UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
Form 10-K
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 333-120120-01
KIDOZ INC.
(Exact name of registrant as specified in its charter)
ANGUILLA, B.W.I.
(State or other jurisdiction of incorporation
or organization)
98-0206369
(I.R.S. Employer Identification No.)
Hansa Bank Building, Ground Floor, Landsome Road
AI 2640, The Valley, Anguilla, B.W.I
(Address of principal executive offices)
(888) 374-2163
(Registrant’s telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
None
(Title of Each Class & Name of each exchange on which registered)
Securities registered under section 12(g) of the Exchange Act:
COMMON STOCK, NO PAR VALUE PER SHARE
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.
No
Yes
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.
No
Yes
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.
No
Yes
Indicate by check mark whether the registrant has submitted electronically every Interactive
Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding
12 months. Yes
No
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
Non-accelerated filer
Accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Ex- change Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its
management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act).
No
Yes
State issuer’s revenues for its most recent fiscal year.
$12,475,480
State the aggregate market value of the voting and non-voting common equity held by non-
affiliates computed by reference to the price at which the common equity was last sold, or the
average bid and asked price and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter.
Our common stock is quoted on the TSX Venture Exchange in Canada under the symbol
“KIDZ” (previously “SGW”). The closing share price as of March 30, 2022, being
CAD$0.45 (US$0.36) per share under symbol KIDZ on the TSX Venture Exchange and
is quoted on the Over-the-Counter Markets – The Venture Marketplace ("OTCQB")
operated by OTC Markets Group Inc. (http://www.otcmarkets.com/) under the symbol
“KDOZF and the aggregate market value of the voting and non-voting common equity
held by non-affiliates is $22,719,273.
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of the registrant’s common stock, no par value per
share, was 131,424,989 as of March 30, 2022.
DOCUMENTS INCORPORATED BY REFERENCE
The merger of Bingo.com, Inc. with Shoal Games Ltd., which was approved by the Securities
Exchange Commission on March 8, 2005, and is effective on April 7, 2005, is described in the
prospectus filed under Rule 424(b) of the Securities Act and the Form S-4, which were filed on
March 9, 2005, and March 4, 2005, respectively. The Company filed Form SB2 on September 18,
2007, for the registration of shares originally issued in the private placement. The Company filed
a TSX Venture Exchange Listing Application for the TSX-V listing on June 29, 2015. The
Company filed a share purchase agreement for the acquisition of Kidoz Ltd. on March 12, 2019.
Page 1
TABLE OF CONTENTS
PART I .......................................................................................................................................... 3
ITEM 1. BUSINESS ................................................................................................................ 3
ITEM 2. PROPERTIES. .......................................................................................................... 8
ITEM 3. LEGAL PROCEEDINGS. ........................................................................................ 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. ............ 9
PART II ....................................................................................................................................... 11
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. 11
ITEM 6. SELECTED FINANCIAL DATA .......................................................................... 13
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. ............................................................. 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. ...................... 23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE. .......................................................... 55
ITEM 9A. CONTROLS AND PROCEDURES ................................................................... 55
ITEM 9B. OTHER INFORMATION .................................................................................... 56
PART III ..................................................................................................................................... 57
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE .................................................................................................................... 57
ITEM 11. EXECUTIVE COMPENSATION ....................................................................... 60
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS .................................. 62
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE ............................................................................................ 64
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES ..................................... 65
PART IV ..................................................................................................................................... 66
ITEM 15. EXHIBITS ............................................................................................................ 66
SIGNATURES ....................................................................................................................... 66
CERTIFICATIONS ............................................................................................................... 67
CERTIFICATION PURSUANT TO 18 U.S.C. §1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 ............................................ 70
EXHIBIT LIST ...................................................................................................................... 73
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PART I
This Annual Report on Form 10-K contains forward-looking statements that involve risks and
uncertainties. All statements contained herein that are not statements of historical fact constitute
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Discussions containing forward-looking statements may be found in the material set
forth under “Business,” and “Management's Discussion and Analysis or Plan of Operation,” as
well as in this Annual Report generally. We generally use words such as “believes,” “intends,”
“expects,” “anticipates,” “plans,” and similar expressions to identify forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity, performance or achievements.
