0001185185-14-001851.txt : 20140721 0001185185-14-001851.hdr.sgml : 20140721 20140721172503 ACCESSION NUMBER: 0001185185-14-001851 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20140531 FILED AS OF DATE: 20140721 DATE AS OF CHANGE: 20140721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OBJ Enterprises, Inc. CENTRAL INDEX KEY: 0001489256 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 271070374 STATE OF INCORPORATION: FL FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55080 FILM NUMBER: 14985255 BUSINESS ADDRESS: STREET 1: 1707 POST OAK BLVD. SUITE 215 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: (832) 900-9366 MAIL ADDRESS: STREET 1: 1707 POST OAK BLVD. SUITE 215 CITY: HOUSTON STATE: TX ZIP: 77056 FORMER COMPANY: FORMER CONFORMED NAME: Obscene Jeans Corp. DATE OF NAME CHANGE: 20100413 10-Q 1 objenterprises10q053114.htm 10-Q objenterprises10q053114.htm


UNITED STATES
SECURITY AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 10-Q
 

 
(MARK ONE)

þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2014
 
or
 
o
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________

 
Commission File Number: 000-55080
 
OBJ ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

Florida
 
27-1070374
(State or other jurisdiction of Incorporation or organization)
 
(I.R.S. Employer Identification Number)
     
1707 Post Oak Blvd, Suite 215
Houston TX
 
77056
(Address of principal executive offices)
 
(Zip code)

Registrant’s telephone number, including area code: (832) 900-9366

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 þ No o

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 Yes  þ No o
 
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
o
Accelerated filer
o
 
Non-accelerated filer
o
Smaller reporting company
þ
 
(Do not check if a smaller reporting company)
   

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

There were 75,313,465 shares of the Registrant’s common stock, $0.0001 par value, issued and outstanding as of July 21, 2014.
 
 
TABLE OF CONTENTS
 
PART I — CONSOLIDATED FINANCIAL INFORMATION
3
Item 1.
4
 
4
 
5
 
6
 
7
 
8
Item 2.
17
Item 3.
21
Item 4.
22
   
PART II — OTHER INFORMATION
23
Item 1.
23
Item 1A.
23
Item 2.
23
Item 3.
24
Item 4.
24
Item 5.
24
Item 6.
24
 
 
PART I FINANCIAL INFORMATION
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This Quarterly Report on Form 10-Q and the exhibits attached hereto contain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Quarterly Report on Form 10-Q, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission (“SEC”).
 
In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by law. We qualify all the forward-looking statements contained in this Quarterly Report by the foregoing cautionary statements.
 
OTHER PERTINENT INFORMATION
 
When used in this report, the terms, “OBJE,” “we,” the “Company,” “our,” and “us” refers to OBJ Enterprises, Inc., a Florida corporation.
 
 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
CONSOLIDATED BALANCE SHEET
(a Development Stage Company)
 (Unaudited)
 
   
Notes
   
May 31, 2014
   
August 31, 2013
 
ASSETS
                 
                   
CURRENT ASSETS
                 
Cash and cash equivalents
        $ 151,454     $ 75,190  
Accounts receivable
          357        
Total current assets
          151,811       75,190  
                       
 Investments in joint ventures- controlled by affiliate
          497,928          
                       
TOTAL ASSETS
        $ 649,739     $ 75,190  
                       
LIABILITIES AND STOCKHOLDERS’ EQUITY
                     
                       
CURRENT LIABILITIES
                     
Accounts payable and accrued liabilities
  4     $ 246,940     $ 92,381  
Current portion of convertible notes payable, net of discount
of $0 and $306, respectively
  5       4,904       76,310  
Current portion of convertible notes payable, net of discount
of $54,573 and $0, respectively – due to related party
          96,319        
Total current liabilities
          348,163       168,691  
                       
Convertible notes payable, net of discount of $281,982 and $521,630, respectively.
  5       26,194       41,643  
Convertible notes payable, net of discount of $0 and $0, respectively –due to related party
          500,288        
TOTAL LIABILITIES
          874,645       210,334  
                       
STOCKHOLDERS’ DEFICIT
                     
Common Stock, $0.0001 par value; 100,000,000 shares authorized; 24,989,939 and 15,234,339 shares issued and outstanding at May 31, 2014 and August 31, 2013, respectively.
  6       2,499       1,523  
Additional paid-in capital
          3,633,514       2,898,220  
Accumulated deficit
          (3,860,919 )     (3,034,887 )
Total stockholders’ deficit
          (224,906 )     (135,144 )
                       
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
        $ 649,739     $ 75,190  
 
On November 13, 2012 the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.
 
The accompany notes are an integral part of these unaudited consolidated financial statements.
 
(a Development Stage Company)
 (Unaudited)
 
   
Nine months ended
May 31,
   
Three months ended
 May 31,
   
Period From
September 21, 2009 (inception) through
May 31,
 
   
2014
   
2013
   
2014
   
2013
   
2014
 
                               
REVENUE
                             
Software Sales
  $ 1,065     $     $ 540     $     $ 1,065  
                                         
GROSS PROFIT
    1,065             540             1,065  
                                         
OPERATING EXPENSES
                                       
General and administrative expenses
    362,494       317,205       89,916       113,513       2,519,655  
Loss on acquisition of 20% of Novalon
    25,000                         25,000  
Net (income)/loss from minority owned entity
    2,072             2,072             2,072  
Impairment of investment in joint venture
                            191,500  
                                         
LOSS FROM OPERATIONS
   
(388,501
)     (317,205 )     (91,448 )     (113,513 )     (2,737,162 )
                                         
OTHER INCOME (EXPENSE)
                                       
Interest expense
    (437,531 )     (257,930 )     (198,604 )     (58,222 )     (1,123,757 )
                                         
NET LOSS
  $ (826,032 )     (575,135 )     (290,052 )     (171,735 )     (3,860,919 )
                                         
NET LOSS PER COMMON SHARE  –  Basic and fully diluted
  $ (0.04 )     (0.09 )   $ (0.01 )   $ (0.02 )        
                                         
COMMON SHARES OUTSTANDING Basic and fully diluted
    19,798,662       6,057,652       22,975,652       9,185,108          

 
On November 13, 2012 the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.
 
The accompany notes are an integral part of these unaudited consolidated financial statements.
 
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
(a Development Stage Company)
 (Unaudited)
 
   
Common Stock
   
Additional
Paid In
   
Accumulated
       
   
Shares
   
Amount
   
Capital
   
Deficit
   
Total
 
                               
BALANCE, September 21, 2009
        $           $     $  
                                         
Issuance of common stock for cash
    225,000       23       8,977             9,000  
Issuance of common stock for cash
    75,000       8       52,492             52,500  
Net loss for the period
                      (20,572 )     (20,572 )
                                         
BALANCE, August 31, 2010
    300,000     $ 31     $ 61,469     $ (20,572 )   $ 40,928  
                                         
Issuance of common stock for services
    37,500       3       619,997             620,000  
Net loss for the period
                      (1,267,017 )     (1,267,017 )
                                         
BALANCE, August 31, 2011
    337,500     $ 34     $ 681,466     $ (1,287,589 )   $ (606,089 )
                                         
Issuance of common stock for conversion of debt
    247,500       25       241,828             241,853  
Issuance of common stock for services
    22,500       2       314,998             315,000  
Discount on convertible notes payable
                436,913             436,913  
Net loss for the period
                      (886,997 )     (886,997 )
                                         
BALANCE, August 31, 2012
    607,500     $ 61     $ 1,675,205     $ (2,174,586 )   $ (499,320 )
                                         
Shares issued for rounding due to stock split
    539                          
Issuance of common stock for conversion of debt
    14,626,300       1,462       478,398             479,860  
Discount on convertible notes payable
                744,617             744,617  
Net loss for the period
                      (860,301 )     (860,301 )
                                         
BALANCE, August 31, 2013
    15,234,339     $ 1,523     $ 2,898,220     $ (3,034,887 )   $ (135,144 )
                                         
Shares issued for conversion of notes payable
    9,755,600       976       516,804             517,780  
Discount on issuance of convertible note payable
                218,490             218,490  
Imputed Interest
                               
Net Loss
                      (826,032 )     (826,032 )
                                         
BALANCE, May 31, 2014
    24,989,939     $ 2,499     $ 3,633,514     $ (3,860,919 )   $ (224,906 )

 
On November 13, 2012 the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.
 
The accompany notes are an integral part of these unaudited consolidated financial statements.
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
(a Development Stage Company)
(Unaudited)

 
   
Nine months ended May 31,
   
Period From
September 21, 2009 (inception) through
May 31,
 
    2014     2013     2014  
CASH FLOW FROM OPERATING ACTIVITIES:                  
Net Loss
 
$
(826,032
)
 
$
(575,135
)
 
$
(3,860,919
)
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Common stock issued for services
   
     
 —
     
935,000
 
Loss on acquisition of 20% of Novalon
   
25,000
     
 —
     
25,000
 
Loss from minority owned entity
   
2,072
     
     
2,072
 
Amortization of discount on convertible note payable
   
403,871
     
234,362
     
1,015,862
 
Changes in operating assets and liabilities:
                       
Accounts receivable
   
( 357
)
   
 —
     
( 357
)
Accounts payable and accrued liabilities
   
96,375
     
30,069
     
187,211
 
Accrued interest payable
   
33,660
     
23,568
     
109,439
 
NET CASH USED IN OPERATING ACTIVITIES
   
(265,411
)
   
(287,136
)
   
(1,586,692
)
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Cash paid to acquire 20% of Novalon
   
(25,000
)
   
 —
     
(25,000
)
Investment in joint venture –with related party
   
(500,000
)    
 —
     
(500,000
)
NET CASH USED IN INVESTING ACTIVITIES
   
(525,000
)    
 —
     
(525,000
)
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Proceeds from issuance of common stock
   
 —
     
 —
     
61,500
 
Proceeds from advances
   
216,675
     
361,110
     
1,551,646
 
    Proceeds from convertible debt – from related party
   
650,000
             
650,000
 
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
866,675
     
361,110
     
2,263,146
 
                         
NET INCREASE (DECREASE) IN CASH
   
76,264
     
73,974
     
151,454
 
                         
CASH, at the beginning of the period
   
75,190
     
2,652
     
 ―
 
                         
CASH, at the end of the period
 
$
151,454
   
$
76,626
   
$
151,454
 
                         
Supplemental Disclosures of Cash Flow Information:
                       
Cash paid during the period for:
                       
Interest
 
$
 —
   
$
 —
   
$
 —
 
Taxes
 
$
 —
   
$
 —
   
$
 —
 
                         
Noncash investing and financing transaction:
                       
Common stock issued for services
 
$
 —
   
$
 —
   
$
935,000
 
Convertible note payable received
   
650,000
     
     
650,000
 
Refinance of advances into convertible notes payable
 
$
158,490
   
$
248,272
   
$
406,762
 
Beneficial conversion on convertible note payable
 
$
218,490
   
$
248,272
   
$
466,762
 
Conversion of convertible notes payable.
 
$
516,804
   
$
170,860
   
$
1,109,780
 
 
The accompany notes are an integral part of these unaudited consolidated financial statements.
 
 
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
Note 1. General Organization and Business
 
OBJ Enterprises, Inc. (the “Company”), a Florida corporation, was formed as Obscene Jeans Corp. to design, develop, wholesale, market, distribute and sell a woman’s line of apparel using the name “Obscene Brand Jeans.” On July 27, 2012, the Company changed its name to OBJ Enterprises, Inc.
 
On November 10, 2011, the Company formed Obscene Interactive, LLC (“Obscene Interactive”), a wholly-owned subsidiary to pursue emerging opportunities in the digital gaming industry. Obscene Interactive pursues acquisition and internally develops property in the online and social media industry while exploring consumer gaming trends to develop games through joint venture agreements and partnerships.
 
On May 9, 2012 (revised on June 9, 2012), the Company engaged Street Source, LLC to act as an independent gaming developer for the Company through a joint venture agreement. The primary focus of this partnership is to develop online and social games leveraging emerging consumer gaming portals; such as smart phones and mobile devices.  On May 21, 2013, the joint venture formed Novalon Technologies, LLC (“Novalon”) to act as the operating entity for the joint venture. OBJE owned 80% of Novalon and Street Source, LLC retained a 20% ownership stake.
 
On October 4, 2013, OBJE purchased Source Street’s interest in Novalon and Source Street’s rights to 20% of the game and resulting profits from the Revised Joint Venture Agreement. As of the date of this report, Novalon’s brand name and intellectual property under Novalon Games are a wholly owned subsidiary of the Company. OBJE paid a total of $25,000 to acquire this interest from Source Street, with $20,000 paid immediately and the remaining $5,000 paid upon the successful completion of the Creature Taverns game. This acquisition represented the acquisition of the remaining 20% of Novalon as OBJE owned 80% under the Revised Joint Venture Agreement. This was an acquisition of a company controlled by OBJE. No amounts were recognized on the balance sheet as a result of this acquisition as Novalon had no assets prior to the acquisition. In accordance with ASC 985-20-25-1, all costs incurred to establish technological feasibility of a computer software product to be sold are research and development costs. The costs to acquire Novalon were expensed as a loss on the acquisition of 20% of Novalon.
 
On March 11, 2014, our wholly-owned subsidiary, Novalon Technologies LLC (“Novalon”), entered into a Software and Development and License Agreement (the “Development Agreement”) with Corv Studios LLC (“Corv”).

On March 5, 2014, Novalon entered into a Software License Agreement (the “License Agreement”) with Corv. Under the terms of the License Agreement, Novalon agreed to pay $10,000 for a non-exclusive license for the Pac-Ball application currently available on the Android platform (“Pac-Ball”) for a period of two years. In exchange, Novalon will have the right to sell the game and retain 50% of the revenue generated from those sales.

On May 21, 2014, OBJ Enterprises, Inc. (“OBJE” or the “Company”) entered into a Joint Venture Agreement (“Agreement”) with Great Outdoors, LLC (“GO”). Pursuant to the Agreement, the Company and GO created My Go Games LLC (“MGG”) to operate the joint venture. The purpose of the joint venture is to expand upon the Company’s and GO’s existing games – “GO Hunting: Shooting Sports” and “GO Hunting: Archery Edition” - and develop and commercialize new games. MGG is owned by GO (80%) and the Company (20%). The Agreement calls for the Company and GO to enter into a Member Control Agreement which permits the appointment of three governors, two to be appointed by GO and one to be appointed by the Company.
 
The Agreement grants the Company the right to acquire GO and MGG or their assets in exchange for an amount of shares of common stock equal to 80% of the post-issuance number of shares of the Company’s common stock.

During the period ended May 31, 2014 the Company made significant management changes. On May 27, 2014, the Company appointed Daniel J. Hammett as a director and Chairman of the Board of Directors. Also on May 27, 2014, Paul C. Watson resigned as Chairman of the Board. Mr. Watson will remain a Director and President of the Company.
 
 
The Company incorporated on September 21, 2009 (Date of Inception) with its corporate headquarters located in Sarasota, Florida. Its fiscal year-end is August 31.
 
Note 2. Going Concern
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of May 31, 2014, the Company has generated net losses since inception of $3,860,919.  For the nine months ended May 31, 2014, the company has a net loss of $826,032 and negative cash flow from operating activities of $265,411.  As of May 31, 2014, the Company has negative working capital of $196,352. The Company has has not emerged from the development stage.
 
These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the potential inability of the Company to continue as a going concern.
 
The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.
 
Management plans to address the Company’s financial situation as follows:
 
In the near term, management plans to seek investors or joint venture partners with the ability to assist the Company financially in its efforts to implement fully the Company’s business plan. Management continues to seek out financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance an appropriate joint venture partner will agree to acceptable terms, investors will continue to invest in the Company or new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.
 
In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow needed to finance the Company’s future growth. However, there is no assurances the Company’s planned activities will be successful, and there is no assurance the Company will attain profitability. The Company’s long term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and achieve adequate profitability and cash flows from operations to sustain its operations.
 
Note 3. Summary of Significant Accounting Policies
 
Interim Financial Statements
 
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the fiscal year ended August 31, 2013 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”).
 
The results of operations for the nine month period ended May 31, 2014 are not necessarily indicative of the results to be expected for the full fiscal year ending August 31, 2014.
 
Basis of Presentation
 
The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a going concern.
 
 
Development Stage Entity
 
The Company is a development stage company as defined by section ASC 915, Development Stage Entities.  The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.  All losses accumulated since inception have been considered as part of the Company’s development stage activities. The Company began generating revenue during the three months ended November 30, 2013. Once revenue exceeds a nominal amount, the Company expects to exit the development stage.
 
Principles of Consolidation
 
The condensed consolidated Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a “going concern”.
 
Use of Estimates
 
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
For the purpose of the financial statements, cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $151,454 and $75,190 at May 31, 2014 and August 31, 2013, respectively.
 
Cash Flows Reporting
 
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, and classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
 
Financial Instruments
 
The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.
 
FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
 
 
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
 
 
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
 
 
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
 
 
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.
 
Share-based Expense
 
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
 
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
 
Revenue Recognition
 
We derive revenue from the sale of virtual goods to GO-gamers – individuals who play our online or mobile games - and from the sale of advertising within our online and mobile games to our brand-partners – companies who seek to have their products featured in online and mobile games.
 
