.48
Granted		-			-
Exercised		(1,215,000	)		(0.50)
Expired, unexercised		(4,004,163	)		(0.51)
Outstanding December 31, 2018		-			$-

(c)  Stock option plans:

2015

stock option plan

In the year ended

December 31, 2015,

the shareholders approved the

2015

stock option plan and the

1999,

2001

and the

2005

plans were discontinued. The

2015

stock option plan is intended to provide incentive to employees, directors, advisors and consultants of the Company to encourage proprietary interest in the Company, to encourage such employees to remain in the employ of the Company or such directors, advisors and consultants to remain in the service of the Company, and to attract new employees, directors, advisors and consultants with outstanding qualifications. The maximum number of shares issuable under the Plan shall

not

exceed

10%

of the number of Shares of the Company issued and outstanding as of each Award Date unless shareholder approval is obtained in advance in accordance unless shareholder approval is obtained in advance in accordance. The Board of Directors determines the terms of the options granted, including the number of options granted, the exercise price and their vesting schedule. The maximum term possible is

10

years. Under the

2015

plan we have reserved

10%

of the number of Shares of the Company issued and outstanding as of each Award Date.

During the year ended

December 31, 2018,

the Company granted

2,130,000

options, of which

710,000

options were fully vested expiring on

June 4, 2023,

with an exercise price of

CAD$0.54

(

US$0.42

),

1,275,000

options were fully vested expiring on

June 4, 2023,

with an exercise price of

$0.50

and

145,000

options were issued where

10%

vests on grant date,

15%

one

year following grant date and

2%

per month thereafter, with an exercise price of

CAD$0.54

(

US$0.42

) to employees and consultants.

During the year ended

December 31, 2017,

the Company granted

725,000

options of which

350,000

options were fully vested expiring on

November 8 ,

2022,

with an exercise price of

CAD$0.54

(

US$0.42

) and

375,000

options were issued where

10%

vests on grant date,

15%

one

year following grant date and

2%

per month thereafter, with an exercise price of

CAD$0.54

(

US$0.42

).

As at

December 31, 2018,

there were a total of

3,575,000

stock options (

2017

-

1,605,000

) outstanding. During the year ended

December 31, 2018,

there were

nil

options exercised (

2017

-

nil

) and

160,000

options expired unexercised (

2017

-

130,000

).

Of the options outstanding at

December 31, 2018,

a total of

3,190,000

(

2017

-

1,230,000

) were fully vested and a total of

385,000

(

2017

-

375,000

) were issued where

10%

vests at the grant date,

15%

one

year following the grant date and

2%

per month starting

13

months after the grant date. A total of

3,273,550

(

2017

-

1,267,500

) of these common stock purchase options had vested at

December 31, 2018.

A summary of stock option activity for the stock option plans for the years ended

December 31, 2018

and

2017

are as follows:

	Number of options			Weighted average exercise price
Outstanding, December 31, 2016		1,010,000		$	0.42
Granted		725,000			0.42
Exercised		-			-
Cancelled		(130,000	)		(0.42	)
Outstanding, December 31, 2017		1,605,000			0.42
Granted		2,130,000			0.47
Exercised		-			-
Cancelled		(160,000	)		(0.42	)
Outstanding December 31, 2018		3,575,000		$	0.45

The aggregate intrinsic value for options as of

December 31, 2018

was

$nil

(

2017

-

$nil

).

The following table summarizes information concerning outstanding and exercisable stock options at

December 31, 2018:

Range of exercise prices per share		Number outstanding		Number exercisable		Expiry date
$	0.42		855,000		855,000	December 20, 2021
	0.42		615,000		421,550	November 8, 2022
	0.42		830,000		722,000	June 4, 2023
	0.50		1,275,000		1,275,000	June 4, 2023
			3,575,000		3,273,550

The Company recorded stock-based compensation of

$595,580

on the

2,130,000

options granted and vested (

2017

-

$43,212

on the

725,000

options granted and vested) and as per the Black-Scholes option-pricing model, with a weighted average fair value per option of

$0.29

(

2017

-

$0.13

).

Subsequent to the year ended

December 31, 2018,

110,000

options were cancelled unexercised.

XML

Note 9 - Commitments

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9.

   Commitments:

The Company leases office facilities in Vancouver, British Columbia, Canada, and The Valley, Anguilla, British West Indies. These office facilities are leased under operating lease agreements. One of the Canadian operating lease expired on

December 31, 2016,

but unless

30

day notice is given this lease automatically renews on a month to month basis until notice is given. The

second

operating lease in Vancouver, Canada is on a month to month basis until notice is given.

The Anguillan operating lease expired on

April 1, 2011

but unless

3

month's notice is given it automatically renews for a further

3

months.

Minimum lease payments under these operating leases are approximately as follows:

2019	$	2,246
2020		-

The Company paid rent expense totaling

$28,287

for the year ended

December 31, 2018 (

2017

-

$19,018

).

Subsequent to the year ended

December 31, 2018,

the Company signed a

five

year lease ending

March 2024.

This facility comprises approximately

1,459

square feet. The Company will account for the lease in accordance with ASU

2016

-

02

(Topic

842

) and will recognize an asset and liability.

The minimum lease payments under this operating lease are approximately as follows:

2019	$	30,225
2020		40,769
2021		41,840
2022		42,910
2023		43,980
2024		11,062

The Company has a management consulting agreement with T.M. Williams (Row), Inc., an Anguilla incorporated company, and Mr. T. M. Williams. During the year ended

December 31, 2014,

the Company amended a previous agreement with Mr. T. M. Williams to provide for a consultancy payment of

2.5%

of the monthly social bingo business with a minimum of

$11,000

and a maximum of

$25,000

per month.

During the year ended

December 31, 2014,

the Company entered into an agreement with Jayska Consulting Ltd. and Mr. J. M. Williams, Co-Chief Executive Officer of the Company for the provision of services of Mr. J. M. Williams as Chief Executive Officer of the Company. The Consulting agreement provides for a consultancy payment of

GBP5,000

per month. In addition, during the year ended

December 31, 2014,

the Company entered into an agreement with LVA Media Inc. and Mr. J. M. Williams, for the provision of services of Mr. J. M. Williams as Chief Executive Officer of the Company. The Consulting agreement provides for a consultancy payment of

2.5%

of the monthly social bingo business with a minimum of

$7,500

and a maximum of

$25,000

per month.