These forward-looking statements are subject to risks, uncertainties and other factors, some of
which are beyond our control, which could cause actual results to differ materially from this
forecast or anticipated in such forward-looking statements.
You should not place undue reliance on these forward-looking statements, which reflect our view
only as of the date of this report. We undertake no obligation to update these statements or
publicly release the result of any revisions to these statements to reflect events or circumstances
after the date of this report or to reflect the occurrence of unanticipated events.
ITEM 1. BUSINESS
INTRODUCTION
Kidoz Inc. (TSXV: KIDZ) is a mobile advertising technology company and owner of the KIDOZ Safe
Ad Network (www.kidoz.net) and the Kidoz Publisher Software Development Kit (“SDK”). By
developing solutions for app developers to monetize with safe, relevant, and fun ads we help keep the
Google and Apple app stores safe and free for children. Our commitment to children's privacy and
safety has created one of the fastest growing mobile networks in the world. Unlike most digital
advertising, every campaign on the Kidoz platform is free of location information, device identifiers,
behavioural data, and other trackers used by advertisers to identify and track users across the Internet
commonly known as IDFA and AAID. Our technology does not rely on any permanent identifiers, and
as Google and Apple begin to disallow persistent trackers from being employed by any network (child-
directed or not), Kidoz's strength increases.
Fiscal 2021 saw Kidoz's growth, profitability, and revenues reach new heights. The Company’s
continued and increasing pace of growth is attributed to potent market and consumer forces both from
the wider digital economy and also specific to the Kidoz niche of private, safe, and contextual
advertising. One of the key factors driving growth is the ever-increasing dominance of mobile usage
and mobile entertainment across all age groups. Mobile is now consumers’ preferred choice for
entertainment and Kidoz provides a safe and high-performance platform to reach hundreds of millions
of consumers on their mobile devices.
Kidoz is a dedicated AdTech developer that is completely focused on creating a high-performance
mobile ad network. We’ve listened to our advertisers who want safe mobile inventory with the greatest
reach and widest variety combined with full-service transparency and brand safety. As a contextual
network free of data targeting, we build value and trust with advertisers by facilitating pre-campaign
contextual app list planning, live campaign optimizations, and detailed post-campaign reporting and
analysis. Our strategy continues to succeed in the dynamic digital advertising environment, and we’re
excited to be expanding our team and refining our products to grow even faster in the months and years
ahead.
The Kidoz network continues to grow in size and now boasts more than double the SDK app adoption
than its closest direct mobile ad competitor. Kidoz continues to build value and trust with advertisers
who seek private, safe, and contextual advertising. We continue to invest heavily into our systems and
technology to increase our network reach and solidify our position as the market leader. The latest
Kidoz technology that was released in 2021 has the power to further increase our growth rate and fill
the billions of impressions exposed monthly on the Kidoz network.
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The most powerful new product is Kidoz's COPPA compliant programmatic technology solution:
Kidoz Connect. This new product release is a unique programmatic solution providing ‘review &
monetize’ technology to enable open market ad sourcing at scale. Kidoz Connect creates a safe pipeline
of advertising sources to be connected to the Kidoz Contextual Ad Network and funneled to the
thousands of apps currently utilizing Kidoz monetization technology.
Kidoz has also developed new tools for enabling the growth of performance campaigns on the Kidoz
network. Software that facilitates the management, tracking, attribution and reporting of performance
app install campaigns have enabled Kidoz to significantly grow this cost-per-install (CPI) business line.
Kidoz is recognized globally for safely reaching children under the age of 13 on their mobile devices
via the Kidoz Contextual Ad Network. After years of development and growth of the Kidoz mobile
platform, the Company has now expanded its offering to include both the teens (13-19) and parents’
markets. Using the enormous reach of the Kidoz SDK, the Kidoz media team can now contextually
target the children, teen and parent segments in their favourite gaming and app environments.