Online and Mobile Games
 
Currently, we operate half of our games as live services that allow GO-Gamers to initially download the game and play a basic version of the game for free. Within these games, GO-Gamers can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Primarily, GO-Gamers pay for our virtual currency – GO Bucks – using payment methods such as credit cards or PayPal.  The other half of our games are available for download for approximately $1.  Revenue from payments for initial download is recognized as though the game is a durable good (discussed below).
 
We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the GO-gamer; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid by the customer is fixed or determinable. For purposes of determining when the service has been provided to the GO-gamer, we have determined that an implied obligation exists to the paying GO-gamer to continue displaying the purchased virtual goods within the online game over their estimated life or until they are consumed. The proceeds from the sales of virtual goods are initially recorded in deferred revenue. We categorize our virtual goods as either consumable or durable. Consumable virtual goods, such as energy or ammo, represent goods that can be consumed by a specific GO-gamer action. Common characteristics of consumable goods may include virtual goods that are no longer displayed on the GO-gamer’s game board after a short period of time, do not provide the GO-gamer any continuing benefit following consumption or often times enable a GO-gamer to perform an in-game action immediately. For the sale of consumable virtual goods, we recognize revenue as the goods are consumed. Durable virtual goods, such as bows, rifles, or levels, represent virtual goods that are accessible to the GO-gamer over an extended period of time. We recognize revenue from the sale of durable virtual goods ratably over the estimated average playing period of paying GO-gamers for the applicable game, which represents our best estimate of the average life of our durable virtual goods. If we do not have the ability to differentiate revenue attributable to durable virtual goods from consumable virtual goods for a specific game, we recognize revenue from the sale of durable and consumable virtual goods for that game ratably over the estimated average period that paying GO-gamers typically play our games (as further discussed below), which are estimated to range from three to 24 months. Future paying GO-gamer usage patterns and behavior may differ from the historical usage patterns and therefore the estimated average playing periods may change in the future.
 
Currently, we have limited data to determine the consumption dates for our consumable virtual goods or to differentiate revenue attributable to durable virtual goods from consumable virtual goods. As we continue to improve our data capture capabilities, we will secure the necessary data for substantially all of our games, thus allowing us to recognize revenue related to consumable goods upon consumption. We expect that in future periods there will be changes in the mix of durable and consumable virtual goods sold, reduced virtual good sales in existing games, changes in estimates in average paying GO-gamer life and/or changes in our ability to make such estimates. When such changes occur, and in particular if more of our revenue in any period is derived from goods for which revenue is recognized over the estimated average playing period, or that period increases on average, the amount of revenue that we recognize in a future period may be reduced, perhaps significantly.
 
 
On a quarterly basis, we determine the estimated average playing period for paying GO-gamers by game beginning at the time of a GO-gamers’s first purchase in that game and ending on a date when that paying GO-gamer is no longer playing the game. To determine when paying GO-gamers are no longer playing a given game, we analyze monthly cohorts of paying GO-gamers for that game who made their first in-game payment between one and 12 months prior to the beginning of each quarter and determine whether each GO-gamer within the cohort is an active or inactive GO-gamer as of the date of our analysis. To determine which GO-gamers are inactive, we analyze the dates that each paying GO-gamer last logged into that game. We determine a paying GO-gamer to be inactive once they have reached a period of inactivity for which it is probable (defined as at least 80%) that a GO-gamer will not return to a specific game. For the payers deemed inactive as of our analysis date we analyze the dates they last logged into that game to determine the rate at which inactive GO-gamers stopped playing. Based on these dates we then project a date at which all paying GO-gamers for each monthly cohort are expected to cease playing our games. We then average the time periods from first purchase date and the date the last GO-gamer is expected to cease playing the game for each of the monthly cohorts to determine the total playing period for that game. To determine the estimated average playing period we then divide this total playing period by two. The use of this “average” approach assumes that paying GO-gamers become inactive at a relatively consistent rate for each of our games. If future data indicates paying GO-gamers do not become inactive at a relatively consistent rate, we will modify our calculations accordingly. If a new game is launched and only a limited period of paying GO-gamer data is available for our analysis, then we also consider other factors, such as the estimated average playing period for other recently launched games with similar characteristics, to determine the estimated average playing period.
 
Advertising
 
We have contractual relationships with our brand-partners for advertisements within our games. We recognize advertising revenue as advertisements are delivered to customers as long as evidence of the arrangement exists (executed contract), the price is fixed and determinable, and we have assessed collectability as reasonably assured. Certain branded virtual goods and sponsorships are deferred and recognized over the estimated average life of the branded virtual good or as the branded virtual good is consumed, similar to game revenue.  All arrangements directly between us and brand-partners are recognized gross equal to the price paid to us by the end advertiser since we are the primary obligor, and we determine the price.
 
Recently Issued Accounting Pronouncements
 
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
 
Note 4. Accounts Payable and Advances
 
During the nine months ended May 31, 2014, the Company received net, non-interest bearing advances from certain third parties totaling $58,185. The total amount due under these advances as of May 31, 2014 and August 31, 2013 was $ 216,675 and $0, respectively.  These advances are not collateralized and are due on demand. On February 28, 2014 $158,460 of the advances received were reclassified as a convertible note.
 
During the quarter ended May 31, 2014 the Company called a large sum on the accounts payable into question.  The total accrued amount in question is approximately $182,000 owed to K.M. Delaney & Associates (“KMDA”), a former vendor that provided a turnkey back-office solution including accounting, legal, treasury and office management services to the company.  In addition, KMDA and its lead attorney, Kathleen Delaney, acted as administrative agent to Vista View Ventures, Inc., Montego Blue Enterprises Corporation, Clearway Investments SA, and Outback Ventures AG (collectively, “Convertible Debt Counterparties”).  The Convertible Debt counterparties were companies that either (a) advanced funds to the Company, (b) held certain convertible debentures originated by the Company, or (c) purchased portions of convertible debentures issued by the Company to one of the other Convertible Debt Counterparties.  On May 6, 2014, the Company terminated its relationship with KMDA and Kathleen M. Delaney, and terminated any informal or formal funding agreements with any and all of the Convertible Debt Counterparties.  While the Company terminated all funding agreements with the Convertible Debt Counterparties, the Company is contractually obligated to adhere to the terms of its outstanding convertible debentures and will continue to do so.  In addition to terminating the aforementioned relationships, the Company began an internal review of the invoices generated, processed, and incorporated into the Company’s financial statements by KMDA that were payable to KMDA.  The Company has requested all relevant documentation from KMDA evidencing the validity of the accrued accounts payable, including, but not limited to, the contract governing such services, terms of payment, and invoices signed by a duly authorized officer of the Company.  Currently, Company legal counsel is communicating with KMDA to complete the internal review and achieve a resolution.  The Company is confident its internal review will prove fruitful; however, to be conservative, the full amount remains fully accrued on the balance sheet.
 
 
Note 5. Convertible Notes Payable
 
Convertible notes payable consist of the following as of May 31, 2014 and August 31, 2013:
 
   
May 31, 2014
   
August 31, 2013
 
Convertible note payable, dated August 31, 2011, bearing interest at 10% per annum, matures on August 31, 2013 and convertible into shares of common stock at $0.05 per share.
          19,468  
Convertible note payable, dated January 31, 2013, bearing interest at 10% per annum, matures on January 31, 2015 and convertible into shares of common stock at $0.10
    243       50,412  
Convertible note payable, dated May 31, 2013, bearing interest at 10% per annum, matures on May 31, 2015 and convertible into shares of common stock at $0.05
          172,450  
Convertible note payable, dated August 31, 2013, bearing interest at 10% per annum, matures on August 31, 2015 and convertible into shares of common stock at $0.05
    145,254.       323,895  
Convertible note payable, dated February 28, 2014, bearing interest at 10% per annum, matures on February 29, 2016 and convertible into shares of common stock at $0.05
    158,490        
Accrued interest payable
    9,093       73,664  
Total convertible notes payable and accrued interest
    313,080       639,889  
Less: current portion of convertible notes payable and accrued interest
    (4,904 )     (76,617 )
Less: discount on noncurrent convertible notes payable
    (281,982 )     (521,630 )
Noncurrent convertible notes payable, net of discount
  $ 26,194     $ 41,642  
 
Convertible notes payable due to a related party consist of the following as of May 31, 2014 and August 31, 2013:
 
   
May 31, 2014
   
August 31, 2013
 
Convertible note payable, dated April 30, 2014, bearing interest at 7% per annum, matures on April 30, 2016 and convertible into shares of common stock at $0.05
    150,000        
Convertible note payable, dated May 27, 2014, bearing interest at 7% per annum, matures on May 30, 2016 and convertible into shares of common stock at $0.05
    500,000        
Accrued interest payable
    1,180        
Total convertible notes payable and accrued interest
    651,180        
Less: current portion of convertible notes payable and accrued interest
    (150,892 )      
Less: discount on noncurrent convertible notes payable
             
Noncurrent convertible notes payable, net of discount
  $ 500,288     $  
 
The Company accrued interest in the amount of $33,660 during the nine months ended May 31, 2014.  This amount was unpaid as of May 31, 2014 and is included in convertible notes payable as of that date.  During the same period, the Company amortized $403,871 of the discount on convertible notes payable to interest expense.
 
During the nine months ended May 31, 2014, the holders of the Convertible Note Payable dated August 31, 2011 elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.04 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense. No gain or loss was recognized on the conversions, as they occurred within the terms of the Convertible Notes Payable agreement.
 
Date
 
Amount Converted
   
Common Shares Issued
   
Unamortized Discount
 
October 1, 2013
  $ 30,000       600,000        
October 4, 2013
    30,000       600,000        
October 15, 2013
    15,000       300,000        
Total
  $ 75,000       1,500,000     $  

 
During the nine months ended May 31, 2014, the holders of the Convertible Note Payable dated January 31, 2013, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.10 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense. No gain or loss was recognized on the conversions as they occurred within the terms of the Convertible Notes Payable agreement.
 
Date
 
Amount Converted
   
Common Shares Issued
   
Unamortized Discount
 
October 8, 2013
  $ 60,000       600,000     $ 21,805  
Total
  $ 60,000       600,000     $ 21,805  
 
 
During the nine months ended May 31, 2014, the holders of the Convertible Note Payable dated May 31, 2013, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.05 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense.
 
Date
 
Amount Converted
   
Common Shares Issued
   
Unamortized Discount
 
December 2, 2013
  $ 80,000       1,600,000     $ 67,263  
January 20, 2014
    40,000       800,000       36,004  
January 29, 2014
    40,000       800,000       36,929  
February 11, 2014
    22,780       455,600       20,259  
Total
  $ 182,780       3,655,600     $ 160,455  

 
During the nine months ended May 31, 2014, the holders of the Convertible Note Payable dated August 31, 2013, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.05 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense.
 
Date
 
Amount Converted
   
Common Shares Issued
   
Unamortized Discount
 
March 14, 2014
  $ 50,000       1,000,000     $ 30,865  
March 21, 2014
    50,000       1,000,000       46,357  
April 14, 2014
    50,000       1,000,000       45,389  
May 20, 2014
    50,000       1,000,000       44,674  
Total
  $ 200,000       4,000,000     $ 167,285  

Note 6. Stockholders’ Equity
 
Common Stock
 
The Company has authorized 100,000,000 shares of $0.0001 par value common stock.  There were 24,989,939 and 15,234,339 shares of common stock outstanding as of May 31, 2014 and August 31, 2013, respectively.
 
During the nine months ended May 31, 2014 the company has issued shares of common stock as a result of the conversion of Convertible Note Payable, as detailed in the following table:
 
Date
 
Amount Converted
   
Common Shares Issued
 
October 1, 2013
    30,000       600,000  
October 4, 2013
    30,000       600,000  
October 8, 2013
    60,000       600,000  
October 15, 2013
    15,000       300,000  
December 2, 2013
    80,000       1,600,000  
January 20, 2014
    40,000       800,000  
January 29, 2014
    40,000       800,000  
February 11, 2014
    22,780       455,600  
March 14, 2014
    50,000       1,000,000  
March 21, 2014
    50,000       1,000,000  
April 14, 2014
    50,000       1,000,000  
May 20, 2014
    50,000       1,000,000  
Total
  $ 517,780       9,755,600  
 
On May 21, 2014, the Company entered into a Joint Venture Agreement (“GO JV Agreement”) with Great Outdoors, LLC (“GO”). Pursuant to the GO JV Agreement, the Company and GO created My Go Games LLC (“MGG”) to operate the joint venture. The purpose of the joint venture is to expand  upon the Company’s and GO’s existing games and develop and commercialize new games. MGG is owned by GO (80%) and the Company (20%). The GO JV Agreement calls for the Company and GO to enter into a member control agreement which permits the appointment of three governors of MGG, two to be appointed by GO and one to be appointed by the Company.
 
On April 30, 2014 the Company entered into a convertible note with GO for $150,000.  On May 27, 2014 the Company entered into a convertible note with GO for $500,000.  The Company then made an initial investment in MGG with this cash.  Per the Master Services Agreement MGG must pay all operating expenses for the Company.
 
 
Below is a simple balance sheet for MGG for the period ended May 31, 2014.  The company recorded 20% of the loss on this minority investment which totaled $2,072.
 
My Go Games, LLC
 
Balance Sheet
 
As of May 31, 2014
 
       
   
Total
 
ASSETS
     
Cash
    498,946.47  
Total Assets
  $ 498,946.47  
         
         
LIABILITIES AND EQUITY
       
Accounts Payable (A/P)
    10,558.69  
Total Current Liabilities
  $ 10,558.69  
Long-Term Liabilities
       
Convertible Loan Payable
    500,000.00  
Total Long-Term Liabilities
  $ 500,000.00  
Total Liabilities
  $ 510,558.69  
Equity
       
Member Capital
       
GO, LLC Equity
    500.00  
Total Member Capital
  $ 500.00  
Retained Earnings
       
Net Income
    -12,112.22  
Total Equity
  $ - 11,612.22  
TOTAL LIABILITIES AND EQUITY
  $ 498,946.47  
 
Note 7. Related Parties
 
During the period ended May 31, 2014 the Company entered into multiple transactions with GO that have resulted in the two entities becoming related parties.  In April and May 2014, the Company entered into two convertible notes payable with GO totaling $650,000.  In May 2014, the Company and GO created MGG a joint venture company to continue developing and selling games.  The Company owns 20% of the JV company MGG while GO owns the remaining 80% (see Notes 6 and 9).
 
Note 8. Subsequent Events

On June 19, 2014, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Great Outdoors, LLC, a Delaware limited liability company (“GO”) and My GO Games, LLC, a Minnesota limited liability company (“MGG”), pursuant to which the Company issued 50,323,526 shares of its common stock (the “Exchange Shares”) for all of the issued and outstanding membership interests of MGG held by GO (the “Share Exchange”). Prior to the Share Exchange MGG was owned 20% by the Company and 80% by GO.
 
GO is owned 100% by Daniel Hammett, a director of the Company, and following the closing of the Share Exchange, the Company’s Chief Executive Officer.
 
Following the closing of the Share Exchange on June 19, 2014, MGG became a wholly-owned subsidiary of the Company and GO acquired 66.82% of the Company’s issued and outstanding shares of common stock.  The Share Exchange requires the Company to amend its articles of incorporation to (i) increase the total number of shares of common stock that the Company has authority to issue to 250,000,000 shares of common stock, par value $0.0001 (the “Authorized Share Increase”); (ii) change the name of the Company from “OBJ Enterprises, Inc.” to “MyGo Games Holding Co.” (the “Name Change”); and (iii) stagger positions on the Company’s Board of Directors into three classes, with the term of office of two director positions to expire at the annual meeting of shareholders next ensuing; another two director positions to expire one year after the annual meeting next ensuing; and another three director positions to expire two years after the annual meeting next ensuing (the “Staggered Board Approval”).
 
 
In connection with the Staggered Board Approval, any director appointed to fill a vacancy on the board by reason of death, resignation, removal from office, refusal to stand for re-election or otherwise shall be appointed for the remainder of the term of the class of the director they are appointed to replace. In the absence of a nomination for a successor at the end of a director’s term, the term of the then current director shall simply be extended for another full three-year term without further action being required.  Not more than one class of directors, being the class up for election at that year’s annual meeting, shall be subject to replacement by the shareholders during any single year. Any increase or decrease in the number of directors pursuant to the Company’s Articles of Incorporation or Bylaws shall be apportioned by resolution of the Company’s Board of Directors to be so apportioned among the director classes as to make all classes as nearly equal in number as possible. In no case will a decrease in the number of directors shorten the term of any incumbent director.
 
The Share Exchange also required the Company to amend its Bylaws to permit the Company’s Board of Directors to be not fewer than one nor more than ten directors and to consist of seven directors initially (the “Board Increase” and, collectively with the Authorized Share Increase, the Name Change and the Staggered Board Approval, the “Amendments”). The officers of the Company are authorized, each individually, to take any such actions that each deems appropriate, necessary or advisable to effect the above Amendments.
 
The Company’s Board of Directors recommended that its shareholders approve the Amendments and on June 23, 2014, GO, as the majority shareholder of the Company, executed a shareholder consent approving the Amendments.
 