As at

December 31, 2018,

the Company had a number of renewable license commitments with large brands, including, Garfield, Moomins, Mr Men and Little Miss, Mr. Bean, Peter Rabbit, Pororo and the Winx club. These agreements have commitments to pay royalties on the revenue from the licenses subject to the following minimum guarantee payments:

2019	$	26,364
2020		3,000
2021		-

The Company expensed the minimum guarantee payments over the life of the agreement and recognized license expense of

$32,009

(

2017

-

$12,888

) for the year ended

December 31, 2018.

XML

Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10.

  Income taxes:

Shoal Games Ltd. is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. However certain of the Company's subsidiaries incur income taxation.

The Tax Cuts and Jobs Act ("Tax Act") was signed into law on

December 22, 2017.

Included as part of the law, was a permanent reduction in the U.S. federal corporate income tax rate from

34%

to

21%

effective

January 1, 2018.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at

December 31, 2018

and

2017,

are presented below:

	2018			2017
Computed "expected" tax benefit (expense)	$	544,495		$	592,264
Reduction in income taxes resulting from income taxes in other tax jurisdictions		(337,087	)		(494,697	)
Other		(403	)		(30	)
Change in taxation rates in other jurisdictions		(2,933	)		-
Change in exchange rates		58,486			21,016
Change in valuation allowance		(173,037	)		(87,792	)
Income tax recovery	$	89,521		$	30,761

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at

December 31, 2018

and

2017

are presented below:

	2018			2017
Deferred tax assets:
Net operating loss carry forwards	$	275,846		$	102,809
Valuation Allowance		(275,846	)		(102,809	)
	$	-		$	-

The valuation allowance for deferred tax assets as of

December 31, 2018

and

2017,

was

$275,846

and

$102,809,

respectively.  The net change in the total valuation allowance was an increase of

$173,037

for the year ended

December 31, 2018 (

2017

-

$87,792

).

As at

December 31, 2018,

the Company's had

$618,204

of non-capital losses expiring through

December 31, 2038.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in assessing the realizability of deferred tax assets.

During the year ended

December 31, 2018,

Shoal Media (Canada) Inc., a subsidiary of Shoal Games Ltd., received the British Columbia Interactive Digital Media Tax Credit of

CAD$116,085

(

$89,521

) (

2017

-

CAD$39,919

(

$30,761

)) from the British Columbia Provincial Government. The Company recognized this tax credit as a recovery of income tax expense on the statement of operations upon receipt of funds. 

XML

Note 11 - Related Party Transactions

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

11.

Related party transactions:

The Company has a liability of

$nil

(

2017

-

$33,000

) to a company owned by a current director and officer of the Company for payment of consulting fees of

$132,000

(

2017

-

$132,000

) by the current director and officer of the Company.

The Company has a liability of

$nil

(

2017

-

$97

) to a current director and officer of the Company for expenses incurred.

The Company has a liability of

$1,647

(

2017

-

$3,982

) to a current director and officer of the Company for expenses incurred.

The Company has a liability of

$nil

(

2017

-

$nil

) to a company owned by a current director and officer of the Company for payment of consulting fees of

$80,128

(

2017

-

$77,310

) by the current director and officer of the Company.

The Company has a liability of

$nil

(

2017

-

$nil

) to a company owned by a current director and officer of the Company for payment of consulting fees of

$90,000

(

2017

-

$90,000

) by the current director and officer of the Company.

The Company has a liability of

$1,500

(

2017

-

$1,000

), to independent directors of the Company for payment of consulting fees. During the year ended

December 31, 2018,

the Company paid

$4,500

(

2017

-

$5,500

) to the independent directors in director fees.

The Company has a liability of

$7,317

(

2017

-

$6,106

), to an officer of the Company for payment of consulting fees and expenses incurred of

$109,079

(

2017

-

$93,078

) by the officer of the Company.

The Company has promissory notes totaling

$nil

(

2017

-

$600,235

), including interest, from shareholders holding more than

10%

of the Company. The interest on the notes are

2%

per annum, calculated and compounded annually and paid annually. During the quarter ended

June 30, 2018,

these promissory notes were settled through a warrant exercise for

1,200,000

shares, in a non-cash transaction.

During the year ended

December 31, 2017,

the directors and shareholders holding more than

10%

of the Company's shares subscribed for

1,200,000

units totaling

CAD$540,000

(

$408,102

) in the private placement.

During the year ended

December 31, 2018,

the Company granted

700,000

(

2017

-

125,000

) options with an exercise price of

CAD$

0.54

(approximately

$

0.42

) for both fiscal

2018

and fiscal

2017

per share and

275,000

(

2017

-

nil

) with an exercise price of

$0.50

for fiscal

2018,

to related parties. The Company expensed

$281,492

(

2017

-

$13,110

) in stock-based compensation for these options granted to related parties.

The Company has a receivable of

$2,305

(

2017

-

$2,630

) from a company of which a previous director of the Company is a director.

The related party transactions are in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related party.

XML

Note 12 - Segmented Information

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12.

Segmented information:

The Company operates in

one

reportable business segment, the sale of in-app purchases on Trophy Bingo and Garfield's Bingo; the premium purchase for Rooplay Originals and recurring subscription revenues from Rooplay.

The Company had the following revenue by geographical region.

	2018		2017
Total revenue from continuing operations
Western Europe	$	13,994	$	10,940
Central, Eastern and Southern Europe		864		486
Nordics		982		875
North America		73,618		63,155
Other		17,520		18,019
Total revenue	$	106,978	$	93,475

Equipment

The Company's equipment is located as follows:

Net Book Value	2018		2017
Anguilla	$	368	$	552
Canada		12,911		8,353
United Kingdom		2,976		815
	$	16,255	$	9,720

XML

Note 13 - Concentrations

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

13.

Concentrations:

Major customers

During the year ended

December 31, 2018

and

2017,

the Company sold subscriptions on its site Rooplay and sold in-app purchases on its social bingo sites, Trophy Bingo and Garfield's Bingo and premium purchases of Rooplay Originals. There was

no

single player who had purchased more than

10%

of the Rooplay, Trophy Bingo and Garfield's Bingo revenue. The Company is reliant on the Google App, iOS App and Amazon App Stores to provide a platform for Rooplay, Trophy Bingo and Garfield's Bingo to be played thereon.

During the year ended

December 31, 2018

and

2017,

the Company offered limited advertising. The Company is reliant on

one

sales customer who provides the advertising revenue.  

XML

Note 14 - Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Concentration Credit Risk [Text Block]

14.

Concentrations of credit risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.  The Company places its cash with high quality financial institutions and limits the amount of credit exposure with any

one

institution.

The Company currently maintains a substantial portion of its day-to-day operating cash balances at financial institutions.  At

December 31, 2018,

the Company had total cash balances of

$641,536

(

2017

-

$478,397

) at financial institutions, where

$489,235

(

2017

-

$336,756

) is in excess of federally insured limits. 