Kidoz has a unique sales strategy that empowers more than thirty local and international media agencies
to sell the Kidoz mobile advertising inventory created by the Kidoz SDK and Kidoz Connect
programmatic solution. Agencies are thrilled with the expansion of the Kidoz technology into the Teen
and Parent markets as the opportunities for new business are enormous. The success of our strategy
and technology increases the pace of our technical investments and creates further opportunities to
accelerate the speed of our growth as we refine our software and systems. Mobile digital media is one
of the world’s largest industries and Kidoz is perfectly positioned with the correct team and technology
to deliver value to its publishers, advertisers, and investors.
Kidoz has recently closed the busiest quarter in Company history. Management is pleased with the
Company’s performance in 2021, excited by the trajectory of our technology, and believe that 2022
will be another record year for Kidoz.
Kidoz's mobile products include the Kid Mode Operating System installed on millions of OEM tablets
worldwide, Rooplay (www.rooplay.com) the cloud-based EduGame system for kids to learn and play;
and Trophy Bingo (www.trophybingo.com), live across mobile platforms.
References in this document to “the Company,” “we,” “us,” and “our” refer to Kidoz Inc. and our
subsidiaries, which are described below.
Our executive offices are located at Hansa Bank Building, Ground Floor, Landsome Road, The
Valley, AI 2640, The Valley, Anguilla, B.W.I. Our telephone number is (888) 374-2163.
History and Corporate Structure
The Company was originally incorporated in the State of Florida on January 12, 1987.
On January 22, 2015, Bingo.com, Ltd. filed Articles of Amendment with the Anguilla Registrar of
Companies changing its name to “Shoal Games Ltd.”. Effective at the open of markets on January 27,
2015, the Common Shares commenced trading under the new trading symbol “SGLDF” on the OTC-
QB.
On June 29, 2015, the Company filed a TSX Venture Exchange Listing Application for the TSX
Venture Exchange listing and commenced trading on July 2, 2015, under the symbol “SGW”.
On April 4, 2019, Shoal Games Ltd. filed Articles of Amendment with the Anguilla Registrar of
Companies changing its name to “Kidoz Inc.”. Effective at the open of markets on April 9, 2019, the
Common Shares commenced trading under the new trading symbol “KIDZ” on the TSX Venture
Exchange.
We conduct our business through the Anguilla incorporated entity and through our wholly-owned
subsidiaries Kidoz Ltd. (“Kidoz Ltd.”), Shoal Media (Canada) Inc. (“Shoal Media Canada”), Shoal
Games (UK) plc (“Shoal UK”), Coral Reef Marketing Inc. (“Coral Reef”), Shoal Media Inc. (“Shoal
Media”), Rooplay Media Ltd. (“Rooplay Media”), Shoal Media UK Ltd. (“Shoal Media UK”), and
Rooplay Media Kenya Limited. (“Rooplay Kenya”)
Page 4
Shoal Media Canada was incorporated under the laws of British Columbia, Canada, on February 10,
1998, as 559262 B.C. Ltd. and changed its name to Bingo.com (Canada) Enterprises Inc. on February
11, 1999. It subsequently changed its name to English Bay Office Management Limited on September
8, 2003. Effective March 11, 2016, it changed its name to Shoal Media (Canada) Inc.
On August 15, 2002, 99% of the share capital of Shoal UK was acquired. Shoal UK was incorporated
under the laws of England and Wales on August 18, 2000, as CellStop plc. and changed its name to
Bingo.com (UK) plc. on August 5, 2002. During the year ended December 31, 2015, the Company
changed the name of the company to Shoal Games (UK) plc.
On January 21, 2008, Coral Reef Marketing Inc., was incorporated under the laws of Anguilla, British
West Indies.
On January 1, 2013, 100% of the share capital of Shoal Media Inc., an Anguillian Company was
acquired.
On October 25, 2016, Rooplay Media Ltd., was incorporated under the laws of British Columbia,
Canada.
On March 27, 2017, Shoal Media UK Ltd. was incorporated under the laws of England and Wales.
On July 12, 2017, Rooplay Media Kenya Limited was incorporated under the laws of Kenya.
On March 4, 2019 the Company completed the acquisition of all of the issued and outstanding equity
securities of Kidoz Ltd. (“Kidoz”) (www.kidoz.net), a privately held Israeli company.