In connection with the Share Exchange, the Company, GO and MGG entered into amended option agreements (the “Option Amendments”) with each of Daniel Hammett, Daniel Miller, and Paul Watson and certain employees of MGG that amended option agreements that MGG previously had entered into with each such persons.  Pursuant to each Option Amendment, in consideration for each such person’s continued employment at MGG, such person, the Company and MGG agreed that options to purchase membership interests of MGG were replaced with options to purchase shares of the Company’s shares of common stock at $0.05 per share (the “Company Options”).  Under these Company Options such persons have the right to acquire up to 82,660,000 shares of common stock of the Company.  None of the Company Options may be exercised until the Authorized Share Increase has become effective. The Company Options were issued pursuant to Section 4(a)(2) of the Securities Act based on representations of the holders of such options.
 
Following the Share Exchange with MGG and GO, on June 19, 2014, there were 75,313,465 shares of the Company’s common stock issued and outstanding and GO holds 66.82% of the issued and outstanding shares of Common Stock.  Further, pursuant to previously issued convertible notes of the Company, GO has the right to acquire an additional 13,000,000 shares of common stock in the Company.  If GO converted such convertible notes, GO would hold 71.70% of the Company’s issued and outstanding shares of common stock on an a partially-diluted basis.  Finally, Daniel Hammett, who is the controlling principal of GO, was also granted Company Options to purchase up to 30,000,000 shares of common stock of the Company.  If Mr. Hammett exercised such options, pursuant to his control of the shares of common stock held or acquirable by GO, Mr. Hammett would control 78.88% of the Company’s issued and outstanding shares of common stock on a partially-diluted basis.
 
On June 19, 2014, in connection with the Share Exchange, Paul Watson, the Company’s Chief Executive Officer and Secretary prior to consummation of the Share Exchange, resigned as Chief Executive Officer and Secretary of the Company.  Mr. Watson continues as the Company’s Chief Strategy Officer, President, Chief Financial Officer and Treasurer. In connection with the Share Exchange, on June 19, 2014, the Company’s Board of Directors appointed Daniel Hammett as Chief Executive Officer and Daniel Miller as Chief Operating Officer and Secretary.  Daniel Hammett is an equity owner of GO, Daniel Miller is the Chief Operating Officer of MGG.  Each of Mr. Hammett, Mr. Miller and Mr. Watson is a director of the Company and was a director at the time that the Company’s Board of Directors approved the Share Exchange.
 
On June 19, 2014, the Board recommended amendments to the Company Articles of Incorporation to effect the Authorized Share Increase, the Name Change and the Staggered Board Approval and the Board also recommended an amendment to the Company’s Bylaws to effect the Board Increase.  On June 23, 2014, stockholders of the Company approved the Amendments by written consent. In connection with the approval of the Amendments by written consent, the Company has filed a definitive Schedule 14C with the Commission on July 2, 2014, which more fully describes the Amendments. The Amendments will not go effective until twenty days after the mailing of a definitive Schedule 14C to the stockholders and approval of the Amendments by the Financial Industry Regulatory Authority.
 
On June 19, 2014, the Board of Directors of the Company amended the Company’s Bylaws to add certain officer positions to the Company and clarify the roles and duties of previously appointed officer positions of the Company.
 
Additional information about the Share Exchange is available on the Company’s report on Form 8-K, filed with the SEC on June 25, 2014. 
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes which appear elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements, please see “Cautionary Note Regarding Forward-Looking Statements” above.
 
Overview
 
We are a development stage company incorporated in the State of Florida on September 21, 2009, as a for-profit company, with an established fiscal year end of August 31. The original intent of the Company was to design a woman’s line of jeans branded as “Obscene Brand Jeans”.  In fiscal year 2011, the Company began to explore opportunities to diversify operations.  Management’s focus has been on opportunities in the online and social media industry, with specific focus on consumer gaming trends in order to develop online and mobile games through internal efforts, joint venture agreements and partnerships.  The Company continues to evaluate its branded jeans business and whether to abandon such efforts; currently, the Company allocates no resources to the branded jeans business.
 
Through our wholly owned subsidiaries, Novalon Technologies, LLC and My Go Games, LLC, the Company develops and publishes various online and mobile game titles.
 
Novalon Technologies
 
Novalon develops and publishes pay-to-play games sold through the Android and Apple marketplaces.
 
Novalon has two gaming applications available in the Android marketplace – Phantasmic and Creature Tavern – branded under the name Novalon Games.  In addition to the titles available for purchase, Novalon is developing, through a joint-venture agreement, the Android version of Bluff Wars and has an option to develop, market and distribute additional games with Bluff Wars, Inc.
 
My Go Games, LLC
 
My Go Games is a global, on-line and mobile game developer and publisher focused on free-to-play games.
 
MGG takes a proven formula combining (a) recognized branding and (b) enthusiast activities with low barriers to entry into a graphically rich massively multiplayer online (“MMO”) world, specifically crafted for various enthusiasts all over the globe. MGG develops and publishes exciting, intuitive, and fun games available to GO-gamers via PCs, mobile phones, tablets and other internet connectable devices.
 
MGG has launched GO Hunting:  Archery Edition and GO Hunting Shooting Sports, which are available online and for mobile.  Currently, MGG is developing new games, including titles such as “GO Fishing”, “GO Volleyball”, “GO Skiing”, “GO Snowboarding”, “GO Surfing” and others.
 
How We Generate Revenue
 
We have pay-to-play and free-to-play games in our portfolio of gaming titles.  As a result, we generate revenue through various channels and mechanisms, namely: game sales; brand-partnerships & advertising; virtual currency and virtual item sales; and brand-partner product sales.

Game Sales

Pay-To-Play.  For our pay-to-play games, we generate revenue through the sale of the games to GO-gamers.  Generally, the cost of the games is less than $1, and we recognize revenue from the sale of the game ratably over the estimated average period that paying GO-gamers typically play our games (see Revenue Recognition), which are estimated to range from three to 24 months.  Upgraded editions or new level packages can be developed and sold to augment a legacy title that proves popular to continue monetization.

Free-to-Play.  For our free-to-play games, we operate our games as free downloadable games. We generate revenue primarily from the in-game sale of virtual currency and items to our GO-gamers and in-game advertising to our brand-partners.

Brand-Partnerships & Advertising

We generate a portion of our revenue from brand-partners who want to be featured in our games.  The revenue generated is part fixed and part variable; however, at this time, all revenue from brand-partnerships & advertising is a small overall contributor to our total revenue.
 
 
The fixed component of brand-partner revenue is paid upon signing of an initial agreement with a brand-partner.  As part of the agreement, the brand-partner will pay a fixed amount to remain featured in the game; the revenue is recognized ratably over the term of the agreement.
 
The variable component of brand-partner revenue results from the sale of Brand-Partner Product Sales (see below).

Virtual Currency & Virtual Items

In our games developed by MGG, we incorporate a virtual currency – GO Bucks – that can only be redeemed for virtual items within the game and cannot be withdrawn. At this time, virtual currency purchased in one of our games cannot be used in another of our games. Revenue from the sale of our virtual currency is not recognized until the GO-gamer purchases an item with the virtual currency.

Our GO-gamers can purchase virtual items, which enhance and expand their game experience. These virtual items include items such as extra lives and skill-enhancing boosters, as well as the ability to unlock additional game content. Our micro-transaction model includes multiple opportunities throughout gameplay for our GO-gamers to buy virtual items. A typical “consumable” virtual item is used immediately and revenue is recognized upon the consumption. We offer “durable” virtual items in some of our games. A GO-gamer can use these items over extended periods of gameplay, and they typically have a higher purchase price. Nearly all virtual items are purchased with GO Bucks.  Revenue from durable virtual items is recognized over the estimated life of a paying GO-gamer for the specific game, which is between three and 24 months. The majority of our sales of virtual items are consumable in nature, with durable goods making up a relatively small percentage of the total mix.
 
The platform provider used by or GO-gamers processes most virtual currency purchases. Nearly all purchases of virtual items are made through Apple’s iOS, Google’s Android, Amazon’s Kindle and Stripe platforms. These platforms typically charge us approximately 30% of the after-tax payments they collect, which reflects their normal terms of trade. We recognize the gross amount of these transactions as revenue and record a corresponding cost of revenue for the amount paid to our platform partners.
 
Brand-Partner Product Sales

We generate a portion of our revenue from brand-partners who want to be featured in our games.  The revenue generated is part fixed and part variable; however, at this time, all revenue from brand-partnerships & advertising is a small overall contributor to our total revenue.

The variable component of brand-partner revenue results from the sale of a brand-partner’s products that are featured in our game or games.  Our GO-gamers are provided the ability to use real products virtually in our games; as a result, some GO-gamers choose to purchase the product from our brand-partners.  When a purchase is made from a brand-partner by a GO-Gamer, we receive a referral fee or commission from the brand-partner.  Revenue from the real product sale is recognized upon finalization of the product sale to the GO-gamer and recognized by us immediately.
 
Factors Affecting Our Performance
 
Studio and Game Development

We have invested in expanding our game studios across the United States and abroad as well as our technical and creative teams. We plan to continue to invest in our existing game studios, while creating additional studio capacity so that we can continue to develop new game IPs, operate existing titles and release new titles on an ongoing basis.  Our ability to hire quality engineering, technical and creative staff will be important for successful new game launches and to sustain our profitability.
 
Content Development: New Game Launches and Franchise Expansion

We have built a unique and differentiated model for developing and scaling our games. Our future revenue will depend on our ability to continue to efficiently develop and launch high-quality titles that become and remain popular, while expanding our existing successful game franchises. The success and timing of our title and franchise developments could vary in the future, which may in turn impact our future financial performance on a quarterly or annual basis.

Our Technology Platform

We have developed a proprietary technology infrastructure that offers a unique gameplay for our GO-gamers, creates an integrated development and service platform for our game studios, and provides scalability and efficiency across our core operations. This infrastructure has been a critical factor in support of our GO-gamer growth and has allowed us to maintain robust service levels for our GO-gamers while scaling our operations. Our ability to expand and enhance our technology and infrastructure will determine the scale of operation we can support and the quality of service we are able to provide our GO-gamers, as well as the required level of capital investment in the future, which in turn may affect our future financial performance and profitability. 
 
Distribution Platforms and GO-gamer Acquisition Channels

Our future success will depend on our ability to attract and retain brand-partners and GO-gamers and to provide our games on the most relevant platforms. To the extent that the way GO-gamers access and interact with our games changes, either through the introduction of new technologies, distribution platforms, or devices, or through changes to existing GO-gamer acquisition channels, the effectiveness and engagement with our games, as well as our ability to reach GO-gamers and potential GO-gamers, may vary, which may in turn affect our financial performance and future profitability.

Sustaining and Growing Our GO-gamer Network

We believe that building and sustaining a sizeable and loyal network of GO-gamers is critical to our future success, as the size of our GO-gamer network determines the maximum potential audience for the purchase of virtual items. The majority of our GO-gamer acquisition has been through unpaid channels. This allows us to achieve an attractive customer acquisition cost. Our ability to continue acquiring GO-gamers at attractive rates of return, sustain our current base of GO-gamers and maintain our network to enable cross-selling across our portfolio of games may change, which could in turn impact our financial performance.

Delivering GO-gamer Engagement

The ability of our games to engage and maintain the interest of our GO-gamers and encourage repeated play of not only a specific game, but our entire portfolio of games, on a regular basis, is critical to building a dynamic GO-gamer network that creates demand for the purchase of virtual items. The enduring quality of the games we develop, and our GO-gamers’ ability to access them on the most relevant platforms, may directly impact our GO-gamer engagement and in turn impact our financial performance.
 
Monetization

While GO-gamers are able to play most of our games for free, we generate the majority of our revenue from in-game sales of virtual currency and virtual items. Our ability to create engaging and relevant content and to offer virtual items, which enhance the GO-gamer experience, and therefore maintain or increase their propensity to purchase more, will be critical to our financial performance. Future monetization will therefore depend on the quality of the games we develop and distribute, and our ability to convert and retain GO-gamers as paying GO-gamers.
 
Share Exchange and Related Transactions
 
See Note 9 Subsequent Events regarding the Share Exchange.  Additional information about the Share Exchange is available on the Company’s report on Form 8-K, filed with the SEC on June 25, 2014. 
 
Critical Accounting Policies
 
We prepare our financial statements in conformity with US GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed financial statements.
 
While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with US GAAP, actual results could differ from our estimates and such differences could be material.
 
For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended August 31, 2013 on Form 10-K.
 
Plan of Operations
 
As a result of the Share Exchange Agreement signed June 19, 2014 between the Company, Great Outdoors, LLC, and My GO Games, LLC (“MGG”), the Company owns 100% of MGG.

MGG takes a proven formula combining (a) recognized branding and (b) enthusiast activities with low barriers to entry into a graphically rich MMO world, specifically crafted for various enthusiasts all over the globe. MGG develops and publishes exciting, intuitive, and fun games available to GO-gamers via PCs, mobile phones, tablets or other internet connectable devices.
 
MGG has launched “GO Hunting:  Archery Edition” and “GO Hunting Shooting Sports,” which are available online and for mobile.
 
 
MGG leverages its brand-partners’ social media, online media, and traditional print, audio, and television media outlets via featured posts, messages and spots mentioning its games to provide the greatest probability for GO-gamer acquisitions.  This approach keeps GO-gamer acquisition cost to a minimum.  While other companies have leadership in the console game market for various enthusiast sporting games, MGG has signed contracts with significant brand-partners and with celebrities to drive customers to the MGG website and games.

In the next 12 months, the Company will augment its current game title portfolio by developing and commercializing new games, including “GO Fishing”, “GO Volleyball”, “GO Skiing”, “GO Snowboarding”, and “GO Surfing” for online and mobile platforms.

In addition to the aforementioned developments, the Company will continue to evaluate various partnerships and joint-ventures with various gaming developers and publishers on an ongoing basis.
 
Our management is actively hiring technical, account management, sales, and finance personnel and interns, primarily located at the Company’s recently opened office in Austin, Texas. Our new CEO, COO, and CSO/CFO will be responsible for implementing our business plan. We intend to hire additional employees, independent consultants and expand our brand-partnership program to further expand our sales, marketing and distribution activities.
 
Results of Operations
 
We incurred a net loss of $826,032 for the nine months ended May 31, 2014. During this period, net cash used by operations was $265,411. As of May 31, 2014, we had working capital deficit of $196,352.
 
We continue to rely on additional funding to address operating shortfalls and do not foresee a change in this situation in the immediate future. We cannot guarantee we will be successful in our business operations. Our business is subject to inherent risks, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. Our management will continue to attempt to secure financing through various means including borrowing and investment from institutions, strategic partners and private individuals, but there is no assurance additional capital will be available to the Company when needed or on acceptable terms.
 
Nine months ended May 31, 2014 compared to the nine months ended May 31, 2013.
 
Revenue
Revenue increased to $1,065 for the nine months ended May 31, 2014, compared to $0 for the nine months ended May 31, 2013. We began generating revenue from the sales of our games during the nine months ended May 31, 2014. No revenue was generated prior to that time.
 
General and Administrative Expenses
We recognized general and administrative expenses in the amount of $362,494 and $317,205 for the nine months ended May 31, 2014 and 2013, respectively. The increase was primarily due to an increase in costs associated with developing games for sale.
 
Loss from Operations
We recognized losses from operations of $361,429 and $317,205 for the nine months ended May 31, 2014 and 2013, respectively. The increase in the loss from operations was due to the increase in general and administrative expenses discussed above.
 
Interest Expense
Interest expense increased from $257,930 for the nine months ended May 31, 2013 to $437,531 for the nine months ended May 31, 2014. Interest expense for the nine months ended May 31, 2014 included amortization of discount on convertible notes payable in the amount of $403,871, compared to $185,270 for the comparable period of 2013. The remaining increase is the result of the Company entering into interest-bearing convertible notes payable.
 
Net Loss
We incurred a net loss of $826,032 for the nine months ended May 31, 2014 as compared to $575,135 for the comparable period of 2013. The increase in the net loss was primarily the result of the increase in general and administrative expenses discussed above.
 
Three months ended May 31, 2014 compared to the three months ended May 31, 2013.
 
Revenue
No revenue was recognized during the three months ended May 31, 2013 and $540 the same period in 2014.
 
 
General and Administrative Expenses
We recognized general and administrative expenses in the amount of $89,916 and $113,513 for the three months ended May 31, 2014 and ended 2013, respectively. This decrease is due primarily to decrease management fees due to terminating a former vendor relationship in the current quarter.
 
Loss from Operations
We recognized losses from operations of $89,376 and $113,513 for the three months ended May 31, 2014 and ended 2013, respectively. Again, this remains relatively unchanged.
 
Interest Expense
Interest expense increased from $58,222 for the three months ended May 31, 2013 to $198,604 for the three months ended May 31, 2014. This was mainly due to higher amortization of discounts on convertible debt payable.
 
Net Loss
We incurred a net loss of $290,052 for the three months ended May 31, 2014 as compared to $171,735 for the comparable period of 2013.  The increase in the net loss was primarily the result of the increase in interest expense.
 
Liquidity and Capital Resources
 
At May 31, 2014, we had cash on hand of $151,454.  The company has negative working capital of $196,352. Net cash used in operating activities for the nine months ended May 31, 2014 was $265,411.
 
Currently, we do not have adequate funds to satisfy our working capital requirements for the next twelve months. We will need to raise additional capital through public or private financing as well as borrowings and other sources, in order to continue our operations. We believe we must raise an additional $750,000 to pay for expenses associated with our development over the next 18 months.  We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be hindered.
 
We intend to pursue capital through public or private financing as well as borrowings and other sources, in order to finance our businesses activities. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be hindered.
 