The Company has concentrations of credit risk with respect to accounts receivable, the majority of its accounts receivable are concentrated geographically in the United States amongst a small number of customers.

As of

December 31, 2018,

the Company had

three

customers, totaling

$8,814

who accounted for greater than

10%

of the total accounts receivable. As of

December 31, 2017,

the Company had

four

customers, totaling

$9,066

who accounted for greater than

10%

of the total accounts receivable.

The Company controls credit risk through monitoring procedures and receiving prepayments of cash for services rendered.  The Company performs credit evaluations of its customers but generally does

not

require collateral to secure accounts receivable.

XML

Note 15 - Subsequent Event

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

15.

  Subsequent event:

Subsequent to the year ended

December 31, 2018,

the Company issued

52,450,286

shares for total consideration of

$20,603,656

in the acquisition of all the issued and outstanding ordinary and preferred shares in the capital stock of Kidoz Ltd., a company incorporated under the laws of the State of Israel. Kidoz Ltd. is a global kids’ content distribution and monetization marketplace. The Company paid a commission of

$130,000

and incurred share issuance costs of

$85,135.

The acquisition closed with the effective date of acquisition being

February 28, 2019.

The acquisition enables the global reach of Kidoz’s content network to be combined with the Company’s Rooplay subscription OTT platform.

This acquisition is accounted for as a business combination. As at the date of this report, the Company is unable to accurately determine the assets and liabilities of Kidoz Ltd. effective

February 28, 2019,

since a portion of the revenue / receivables and expenses / payables are based on customer and suppliers reports which are

not

yet available from

third

party sources.  On acquisition of Kidoz Ltd., the Company allocated the purchase price to the fair value of the net assets acquired. However, as certain information regarding Kidoz Ltd.’s working capital, intangible assets and resulting goodwill is

not

yet finalized, these figures are subject to change. The provisional measurements of assets and liabilities

may

be retrospectively adjusted when new information is obtained until the final measurements are determined within

one

year of the acquisition date.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

(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 year ended

December 31, 2017,

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

Subsequent to the year ended

December 31, 2018,

the Company acquired Kidoz Ltd. a company incorporated under the laws of the State of Israel. (Note

15

)

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

Use of Estimates, Policy [Policy Text Block]

(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 collectability of accounts receivable, the valuation of promissory notes, stock-based compensation and the estimated market rate of

15%,

the derivative liability - warrants valuation, the valuation of deferred tax assets and the subsequent valuation of the acquisition of Kidoz Ltd. Actual results

may

differ significantly from these estimates.

Revenue from Contract with Customer [Policy Text Block]

(c)    Revenue recognition:

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

Rooplay Original's revenue have been recognized from the sale of premium purchases, at the time of purchase by the player.

Research revenue have been recognized when the services have been delivered and collection of the amounts are reasonably assured.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

(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 operations. Revenues and expenses are translated at the rates of exchange prevailing on the dates such items are recognized in earnings.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

(e)  Accounts receivable:

Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts considered necessary. Accounts receivable includes receivables from online platforms and trade receivables from customers. The Company estimates doubtful accounts on an item-by-item basis and includes over-aged accounts as part of allowance for doubtful accounts, which are generally ones that are

ninety

-days overdue.  Bad debt expense, for the year ended

December 31, 2018,

was

$nil

(

2017

-

$nil

).

Property, Plant and Equipment, Policy [Policy Text Block]

(f)  Equipment:

Equipment is recorded at cost less accumulated depreciation. Depreciation is provided for annually on the declining balance method over the following periods:

	years
Equipment and computers		3
Furniture and fixtures		5

Expenditures for maintenance and repairs are charged to expenses as incurred. Major improvements are capitalized. Gains and losses on disposition of equipment are included in operations as realized.

Internal Use Software, Policy [Policy Text Block]

(g)  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 Rooplay, Rooplay Originals, Garfield's Bingo, Trophy Bingo, and related technologies were

$6,716,810

as at

December 31, 2018 (

December 31, 2017 -

$5,768,476

).

Advertising Costs, Policy [Policy Text Block]

(h)  Advertising:

The Company expenses the cost of advertising in the period in which the advertising space or airtime is used. Advertising costs from continuing operations charged to selling and marketing expenses in

2018

totaled

$352,770

(

2017

-

$244,810

). 

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

(i)   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		109	%		25	%
Weighted average volatility		96	%		25	%
Risk-free interest rate		1.97	%		1.56	%
Expected life of options (years)		5			5
Forfeiture rate		5	%		5	%

Derivatives, Policy [Policy Text Block]

(j) Derivative liability - warrants

The warrants had 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

no

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

was estimated on the date of the subscription using the Binomial Lattice pricing model. During the year ended

December 31, 2018,

there was a gain on derivative liability - warrants of

$44,572

(

2017

-

$78,712

) and the derivative liability - warrants value reduced to

$nil

with the following assumptions:

	2018		2017
Average stock price		-		CAD$0.65
Expected dividend yield		-		-
Expected stock price volatility		-		93.74	%
Risk-free interest rate		-		1.66	%
Expected life of warrants (years)		-		0.5

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

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

(k) Impairment of long-lived assets and long-lived assets to be disposed of:

The Company accounts for long-lived assets in accordance with the provisions of ASC

360,

Property, Plant and Equipment and ASC

350,

Intangibles-Goodwill and Others. During the periods presented, the only long-lived assets reported on the Company's consolidated balance sheet are equipment, and security deposits.  These provisions require that long-lived assets and certain identifiable recorded intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the carrying amount and the fair value less costs to sell.

Income Tax, Policy [Policy Text Block]

(l)   Income taxes:

The Company follows the asset and liability method of accounting for income taxes.  Under this method, current income taxes are recognized for the estimated income taxes payable for the current period.  The Company recognizes the income tax recovery from the receipt of tax credits upon receipt of funds. Deferred income taxes are provided based on the estimated future tax effects of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as the benefit of losses available to be carried forward to future years for tax purposes.

Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered and settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.  A valuation allowance is recorded for deferred tax assets when it is

not

more likely than

not

that such future tax assets will be realized.

Earnings Per Share, Policy [Policy Text Block]

(m) Net (loss) income per share:

ASC

260,

"Earnings Per Share", requires presentation of basic earnings per share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution, using the treasury stock method, that could occur if outstanding options or warrants were exercised and converted into common stock. In computing diluted earnings per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period.

Options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. A total of

3,575,000

(

2017

-

1,605,000

) stock options and

nil

(

2017

-

5,219,163

) warrants were excluded as at

December 31, 2018.