The Company also maintains a number of inactive wholly-owned subsidiaries. These are:
- Bingo.com (Antigua), Inc., (“Bingo.com (Antigua)”) incorporated as an Antigua
International Business Corporation on April 7, 1999, as Star Communications Ltd. and
changed its name to Bingo.com. (Antigua), Inc. on April 21, 1999;
- Bingo.com (Wyoming), Inc., incorporated in the State of Wyoming on July 14, 1999;
- Bingo.com Acquisition Corp., incorporated in the State of Delaware on January 9, 2001.
All three of the inactive subsidiaries were incorporated to facilitate the implementation of business
plans that we have since modified and refocused and, consequently, there is no activity in these entities.
Our common shares are currently quoted on the TSX Venture Exchange in Canada under the symbol
“KIDZ”. We have not been subject to any bankruptcy, receivership or other similar proceedings.
Development of the Business
The core focus of Kidoz Inc. is the development and expansion of the Kidoz Ad Network which
provides a safe and curated platform for family focused advertisers who care about brand safety. The
size of the mobile advertising ecosystem is projected by eMarketer to exceed over US$400 billion by
2023 (eMarketer). It is the Company's intention to continue to expand the reach application of our
technology to access the wider mobile advertising ecosystem via programmatic connections or
synergistic M&A opportunities and expand in the teen and parent market. As developments in privacy
laws and Apple and Google's policy updates move to provide additional protection to digital minors,
Kidoz's importance in the digital advertising eco-system increases.
Kidoz Inc. Domain Names
Kidoz Inc. owns the domain names Kidoz.net, Rooplay.com, Shoalgames.com, Shoalgames.net,
Shoalmedia.com, Garfieldsbingo.com, Trophybingo.com, Trophybingo.ca, Prado.co and many other
smaller domains.
BUSINESS OVERVIEW
Kidoz Inc. is an AdTech software developer and owner of the leading mobile Kidoz Safe Ad Network
(www.kidoz.net). We help create a free and safe mobile app environment for children by enabling
content producers to monetize their apps and video with safe, relevant, and fun ads. Our commitment
to family privacy and safety has created one of the fastest growing mobile networks in the world.
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Product Strategy
Kidoz builds and maintains the Kidoz Safe Ad Network, the Kidoz SDK, and the Kidoz Connect
Programmatic solution for app developers and global advertisers to reach children and families in a
compliant and brand safe way. The Kidoz SDK is the core of the advertising technology that enables
Kidoz to have advertising impressions available for sale. The Kidoz proprietary advertising system is
compliant with COPPA (“Children's Online Privacy Protection Rule”), GDPR-K (“The European
Union’s General Data Protection Regulation for children”) and other regulations adopted to protect
children in a complex digital world. Kidoz technology is completely proprietary. Kidoz continues to
upgrade its advertising systems to be compatible with the latest IAB (“International Advertising
Board”) specifications for real-time-bidding, header bidding, and server-to-server direct connections.
Our design and implementation of these solutions incorporates a view to their utilization not only in
the kids' marketplace but to the entire advertising market. Programmatic advertising is the use of
automated advertising technology to enable media buying and selling as opposed to traditional direct
methods of digital advertising which involve humans interfacing to agree to deal terms. Offering a
managed programmatic solution of the best mobile advertising inventory is a valuable offering that our
agency partners are utilizing with increased frequency and scale.
Marketing & Distribution Strategy
Each new app that installs the Kidoz SDK increases our user base and increases the number of available
impressions that Kidoz can monetize. The adoption of the Kidoz SDK has been rapid as app developers
have few choices when it comes to sources of safe, compliant, and relevant ads for their users. Kidoz
has built its brand and reputation as the market leader for safe child and family mobile advertising
technology and this has enabled our SDK to become quickly adopted. It is our strategy to invest in our
systems and build alliances with the largest software companies in the world. Since Google's
certification of Kidoz and Apple's updated rules endorsing Kidoz's methodologies the Company is
experiencing unprecedented demand for its safe advertising solutions.