The Company currently has an off-balance sheet arrangement that will have or is reasonably likely to have a current or future effect on our financial condition or immediate access to capital.  See Off-Balance Sheet Arrangements below.
 
Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.
 
Additional Financing
 
The Company intends to seek additional financing through means such as borrowings from institutions, strategic partners or private individuals. There can be no assurance that the Company will be able to keep costs from being more than these estimated amounts or that the Company will be able to raise such funds. The Company may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable bankruptcy laws.
 
Off Balance Sheet Arrangements
 
The Company currently has an external source of liquidity or off-balance sheet arrangement that will have or is reasonably likely to have a current or future effect on our financial condition or immediate access to capital.  Through our Master Services Agreement with MGG, the Company has secured payment of all operating expenses for the Company.  MGG was recently capitalized with $500,000 by the Company to operate.
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
 
ITEM 4. CONTROLS AND PROCEDURES
 
Management’s Report on Disclosure Controls and Procedures
 
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of May 31, 2014. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of May 31, 2014, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
1.  
As of May 31, 2014, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.
 
2.  
As of May 31, 2014, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.
 
Our management, including our principal executive officer and principal financial officer do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
 
Change in Internal Control Over Financial Reporting
 
There was no change in our internal control over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
 
 
PART II — OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
On March 21, 2014, Daniel Hammett and Great Outdoors, LLC commenced an action against iEntertainment Network, Inc. in the United States District Court, Eastern District of North Carolina, Case No.: 4:14-cv-00044-BO alleging various causes of action arising out of Hammett’s separation from employment with iEntertainment Network, Inc. and a letter of intent between Great Outdoors, LLC and iEntertainment Network, Inc. related to a transaction that was never consummated; and seeking to rescind certain agreements with and enjoin certain conduct of iEntertainment Network, Inc.  Mr. Hammett subsequently became aware that on March 14, 2014, iEntertainment Network, Inc. commenced a lawsuit against Daniel Hammett and Great Outdoors, LLC in the United States District Court, Eastern District of North Carolina, Case No.: 5:14-cv-00157-BO alleging various causes of action arising out of Hammett’s employment with and separation from iEntertainment Network, Inc. and a letter of intent between Great Outdoors, LLC and iEntertainment Network, Inc. related to a transaction that was never consummated.   These two actions have been consolidated and are in the early stages of discovery.
 
ITEM 1A. RISK FACTORS
 
Not applicable.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the nine months ended May 31, 2014, the company issued shares of common stock as a result of the conversion of Convertible Notes Payable. No additional consideration was paid in connection with the conversion of the Convertible Notes Payable and the Company did not receive any additional proceeds from such conversions.  The shares of common stock were issued pursuant to the exemptions from the registration requirements of the the Securities Act of 1933, as amended (the “Securities Act”) provided under Section 3(a)(9) of the Securities Act and/or Section 4(a)(2) of the Securities Act based on the representations of the holders of the Convertible Notes Payable to the Company of certain matters related to the conversions.
 
Date
 
Amount Converted
 
Common Shares Issued
October 1, 2013
 
$
   30,000
 
600,000
October 4, 2013
   
30,000
 
600,000
October 8, 2013
   
60,000
 
600,000
October 15, 2013
   
15,000
 
300,000
December 2, 2013
   
 80,000
 
1,600,000
January 20, 2014
   
40,000
 
800,000
January 29, 2014
   
40,000
 
800,000
February 11, 2014
   
22,780
 
455,600
March 14, 2014
   
50,000
 
1,000,000
March 21, 2014
   
50,000
 
1,000,000
April 14, 2014
   
50,000
 
1,000,000
May 20, 2014
   
50,000
 
1,000,000
Total
 
$
517,780
 
9,755,600
 
On April 30, 2014, we issued a 7% Series A Convertible Note (“April Note”) in the amount of $150,000 USD and on May 27, 2014, we issued a 7% Series A Convertible Note (“May Note” together with the April Note, the “Notes”) in the amount of $500,000 USD, in both cases to Great Outdoors, LLC (“GO”). The Notes are convertible at the option of GO into shares of common stock of the Company, and at GO’s (or any subsequent holder’s) option, accrued interest, on the earlier of: (i) May 1, 2015 in the case of the April Note and May 28, 2016 in the case of the May Note or (ii) any Change of Control Transaction (as described below), at a conversion price of $0.05 per share of Common Stock, subject to certain restrictions defined in the Note. A Change of Control Transaction is defined as (a) any sale of equity securities or securities convertible into equity securities of the Company in an amount greater than $150,000 in the case of the April Note and $500,000 in the case of the May Note; (b) the removal or demotion of Paul C. Watson from his current positions of President and Chief Executive Officer of the Company or the removal or demotion of any director or corporate officer appointed by Paul C. Watson without the express written approval of such removal or demotion by Paul C. Watson, (c) any merger, consolidation, statutory share exchange or acquisition transaction involving the Company or any material subsidiary of the Company; (d) any sale of substantially all of the assets of the Company or any material subsidiary of the Company; or (e) any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company unless, following the completion of such transaction, the then existing shareholders of Company own or control, directly or indirectly, at least 50% of the voting power or liquidation rights of Company or the successor of such merger, consolidation or statutory share exchange. The Notes were issued for cash payments in the amount of the principal of each note.  The Notes were issued pursuant to the exemption from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act based on the representations of GO to the Company of certain matters related to the issuance.
 
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4. MINE SAFETY DISCLOSURES
 
Not applicable.
 
ITEM 5. OTHER INFORMATION
 
None.
 
ITEM 6. EXHIBITS
 
3.1
Articles of Incorporation 1
3.2
Amended and Restated Bylaws 3
3.3
Amended Articles of Incorporation dated June 27, 2012 2
4.1
4.2
10.1
31.1
31.2
32.1
32.2
101
XBRL Interactive data
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document

 
(1) Incorporated by reference to Exhibit 3.1 to our Form S-1 filed with the Commission on April 14, 2010
 
(2) Incorporated by reference to Exhibit 3.3 to our Form 10-Q filed with the Commission on July 16, 2012
 
(3) Incorporated by reference to Exhibit 3.01 to our Form 8-K filed with the Commission on June 25, 2014
 
(4) Filed herewith

 
 
Pursuant to the requirements 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.
 
 
OBJ Enterprises, Inc.
   
   
Date: July 21, 2014
BY: /s/ Daniel Hammett
 
Daniel Hammett
 
Chief Executive Officer
(Principal Executive Officer)
   

 
Date: July 21, 2014
BY: /s/ Paul Watson
 
Paul Watson
 
Chief Financial Officer
(Principal Financial and Accounting Officer)
 
   
 
 
25

 
EX-4.1 2 ex4-1.htm EX-4.1 ex4-1.htm
 
EXHIBIT 4.1
 
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE W I T H APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE CORPORATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

7.0% SERIES A CONVERTIBLE NOTE
No: 2014 Series A CN - 001
US$ 150,000 April 30, 2014

For value received, OBJ Enterprises, Inc., a Florida corporation (the “Company”), promises to pay to Great Outdoors LLC (the “Holder”), the principal sum of $150,000. Interest shall accrue from the date of this Convertible Note (this “Note”) on the unpaid principal amount at a rate equal to seven percent (7%) per annum, compounded annually. This Note is subject to the following terms and conditions.

1.  
Maturity. Unless converted as provided in Section 2, this Note will automatically mature and be due and payable on May 1, 2015 (the “Maturity Date”). Subject to Section 2 below, interest shall accrue on this Note but shall not be due and payable until the Maturity Date. Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company. The foregoing notwithstanding, prepayment in cash of the principal balance of this Note, together with all accrued and unpaid interest on the portion of principal so prepaid, may be made by the Company in whole or in part at any time without penalty, upon a five (5) business day notice (a “Pre-Payment Notice”). The Holder may convert the Note into common stock, in accordance with Section 2(c), during the five business day Pre-Payment Notice period; provided that notice of conversion is delivered to the Company prior to 2:00 p.m. (New York Time) on the fifth business day of the Pre-Payment Notice period.

2.  
Conversion; Payment; Etc.
a.  
This Note shall be convertible at any time, in whole or in part, at the option of the Holder, into such number of fully paid and nonassessable shares of Common Stock of the Company (“Common Stock”) by dividing (i) the entire principal amount of, and at the Holder’s option accrued interest on, this Note on the date of such optional conversion, by (ii) a conversion price of US$0.05 per share.
 
 
 

 
 
b.  
The conversion price shall be subject to adjustment from time to time as hereinafter provided in this Section 2(b):
i.  
If the Company at any time divides the outstanding shares of its Common Stock into a greater number of shares (whether pursuant to a stock split, stock dividend or otherwise), and conversely, if the outstanding shares of its Common Stock are combined into a smaller number of shares, the conversion price in effect immediately prior to such division or combination shall be proportionately adjusted to reflect the reduction or increase in the value of each such common share.
ii.  
If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of the Company’s Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for such Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, Holder shall have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Note and in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such shares of stock, other securities or assets as would have been issued or delivered to Holder if Holder had exercised this Note and had received such shares of Common Stock immediately prior to such reorganization, reclassification, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed to the Holder at the last address of the Holder appearing on the books of the Company the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase.
c.  
No fractional shares of the Company’s capital stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of shares to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note and the deliveries required pursuant to this Section 2 in connection with such conversion, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount and accrued interest being converted including without limitation the obligation to pay such portion of the principal amount and accrued interest.
d.  
The foregoing notwithstanding, prepayment in cash of the principal balance of this Note, together with all accrued and unpaid interest on the portion of principal so prepaid, may be made by the Company in whole or in part at any time without premium or penalty.

Notwithstanding any other provision hereof, no Holder shall convert this Note or any portion thereof, if as a result of such conversion the holder would then become a “beneficial owner” (as determined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 4.99% or more of the issued and outstanding Common Stock. For greater certainty, the Note shall not be convertible by the Holder to the extend that, if, after giving effect to such conversion, the holder of such securities, together with its affiliates, would in aggregate beneficially own, or exercise control or direction over that number of voting securities of the Company which is 4.99% or greater of the total issued and outstanding voting securities of the Company, immediately after giving effect to such conversion.
 
 
 

 
 
e.  
Payment of Interest. Upon conversion of the entire principal amount of this Note into the Company’s capital stock, any interest accrued on this Note that is not by reason of Section 2 hereof simultaneously converted into Common Stock shall be immediately paid to the Holder.
f.  
Payment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. This Note may not be prepaid at any time without the prior written consent of the Holder.
 
3.  
Due on Sale Clause. The Holder shall have the right, at its sole option, to declare this Note immediately due and payable irrespective of the Maturity Date specified herein ten business days prior to the effective date of any Change of Control Transaction undertaken without the prior written consent of the Holder, which consent the Holder shall have no obligation to give. A “Change of Control Transaction” means (a) any sale of equity securities or securities convertible into equity securities of the Company in an amount greater than $50,000; (b) the removal or demotion of Paul C. Watson from his current positions of President and Chief Executive Officer of the Company or the removal or demotion of any director or corporate officer appointed by Paul C. Watson without the express written approval of such removal or demotion by Paul C. Watson, (c) any merger, consolidation, statutory share exchange or acquisition transaction involving the Company or any material subsidiary of the Company; (d) any sale of substantially all of the assets of the Company or any material subsidiary of the Company; or (e) any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company unless, following the completion of such transaction, the then existing shareholders of Company own or control, directly or indirectly, at least 50% of the voting power or liquidation rights of Company or the successor of such merger, consolidation or statutory share exchange. In the event of a contemplated Change of Control Transaction, the Company shall provide the Holder at least Fifteen business days prior to the effective date of any Change of Control Transaction, except as may otherwise be prohibited by law.

4.  
Transfer; Successors and Assigns.
a.  
The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. This Note may be transferred, or divided into two or more Notes of smaller denomination, subject to the following conditions. The Holder, by acceptance hereof, agrees to give written notice to the Company before transferring this Note of such Holder’s intention to do so, describing briefly the manner of the proposed transfer. Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel. If in the opinion of the Company’s counsel the proposed transfer may be effected without constituting a violation of the applicable U.S. state or federal securities laws, then the Company, as promptly as practicable, shall notify the Holder of such opinion, whereupon the Holder shall be entitled to transfer this Note, provided that an appropriate legend may be endorsed on this Note respecting restrictions upon transfer thereof necessary or advisable in the opinion of counsel satisfactory to the Company to prevent further transfers which would be in violation of such securities laws or adversely affect the exemptions relied upon by the Company. To such effect, the Company may request that the intended transferee execute an investment letter satisfactory to the Company and its counsel.
 
 
 

 
 
b.  
A register of the issuance and transfer of this Note shall be kept at the office of the Company, and this Note may be transferred only on the books of the Company maintained at its office. Each transfer shall be in writing signed by the then registered Holder hereof or the Holder’s legal representatives or successors, and no transfer hereof shall be binding upon the Company unless in writing and duly registered on the register maintained at the Company’s office. Upon transfer of this Note, the transferee, by accepting the Note, agrees to be bound by the provisions, terms, conditions and limitations of this Note.
c.  
If in the opinion of the counsel referred to in this Section 4, the proposed transferor disposition of the Note described in the Holder’s written notice given pursuant to this Section 4 may not be effected without registration or without adversely affecting the exemptions relied upon by the Company, the Company shall promptly give written notice to the Holder and the Holder will limit its activities and restrict its transfer accordingly.

5.  
Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of law.

6.  
Notices. Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon delivery, when (a) delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), (b) seventy-two (72) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth herein or as subsequently modified by written notice or (c) sent by facsimile with a return confirmation received, addressed to the party to be notified at such party’s facsimile number as set forth herein or as subsequently modified by written notice.

7.  
Amendments and Waivers. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 7 shall be binding upon the Company, the Holder and each transferee of the Note.

Company hereby waives presentment for payment, notice of dishonor, protest and notice of protest. If this Note is not paid when due, the Company agrees to pay all costs of collection, including reasonable attorneys’ fees.

THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

OBJ ENTERPRISES, INC.




By: Paul C Watson
Its: President and CEO
Address: 1707 Post Oak Blvd, Suite 215, Houston TX 77056
EX-4.2 3 ex4-2.htm EX-4.2 ex4-2.htm
EXHIBIT 4.2
 
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE W I T H APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE CORPORATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

7.0% SERIES A CONVERTIBLE NOTE
No: 2014 Series A CN - 001
US$ 500,000 May 27, 2014

For value received, OBJ Enterprises, Inc., a Florida corporation (the “Company”), promises to pay to Great Outdoors LLC (the “Holder”), the principal sum of $500,000. Interest shall accrue from the date of this Convertible Note (this “Note”) on the unpaid principal amount at a rate equal to seven percent (7%) per annum, compounded annually. This Note is subject to the following terms and conditions.

1.  
Maturity. Unless converted as provided in Section 2, this Note will automatically mature and be due and payable on May 28, 2016 (the “Maturity Date”). Subject to Section 2 below, interest shall accrue on this Note but shall not be due and payable until the Maturity Date. Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company. The foregoing notwithstanding, prepayment in cash of the principal balance of this Note, together with all accrued and unpaid interest on the portion of principal so prepaid, may be made by the Company in whole or in part at any time without penalty, upon a five (5) business day notice (a “Pre-Payment Notice”). The Holder may convert the Note into common stock, in accordance with Section 2(c), during the five business day Pre-Payment Notice period; provided that notice of conversion is delivered to the Company prior to 2:00 p.m. (New York Time) on the fifth business day of the Pre-Payment Notice period.

2.  
Conversion; Payment; Etc.
a.  
This Note shall be convertible at any time, in whole or in part, at the option of the Holder, into such number of fully paid and nonassessable shares of Common Stock of the Company (“Common Stock”) by dividing (i) the entire principal amount of, and at the Holder’s option accrued interest on, this Note on the date of such optional conversion, by (ii) a conversion price of US$0.05 per share.
 
 
 

 
 
b.  
The conversion price shall be subject to adjustment from time to time as hereinafter provided in this Section 2(b):
i.  
If the Company at any time divides the outstanding shares of its Common Stock into a greater number of shares (whether pursuant to a stock split, stock dividend or otherwise), and conversely, if the outstanding shares of its Common Stock are combined into a smaller number of shares, the conversion price in effect immediately prior to such division or combination shall be proportionately adjusted to reflect the reduction or increase in the value of each such common share.
ii.  
If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of the Company’s Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for such Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, Holder shall have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Note and in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such shares of stock, other securities or assets as would have been issued or delivered to Holder if Holder had exercised this Note and had received such shares of Common Stock immediately prior to such reorganization, reclassification, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument executed and mailed to the Holder at the last address of the Holder appearing on the books of the Company the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase.
c.  
No fractional shares of the Company’s capital stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of shares to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note and the deliveries required pursuant to this Section 2 in connection with such conversion, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount and accrued interest being converted including without limitation the obligation to pay such portion of the principal amount and accrued interest.
d.  
The foregoing notwithstanding, prepayment in cash of the principal balance of this Note, together with all accrued and unpaid interest on the portion of principal so prepaid, may be made by the Company in whole or in part at any time without premium or penalty.
 
 
 

 
 
Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Debenture is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Debenture is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Debenture may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Debenture is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.   For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Debenture, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture held by the Holder.  The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Debenture held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply.  Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company.  The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Debenture.
e.  
Payment of Interest. Upon conversion of the entire principal amount of this Note into the Company’s capital stock, any interest accrued on this Note that is not by reason of Section 2 hereof simultaneously converted into Common Stock shall be immediately paid to the Holder.
 