The earnings per share data for the year ended

December 31, 2018

and

2017

are summarized as follows:

	2018			2017
Loss for the year	$	(2,592,831	)	$	(1,741,951	)
Basic and diluted weighted average number of common shares outstanding		72,111,456			61,730,928
Basic and diluted loss per common share outstanding	$	(0.04	)	$	(0.03	)

New Accounting Pronouncements, Policy [Policy Text Block]

(n)  New accounting pronouncements and changes in accounting policies:

In

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

-

11

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 adopted ASC

2014

-

09

as of

January 1, 2018

using the modified retrospective method. The new standard was applied to all contracts

not

completed as of

January 1, 2018

and had

no

material impact to its results of operations or cash flows.

In

January 2016,

the FASB issued ASU

2016

-

01,

Financial Instruments - Overall (Subtopic

825

-

10

): 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

-

01

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

2016

-

01

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

-

01

as of

January 1, 2018

and ASU

2016

-

01

has

not

had a material impact on the consolidated financial statements.

In

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

12

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. The Company has evaluated the impact of the amended guidance on the Company's Consolidated Financial Statements and determined the impact to assets and liabilities is

not

significant to the consolidated financial statements for the existing lease. 

In

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

-

13

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.

In

November 2018,

the FASB issued ASU

2018

-

19,

Codification Improvements to Topic

326,

Financial Instruments - Credit Losses ( " ASU

2018

-

19"

) . ASU

2018

-

19

clarifies that receivables arising from operating leases are

not

within the scope of Subtopic

326

-

20.

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic

842,

Leases. The Company is currently evaluating the impact of the amended guidance and has

not

yet determined the effect of the standard on its ongoing financial reporting.

In

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

-

15

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

-

09

as of

January 1, 2018

and it has

not

had a material impact on the consolidated financial statements.

In

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

-

16

on

January 1, 2018

and it did

not

have an impact on its consolidated financial statements.

In

January

of

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. The Company adopted ASU

2017

-

01

on

January 1, 2018

and the adoption did

not

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

In

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

-

09

on

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.

In

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 adoption of this guidance will

not

have a material impact on the Company's financial position, results of operations and liquidity.

In

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

-

02

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 adopted ASU-

2018

-

02

in the

first

quarter of

2018

and the impact of the adoption was

not

material to our Consolidated Financial Statements.

In

February 2018,

FASB issued ASU

2018

-

03,

"Technical Corrections and Improvements to Financial Instruments (Subtopic

825

-

10

) - 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

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities". This includes an amendment to clarify that anentity 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 adopted ASC

2018

-

03

as of

January 1, 2018

and it has

not

had a material impact on the consolidated financial statements.

In

June 2018,

the FASB issued ASU

No.

2018

-

07

"Compensation - Stock Compensation (Topic

718

): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic

718,

Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic

505

-

50,

Equity - Equity-Based Payments to Non-Employees. This ASU is effective for annual and interim reporting periods beginning after

December 15, 2018,

with early adoption permitted.  Entities must transition to the new guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of this guidance had an immaterial impact on the Company's financial statements and related disclosures.

In

August 2018,

the FASB issued ASU

No.

2018

-

13,

"Fair Value Measurement: Disclosure Framework (Topic

840

) - Changes to the Disclosure Requirements for Fair Value Measurement", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring Level

1,

Level

2

and Level

3

instruments in the fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The Company is evaluating the impact this standard will have on the Company's consolidated financial statements.

In

August 2018,

the FASB issued ASU

No.

2018

-

15,

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires implementation costs in a hosting arrangement that is a service contract to be capitalized consistent with the rules in ASC

350

-

40,

Intangibles-Goodwill and Other-Internal-Use Software. This aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs incurred during the application development stage are to be capitalized and expensed according to their nature, while costs incurred during the preliminary project and post- implementation stages are to be expensed. This ASU also contains guidance with regard to the amortization period, impairment and presentation within the financial statements. The ASU is required to be adopted by the Company during

2020,

however early adoption is allowed in an interim period before then, and

may

be applied retrospectively or prospectively to applicable costs on the Company's condensed consolidated financial statements. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt.

There have been

no

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

December 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.

Fair Value of Financial Instruments, Policy [Policy Text Block]

(o)  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

1

fair value measurement.

In general, fair values determined by Level

1

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

2

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

Fair values determined by Level

3

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

1

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

2

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

3

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.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Consolidation, Wholly Owned and Less than Wholly Owned Subsidiary, Parent Ownership Interest [Table Text Block]

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%

Property, Plant and Equipment, Useful Life [Table Text Block]

	years
Equipment and computers		3
Furniture and fixtures		5

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	2018			2017
Expected dividend yield		-			-
Expected stock price volatility		109	%		25	%
Weighted average volatility		96	%		25	%
Risk-free interest rate		1.97	%		1.56	%
Expected life of options (years)		5			5
Forfeiture rate		5	%		5	%

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

	2018		2017
Average stock price		-		CAD$0.65
Expected dividend yield		-		-
Expected stock price volatility		-		93.74	%
Risk-free interest rate		-		1.66	%
Expected life of warrants (years)		-		0.5

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	2018			2017
Loss for the year	$	(2,592,831	)	$	(1,741,951	)
Basic and diluted weighted average number of common shares outstanding		72,111,456			61,730,928
Basic and diluted loss per common share outstanding	$	(0.04	)	$	(0.03	)

XML

Note 3 - Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	2018			2017
Accounts receivable	$	39,769		$	42,688
Provision for doubtful accounts		(27,666	)		(27,666	)
Net accounts receivable	$	12,103		$	15,022

XML

Note 5 - Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Property, Plant and Equipment [Table Text Block]

2018	Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	128,097	$	112,845	$	15,252
Furniture and fixtures		8,037		7,034		1,003
	$	136,134	$	119,879	$	16,255

2017	Cost		Accumulated depreciation		Net book Value
Equipment and computers	$	116,444	$	107,444	$	9,000
Furniture and fixtures		7,541		6,821		720
	$	123,985	$	114,265	$	9,720

XML

Note 6 - Software Development Assets (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Expense of Development Costs [Table Text Block]

	2018		2017
Opening total software development costs	$	5,768,476	$	4,935,274
Software development during the year		948,334		833,202
Closing total Software development costs	$	6,716,810	$	5,768,476