Sales & Pricing Strategy
Kidoz has a global sales agency partnership strategy that places local sellers into dozens of national and
international markets. In 2021 Kidoz launched campaigns in 58 different countries. Through our direct
sales and marketing channels we locate, recruit and sign new international sales houses. As the Kidoz
network is a unique advertising platform in the market, it commands high prices and media sales houses
aspire to represent the Company. Kidoz has found the agency partnership strategy to be highly effective
as once sales houses are recruited and the first few campaigns are delivered with success, repeat
customers are established and the value of the region begins to grow. After years of development with
this strategy, Kidoz has many established sales houses in the largest economies of the world and is now
tasked with increasing the value of each partnership and empowering the sales houses to increase the
portion of advertisers' budgets that is spent with Kidoz. The Kidoz Connect solution has created new
opportunities for all of Kidoz's agency partners as the solution creates inventory for brands who are
building awareness with parents and teens in addition to children.
Growth Strategy
The Kidoz sales, product, and operational strategies are custom fit to match the favorable regulatory,
consumer, and technological trends occurring in the market. It is the Kidoz mission to deliver best-in-
class solutions for our advertiser and publisher partners that are compliant with Apple, Google, and
strict government data privacy regulations. Kidoz technology is built with privacy as a priority and we
champion contextual advertising as a superior method of reaching target consumers. Kidoz publisher
partners can monetize with human-curated safe advertising on a global scale and with the knowledge
that their users’ data is not compromised.
Kidoz is growing at a rapid pace as a result of its core media business and the expansion to include the
teen and parent segments. Kidoz growth is also being propelled by a new customer type, the app
developer themselves. Kidoz is increasingly utilized as a performance platform for apps to scale their
installs and revenues by paying on a cost-per-install (“CPI”) basis. The global app install segment of
mobile advertising is estimated to be US$118B in 2022 according to AppsFlyer. Kidoz has launched
Page 6
new software to support this high growth business and the Company expects performance CPI media
to be an increasing percentage of overall business. Finally, Kidoz Connect is the latest product release
to deliver enhanced value to our advertising partners as the technology enables Kidoz to ingest
programmatic campaigns of all types and scale them across the Kidoz network. The Kidoz commercial
teams look forward to welcoming many new and existing customers to this new offering as we expand
the Kidoz reach within the global digital advertising ecosystem.
Furthermore, while the focus of the Company is the development and expansion of the KIDOZ Safe
Ad Network, we are investigating options to use our technology to expand into new markets, either
through new connections to the wider mobile advertising market, or via synergistic M&A.
Kidoz Original Equipment Manufacturer (“OEM”)
Kidoz's mobile products includes the Kid Mode Operating System (“OS”) installed on millions of OEM
tablets worldwide. The Company earns license fees based on the OEM agreements dependent on the
number of devices the Kidoz Kid Mode OS is installed.
Rooplay
The Company owns Rooplay (www.rooplay.com) the cloud-based EduGame system for kids to play
multiple games to learn and play. The platform is live on the Google’s Android system and has stand-
alone games available on Apple’s iOS and Google’s Android systems.
Trophy Bingo
The Company has the social bingo games Trophy Bingo which is available on Apple’s iOS, Google’s
Android and Amazon Android systems. Revenue is generated in the games via in-app purchases and
advertising.
OPERATIONS
Employees
As of December 31, 2021, we had 32 consultants, employees and independent contractors throughout
the world including fourteen full-time employees in Canada and Israel. Since 2006 it has been, and
continues to be, the Company’s objective to control its costs by retaining consultants, as needed, to
provide special expertise in developing internal strategic, marketing, accounting and technical services.
None of our employees or consultants are represented by a labor union, and we believe that our
relationship with our employees and consultants is good.
We are substantially dependent upon the continued services and performance of J. M. Williams, Co-
Chief Executive Officer; Eldad Ben Tora, Co-Chief Executive Officer and T. M. Williams, Executive
Chairman. The loss of the services of these key individuals would have a material adverse effect on
our business, financial condition and results of operations. We do not carry any key man life insurance
on any individuals.
