NFTG(NFTG) - 2023 Q2 - Quarterly Report

Gaming Platform Development - The company is developing a gaming platform called "Gaxos," which will integrate conventional games with unique in-game features represented as NFTs[89] - The initial launch will focus on proprietary games that allow users to mint affordable NFTs with exclusive features[90] Financial Position - As of June 30, 2023, the company held approximately $1,171,000 in cash exceeding FDIC limits of $250,000[102] - As of June 30, 2023, the company had $1,688,910 in cash and $3,529,047 in short-term investments[133] - The accumulated deficit as of June 30, 2023, was $3,723,502[134] Revenue Generation - Revenue will be generated from the sale of in-game NFTs, recognized upon delivery to customers, with payments accepted in both USD and digital currencies[112] - Advertising fees from game advertisers and developers will also contribute to revenue, recognized ratably over the service period[113] - No revenue was generated from operations during the three and six months ended June 30, 2023, and 2022, with no revenue anticipated for the foreseeable future[120] Expenses and Losses - Research and development fees for the three months ended June 30, 2023, were $267,618, an increase of $30,250, or 12.7% compared to the same period in 2022[123] - General and administrative expenses for the three months ended June 30, 2023, totaled $448,620, an increase of $221,377, or 97.4% compared to the same period in 2022[124] - Compensation and related benefits increased to $207,597 for the three months ended June 30, 2023, representing a 32.6% increase from $156,523 in the same period in 2022[125] - The net loss for the three months ended June 30, 2023, was $754,044, a 62.5% increase from the net loss of $464,094 in the same period in 2022[132] - Cash used in operations for the six months ended June 30, 2023, was $1,433,858, primarily due to a net loss of $2,290,075[136] Cash Flow Activities - Net cash used in investing activities for the six months ended June 30, 2023, was $3,491,242, resulting from the purchase of short-term investments[138] - Net cash provided by financing activities for the six months ended June 30, 2023, was $5,934,229, following an IPO that raised approximately $7 million[139] Compliance and Reporting - The financial statements are prepared in accordance with GAAP and SEC requirements[94] - The company has no capitalized software costs as of June 30, 2023, with all development costs expensed as incurred[107] - The company intends to rely on exemptions as an "emerging growth company" until total annual gross revenues reach $1.07 billion or more[148] - The company will remain an "emerging growth company" until the last day of the fiscal year following the fifth anniversary of its initial public offering[148] - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures[149] Investment Evaluation - The company plans to evaluate its investments for other-than-temporary declines in fair value each quarter[104]