XML

Note 7 - Promissory Notes (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	2018			2017
Opening balance	$	502,313		$	347,698
Promissory note issued		-			188,135
Discount on promissory note		-			(23,461	)
Gain on extinguishment and reissuance of promissory notes with related parties		-			(94,191	)
Reduction of capital on extinguishment of promissory notes with related parties		65,955			-
Extinguishment of promissory notes to related parties		(605,358	)		(418,181	)
Reissuance of promissory notes to related parties		-			418,181
Accrued interest		5,124			11,288
Interest accretion		31,966			72,844
Closing balance	$	-		$	502,313

XML

Note 8 - Stockholders' Equity (Deficiency) (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Number of warrants			Weighted average exercise price
Outstanding, December 31, 2016		-			$-
Granted		2,323,779		0.43	-	0.49
Granted		2,887,895		0.44	-	0.52
Granted		128,600		0.44	-	0.52
Exercised		(121,111	)		(0.43)
Outstanding, December 31, 2017		5,219,163			0.48
Granted		-			-
Exercised		(1,215,000	)		(0.50)
Expired, unexercised		(4,004,163	)		(0.51)
Outstanding December 31, 2018		-			$-

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of options			Weighted average exercise price
Outstanding, December 31, 2016		1,010,000		$	0.42
Granted		725,000			0.42
Exercised		-			-
Cancelled		(130,000	)		(0.42	)
Outstanding, December 31, 2017		1,605,000			0.42
Granted		2,130,000			0.47
Exercised		-			-
Cancelled		(160,000	)		(0.42	)
Outstanding December 31, 2018		3,575,000		$	0.45

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Range of exercise prices per share		Number outstanding		Number exercisable		Expiry date
$	0.42		855,000		855,000	December 20, 2021
	0.42		615,000		421,550	November 8, 2022
	0.42		830,000		722,000	June 4, 2023
	0.50		1,275,000		1,275,000	June 4, 2023
			3,575,000		3,273,550

XML

Note 9 - Commitments (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2019	$	2,246
2020		-

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2019	$	30,225
2020		40,769
2021		41,840
2022		42,910
2023		43,980
2024		11,062

Minimum Guarantee Payments Under Renewable License Commitments [Table Text Block]

<div style="display: inline; font-family: times new roman; font-size: 10pt"><table border="0" cellpadding="0" cellspacing="0" style="margin-right: 5%; margin-left: 5%; font-size: 10pt; font-family: "Times New Roman", Times, serif; text-indent: 0px; min-; min-width: 700px;"> <tr> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 83%; border-top: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-top: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-top: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-top: 1px solid rgb(0, 0, 0);"> </td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; width: 83%;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">2019</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26,364</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">2020</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,000</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt;"> <div style=" font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">2021</div> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt;"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> <tr> <td style="font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td style="width: 14%; text-align: right; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> </td> <td nowrap="nowrap" style="width: 1%; font-family: "Times New Roman", Times, serif; font-size: 10pt; margin-left: 0pt;"> </td> </tr> </table></div>

XML

Note 10 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2018			2017
Computed "expected" tax benefit (expense)	$	544,495		$	592,264
Reduction in income taxes resulting from income taxes in other tax jurisdictions		(337,087	)		(494,697	)
Other		(403	)		(30	)
Change in taxation rates in other jurisdictions		(2,933	)		-
Change in exchange rates		58,486			21,016
Change in valuation allowance		(173,037	)		(87,792	)
Income tax recovery	$	89,521		$	30,761

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	2018			2017
Deferred tax assets:
Net operating loss carry forwards	$	275,846		$	102,809
Valuation Allowance		(275,846	)		(102,809	)
	$	-		$	-

XML

Note 12 - Segmented Information (Tables)

12 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	2018		2017
Total revenue from continuing operations
Western Europe	$	13,994	$	10,940
Central, Eastern and Southern Europe		864		486
Nordics		982		875
North America		73,618		63,155
Other		17,520		18,019
Total revenue	$	106,978	$	93,475

Long-lived Assets by Geographic Areas [Table Text Block]

Net Book Value	2018		2017
Anguilla	$	368	$	552
Canada		12,911		8,353
United Kingdom		2,976		815
	$	16,255	$	9,720

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Note 1 - Introduction (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Retained Earnings (Accumulated Deficit), Ending Balance	$ (25,898,220)	$ (23,305,389)

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Note 2 - Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($)	Jun. 16, 2017 USD ($)
Provision for Doubtful Accounts	$ 0	$ 0	$ 27,666
Accumulated Development Costs	6,716,810	5,768,476	$ 4,935,274
Advertising Expense	352,770	244,810
Derivative Liability, Total	0			$ 215,687
Fair Value Adjustment of Warrants	$ (44,572)	$ (78,712)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	34.00%
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares	3,575,000	1,605,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares	0	5,219,163
Promissory Note [Member] | Valuation, Income Approach [Member] | Measurement Input, Discount Rate [Member]
Long-term Debt, Measurement Input	0.15

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Note 2 - Summary of Significant Accounting Policies - Subsidiaries (Details)	Dec. 31, 2018
Shoal Media (Canada) Inc. [Member]
Ownership percentage	100.00%
Coral Reef Marketing Inc. [Member]
Ownership percentage	100.00%
Rooplay Media Ltd. [Member]
Ownership percentage	100.00%
Rooplay Media Kenya Limited [Member]
Ownership percentage	100.00%
Shoal Media Inc. [Member]
Ownership percentage	100.00%
Shoal Games (UK) PLC [Member]
Ownership percentage	99.00%
Shoal Media (UK) Ltd. [Member]
Ownership percentage	100.00%

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Note 2 - Summary of Significant Accounting Policies - Useful Life of Property, Plant, and Equipment (Details)	12 Months Ended
	Dec. 31, 2018
Computer Equipment [Member]
Property, plant, and equipment, useful life (Year)	3 years
Furniture and Fixtures [Member]
Property, plant, and equipment, useful life (Year)	5 years

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Note 2 - Summary of Significant Accounting Policies - Fair Value Assumptions of Stock-based Compensation (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Expected dividend yield
Expected stock price volatility	109.00%	25.00%
Weighted average volatility	96.00%	25.00%
Risk-free interest rate	1.97%	1.56%
Expected life of options (Year)	5 years	5 years
Forfeiture rate	5.00%	5.00%

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Note 2 - Summary of Significant Accounting Policies - Fair Value Derivative Assumptions (Details) - Warrant Liabilities [Member]	Dec. 31, 2018	Dec. 31, 2017
Measurement Input, Share Price [Member]
Fair value assumptions		0.65
Measurement Input, Expected Dividend Rate [Member]
Fair value assumptions
Measurement Input, Price Volatility [Member]
Fair value assumptions		0.9374
Measurement Input, Risk Free Interest Rate [Member]
Fair value assumptions		0.0166
Measurement Input, Expected Term [Member]
Fair value assumptions		0.5