Competition
Kidoz competes with other advertising technology providers that offer safe, COPPA compliant,
products. These companies include Super Awesome and Google’s Admob. However, these
competitors are not direct threats to Kidoz as their operations and strategies are quite different. For
instance, Super Awesome, who maintains a COPPA SDK, sells a variety of media types and
technologies unrelated to mobile inventory which is core to Kidoz. As a result, Super awesome is one
of Kidoz largest customers. While on the other hand, Google’s Admob SDK is focused on mobile
inventory, but is not human curated for child safety. As the technology barriers are high to enter the
market with a mobile advertising network, few competitors exist for Kidoz. Kidoz offers a highly
customized and targeted offering to advertisers that management believes will enable the Company to
grow and succeed in the market.
Page 7
Costs and Effects of Compliance with Environmental Laws
The Company is in the business of developing and marketing mobile products and services for kids in
a digital world. To the best of our knowledge, no federal, state or local environmental laws are
applicable to our business.
BRITISH COLUMBIA SECURITIES COMMISSION
Effective September 15, 2008, the British Columbia Securities Commission (“BCSC”) issued rule 51-
509 Issuers Quoted in the U.S. Over-the-Counter Markets. Rule 51 - 509 requires all Over-the-Counter
Companies that have connections to British Columbia (BC) to comply with BC securities law and
certain public disclosure requirements. The Company is deemed to have connection to BC due to the
fact that administration and a director are located in BC. The Company has complied with rule 51-509
and registered and filed the necessary documents on SEDAR. The Company is deemed, due to the fact
that there are less than 50% of the Company’s shareholders located in BC, to be a foreign reporting
issuer in accordance with NI 71-102 “Continuous Disclosure and Other Exemptions Relating to Foreign
Issuers”. Therefore, the Company meets all requirements to file its reports, statements or other
information that it files with the Securities and Exchange Commission on SEDAR.
FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
The equipment of the Company to operate the operations of the Company is located in Anguilla, Israel,
United Kingdom, and Canada. The revenue from Ad Tech and in-app purchases is worldwide, with the
majority from the USA and Europe.
AVAILABLE INFORMATION
The Company makes available through the Corporate Kidoz Inc. section of its internet website at
http://investor.kidoz.net its annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, Press Releases, Research Reports, and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable
after electronically filing such material with the Securities and Exchange Commission.
You may read and copy any reports, statements or other information that we file with TSX Venture
exchange on SEDAR. The address of this Internet site is http://www.sedar.com.
In addition, we file with the Securities and Exchange Commission at the Securities and Exchange
Commission’s Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the Securities and
Exchange Commission. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the operation of the Public Reference Room.
We file our reports with the Securities and Exchange Commission electronically through the Securities
and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system.
The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding companies that file electronically with the
Securities and Exchange Commission through EDGAR. The address of this Internet site is
http://www.sec.gov.
ITEM 2. PROPERTIES.
Since 2005 our executive office is located in The Valley, Anguilla, British West Indies. We commenced
the present lease agreement on April 1, 2010, for a period of one year. Unless 3 months’ notice is given
it automatically renews for a future 3 months until notice is given. To date no notice has been given.
The monthly rental is $250.
We have 2 primary development and operational offices located in Vancouver, Canada and Netanya,
Israel.
During the year ended December 31, 2019, the Company signed a five-year lease in Vancouver, Canada
ending March 2024. This facility comprises approximately 1,459 square feet. The monthly rental is
approximately $4,071.
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Kidoz Ltd. has an annual office lease in Netanya, Israel, with rent payable on a quarterly basis. The
operating lease expired on July 14, 2017 but unless 3 months’ notice is given it automatically renews
for a future 12 months until notice is given. This facility comprises approximately 190 square metres.
The monthly rental is approximately $4,065.
We operate a sales and marketing office in London, United Kingdom. There are no direct monthly
rental fees associated with the London office.
We believe that these facilities will be adequate to meet our requirements for the near future and that
suitable additional space will be available if needed. Since March 2020, the majority of Kidoz staff
world-wide is operating from home or other suitable locations and interacting on a daily basis through
communication technologies. It is anticipated this will continue for the foreseeable future due to the
benefits derived with increased productivity and personal satisfaction from our staff. Other than
described above, neither we, nor any of our subsidiaries presently own or lease any other property or
real estate.