 
 

 
 
f.  
Payment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. This Note may not be prepaid at any time without the prior written consent of the Holder.
 
3.  
Due on Sale Clause. The Holder shall have the right, at its sole option, to declare this Note immediately due and payable irrespective of the Maturity Date specified herein ten business days prior to the effective date of any Change of Control Transaction undertaken without the prior written consent of the Holder, which consent the Holder shall have no obligation to give. A “Change of Control Transaction” means (a) any sale of equity securities or securities convertible into equity securities of the Company in an amount greater than $150,000; (b) the removal or demotion of Paul C. Watson from his current positions of President and Chief Executive Officer of the Company or the removal or demotion of any director or corporate officer appointed by Paul C. Watson without the express written approval of such removal or demotion by Paul C. Watson, (c) any merger, consolidation, statutory share exchange or acquisition transaction involving the Company or any material subsidiary of the Company; (d) any sale of substantially all of the assets of the Company or any material subsidiary of the Company; or (e) any similar transaction involving the issuance, cancellation or restructuring of equity securities of the Company unless, following the completion of such transaction, the then existing shareholders of Company own or control, directly or indirectly, at least 50% of the voting power or liquidation rights of Company or the successor of such merger, consolidation or statutory share exchange. In the event of a contemplated Change of Control Transaction, the Company shall provide the Holder at least Fifteen business days prior to the effective date of any Change of Control Transaction, except as may otherwise be prohibited by law.

4.  
Transfer; Successors and Assigns.
a.  
The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. This Note may be transferred, or divided into two or more Notes of smaller denomination, subject to the following conditions. The Holder, by acceptance hereof, agrees to give written notice to the Company before transferring this Note of such Holder’s intention to do so, describing briefly the manner of the proposed transfer. Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel. If in the opinion of the Company’s counsel the proposed transfer may be effected without constituting a violation of the applicable U.S. state or federal securities laws, then the Company, as promptly as practicable, shall notify the Holder of such opinion, whereupon the Holder shall be entitled to transfer this Note, provided that an appropriate legend may be endorsed on this Note respecting restrictions upon transfer thereof necessary or advisable in the opinion of counsel satisfactory to the Company to prevent further transfers which would be in violation of such securities laws or adversely affect the exemptions relied upon by the Company. To such effect, the Company may request that the intended transferee execute an investment letter satisfactory to the Company and its counsel.
b.  
A register of the issuance and transfer of this Note shall be kept at the office of the Company, and this Note may be transferred only on the books of the Company maintained at its office. Each transfer shall be in writing signed by the then registered Holder hereof or the Holder’s legal representatives or successors, and no transfer hereof shall be binding upon the Company unless in writing and duly registered on the register maintained at the Company’s office. Upon transfer of this Note, the transferee, by accepting the Note, agrees to be bound by the provisions, terms, conditions and limitations of this Note.
 
 
 

 
 
c.  
If in the opinion of the counsel referred to in this Section 4, the proposed transferor disposition of the Note described in the Holder’s written notice given pursuant to this Section 4 may not be effected without registration or without adversely affecting the exemptions relied upon by the Company, the Company shall promptly give written notice to the Holder and the Holder will limit its activities and restrict its transfer accordingly.

5.  
Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Texas, without giving effect to principles of conflicts of law.

6.  
Notices. Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon delivery, when (a) delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), (b) seventy-two (72) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth herein or as subsequently modified by written notice or (c) sent by facsimile with a return confirmation received, addressed to the party to be notified at such party’s facsimile number as set forth herein or as subsequently modified by written notice.

7.  
Amendments and Waivers. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 7 shall be binding upon the Company, the Holder and each transferee of the Note.

Company hereby waives presentment for payment, notice of dishonor, protest and notice of protest. If this Note is not paid when due, the Company agrees to pay all costs of collection, including reasonable attorneys’ fees.

THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

OBJ ENTERPRISES, INC.




By: Paul C Watson
Its: President and CEO
Address: 1707 Post Oak Blvd, Suite 215, Houston TX 77056
 
EX-10.1 4 ex10-1.htm EX-10.1 ex10-1.htm
EXHIBIT 10.1
 
JOINT VENTURE AGREEMENT
 
THIS JOINT VENTURE AGREEMENT (the “Agreement”), dated as of May __, 2014 (the “Effective Date”) between OBJ Enterprises, Inc., a Florida corporation with its principal place of business at 1707 Post Oak Blvd., Suite 215, Houston, TX 77056 (“OBJE”), and Great Outdoors, LLC, a Delaware limited liability company with its principal place of business at 700 Hammett Lane, New Smyrna FL 32168 (“GO”).
 
RECITALS

1.  
OBJE is the business of developing and marketing PC and mobile based gaming software;

2.  
GO is in the business of developing and marketing branded software PC and mobile based gaming software;

3.  
OBJE and GO have entered into a non-binding Term Sheet dated the 28th day of April, 2014 (the "Term Sheet") setting forth the basic terms pursuant to which they would form and contribute to a new limited liability company for the purposes of jointly developing and marketing a branded gaming software platform with the goal of  merging the new company into OBJE in the future; and

4.  
OBJE and GO formed My Go Games, LLC, a Minnesota limited liability company (“MGG”) with OBJE owning twenty percent (20%) of the membership interests in MGG and Go owning eighty percent (80%) of the membership interests in MGG.

NOW, THEREFORE, in consideration of the mutual terms, conditions, covenants and promises herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
 
1.  
DEFINITIONS

The following capitalized terms not otherwise defined herein shall have the following meanings when used in this Agreement.
 
a.  
“Affiliate” means, with respect to a Party, a person, corporation, or other legal entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party.  For purposes of this definition “control” means the direct or indirect ownership of at least fifty percent (50%) of the outstanding voting securities of the controlled entity.

b.  
 “GO Technology” means any Invention owned by GO as of the Effective Date or any Invention acquired, licensed or developed exclusively by GO.

c.  
“GO Derivative Works” means any Improvement primarily on a GO Technology developed by GO, OBJE or both of them during the term of this Agreement.

d.  
“Change in Control Transaction” means any transaction or series of transactions (a) resulting in a consolidation, merger or other business combination of either Party with or into any other legal entity in which the Party is not the surviving entity; (b) any corporate transaction, or series of related transactions, resulting in the voting security-holders of such Party immediately prior to such transaction or transactions ceasing to own at least fifty percent (50%) of the voting securities of such Party after such transaction; (c) there is a sale or transfer of all or substantially all of the assets of a Party; (d) a Party enters into any dissolution, winding up, liquidation, or transaction or series of transactions pursuant to which its voting securities are converted to cash or property; or (e) a Party enters into an agreement providing for an event set forth in (a) through (d) above.

e.  
“OBJE Technology” means any Invention owned by OBJE as of the Effective Date or any Invention acquired, licensed or developed exclusively by OBJE.
 
 
 

 
 
f.  
“OBJE Derivative Works” means any Improvement primarily on a OBJE Technology developed by GO, OBJE or both of them during the term of this Agreement.

g.  
 “Commercial Products” means any products or services incorporating Joint Technology or Derivative Works.

h.  
“Confidential Information” means information and physical material not generally known or available outside of the Parties and information and physical material entrusted to either Party in confidence by a Third Party, including, without limitation, (a) Inventions or Improvements of either Party or developed in connection with this Agreement; (b) technical data, trade secrets, know-how, research, product or service ideas or plans, software codes and designs, developments, inventions, laboratory notebooks, processes, formulas, techniques, biological materials, mask works, engineering designs and drawings, hardware configuration information, lists of, or information relating to, employees and consultants of either Party (including, but not limited to, the names, contact information, jobs, compensation, and expertise of such employees and consultants), lists of, or information relating to, suppliers and customers of Either Party, price lists, pricing methodologies, cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical financial data, budgets or other information disclosed by either Party, directly or indirectly, whether in writing, electronically, orally, or by observation that the other Party knows or reasonably should know is proprietary or confidential.

i.  
“Derivative Works” means any and all GO Derivative Works or OBJE Derivative Works.

j.  
“Collaborative Technology” means any Invention or Improvement created, developed or discovered through the work of employees, consultants, advisors, or contractors of both Parties pursuant to their work undertaken under this Agreement; provided, however, that Collaborative Technology shall not include GO Technology, GO Derivative Works, OBJE Technology or OBJE Derivative Works.

k.  
“Contributed Technology” means GO Technology and OBJE Technology contributed to the Project pursuant to the Collaboration Plan.

l.  
“Field of Use” means the field of computer and mobile outdoors action video games.

m.  
“Improvement” means any Invention created, developed or discovered while using or practicing a GO Technology or OBJE Technology, as applicable.

n.  
“Invention” means any and all information means discoveries, developments, concepts, designs, ideas, know how, improvements, inventions, trade secrets and/or original works of authorship, whether or not patentable, copyrightable or otherwise legally protectable, including, without limitation, any product, machine, article of manufacture, biological material, mask work, method, procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design or configuration of any kind, or any improvement thereon.

o.  
"Project" means jointly developing and marketing a branded gaming software platform through MGG with the intention of merging MGG into OBJE.

p.  
"Project Assets" means those assets listed in Schedule "A" attached hereto and any future assets purchased by or on behalf of MGG and all other property, whether real or personal, which is owned, leased, held, developed, constructed or acquired for MGG by or on behalf of the Parties.

q.  
"Project Loans" means (i) those loans contributed by OBJE to MGG that are listed in Schedule "C" attached hereto, (ii) those loans contributed by GO to MGG that are listed in Schedule “D” attached hereto and any and all future loans, debts, obligations incurred by MGG in accordance with the terms and provisions defined herein.
 
 
 

 
 
r.  
“Membership Interest” shall have the same meaning as set forth in the Operating Agreement and Member Control Agreement of MGG.

s.  
“Net Revenue” means the total revenue received by a Party, Affiliate, or Sublicensee of a Party for sale, distribution, licensing or other disposition of Contributed Technology, Derivative Works or Joint Technology or a product or service incorporating any of the foregoing, less the following to the extent actually incurred or allowed:  (i) the reasonable costs or royalties paid by the Party to a Third Party in connection with the manufacture, distribution disposition of such products or any payment of Additional Costs; (ii) discounts, including cash discounts, rebates, or other price reductions or allowances on such product, service or technology; (iii) credits or allowances actually granted on claims, rejections or returns of such products; (iv) freight, postage, shipping and insurance charges paid for delivery of such products; and (v) any taxes, duties or other governmental charges levied on such products, services or technologies or measured by the billing amount of such products, services or technologies, when actually included in billing for such products or services; provided, however, that Net Revenue shall not be reduced by either Party’s income or like taxes with respect to such Party’s share of Net Revenue hereunder.

t.  
A “Party” means either GO or OBJE, which are referred to collectively as the “Parties.”

u.  
“Sublicensee” means a Third Party expressly licensed by the Parties to make, sell, or otherwise distribute or dispose of any products or services incorporating any Derivative Works or Joint Technology.

v.  
“Third Party” means an individual or legal entity other than the Parties or an affiliate of either Party.

2.  
INITIAL CONTRIBUTIONS & INTERESTS

a.  
The Parties contribute the following as their initial contributions to the Project:

i.  
OBJE, as its initial contribution, hereby contributes all of its interest and title in the Assets set forth in Schedule "A" hereto.

ii.  
GO, as its initial contribution, hereby contributes all of its interest and title in the Assets set forth in Schedule "B" hereto.

b.  
The Parties initial Interests are reflected in their respective ownership of Membership Interests in MGG in the following percentages:

i.  
OBJE - 20%

ii.  
GO - 80%

c.  
Except as otherwise provided herein, the Parties shall each bear their own costs and all liabilities arising under this Agreement.

d.  
All revenues and benefits derived from the Project shall be received by the Parties as distributions from MGG in the ratio of their respective Membership Interests in MGG.  All obligations and liabilities incurred in respect of, the Project shall be received or borne by MGG.

3.  
GOVERNANCE & MANAGEMENT OF MGG

a.  
The Parties will enter into a Member Control Agreement for MGG which shall provide, among other things, that MGG will be governed by a three member Board of Governors, which shall be appointed according to the following:
 
 
 

 
 
i.  
One Governor shall be appointed by OBJE;

ii.  
Two Governors shall be appointed by GO.

b.  
Day to day operations of MGG and strategic collaboration between the Parties will be determined by the MGG Board who may delegate certain responsibilities to officers/managers consistent with the MGG Operating Agreement and Member Control Agreement.

4.  
COLLABORATION AND DEVELOPMENT

a.  
Development.  Each of the Parties shall, commencing on the Commencement Date, use its best efforts to engage in collaborative research and development with the general goal of developing Improvements to the GO Technology and OBJE Technology and Joint Technology within the field of use.  The specific scope of research, development, and marketing to be undertaken through MGG shall be determined by the MGG Board.  

b.  
Participation on MGG Board.  As is more specifically set forth in the MGG Operating Agreement and Member Control Agreement, Each of the Parties’ has designated their representative(s) to represent them on the MGG Board.  The MGG Board shall meet within ten (10) days of the Effective Date, and determine the date upon which the Project shall commence (the “Commencement Date”), which shall be within thirty (30) days of the initial meeting of the MGG Board, and the term of the Project (the “Project Term”), which shall not be greater than five (5) years without the written consent of both Parties.

c.  
Rights and Duties of the MGG Board.  The MGG Board shall have the authority and obligations as set forth in the MGG Operating Agreement and Member Control Agreement. The Parties respective MGG Board designees shall report collaborative research, development results and recommendations to their respective Officers and Directors or Governors as the case may be.

d.  
Meetings of the MGG Board.  The MGG Board shall act through regular or special meetings or through unanimous written consent pursuant to the MGG Operating Agreement and Member Control Agreement.

e.  
Contributions.  
i.  
OBJE will take all steps necessary to contribute to MGG personnel, intellectual property, and other assets identified on Schedule “A” in a timely manner.
ii.  
GO will take all steps necessary to contribute to MGG personnel, intellectual property, and other assets identified on Schedule “B” in a timely manner

f.  
 Each of the Parties shall bear its own expenses with respect to this Agreement and, unless specifically agreed to in writing otherwise, shall be solely responsible for compensating its Staff, making tax withholding or necessary payments with respect to its Staff, and for withholding or paying any applicable taxes, duties or other fees on any amounts paid to it hereunder, all in compliance with applicable law.

5.  
INTELLECTUAL PROPERTY & LICENSING

a.  
Retention of Separate Intellectual Property.  OBJE shall retain all right, title and interest in any and all OBJE Technology, and GO shall retain all right, title and interest in any and all GO Technology.  Nothing hereunder or under the Collaboration Plan shall be construed as an assignment or license of any OBJE Technology to GO or MGG, or GO Technology to OBJE or MGG except as expressly set forth herein.
 
 
 

 
 
b.  
Research and Development License.  Subject to the terms of this Agreement, each of the Parties’ hereby grants to MGG and the other a non-exclusive, royalty free, fully-paid up worldwide license to use any Contributed Technology, Derivative Works or Collaborative Technology solely for research or development as specified in this Agreement, subject to the following restrictions:

i.  
No Sublicenses. OBJE shall not have any right to sublicense any GO Technology even if it is also Contributed Technology.  GO shall have no right to sublicense any OBJE Technology even if it is also Contributed Technology.  Neither Party shall have the right sublicense Derivative Works except as expressly set forth herein.

ii.  
No Competitive Uses.  Neither Party shall have any license hereunder to use Contributed Technology, Derivative Works or Collaborative Technology to independently develop Improvements that compete, directly or indirectly, with the actual or anticipated products or services of the other Party; provided, however, that this provision shall not prohibit or restrict the rights of either party to use its own Contributed Technology in any manner it may choose.

c.  
Ownership After Termination.  Upon the expiration or termination of this Agreement, the Research and Development License set forth in Section 4.b. hereof shall terminate, and the Parties shall mutually determine in good faith whether any Invention or Improvement created, developed or conceived during the term of this Agreement is a GO Derivative Work, an OBJE Derivative Work, or Collaborative Technology.

i.  
OBJE hereby assigns and transfers all of its right, title, and interest in any and all GO Derivative Works to GO, and hereby assigns, transfers and quitclaims any and all claims, causes or rights of action, then existing or thereafter accrued, for infringement of any such Improvements to GO.  OBJE agrees that, following such assignment, it shall have no further licenses or other rights with respect to the GO Derivative Works.

ii.  
GO hereby assigns and transfers all of its right, title and interest in any and all OBJE Derivative Works to OBJE, and hereby assigns, transfers and quitclaims any and all claims, causes or rights of action, then existing or thereafter accrued, for infringement of any such Improvements to OBJE. GO agrees that, following such assignment, it shall have no further licenses or other rights with respect to the OBJE Derivative Works.

iii.  
GO and OBJE hereby assign and transfer all of their right, title and interest in any and all Collaborative Technology created, developed or conceived during the term of this Agreement to MGG.

d.  
Assistance.  Each of the Parties shall take all actions and execute all instruments necessary to register, protect, enforce or defend any intellectual property rights of any Party under this Section 4, including without limitation assisting in the preparation or prosecution of any application for intellectual property rights, or participating in the prosecution or defense of any lawsuit with respect to such rights, at the expense of the Party asserting such rights; provided, that if such rights relate to Derivative Works or Joint Technology that has not been assigned to either Party hereunder pursuant to 3.c. hereof, the Parties shall jointly bear all costs and expenses (including reasonable attorney’s fees) in protecting, enforcing or defending such rights..  The Parties’ obligations under this Section shall survive until the last to expire of any such intellectual property rights.