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Note 2 - Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Loss for the year	$ (2,592,831)	$ (1,741,951)
Basic and diluted weighted average number of common shares outstanding (in shares)	72,111,456	61,730,928
Basic and diluted loss per common share outstanding (in dollars per share)	$ (0.04)	$ (0.03)

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Note 3 - Accounts Receivable (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Provision for Doubtful Accounts	$ 0	$ 0	$ 27,666

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Note 3 - Accounts Receivable - Accounts Receivable (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Accounts receivable	$ 39,769	$ 42,688
Provision for doubtful accounts	(27,666)	(27,666)
Net accounts receivable	$ 12,103	$ 15,022

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Note 4 - Prepaid Expenses (Details Textual) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Prepaid Expense and Other Assets	$ 99,739	$ 54,714
Prepaid Licenses Fees	$ 65,387	$ 33,502

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Note 5 - Equipment (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Depreciation, Total	$ 5,614	$ 4,068

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Note 5 - Equipment - Property, Plant, and Equipment (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Cost	$ 136,134	$ 123,985
Accumulated depreciation	119,879	114,265
Equipment, net (Note 5)	16,255	9,720
Equipment and Computers [Member]
Cost	128,097	116,444
Accumulated depreciation	112,845	107,444
Equipment, net (Note 5)	15,252	9,000
Furniture and Fixtures [Member]
Cost	8,037	7,541
Accumulated depreciation	7,034	6,821
Equipment, net (Note 5)	$ 1,003	$ 720

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Note 6 - Software Development Assets - Development Costs (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Opening total software development costs	$ 5,768,476	$ 4,935,274
Software development during the year	948,334	833,202
Closing total Software development costs	$ 6,716,810	$ 5,768,476

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Note 7 - Promissory Notes (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Gain on Extinguishment of Promissory Notes With Related Party			$ 94,191
Adjustment to Additional Paid in Capital Extinguishment of Promissory Notes		$ (65,955)
Interest on Convertible Debt, Equity Portion		$ 31,966	72,844
Promissory Note [Member]
Debt Instrument, Interest Rate, Stated Percentage		2.00%
Gain on Extinguishment of Promissory Notes With Related Party	$ 94,191
Proceeds from Notes Payable, Total			188,135
Debt Instrument Carrying Amount of The Equity Component			23,461
Interest on Convertible Debt, Equity Portion		$ 31,966	$ 72,844
Promissory Note [Member] | Valuation, Income Approach [Member] | Measurement Input, Discount Rate [Member]
Long-term Debt, Measurement Input		0.15
Promissory Note, Debt Portion [Member] | Discounted Cash Flows Approach Valuation Technique [Member] | Measurement Input, Discount Rate [Member]
Long-term Debt, Measurement Input		0.15

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Note 7 - Promissory Notes - Schedule of Promissory Notes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Balance	$ 502,313
Non-cash financing activity - Extinguishment and reissuance of promissory notes	(65,955)	$ 94,191
Promissory note - accrued interest	5,124
Interest accretion	31,966	72,844
Balance		502,313
Promissory Note [Member]
Balance	502,313	347,698
Proceeds from Notes Payable, Total		188,135
Discount on promissory note		(23,461)
Gain on extinguishment and reissuance of promissory notes with related parties		(94,191)
Non-cash financing activity - Extinguishment and reissuance of promissory notes	65,955
Extinguishment of promissory notes to related parties	(605,358)	(418,181)
Reissuance of promissory notes to related parties		418,181
Promissory note - accrued interest	5,124	11,288
Interest accretion	31,966	72,844
Balance		$ 502,313

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Note 8 - Stockholders' Equity (Deficiency) (Details Textual)	1 Months Ended						3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2018 $ / shares shares	Feb. 28, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) shares	Oct. 31, 2017 USD ($) $ / shares shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2017 CAD ($) $ / shares shares	Mar. 20, 2019 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 $ / shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2015	Jun. 30, 2018 $ / shares	Dec. 31, 2017 USD ($) $ / shares shares	Jun. 30, 2017 $ / shares shares	Dec. 31, 2016 shares
Common Stock, Dividends, Per Share, Declared | $ / shares										$ 0
Common Stock, No Par Value | $ / shares									$ 0	0					$ 0
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares															$ 0.48
Proceeds from Warrant Exercises | $										$ 6,600		$ 52,310
Stock Issued During Period, Value, New Issues | $										2,551,500		1,846,055
Payments of Stock Issuance Costs | $										272,092		25,816
Proceeds from Issuance of Private Placement | $										2,551,500		1,846,055
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $										$ 272,092		$ 25,816
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross										2,130,000		725,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares										$ 0.47		$ 0.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance									3,575,000	3,575,000					1,605,000		1,010,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period										160,000		130,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $									$ 0	$ 0					$ 0
Share-based Compensation, Total | $										$ 595,580		$ 43,212
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares										$ 0.29		$ 0.13
2015 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum													10.00%
Common Stock, Capital Shares Reserved for Future Issuance, Percentage													10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross												725,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares												350,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | (per share)									$ 0.54	$ 0.42	$ 0.54	$ 0.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expected to Vest, Outstanding, Number									385,000	385,000					375,000
Share-based Compensation Arrangement by Share-based Payment Award, Option, Nonvested, Weighted Average Exercise Price, Ending Balance | (per share)											0.54				$ 0.42
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance									3,575,000	3,575,000					1,605,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period										0		0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period										160,000		130,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Fully Vested, Outstanding, Number									3,190,000	3,190,000					1,230,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number									3,273,550	3,273,550					1,267,500
2015 Stock Option Plan [Member] | Vesting at the Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage										10.00%		10.00%
2015 Stock Option Plan [Member] | Vesting One Year Following the Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage										15.00%		15.00%
2015 Stock Option Plan [Member] | Vesting Per Month Starting 13 Months After the Grant Date [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage										2.00%		2.00%
2015 Stock Option Plan [Member] | Employee Stock Options 1 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares										710,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | (per share)									$ 0.54	$ 0.42
2015 Stock Option Plan [Member] | Employee Stock Options 2 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares										1,275,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares										$ 0.50
2015 Stock Option Plan [Member] | Employee Stock Options 3 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross										145,000
2015 Stock Option Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period													10 years
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Total							110,000
Private Placement [Member]
Stock Issued During Period, Value, New Issues | $		$ 2,551,500
Stock Issued During Period, Shares, New Issues		7,290,000
Shares Issued, Price Per Share | $ / shares		$ 0.35
Proceeds from Issuance of Private Placement				$ 45,011	$ 790,281	$ 1,045,000		$ 1,010,763
Units Issued During the Period, Units, New Issues				128,600	2,323,779	2,323,779		2,887,895
Units Issued During the Period, Price Per Unit | (per share)				$ 0.35		$ 0.45		$ 0.35								$ 0.34
Number of Common Shares per Unit				1		1		1								1
Number of Warrants Per Unit				1		1		1								1
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right				1		1		1								1
Class of Warrant or Right, Term				1 year	1 year	1 year		1 year
Private Placement [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues							5,000,000
Shares Issued, Price Per Share | $ / shares							$ 0.40
Payments of Stock Issuance Costs | $							$ 200,000
Proceeds from Issuance of Private Placement | $							2,000,000
Share Issuance Expense | $							$ 13,546
Private Placement [Member] | Commission Fees [Member]
Payments of Stock Issuance Costs | $		$ 253,750
Private Placement [Member] | Other Stock Issuance Fees [Member]
Payments of Stock Issuance Costs | $		$ 18,342
Warrants Exercised Subsequent to the Year Ended December 31, 2017 [Member]
Stock Issued During Period, Shares, Warrants Exercised	1,200,000	15,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share)	$ 0.65	$ 0.44												$ 0.50
Proceeds from Warrant Exercises | $		$ 6,600
Warrants Exercised in December 2017 [Member]
Stock Issued During Period, Shares, Warrants Exercised			121,111
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share)											$ 0.55				$ 0.43
Proceeds from Warrant Exercises | $			$ 52,310
Warrants Exercisable in the First Six Months Following Closing [Member] | Private Placement [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share)				$ 0.44		$ 0.55		$ 0.44
Warrants Exercisable From 7 to 12 Months Following Closing [Member] | Private Placement [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights | (per share)				$ 0.52		$ 0.65		$ 0.52