ITEM 3. LEGAL PROCEEDINGS.
We are not currently a party to any legal proceedings and were not a party to any other legal proceeding,
during the fiscal year ended December 31, 2021. We are currently not aware of any legal proceedings
proposed to be initiated against us. However, from time-to-time, we may become subject to claims and
litigation generally associated with any business venture.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We held our Annual Meeting of Stockholders in Anguilla on November 27, 2021. The Annual Meeting
was for the purposes of electing to set the number of directors to be 6; electing our directors; and to
ratify the appointment of Davidson & Company LLP, Chartered Professional Accountants, as our
independent auditors for the 2021 fiscal year; to ratify our Rolling Stock Option plan as amended by
inclusion of an Israeli Taxpayers Appendix thereto; and for any other regular business. The Company
issued a schedule 14A proxy statement to the shareholders on November 27, 2021.
All nominees for directors were elected; the appointment of auditors was ratified; and the Rolling
Stock Option plan as amended by inclusion of an Israeli Taxpayers Appendix thereto was ratified.
The voting on each matter is set forth below:
(a) Elected to set the number of directors to be 6.
For
58,258,531
Against
7,800
Not Voted
643,887
Elected the following persons to serve as directors until the next annual meeting or until their
(b)
successors are duly qualified:
T. M. Williams
J. M. Williams
E. Ben Tora
F. Curtis (Non-Executive Director)
C. Kalborg (Non-Executive Director)
M. David (Non-Executive Director)
Election of the Directors of the Company.
NOMINEE
Mr. T. M. Williams
Mr. J. M. Williams
Mr. E. Ben Tora
Ms. F. Curtis
Mr. C. Kalborg
Mr. M. David
FOR
58,258,156
58,258,356
58,258,156
58,258,643
58,260,881
58,258,356
WITHHOLD
8,175
7,975
8,175
7,688
5,450
7,975
NOT VOTED
643,887
643,887
643,887
643,887
643,887
643,887
Page 9
(c) Approved the selection of Davidson & Company LLP, Chartered Professional Accountants as the
Company's independent auditors for the fiscal year ending December 31, 2021.
FOR
58,903,993
WITHHOLD
6,225
NOT VOTED
nil
(d) The ratification of the existing 2015, 10% Rolling Stock Option plan, as amended by inclusion of
an Israeli Taxpayers Appendix thereto, as more particularly set out in Schedule B to the Proxy
Statement was approved.
FOR
58,041,055
AGAINST
225,276
NOT VOTED
643,887
Subsequent to their appointment the Board of Directors ratified the continuation of Mr. Jason
Williams and Mr. Eldad Ben Tora will continue as Co-CEO of the Kidoz Inc. organization and Mr. T.
M. Williams, will continue to serve as Executive Chairman.
Page 10
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Our common stock is currently quoted on the TSX Venture Exchange in Canada under the symbol
“KIDZ”.
On March 19, 1997, our common stock was approved for trading on the National Association of
Securities Dealers OTC Bulletin Board (the “OTCBB”) under the symbol “PGLB”. In January 1999,
when we changed our name to Bingo.com, Inc., our OTCBB symbol was changed to “BIGG”. On July
26, 1999, we changed our trading symbol from “BIGG” to “BIGR”. On April 7, 2005, Bingo.com, Inc.
completed a merger with its wholly- owned subsidiary Bingo.com, Ltd. The principal reason for
Bingo.com, Inc.’s merger with its subsidiary Bingo.com, Ltd. was to facilitate Bingo.com, Inc.’s
reincorporation under the International Business Companies Act of Anguilla, B.W.I. Effective April 7,
2005, the shares of Bingo.com, Ltd. began trading under the new ticker symbol “BNGOF”. In 2011,
we transferred to the Over the Counter Markets - The Venture Marketplace ("OTCQB") operated by
OTC Markets Group Inc., whilst continuing our ticker symbol “BNGOF”. During the year ended
December 31, 2015, the Company changed its name to Shoal Games Ltd. and changed our trading
symbol on the OTCQB from “BNGOF” to “SGLDF”.