6.  
COMMERCIALIZATION

a.  
Agreement to Commercialize.  Upon the determination by the MGG Board that the Project has resulted in a commercially viable Derivative Work or Collaborative Technology, the Parties shall grant MGG a non-exclusive, royalty free, fully-paid up worldwide license to use any Contributed Technology, Derivative Works or Joint Technology to use such Contributed Technology, Derivative Work or Joint Technology through the sale or distribution of Commercial Products or the licensing of such Derivative Works or Joint Technology.
 
 
 

 
 
b.  
Revenue Share.  The Parties’ shall share revenue through MGG distributions which shall be based upon their respective Membership Interests in MGG.

c.  
Additional Costs.  The Parties’ shall determine in good faith prior to the commercialization of any Commercial Product or licensing of technology under this Section 5, the Additional Costs owing to either Party.  Such Additional Costs shall be paid out of the revenues generated from any Commercial Product or license with respect to which such Additional Costs apply prior to the distribution of revenues pursuant to Section 5.b.

7.  
RIGHTS AND DUTIES OF THE PARTIES

a.  
Relationship of the Parties.  Nothing in this Agreement shall be construed to create a partnership, joint venture, employment or agency relationship among the Parties, their Affiliates, or their respective Staff.  Each Party shall be only an independent contractor of the other Party and shall have no authority to bind the other Party or act on the other Party’s behalf.

b.  
Retention of Records; Audit:

i.  
Research and Development.  Each Party shall retain and assure that their Staff retains adequate records documenting all research and development efforts under the Project, such that either Party may assess and continue to in such research and development efforts following termination or expiration of this Agreement.  Upon termination or expiration of this Agreement, each Party shall provide to the other Party any and all documents or other records, in any form, relating to any Derivative Works or Joint Technology assigned to such Party hereunder, shall respond to any reasonable requests for additional information by such Party, and shall destroy all copies of such documents or records in its possession that relate solely to such Derivative Works or Joint Technology, and confirm in writing that it has done so.

ii.  
Records of Additional Costs and Revenue.  Each Party shall maintain complete and accurate records of any Additional Costs, revenues from commercialization, or Revenue Share earned by such Party for a period of three (3) years after, as applicable, (i) the later of date upon which such Additional Costs are incurred or paid, (ii) the date such revenues are received, or (iii) the date such Revenue Share is paid, in sufficient detail to permit the other Party to confirm the accuracy of all payments due hereunder.  A Party entitled to payments hereunder shall have the right to cause an independent, certified public accountant reasonably acceptable to the other Party (and who has executed a confidentiality agreement with the Party to be audited) to audit such records to confirm that the Additional Costs, revenues from commercialization, and Net Revenues were accurate as stated to such Party; provided, however, that such auditor shall not disclose the audited Party's confidential information to the other Party, except to the extent such disclosure is necessary to verify the amount of royalties and other payments due under this Agreement. A copy of any report provided by such accountant shall be provided to the audited Party at the time that it is provided to the auditing Party.  Such audits may be exercised once a year, within three (3) years after the period to which such records relate, at mutually acceptable dates and times, on not less than thirty (30) days advance notice.  Any amounts shown to be owing by such audits shall be paid immediately with interest in the amount of one percent (1%) per month (or the maximum amount permitted by law, if less) from the date first owed until paid.  The auditing Party shall bear the full cost of such audit unless such audit discloses that royalties actually paid by the audited Party are more than five percent (5%) less from the amount of royalties and/or other payments actually owed.  In such case, the audited Party shall bear the full cost of such audit.
 
 
 

 
 
c.  
Confidentiality.  Except as expressly authorized hereunder, or otherwise agreed in writing, the Parties’ agree that for the term of this Agreement and for a period of ten (10) years after (or the maximum period authorized by law, if shorter) a party gaining access to Confidential Information hereunder shall (a) keep such information in strictest confidence, using commercially reasonable measures to protect such information of at least the same degree as it uses in protecting its own confidential and proprietary information, (b) not use Confidential Information for any purpose other than as provided in this Agreement, and (c) not disclose such Confidential Information to any Third Party.

i.  
Each Party shall only share Confidential Information with those members of its Staff that are expressly approved in writing by the Project Lead of the other Party after such Staff have executed an agreement, naming the other Party as a third-party beneficiary, agreeing to be bound by the obligations of this Section 6.c.

ii.  
Immediately upon the expiration or termination of this Agreement, each Party shall destroy all Confidential Information provided by the other Party or generated during the term of this Agreement, except Confidential Information relating to such Party’s Contributed Technology or Derivative Works or Joint Technology assigned to such Party hereunder, and confirm in writing that it has done so.

iii.  
Exclusions.  The obligations set forth in this Section 6.c. shall not apply where the receiving Party can establish by competent proof that such Confidential Information (i) was already known to the receiving Party, other than under a confidentiality obligation, at the time of disclosure by the disclosing Party; (ii) was generally available to the public or part of the public domain at the time of disclosure to the receiving Party; (iii) became generally known or publicly available other than through any act or omission of the receiving party; or (iv) was disclosed to the receiving Party, other than under a confidentiality obligation, by a Third Party who had no obligation to keep such information confidential.  A Party may disclose Confidential Information upon an order by a court or regulatory body of competent jurisdiction; provided, that such Party must notify the other Party immediately upon the receipt of a demand for such Confidential Information, and take all reasonable steps to assist the other Party in protecting or limiting disclosure of such Confidential Information.

iv.  
Non-Competition.  To the greatest extent permitted by applicable law, each of the Parties agrees to cease and refrain, during the term of this Agreement from undertaking any activities that compete with the other Party within the Field of Use; provided, however, that neither Party shall be prohibited from developing or marketing any product, service or technology, or licensing any technology or intellectual property, developed independently of this Agreement, not utilizing any Derivative Works or Joint Technology, and not using any Confidential Information.

1.  
To the maximum extent permitted by law, for the term of this Agreement, and for a period of one (1) year hereafter, neither Party shall directly or indirectly solicit, induce, recruit or encourage any of the other Party’s employees or consultants to terminate their relationship with such Party, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of such Party, either for itself or for any Third Party.

2.  
To the maximum extent permitted by law, for the term of this Agreement and for a period of one (1) year hereafter, neither Party shall use any Confidential Information of the other Party to negatively influence any of the other Party’s clients or customers from purchasing such Party’s products or services or licensing such Party’s technology, or solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct any purchase of products and/or services or any license of technology to any person, firm, corporation, institution or other entity in competition with the business of such Party.
 
 
 

 
 
d.  
Duties Upon Change in Control Transaction:  Any Party who accepts a bona fide offer to engage in a Change in Control Transaction or does engage in a Change in Control Transaction shall provide written notice to the other Party immediately upon the earliest of (a) its acceptance of such offer, (b) its agreement to enter such transaction, or (c) the consummation of such a transaction.
 
8.  
ACQUISITION OF GO AND MGG

a.  
During the term of this Agreement and for a period of one (1) year hereafter, OBJE or its designee shall have the option, in its sole and exclusive discretion, to acquire GO and MGG or, at OBJE’s election, all of the assets of GO and MGG (including any intellectual property assigned to GO hereunder) for aggregate consideration of a number of shares that results in GO and MGG collectively owning eighty percent (80%) of the common stock of OBJE, par value $0.0001, adjusted to reflect any substitution of shares, stock dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, or other similar transactions.  Such acquisition shall take place pursuant to an agreement and plan of merger, asset acquisition agreement, or like agreement, in compliance with applicable law, with customary representations, warranties, and covenants.   OBJE may exercise this option by providing thirty (30) days written notice to GO and/or MGG of its intention to acquire GO and/or MGG or the assets of GO and/or MGG, and GO and/or MGG shall take all actions and execute all instruments necessary to effectuate such transaction.

9.  
REPRESENTATIONS AND WARRANTIES

Each of the Parties represents and warrants to the other Party as follows:

a.  
As of the Effective Date, it is a duly formed, validly existing legal entity in good standings under the laws of the jurisdiction in which it was formed.  It has the power and authority to carry on its business as it is now being conducted, and is licensed and qualified to do business in any jurisdiction in which such license or qualification is necessary, unless its failure to be so licensed and qualified would not have a material adverse effect.  The undersigned has authority to enter this Agreement on behalf of it, and it has secured all necessary approvals, votes, or authorizations to execute this Agreement and carry out the transactions contemplated hereby.  The execution, delivery and performance of this Agreement does not conflict with any agreement, instrument or understanding of such Party, whether oral or written, or any law, regulation, or order of any court, government body or other agency with jurisdiction over it.

b.  
As of the Effective Date and the Commencement Date, such Party exclusively (and not jointly) owns all of the right, title and interest in any and all Contributed Technology contributed by such Party to the Project, and has not granted any ownership interests, exclusive licenses, security interests, options or other interests or licenses, or entered any agreements, that would conflict or interfere with the rights granted hereunder or the purposes of this Agreement.

c.  
As of the Effective Date and throughout the term of this Agreement, such Party has not granted and will not grant any rights to any other party in any Contributed Technology, Derivative Works or Joint Technology within the Field of Use that would conflict, interfere or be inconsistent with rights granted hereunder or the purposes of this Agreement.

10.  
INDEMNIFICATION

a.  
Definitions:  For purposes of this provision, “Indemnified Party” means a Party entitled to indemnification hereunder and its Affiliates, parents, successors, assign employees, officers, managers, directors, agents, consultants, advisors or representatives.  “Indemnifying Party” means the party obligated to provide such indemnification, and its Affiliates, parents, successors, assigns, employees, officers, managers, directors, agents, consultants, advisors or representatives.  “Indemnified Claims,” means any claim, cost or expense arising from (a) the Indemnifying Party’s breach of any covenant, representation or warranty hereunder, (b) any claim that Contributed Technology contributed by the Indemnifying Party breaches any intellectual property rights of any Third Party; (c) any claim that the Indemnifying Party’s actions in entering this Agreement or performing its obligations hereunder violated any legal or contractual obligation to any Third Party; (d) any claim that any product or service manufactured or distributed by the Indemnifying Party damaged or caused harm to any Third Person; or (e) arising from the gross negligence, recklessness or willful misconduct of the Indemnifying Party.
 
 
 

 
 
b.  
Indemnification.  The Indemnifying Party agrees to defend, indemnify, and hold the Indemnified Party harmless against any and all claims, causes of action, liabilities, damages, losses, costs, or expenses (including reasonable attorney’s fees) resulting from any Indemnified Claim.  The Indemnifying Party shall advance all costs and expenses (including reasonable attorney’s fees) to the Indemnified Party in connection with any actual or threatened lawsuit, investigation, regulatory or other adversary proceeding arising in connection with an Indemnified Claim; provided, that the Indemnifying Party may control the defense and settlement of such suit or proceeding, provided that any such settlement (a) provides for a full and complete release of the Indemnified Party from all claims asserted in such suit or proceeding, (b) does not require an admission of fault on the part of the Indemnified Party, and (c) does not result in any relief against the Indemnified Party other than monetary relief; provided, further, that the Indemnified Party may retain its own counsel at its own expense to assist in the defense of any such suit or proceeding.

11.  
DISPUTE RESOLUTION

The Parties agree that any dispute arising under this Agreement, the Parties’ performance or breach hereof, or the relationship created hereby, shall be resolved through binding arbitration within the city of Austin, Travis County Texas before the American Arbitration Association, pursuant to the American Arbitration Association Commercial Arbitration Rules (“AAA Rules”); provided, however, that nothing in this Section 10 shall prevent any Party from seeking injunctive relief (or other provisional remedy) from a Court of competent jurisdiction.

a.  
Procedures.  The arbitrator shall be a retired judge, and may grant injunctions and other relief; provided, however, that the arbitrator shall neither have nor exercise any power to act as amiable compositeur or ex aequo et bono, to award special, indirect, consequential or punitive damages, or to render rulings that are legally erroneous.  The arbitrator shall administer and conduct the arbitration in accordance with Nevada substantive law, without reference to the principles of conflicts of laws. The arbitrator’s decision shall be final, conclusive and binding on the Parties’ thereto, and judgment thereon or an injunction enforcing such decision may be entered, issued and enforced in any court of competent jurisdiction.

b.  
No Jury Trial.  THE PARTIES HEREBY EXPRESSLY WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN OR AMONG THEM RESOLVED IN A COURT OF LAW AND THEIR RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY SUCH DISPUTE.  IN THE EVENT THAT ANY PARTY DISPUTE HEREUNDER, NOTWITHSTANDING THE OTHER PROVISIONS HEREOF, PROCEEDS IN A COURT OF LAW, THE PARTIES HEREBY EXPRESSLY CONSENT TO A BENCH TRIAL BEFORE THE JUDGE PRESIDING, WITH THE JUDGE ACTING AS TRIER OF FACT.

c.  
Fees and Costs.  Each Party shall bear its own fees and costs (including attorney’s fees) in the arbitration and one-half (1/2) of the arbitrator’s fees and costs; provided, however, that the arbitrator shall award the substantially prevailing Party in an arbitration its reasonable expenses, including without limitation reasonable attorney’s fees and its share of the arbitrator’s fees and costs, except as prohibited by law.
 
 
 

 
 
12.  
TERM & TERMINATION

The term of this Agreement shall commence on the Effective Date and shall run until the earlier of the end of the Project Term as set forth in the Project Plan, unless extended by mutual agreement of the Parties, or its termination as set forth below.

a.  
Termination for Breach:  Either Party may terminate this Agreement,

i.  
Immediately upon a material breach of this Agreement by the other Party; or

ii.  
Upon any breach of this Agreement by the other Party, upon written notice to such Party of its breach and such Party’s failure to cure the breach within thirty (30) days of receiving such notice.

b.  
Termination Without Breach:  Either Party may terminate this Agreement upon written notice to the other Party,

i.  
If the MGG Board and/or Members become deadlocked on an issue that requires a supra majority vote under the MGG Operating Agreement and/or Member Control Agreement;

ii.  
The Parties have failed to commercialize any Derivative Works or Joint Technology after the earlier of (i) two (2) years after the Commencement Date, or (ii) within six (6) months of a determination by either Party or the CMC that the Project has resulted in a commercially viable technology; or

iii.  
The other Party provides notice of its intent to engage in a Change in Control Transaction or engages in such a transaction.

iv.  
In the event that the other party makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated to be bankrupt or insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statue, law or regulation, or has its business put in the hands of a trustee or a receiver by voluntary act or otherwise.

c.  
Survival:  The following provisions of this Agreement shall survive termination or expiration of the Agreement, in addition to those provisions that survive by their terms: Sections 6, 7, 9, 10, 11, and 12.

13.  
GENERAL PROVISIONS:

a.  
Governing Law.  This Agreement, including the validity, interpretation, performance, and enforcement hereof, and the relationship created hereby, shall be governed and construed according to the laws of the United States, as applicable, and the laws of the State of Texas, without giving effect to the principles of conflicts of laws.  Any lawsuit or other similar proceeding arising out of the subject matter of this Agreement or the relationship created hereby, except as expressly set forth herein, shall be brought in a state or federal court of competent jurisdiction, located within the city of Austin, Travis County Texas and all parties hereby consent to personal jurisdiction in such court, and agree and stipulate that such court is a convenient forum for the resolution of such lawsuit or proceeding.

b.  
Entire Agreement.  This Agreement shall constitute the full and complete agreement of the parties concerning the subject matter hereof, and supersedes any prior discussions, communications, negotiations, agreements, or representations of the parties thereon; each party represents and warrants that no other representations, warranties, guarantees, agreements, promises or inducements have been made in connection with this Agreement or the subject matter hereof, except as expressly set forth herein.
 
 
 

 
 
c.  
Amendment; Waiver.  This Agreement may not be modified, except by through a written agreement signed by all Parties hereto.  No right or obligation hereunder shall be deemed waived by any Party or Parties’ action, inaction, delay, or failure to enforce any such right or obligation; no waiver of any right or obligation under this Agreement shall be valid unless in writing, signed by the Party sought to be charged with such waiver, and no such waiver shall be effective as to any right or obligation except as expressly set forth therein, or operate as a waiver except in the specific instance and circumstances described therein.

d.  
Severability.  If any term, covenant or condition of this Agreement or the application thereof to any Party or circumstance shall, to any extent, be held to be invalid or unenforceable by a tribunal of competent jurisdiction, then the remainder of this Agreement, or the application of such term, covenant or condition to Parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

e.  
Further Assurances.  Each Party agrees to take such further actions and execute such further instruments, and do all such other acts, as may be necessary to carry out the purpose and intent of this Agreement.

f.  
Successors and Assigns.  Neither Party may assign any of its rights or delegate any of its obligations hereunder, except (a) with the express written consent of the other Party, (b) in connection with a Change in Control Transaction, or (c) to an Affiliate; provided, however, that in no event shall either party’s rights or obligations hereunder be assigned or delegated without prior written notice to the other Party.  In any case, neither Party may make an assignment of its assets which renders it unable to perform its material obligations hereunder.  Notwithstanding the foregoing, this Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns.

g.  
Force Majeure.  Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses on account of failure of performance by the defaulting Party if the failure is occasioned by government action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or any other similar cause beyond the control of the defaulting Party, provided that the Party claiming force majeure has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, in no event shall a Party be required to settle any labor dispute or disturbance.

h.  
Notices.  Any and all notices required or permitted to be given to a Party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such Party sufficient notice under this Agreement on the earliest of the following:  (a) at the time of personal delivery, if delivery is in person; (b) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States; (c) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries; or (d) upon delivery of an email to the Party so notified unless the notifying Party receives actual or constructive notice that the email was not delivered.  All notices for delivery outside the United States will be sent by express courier or email.  All notices not delivered personally will be sent by email or postal mail with postage and/or other charges prepaid and properly addressed to the Party to be notified at the addresses or email addresses set forth below or at such other addresses or email addresses as such Party may designate by one of the indicated means of notice herein to the other Parties hereto.
 