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Note 8 - Stockholders' Equity (Deficiency) - Summary of Warrant Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Outstanding, number of options (in shares)	5,219,163
Granted (in shares)
Exercised (in shares)	(1,215,000)
Exercised, weighted average exercise price (in dollars per share)	$ (0.50)
Expired, unexercised (in shares)	(4,004,163)
Expired, unexercised, weighted average exercise price (in dollars per share)	$ (0.51)
Outstanding, number of options (in shares)		5,219,163
Outstanding, weighted average exercise price (in dollars per share)		$ 0.48
Warrants with June 15, 2018 Expiration Date [Member]
Granted (in shares)		2,323,779
Granted, weighted average exercise price (in dollars per share)		$ 0.49
Exercised (in shares)		(121,111)
Exercised, weighted average exercise price (in dollars per share)		$ (0.43)
Warrants with June 15, 2018 Expiration Date [Member] | Minimum [Member]
Granted, weighted average exercise price (in dollars per share)		0.43
Warrants with June 15, 2018 Expiration Date [Member] | Maximum [Member]
Granted, weighted average exercise price (in dollars per share)		$ 0.49
Warrants with September 28, 2018 Expiration Date [Member]
Granted (in shares)		2,887,895
Granted, weighted average exercise price (in dollars per share)		$ 0.52
Warrants with September 28, 2018 Expiration Date [Member] | Minimum [Member]
Granted, weighted average exercise price (in dollars per share)		0.44
Warrants with September 28, 2018 Expiration Date [Member] | Maximum [Member]
Granted, weighted average exercise price (in dollars per share)		$ 0.52
Warrants with October 26, 2018 Expiration Date [Member]
Granted (in shares)		128,600
Granted, weighted average exercise price (in dollars per share)		$ 0.52
Warrants with October 26, 2018 Expiration Date [Member] | Minimum [Member]
Granted, weighted average exercise price (in dollars per share)		0.44
Warrants with October 26, 2018 Expiration Date [Member] | Maximum [Member]
Granted, weighted average exercise price (in dollars per share)		$ 0.52

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Note 8 - Stockholders' Equity (Deficiency) - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Outstanding, number of options, balance (in shares)	1,605,000	1,010,000
Outstanding, weighted average exercise price, balance (in dollars per share)	$ 0.42	$ 0.42
Granted, number of options (in shares)	2,130,000	725,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.47	$ 0.42
Exercised, number of options (in shares)
Exercised, weighted average exercise price (in dollars per share)
Cancelled, number of options (in shares)	(160,000)	(130,000)
Cancelled, weighted average exercise price (in dollars per share)	$ (0.42)	$ (0.42)
Outstanding, number of options, balance (in shares)	3,575,000	1,605,000
Outstanding, weighted average exercise price, balance (in dollars per share)	$ 0.45	$ 0.42

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Note 8 - Stockholders' Equity (Deficiency) - Summary of Information Concerning Outstanding and Exercisable Stock Options (Details)	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Number of outstanding (in shares)	3,575,000
Number of exercisable (in shares)	3,273,550
Range 1 [Member]
Range of exercise prices per share (in dollars per share) | $ / shares	$ 0.42
Number of outstanding (in shares)	855,000
Number of exercisable (in shares)	855,000
Expiry date	Dec. 20, 2021
Range 2 [Member]
Range of exercise prices per share (in dollars per share) | $ / shares	$ 0.42
Number of outstanding (in shares)	615,000
Number of exercisable (in shares)	421,550
Expiry date	Nov. 08, 2022
Range 3 [Member]
Range of exercise prices per share (in dollars per share) | $ / shares	$ 0.42
Number of outstanding (in shares)	830,000
Number of exercisable (in shares)	722,000
Expiry date	Jun. 04, 2023
Range 4 [Member]
Range of exercise prices per share (in dollars per share) | $ / shares	$ 0.50
Number of outstanding (in shares)	1,275,000
Number of exercisable (in shares)	1,275,000
Expiry date	Jun. 04, 2023

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Note 9 - Commitments (Details Textual)	3 Months Ended	12 Months Ended
	Mar. 20, 2019 ft²	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 GBP (£)
Operating Leases, Rent Expense, Net, Total		$ 28,287	$ 19,018
Royalty Expense		$ 32,009	$ 12,888
Executive Chairman [Member]
Consulting Agreement, Monthly Payment, Percentage				2.50%	2.50%
Executive Chairman [Member] | Minimum [Member]
Consulting Agreement, Monthly Payment				$ 11,000
Executive Chairman [Member] | Maximum [Member]
Consulting Agreement, Monthly Payment				$ 25,000
Chief Executive Officer [Member]
Consulting Agreement, Monthly Payment, Percentage				2.50%	2.50%
Consulting Agreement, Monthly Payment | £					£ 5,000
Chief Executive Officer [Member] | Minimum [Member]
Consulting Agreement, Monthly Payment				$ 7,500
Chief Executive Officer [Member] | Maximum [Member]
Consulting Agreement, Monthly Payment				$ 25,000
Subsequent Event [Member]
Lessee, Operating Lease, Term of Contract	5 years
Lessee, Operating Lease, Area of Property | ft²	1,459
Lease Expiration Date	Mar. 31, 2024