If to GO, addressed to:
 
______________________
______________________
______________________
______________________
 
 
 

 
 
With a copy to:
Scott S Payzant
Leonard O’Brien Spencer Gale & Sayre
100 South 5th Street
Suite 2500
Minneapolis, MN 55402
 
If to OBJE, addressed to:
 
______________________
______________________
______________________
______________________
 
With a copy to:
[LAW FIRM]
 

i.  
No Strict Construction.  The Parties represent and warrant that this Agreement is the result of the joint drafting and negotiation of the Parties and reflects their mutual intent.  Accordingly, no rule of construction or presumption requiring interpretation of any ambiguity herein against the Party drafting this Agreement shall apply.

j.  
Interpretation.  The Section and paragraph headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of the Sections or paragraphs to which they apply.

k.  
Facsimile Signatures; Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.  This Agreement may be executed and delivered by facsimile or electronic means and upon such delivery the facsimile or electronic signature of a party will be deemed to have the same effect as if the original physical signature had been delivered.

l.  
Authorized Signatories.  Each Party other than a natural person represents and warrants that the undersigned is duly authorized and empowered to execute and deliver this Agreement on behalf of such Party, and that all necessary approvals on the part of such Party have been secured, such that the signature of the undersigned is the binding act and deed of such party.


IN WITNESS HEREOF, the parties have caused this JOINT VENTURE AGREEMENT to be executed by their duly authorized representatives as of the date first above written.
 

OBJ ENTERPRISES, INC


____________________________
Paul Watson
President & CEO

GREAT OUTDOORS, LLC


____________________________
Danny Hammett
CEO
 
 
 

 
 
SCHEDULE A
JOINT VENTURE ASSETS
OBJE

1.  
Net cash remaining from the proceeds from that certain $150,000 convertible debenture dated 30 April 2014 by and between OBJE and Great Outdoors, LLC;

2.  
Net cash remaining from the proceeds from that certain $500,000 convertible debenture dated 27 May 2014 by and between OBJE and Great Outdoors, LLC.

3.  
Intellectual property related to Pac-ball;

4.  
Intellectual property related to Creature Taverns;

5.  
Intellectual property related to Phantasmic.

 
 

 

SCHEDULE B
JOINT VENTURE ASSETS
GO


1.  
All beneficial contracts to which GO is party;

2.  
Intellectual property related to GO Hunting;

3.  
All other GO intellectual property.

 
 

 

SCHEDULE C
JOINT VENTURE LIABILITIES
OBJE


1.  
That certain $150,000 convertible debenture dated 30 April 2014 by and between OBJE and Great Outdoors, LLC;

2.  
That certain $500,000 convertible debenture dated 27 May 2014 by and between OBJE and Great Outdoors, LLC.

 
 

 
 
SCHEDULE D
JOINT VENTURE LIABILITIES
GO

1.  
Certain liabilities of GO relating to the day-to-day operations of GO, such as lease agreements, employment contracts, or professional service agreements, or any other agreement necessary for the continued operation of software development by GO; however all agreements must be disclosed and presented to OBJE within 30 days of signing the Agreement.

EX-31.1 5 ex31-1.htm EX-31.1 ex31-1.htm
EXHIBIT 31.1

CERTIFICATION
 
I, Daniel Hammett, certify that:

1.  
I have reviewed this Quarterly Report on Form 10-Q of OBJ Enterprises, Inc.,

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 the registrant as of, and for, the periods presented in this report;

4.  
The registrant’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 the registrant, 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 the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 the registrant’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.

 
Date: July 21, 2014 By: /s/ Daniel Hammett  
   
        Daniel Hammett
        Chief Executive Officer
        Principal Executive Officer
 
EX-31.2 6 ex31-2.htm EX-31.2 ex31-2.htm
EXHIBIT 31.2
 

CERTIFICATION
 
I, Paul Watson, certify that:

1.  
I have reviewed this Quarterly Report on Form 10-Q of OBJ Enterprises, Inc.

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 the registrant as of, and for, the periods presented in this report;

4.  
The registrant’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 the registrant, 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 the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.  
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 the registrant’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.

 
  By:   /s/ Paul Watson  
Date: July 21, 2014
 
        Paul Watson
        Chief Financial Officer
        Principal Financial Officer
 
EX-32.1 7 ex32-1.htm EX-32.1 ex32-1.htm
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 Quarterly Report of OBJ Enterprises, Inc. (the “Company”) on Form 10-Q for the quarter ended May 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel Hammett, 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:
 
   
(1)
 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
   
(2)
 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 

Date: July 21, 2014 By: /s/ Daniel Hammett  
 
 
        Daniel Hammett
        Chief Executive Officer
        Principal Executive Officer
 



The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.
 
EX-32.2 8 ex32-2.htm EX-32.2 ex32-2.htm
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 Quarterly Report of OBJ Enterprises, Inc. (the “Company”) on Form 10-Q for the quarter ended May 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul Watson, 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:
 
   
(1)
 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
   
(2)
 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 

Date: July 21, 2014 By:    /s/ Paul Watson   
 
 
        Paul Watson
        Chief Financial Officer
        Principal Financial Officer
 


The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.
 
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General Organization and Business</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">OBJ Enterprises, Inc. (the &#8220;Company&#8221;), a Florida corporation, was formed as Obscene Jeans Corp. to design, develop, wholesale, market, distribute and sell a woman&#8217;s line of apparel using the name &#8220;Obscene Brand Jeans.&#8221; On July 27, 2012, the Company changed its name to OBJ Enterprises, Inc.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On November 10, 2011, the Company formed Obscene Interactive, LLC (&#8220;Obscene Interactive&#8221;), a wholly-owned subsidiary to pursue emerging opportunities in the digital gaming industry. Obscene Interactive pursues acquisition and internally develops property in the online and social media industry while exploring consumer gaming trends to develop games through joint venture agreements and partnerships.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On May 9, 2012 (revised on June 9, 2012), the Company engaged Street Source, LLC to act as an independent gaming developer for the Company through a joint venture agreement. The primary focus of this partnership is to develop online and social games leveraging emerging consumer gaming portals; such as smart phones and mobile devices.&#160;&#160;On May 21, 2013, the joint venture formed Novalon Technologies, LLC (&#8220;Novalon&#8221;) to act as the operating entity for the joint venture. OBJE owned 80% of Novalon and Street Source, LLC retained a 20% ownership stake.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On October 4, 2013, OBJE purchased Source Street&#8217;s interest in Novalon and Source Street&#8217;s rights to 20% of the game and resulting profits from the Revised Joint Venture Agreement. As of the date of this report, Novalon&#8217;s brand name and intellectual property under Novalon Games are a wholly owned subsidiary of the Company. OBJE paid a total of $25,000 to acquire this interest from Source Street, with $20,000 paid immediately and the remaining $5,000 paid upon the successful completion of the Creature Taverns game. This acquisition represented the acquisition of the remaining 20% of Novalon as OBJE owned 80% under the Revised Joint Venture Agreement. This was an acquisition of a company controlled by OBJE. No amounts were recognized on the balance sheet as a result of this acquisition as Novalon had no assets prior to the acquisition. In accordance with ASC 985-20-25-1, all costs incurred to establish technological feasibility of a computer software product to be sold are research and development costs. The costs to acquire Novalon were expensed as a loss on the acquisition of 20% of Novalon.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On March 11, 2014, our wholly-owned subsidiary, Novalon Technologies LLC (&#8220;Novalon&#8221;), entered into a Software and Development and License Agreement (the &#8220;Development Agreement&#8221;) with Corv Studios LLC (&#8220;Corv&#8221;).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On March 5, 2014, Novalon entered into a Software License Agreement (the &#8220;License Agreement&#8221;) with Corv. Under the terms of the License Agreement, Novalon agreed to pay $10,000 for a non-exclusive license for the Pac-Ball application currently available on the Android platform (&#8220;Pac-Ball&#8221;) for a period of two years. In exchange, Novalon will have the right to sell the game and retain 50% of the revenue generated from those sales.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On May 21, 2014, OBJ Enterprises, Inc. (&#8220;OBJE&#8221; or the &#8220;Company&#8221;) entered into a Joint Venture Agreement (&#8220;Agreement&#8221;) with Great Outdoors, LLC (&#8220;GO&#8221;). Pursuant to the Agreement, the Company and GO created My Go Games LLC (&#8220;MGG&#8221;) to operate the joint venture. The purpose of the joint venture is to expand upon the Company&#8217;s and GO&#8217;s existing games &#8211; &#8220;GO Hunting: Shooting Sports&#8221; and &#8220;GO Hunting: Archery Edition&#8221; - and develop and commercialize new games. MGG is owned by GO (80%) and the Company (20%). The Agreement calls for the Company and GO to enter into a Member Control Agreement which permits the appointment of three governors, two to be appointed by GO and one to be appointed by the Company.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Agreement grants the Company the right to acquire GO and MGG or their assets in exchange for an amount of shares of common stock equal to 80% of the post-issuance number of shares of the Company&#8217;s common stock.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During the period ended May 31, 2014 the Company made significant management changes. On May 27, 2014, the Company appointed Daniel J. Hammett as a director and Chairman of the Board of Directors. Also on May 27, 2014, Paul C. Watson resigned as Chairman of the Board. Mr. Watson will remain a Director and President of the Company.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company incorporated on September 21, 2009 (Date of Inception) with its corporate headquarters located in Sarasota, Florida. Its fiscal year-end is August 31.</font> </div><br/> The primary focus of this partnership is to develop online and social games leveraging emerging consumer gaming portals; such as smart phones and mobile devices. 0.80 0.20 25000 20000 5000 10000 P2Y 0.50 0.80 0.20 3 2 1 <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 2. Going Concern</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of May 31, 2014, the Company has generated net losses since inception of $3,860,919.&#160;&#160;For the nine months ended May 31, 2014, the company has a net loss of $826,032 and negative cash flow from operating activities of $265,411.&#160;&#160;As of May 31, 2014, the Company has negative working capital of $196,352. The Company has has not emerged from the development stage.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">These factors raise a substantial doubt about the Company&#8217;s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the potential inability of the Company to continue as a going concern.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Management plans to address the Company&#8217;s financial situation as follows:</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In the near term, management plans to seek investors or joint venture partners with the ability to assist the Company financially in its efforts to implement fully the Company&#8217;s business plan. Management continues to seek out financing to obtain the capital required to meet the Company&#8217;s financial obligations. There is no assurance an appropriate joint venture partner will agree to acceptable terms, investors will continue to invest in the Company or new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company&#8217;s ability to continue as a going concern.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In the long term, management believes that the Company&#8217;s projects and initiatives will be successful and will provide cash flow needed to finance the Company&#8217;s future growth. However, there is no assurances the Company&#8217;s planned activities will be successful, and there is no assurance the Company will attain profitability. The Company&#8217;s long term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and achieve adequate profitability and cash flows from operations to sustain its operations.</font> </div><br/> 196352 <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 3. Summary of Significant Accounting Policies</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Interim Financial Statements</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">These unaudited <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">consolidated</font> financial statements have been prepared in accordance with generally accepted accounting principles in the United States (&#8220;US GAAP&#8221;) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the fiscal year ended August 31, 2013 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the &#8220;SEC&#8221;).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The results of operations for the nine month period ended May 31, 2014 are not necessarily indicative of the results to be expected for the full fiscal year ending August 31, 2014.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Basis of Presentation</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.&#160;&#160;The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a going concern.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Development Stage Entity</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company is a development stage company as defined by section ASC 915, <font style="FONT-STYLE: italic; DISPLAY: inline">Development Stage Entities</font>.&#160;&#160;The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.&#160;&#160;All losses accumulated since inception have been considered as part of the Company&#8217;s development stage activities. The Company began generating revenue during the three months ended November 30, 2013. Once revenue exceeds a nominal amount, the Company expects to exit the development stage.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Principles of Consolidation</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The condensed consolidated Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.&#160;&#160;The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a &#8220;going concern&#8221;.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Use of Estimates</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash and Cash Equivalents</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For the purpose of the financial statements, cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $151,454 and $75,190 at May 31, 2014 and August 31, 2013, respectively.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash Flows Reporting</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company follows ASC 230, <font style="FONT-STYLE: italic; DISPLAY: inline">Statement of Cash Flows</font>, for cash flows reporting, and classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method as defined by ASC 230, <font style="FONT-STYLE: italic; DISPLAY: inline">Statement of Cash Flows</font>, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Financial Instruments</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company&#8217;s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">FASB Accounting Standards Codification (ASC) 820 <font style="FONT-STYLE: italic; DISPLAY: inline">Fair Value Measurements and Disclosures</font> (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity&#8217;s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:</font> </div><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.</font> </div> </td> </tr> </table><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent-0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</font> </div> </td> </tr> </table><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent-1" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</font> </div> </td> </tr> </table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company&#8217;s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Share-based Expense</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ASC 718, <font style="FONT-STYLE: italic; DISPLAY: inline">Compensation &#8211; Stock Compensation</font>, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.&#160;&#160;Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.&#160;&#160;Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity &#8211; Based Payments to Non-Employees.&#160;&#160;Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:&#160;&#160;(a) the goods or services received; or (b) the equity instruments issued.&#160;&#160;The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue Recognition</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We derive revenue from the sale of virtual goods to GO-gamers &#8211; individuals who play our online or mobile games - and from the sale of advertising within our online and mobile games to our brand-partners &#8211; companies who seek to have their products featured in online and mobile games.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Online and Mobile Games</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Currently, we operate half of our games as live services that allow GO-Gamers to initially download the game and play a basic version of the game for free. Within these games, GO-Gamers can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Primarily, GO-Gamers pay for our virtual currency &#8211; GO Bucks &#8211; using payment methods such as credit cards or PayPal.&#160;&#160;The other half of our games are available for download for approximately $1.&#160;&#160;Revenue from payments for initial download is recognized as though the game is a durable good (discussed below).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the GO-gamer; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid by the customer is fixed or determinable. For purposes of determining when the service has been provided to the GO-gamer, we have determined that an implied obligation exists to the paying GO-gamer to continue displaying the purchased virtual goods within the online game over their estimated life or until they are consumed. The proceeds from the sales of virtual goods are initially recorded in deferred revenue. We categorize our virtual goods as either consumable or durable. Consumable virtual goods, such as energy or ammo, represent goods that can be consumed by a specific GO-gamer action. Common characteristics of consumable goods may include virtual goods that are no longer displayed on the GO-gamer&#8217;s game board after a short period of time, do not provide the GO-gamer any continuing benefit following consumption or often times enable a GO-gamer to perform an in-game action immediately. For the sale of consumable virtual goods, we recognize revenue as the goods are consumed. Durable virtual goods, such as bows, rifles, or levels, represent virtual goods that are accessible to the GO-gamer over an extended period of time. We recognize revenue from the sale of durable virtual goods ratably over the estimated average playing period of paying GO-gamers for the applicable game, which represents our best estimate of the average life of our durable virtual goods. If we do not have the ability to differentiate revenue attributable to durable virtual goods from consumable virtual goods for a specific game, we recognize revenue from the sale of durable and consumable virtual goods for that game ratably over the estimated average period that paying GO-gamers typically play our games (as further discussed below), which are estimated to range from three to 24 months. Future paying GO-gamer usage patterns and behavior may differ from the historical usage patterns and therefore the estimated average playing periods may change in the future.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Currently, we have limited data to determine the consumption dates for our consumable virtual goods or to differentiate revenue attributable to durable virtual goods from consumable virtual goods. As we continue to improve our data capture capabilities, we will secure the necessary data for substantially all of our games, thus allowing us to recognize revenue related to consumable goods upon consumption. We expect that in future periods there will be changes in the mix of durable and consumable virtual goods sold, reduced virtual good sales in existing games, changes in estimates in average paying GO-gamer life and/or changes in our ability to make such estimates. When such changes occur, and in particular if more of our revenue in any period is derived from goods for which revenue is recognized over the estimated average playing period, or that period increases on average, the amount of revenue that we recognize in a future period may be reduced, perhaps significantly.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On a quarterly basis, we determine the estimated average playing period for paying GO-gamers by game beginning at the time of a GO-gamers&#8217;s first purchase in that game and ending on a date when that paying GO-gamer is no longer playing the game. To determine when paying GO-gamers are no longer playing a given game, we analyze monthly cohorts of paying GO-gamers for that game who made their first in-game payment between one and 12 months prior to the beginning of each quarter and determine whether each GO-gamer within the cohort is an active or inactive GO-gamer as of the date of our analysis. To determine which GO-gamers are inactive, we analyze the dates that each paying GO-gamer last logged into that game. We determine a paying GO-gamer to be inactive once they have reached a period of inactivity for which it is probable (defined as at least 80%) that a GO-gamer will not return to a specific game. For the payers deemed inactive as of our analysis date we analyze the dates they last logged into that game to determine the rate at which inactive GO-gamers stopped playing. Based on these dates we then project a date at which all paying GO-gamers for each monthly cohort are expected to cease playing our games. We then average the time periods from first purchase date and the date the last GO-gamer is expected to cease playing the game for each of the monthly cohorts to determine the total playing period for that game. To determine the estimated average playing period we then divide this total playing period by two. The use of this &#8220;average&#8221; approach assumes that paying GO-gamers become inactive at a relatively consistent rate for each of our games. If future data indicates paying GO-gamers do not become inactive at a relatively consistent rate, we will modify our calculations accordingly. If a new game is launched and only a limited period of paying GO-gamer data is available for our analysis, then we also consider other factors, such as the estimated average playing period for other recently launched games with similar characteristics, to determine the estimated average playing period.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Advertising</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We have contractual relationships with our brand-partners for advertisements within our games. We recognize advertising revenue as advertisements are delivered to customers as long as evidence of the arrangement exists (executed contract), the price is fixed and determinable, and we have assessed collectability as reasonably assured. Certain branded virtual goods and sponsorships are deferred and recognized over the estimated average life of the branded virtual good or as the branded virtual good is consumed, similar to game revenue.&#160;&#160;All arrangements directly between us and brand-partners are recognized gross equal to the price paid to us by the end advertiser since we are the primary obligor, and we determine the price.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Recently Issued Accounting Pronouncements</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We have reviewed the FASB issued Accounting Standards Update (&#8220;ASU&#8221;) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation&#8217;s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.</font> </div><br/> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Interim Financial Statements</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">These unaudited <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">consolidated</font> financial statements have been prepared in accordance with generally accepted accounting principles in the United States (&#8220;US GAAP&#8221;) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the fiscal year ended August 31, 2013 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the &#8220;SEC&#8221;).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The results of operations for the nine month period ended May 31, 2014 are not necessarily indicative of the results to be expected for the full fiscal year ending August 31, 2014.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Basis of Presentation</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.&#160;&#160;The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a going concern.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Development Stage Entity</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company is a development stage company as defined by section ASC 915, <font style="FONT-STYLE: italic; DISPLAY: inline">Development Stage Entities</font>.&#160;&#160;The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.&#160;&#160;All losses accumulated since inception have been considered as part of the Company&#8217;s development stage activities. The Company began generating revenue during the three months ended November 30, 2013. Once revenue exceeds a nominal amount, the Company expects to exit the development stage.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Principles of Consolidation</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The condensed consolidated Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.&#160;&#160;The Financial Statements have been prepared using the accrual basis of accounting in accordance with US GAAP. See Note 2 regarding the assumption that the Company is a &#8220;going concern&#8221;.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Use of Estimates</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash and Cash Equivalents</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For the purpose of the financial statements, cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $151,454 and $75,190 at May 31, 2014 and August 31, 2013, respectively.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash Flows Reporting</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company follows ASC 230, <font style="FONT-STYLE: italic; DISPLAY: inline">Statement of Cash Flows</font>, for cash flows reporting, and classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method as defined by ASC 230, <font style="FONT-STYLE: italic; DISPLAY: inline">Statement of Cash Flows</font>, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Financial Instruments</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company&#8217;s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">FASB Accounting Standards Codification (ASC) 820 <font style="FONT-STYLE: italic; DISPLAY: inline">Fair Value Measurements and Disclosures</font> (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity&#8217;s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:</font> </div><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.</font> </div> </td> </tr> </table><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent-0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.</font> </div> </td> </tr> </table><br/><table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent-1" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"> <tr valign="top"> <td style="WIDTH: 62.6pt"> <div> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font> </div> </td> <td> <div align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</font> </div> </td> </tr> </table><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company&#8217;s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Share-based Expense</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">ASC 718, <font style="FONT-STYLE: italic; DISPLAY: inline">Compensation &#8211; Stock Compensation</font>, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.&#160;&#160;Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.&#160;&#160;Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity &#8211; Based Payments to Non-Employees.&#160;&#160;Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:&#160;&#160;(a) the goods or services received; or (b) the equity instruments issued.&#160;&#160;The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue Recognition</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We derive revenue from the sale of virtual goods to GO-gamers &#8211; individuals who play our online or mobile games - and from the sale of advertising within our online and mobile games to our brand-partners &#8211; companies who seek to have their products featured in online and mobile games.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Online and Mobile Games</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Currently, we operate half of our games as live services that allow GO-Gamers to initially download the game and play a basic version of the game for free. Within these games, GO-Gamers can purchase virtual currency to obtain virtual goods to enhance their game-playing experience. Primarily, GO-Gamers pay for our virtual currency &#8211; GO Bucks &#8211; using payment methods such as credit cards or PayPal.&#160;&#160;The other half of our games are available for download for approximately $1.&#160;&#160;Revenue from payments for initial download is recognized as though the game is a durable good (discussed below).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the GO-gamer; (3) the collection of our fees is reasonably assured; and (4) the amount of fees to be paid by the customer is fixed or determinable. For purposes of determining when the service has been provided to the GO-gamer, we have determined that an implied obligation exists to the paying GO-gamer to continue displaying the purchased virtual goods within the online game over their estimated life or until they are consumed. The proceeds from the sales of virtual goods are initially recorded in deferred revenue. We categorize our virtual goods as either consumable or durable. Consumable virtual goods, such as energy or ammo, represent goods that can be consumed by a specific GO-gamer action. Common characteristics of consumable goods may include virtual goods that are no longer displayed on the GO-gamer&#8217;s game board after a short period of time, do not provide the GO-gamer any continuing benefit following consumption or often times enable a GO-gamer to perform an in-game action immediately. For the sale of consumable virtual goods, we recognize revenue as the goods are consumed. Durable virtual goods, such as bows, rifles, or levels, represent virtual goods that are accessible to the GO-gamer over an extended period of time. We recognize revenue from the sale of durable virtual goods ratably over the estimated average playing period of paying GO-gamers for the applicable game, which represents our best estimate of the average life of our durable virtual goods. If we do not have the ability to differentiate revenue attributable to durable virtual goods from consumable virtual goods for a specific game, we recognize revenue from the sale of durable and consumable virtual goods for that game ratably over the estimated average period that paying GO-gamers typically play our games (as further discussed below), which are estimated to range from three to 24 months. Future paying GO-gamer usage patterns and behavior may differ from the historical usage patterns and therefore the estimated average playing periods may change in the future.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Currently, we have limited data to determine the consumption dates for our consumable virtual goods or to differentiate revenue attributable to durable virtual goods from consumable virtual goods. As we continue to improve our data capture capabilities, we will secure the necessary data for substantially all of our games, thus allowing us to recognize revenue related to consumable goods upon consumption. We expect that in future periods there will be changes in the mix of durable and consumable virtual goods sold, reduced virtual good sales in existing games, changes in estimates in average paying GO-gamer life and/or changes in our ability to make such estimates. When such changes occur, and in particular if more of our revenue in any period is derived from goods for which revenue is recognized over the estimated average playing period, or that period increases on average, the amount of revenue that we recognize in a future period may be reduced, perhaps significantly.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On a quarterly basis, we determine the estimated average playing period for paying GO-gamers by game beginning at the time of a GO-gamers&#8217;s first purchase in that game and ending on a date when that paying GO-gamer is no longer playing the game. To determine when paying GO-gamers are no longer playing a given game, we analyze monthly cohorts of paying GO-gamers for that game who made their first in-game payment between one and 12 months prior to the beginning of each quarter and determine whether each GO-gamer within the cohort is an active or inactive GO-gamer as of the date of our analysis. To determine which GO-gamers are inactive, we analyze the dates that each paying GO-gamer last logged into that game. We determine a paying GO-gamer to be inactive once they have reached a period of inactivity for which it is probable (defined as at least 80%) that a GO-gamer will not return to a specific game. For the payers deemed inactive as of our analysis date we analyze the dates they last logged into that game to determine the rate at which inactive GO-gamers stopped playing. Based on these dates we then project a date at which all paying GO-gamers for each monthly cohort are expected to cease playing our games. We then average the time periods from first purchase date and the date the last GO-gamer is expected to cease playing the game for each of the monthly cohorts to determine the total playing period for that game. To determine the estimated average playing period we then divide this total playing period by two. The use of this &#8220;average&#8221; approach assumes that paying GO-gamers become inactive at a relatively consistent rate for each of our games. If future data indicates paying GO-gamers do not become inactive at a relatively consistent rate, we will modify our calculations accordingly. If a new game is launched and only a limited period of paying GO-gamer data is available for our analysis, then we also consider other factors, such as the estimated average playing period for other recently launched games with similar characteristics, to determine the estimated average playing period.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Advertising</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We have contractual relationships with our brand-partners for advertisements within our games. We recognize advertising revenue as advertisements are delivered to customers as long as evidence of the arrangement exists (executed contract), the price is fixed and determinable, and we have assessed collectability as reasonably assured. Certain branded virtual goods and sponsorships are deferred and recognized over the estimated average life of the branded virtual good or as the branded virtual good is consumed, similar to game revenue.&#160;&#160;All arrangements directly between us and brand-partners are recognized gross equal to the price paid to us by the end advertiser since we are the primary obligor, and we determine the price.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Recently Issued Accounting Pronouncements</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We have reviewed the FASB issued Accounting Standards Update (&#8220;ASU&#8221;) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation&#8217;s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.</font></div> <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 4. Accounts Payable and Advances</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During the nine months ended May 31, 2014, the Company received net, non-interest bearing advances from certain third parties totaling $58,185. The total amount due under these advances as of May 31, 2014 and August 31, 2013 was $ 216,675 and $0, respectively.&#160;&#160;These advances are not collateralized and are due on demand. On February 28, 2014 $158,460 of the advances received were reclassified as a convertible note.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt">During the quarter ended May 31, 2014 the Company called a large sum on the accounts payable into question.&#160;&#160;The total accrued amount in question is approximately $182,000 owed to K.M. Delaney &amp; Associates (&#8220;KMDA&#8221;), a former vendor that provided a turnkey back-office solution including accounting, legal, treasury and office management services to the company.&#160;&#160;In addition, KMDA and its lead attorney, Kathleen Delaney, acted as administrative agent to Vista View Ventures, Inc., Montego Blue Enterprises Corporation, Clearway Investments SA, and Outback Ventures AG (collectively, &#8220;Convertible Debt Counterparties&#8221;).&#160;&#160;The Convertible Debt counterparties were companies that either (a) advanced funds to the Company, (b) held certain convertible debentures originated by the Company, or (c) purchased portions of convertible debentures issued by the Company to one of the other Convertible Debt Counterparties.&#160;&#160;On May 6, 2014, the Company terminated its relationship with KMDA and Kathleen M. 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Related Parties</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During the period ended May 31, 2014 the Company entered into multiple transactions with GO that have resulted in the two entities becoming related parties.&#160;&#160;In April and May 2014, the Company entered into two convertible notes payable with GO totaling $650,000.&#160;&#160;In May 2014, the Company and GO created MGG a joint venture company to continue developing and selling games.&#160;&#160;The Company owns 20% of the JV company MGG while GO owns the remaining 80% (see Notes 6 and 9).</font> </div><br/> 2 650000 650000 0.20 0.80 <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 8. Subsequent Events</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June 19, 2014, the Company entered into a share exchange agreement (the &#8220;Share Exchange Agreement&#8221;)<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>with Great Outdoors, LLC, a Delaware limited liability company (&#8220;GO&#8221;) and My GO Games, LLC, a Minnesota limited liability company (&#8220;MGG&#8221;), pursuant to which the Company issued 50,323,526 shares of its common stock (the &#8220;Exchange Shares&#8221;) for all of the issued and outstanding membership interests of MGG held by GO (the &#8220;Share Exchange&#8221;). Prior to the Share Exchange MGG was owned 20% by the Company and 80% by GO.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">GO is owned 100% by Daniel Hammett, a director of the Company, and following the closing of the Share Exchange, the Company&#8217;s Chief Executive Officer.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Following the closing of the Share Exchange on June 19, 2014, MGG became a wholly-owned subsidiary of the Company and GO acquired 66.82% of the Company&#8217;s issued and outstanding shares of common stock.&#160;&#160;The Share Exchange requires the Company to amend its articles of incorporation to (i) increase the total number of shares of common stock that the Company has authority to issue to 250,000,000 shares of common stock, par value $0.0001 (the &#8220;Authorized Share Increase&#8221;); (ii) change the name of the Company from &#8220;OBJ Enterprises, Inc.&#8221; to &#8220;MyGo Games Holding Co.&#8221; (the &#8220;Name<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>Change&#8221;); and (iii) stagger positions on the Company&#8217;s Board of Directors into three classes, with the term of office of two director positions to expire at the annual meeting of shareholders next ensuing; another two director positions to expire one year after the annual meeting next ensuing; and another three director positions to expire two years after the annual meeting next ensuing (the &#8220;Staggered Board<font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>Approval&#8221;).</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In connection with the Staggered Board Approval, any director appointed to fill a vacancy on the board by reason of death, resignation, removal from office, refusal to stand for re-election or otherwise shall be appointed for the remainder of the term of the class of the director they are appointed to replace. In the absence of a nomination for a successor at the end of a director&#8217;s term, the term of the then current director shall simply be extended for another full three-year term without further action being required.&#160;&#160;Not more than one class of directors, being the class up for election at that year&#8217;s annual meeting, shall be subject to replacement by the shareholders during any single year. Any increase or decrease in the number of directors pursuant to the Company&#8217;s Articles of Incorporation or Bylaws shall be apportioned by resolution of the Company&#8217;s Board of Directors to be so apportioned among the director classes as to make all classes as nearly equal in number as possible. In no case will a decrease in the number of directors shorten the term of any incumbent director.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Share Exchange also required the Company to amend its Bylaws to permit the Company&#8217;s Board of Directors to be not fewer than one nor more than ten directors and to consist of seven directors initially (the &#8220;Board Increase&#8221; and, collectively with the Authorized Share Increase, the Name Change and the Staggered Board Approval, the &#8220;Amendments&#8221;). The officers of the Company are authorized, each individually, to take any such actions that each deems appropriate, necessary or advisable to effect the above Amendments.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Company&#8217;s Board of Directors recommended that its shareholders approve the Amendments and on June 23, 2014, GO, as the majority shareholder of the Company, executed a shareholder consent approving the Amendments.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In connection with the Share Exchange, the Company, GO and MGG entered into amended option agreements (the &#8220;Option Amendments&#8221;) with each of Daniel Hammett, Daniel Miller, and Paul Watson and certain employees of MGG that amended option agreements that MGG previously had entered into with each such persons.&#160;&#160;Pursuant to each Option Amendment, in consideration for each such person&#8217;s continued employment at MGG, such person, the Company and MGG agreed that options to purchase membership interests of MGG were replaced with options to purchase shares of the Company&#8217;s shares of common stock at $0.05 per share (the &#8220;Company Options&#8221;).&#160;&#160;Under these Company Options such persons have the right to acquire up to 82,660,000 shares of common stock of the Company.&#160;&#160;None of the Company Options may be exercised until the Authorized Share Increase has become effective. The Company Options were issued pursuant to Section 4(a)(2) of the Securities Act based on representations of the holders of such options.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Following the Share Exchange with MGG and GO, on June 19, 2014, there were 75,313,465 shares of the Company&#8217;s common stock issued and outstanding and GO holds 66.82% of the issued and outstanding shares of Common Stock.&#160;&#160;Further, pursuant to previously issued convertible notes of the Company, GO has the right to acquire an additional 13,000,000 shares of common stock in the Company.&#160;&#160;If GO converted such convertible notes, GO would hold 71.70% of the Company&#8217;s issued and outstanding shares of common stock on an a partially-diluted basis.&#160;&#160;Finally, Daniel Hammett, who is the controlling principal of GO, was also granted Company Options to purchase up to 30,000,000 shares of common stock of the Company.&#160;&#160;If Mr. Hammett exercised such options, pursuant to his control of the shares of common stock held or acquirable by GO, Mr. Hammett would control 78.88% of the Company&#8217;s issued and outstanding shares of common stock on a partially-diluted basis.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June 19, 2014, in connection with the Share Exchange, Paul Watson, the Company&#8217;s Chief Executive Officer and Secretary prior to consummation of the Share Exchange, resigned as Chief Executive Officer and Secretary of the Company.&#160;&#160;Mr. Watson continues as the Company&#8217;s Chief Strategy Officer, President, Chief Financial Officer and Treasurer. In connection with the Share Exchange, on June 19, 2014, the Company&#8217;s Board of Directors appointed Daniel Hammett as Chief Executive Officer and Daniel Miller as Chief Operating Officer and Secretary.&#160;&#160;Daniel Hammett is an equity owner of GO, Daniel Miller is the Chief Operating Officer of MGG.&#160;&#160;Each of Mr. Hammett, Mr. Miller and Mr. Watson is a director of the Company and was a director at the time that the Company&#8217;s Board of Directors approved the Share Exchange.</font> </div><br/><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June 19, 2014, the Board recommended amendments to the Company Articles of Incorporation to effect the Authorized Share Increase, the Name Change and the Staggered Board Approval and the Board also recommended an amendment to the Company&#8217;s Bylaws to effect the Board Increase.&#160;&#160;On June 23, 2014, stockholders of the Company approved the Amendments by written consent. In connection with the approval of the Amendments by written consent, the Company has filed a definitive Schedule 14C with the Commission on July 2, 2014, which more fully describes the Amendments. 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