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Note 9 - Commitments - Minimum Operating Leases (Details)	Dec. 31, 2018 USD ($)
2019	$ 2,246
2020

XML

Note 9 - Commitments - Minimum Lease Payments for Lease Accounted for In Accordance With ASU 2016-02 (Details) - Subsequent Event [Member]	Mar. 20, 2019 USD ($)
2019	$ 30,225
2020	40,769
2021	41,840
2022	42,910
2023	43,980
2024	$ 11,062

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Note 9 - Commitments - Minimum Guarantee Payments Under Renewable License Commitments (Details)	Dec. 31, 2018 USD ($)
2019	$ 26,364
2020	3,000
2021

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Note 10 - Income Taxes (Details Textual)	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CAD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	34.00%	34.00%
Deferred Tax Assets, Valuation Allowance, Total	$ 275,846		$ 102,809
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	173,037		87,792
Tax Credit Carryforward, Amount	618,204
British Columbia Provincial Government [Member]
Proceeds from Tax Credit	$ 89,521	$ 116,085	$ 30,761	$ 39,919

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Note 10 - Income Taxes - Income Tax Reconciliation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Computed "expected" tax benefit (expense)	$ 544,495	$ 592,264
Reduction in income taxes resulting from income taxes in other tax jurisdictions	(337,087)	(494,697)
Other	(403)	(30)
Change in taxation rates in other jurisdictions	(2,933)
Change in exchange rates	58,486	21,016
Change in valuation allowance	(173,037)	(87,792)
Income tax recovery	$ 89,521	$ 30,761

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Note 10 - Income Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carry forwards	$ 275,846	$ 102,809
Valuation Allowance	$ (275,846)	$ (102,809)

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Note 11 - Related Party Transactions (Details Textual)	1 Months Ended			3 Months Ended	9 Months Ended	12 Months Ended
	Oct. 31, 2017 USD ($) shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2017 CAD ($) shares	Jun. 30, 2018 shares	Sep. 30, 2017 USD ($) shares	Dec. 31, 2018 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2017 CAD ($) $ / shares shares
Proceeds from Issuance of Private Placement							$ 2,551,500	$ 1,846,055
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares							2,130,000	725,000	725,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares							$ 0.47	$ 0.42
Allocated Share-based Compensation Expense, Total							$ 595,580	$ 43,212
Private Placement [Member]
Units Issued During the Period, Units, New Issues | shares	128,600	2,323,779	2,323,779		2,887,895
Proceeds from Issuance of Private Placement	$ 45,011	$ 790,281	$ 1,045,000		$ 1,010,763
Director and Officer [Member]
Due to Related Parties, Total						$ 0	0	33,000
Payment for Directors Fees						132,000	132,000	132,000
Director and Officer 1 [Member]
Due to Related Parties, Total						0	0	97
Director and Officer 2 [Member]
Due to Related Parties, Total						1,647	1,647	3,982
Director and Officer 3 [Member]
Due to Related Parties, Total						0	0	0
Payment for Directors Fees						80,128	80,128	77,310
Director and Officer 4 [Member]
Due to Related Parties, Total						0	0	0
Payment for Directors Fees						90,000	90,000	90,000
Independent Director [Member]
Due to Related Parties, Total						1,500	1,500	1,000
Payment for Directors Fees						4,500	4,500	5,500
Officer [Member]
Due to Related Parties, Total						7,317	7,317	6,106
Payment for Directors Fees						109,079	109,079	93,078
Shareholders Holding More Than 10% of the Company [Member]
Notes Payable, Related Parties						$ 0	$ 0	$ 600,235
Debt Instrument, Interest Rate, Stated Percentage						2.00%	2.00%	2.00%
Stock Issued During Period, Shares, Warrants Exercised | shares				1,200,000
Shareholders Holding More Than 10% of the Company [Member] | Private Placement [Member]
Units Issued During the Period, Units, New Issues | shares								1,200,000	1,200,000
Proceeds from Issuance of Private Placement								$ 408,102	$ 540,000
Related Parties [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares							700,000	125,000	125,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | (per share)						$ 0.54	$ 0.42	$ 0.42	$ 0.54
Allocated Share-based Compensation Expense, Total							$ 281,492	$ 13,110
Related Parties 2 [Member]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares							$ 0.50
Due from Related Parties, Total						$ 275,000	$ 275,000	0
Company of Which a Current Director of the Reporting Entity is a Director [Member]
Due from Related Parties, Total						$ 2,305	$ 2,305	$ 2,630

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Note 12 - Segmented Information - Revenue by Geographical Region (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Total revenue	$ 106,978	$ 93,475
Western Europe [Member]
Total revenue	13,994	10,940
Central Eastern and Southern Europe [Member]
Total revenue	864	486
Nordics [Member]
Total revenue	982	875
North America [Member]
Total revenue	73,618	63,155
Others [Member]
Total revenue	$ 17,520	$ 18,019

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Note 12 - Segmented Information - Equipment by Location (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Net Book Value	$ 16,255	$ 9,720
ANGUILLA
Net Book Value	368	552
CANADA
Net Book Value	12,911	8,353
UNITED KINGDOM
Net Book Value	$ 2,976	$ 815

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Note 13 - Concentrations (Details Textual)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Customer Concentration Risk [Member] | Advertising Revenue [Member]
Number of Major Customers	1	1

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Note 14 - Concentrations of Credit Risk (Details Textual)	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Cash and Cash Equivalents, at Carrying Value, Ending Balance	$ 641,536	$ 478,397
Cash, Uninsured Amount	$ 489,235	$ 336,756
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Number of Major Customers	3	4
Accounts Receivable, Net, Total	$ 8,814	$ 9,066

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Note 15 - Subsequent Event (Details Textual) - USD ($)		12 Months Ended
	Mar. 04, 2019	Dec. 31, 2018	Dec. 31, 2017
Payments of Stock Issuance Costs		$ 272,092	$ 25,816
Subsequent Event [Member] | Kidoz [Member]
Stock Issued During Period, Shares, Acquisitions	52,450,286
Business Combination, Consideration Transferred, Total	$ 20,603,656
Business Combination, Acquisition Related Costs	130,000
Payments of Stock Issuance Costs	$ 85,135