Effective July 2, 2015, the Company additionally commenced trading on the TSX Venture Exchange
in Canada (“TSXV”) under the symbol “SGW”. On December 31, 2019 our shares were Halt Traded
on the TSXV pending completion of our acquisition of Kidoz Ltd. The Halt Trade was rescinded on
March 7, 2019, after our announcement on March 4, 2019 that we had successfully completed the
acquisition of all of the Kidoz Ltd. shares. Effective January 7, 2019, our shares ceased to be quoted
on and traded through the OTCQB due to the TSXV Halt Trade. The Company has decided not to
reinstate the quotation of its shares on the OTCQB, due to the small number of trades effected through
the OTCQB subsequent to our shares being listed on the TSXV on July 2, 2015.
Effective April 4, 2019, the Company received approval from the TSX Venture Exchange (the
“Exchange”) to change its name to “Kidoz Inc.” and to have its shares trade under the new symbol
TSXV:KIDZ. The common shares of the Company began trading on the Exchange under the new name
and symbol at market open on Tuesday, April 9, 2019. The shares continue to be quoted on the OTC
under the symbol “KDOZF”. The bid quotations set forth below, reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not reflect actual transactions.
TSX-V - KIDZ
OTC - KDOZF
Quarter Ended
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
High (1)
CAD$
$0.75
$0.76
$1.14
$1.20
$0.56
$0.45
$0.34
$0.30
1.
Prices as per Yahoo! TM Finance
Low (1)
CAD$
$0.58
$0.60
$0.63
$0.45
$0.42
$0.21
$0.20
$0.20
High (1)
US$
Low (1)
US$
$0.64
$0.61
$0.96
$0.98
$0.46
$0.25
$0.27
$0.23
$0.45
$0.45
$0.53
$0.35
$0.33
$0.16
$0.07
$0.16
On March 30, 2022, the last reported sale price of our common stock, as reported by the TSX Venture
Exchange, was CAD$0.45 per share.
As of March 30, 2022, we believe there are approximately 731 shareholders (including nominees and
brokers holding street accounts) of our shares of common stock.
Page 11
Other than described above, our shares of common stock are not and have not been listed on any other
exchange.
Dividend Policy
We have not declared or paid any cash dividends on our common stock since our inception. The Board
of Directors is presently reviewing the Company’s dividend policy. Any future payment of dividends
will depend upon our results of operations, financial condition, cash requirements and other factors
deemed relevant by our Board of Directors.
Recent Sales of Unregistered Securities
During the year ended December 31, 2021, the Company engaged Research Capital Corporation
(“RCC”) as a financial and capital markets advisor. As part of the compensation for its services, RCC
will receive a monthly fee of $5,162 (CAD$6,500) for its trading advisory services for a minimum of
6 months with extension by mutual agreement and a financial advisory fee to be satisfied by the issuance
of 230,000 common shares of the Company valued at $179,293. In addition, the Company granted
230,000 common share purchase warrants to RCC. Each warrant will entitle the holder thereof to
purchase one common share in the capital of the Company at an exercise price of $0.77 (CAD$0.98) at
any time up to 24 months following the date of issuance.
During the year ended December 31, 2021, the holder of 70,000 stock options exercised their options
for 70,000 shares for $31,264 at an average exercise price of $0.45 (CAD$0.54) per share.
During the year ended December 31, 2020, no shares were issued by the Company.
Securities authorized for issuance under equity compensation plans.
In 2015, the shareholders approved the 2015 Rolling Stock Option plan. Under the 2015 plan we have
reserved 10% of the number of Shares of the Company issued and outstanding as of each Award Date.
Pursuant to this plan we have 6,870,150 stock purchase options (2020 - 5,875,750) outstanding at
December 31, 2021. During the year ended December 31, 2021, there were 70,000 (2020 – nil) options
exercised and 1,040,600 (2020 – 70,000) options cancelled and 570,000 (2020 – nil) options expired
unexercised, issued under this plan.
Equity Compensation Plan Information
Number of securities to be
issued upon exercise of
outstanding options and rights
(a)
6,870,150
Weighted average exercise
price of outstanding options
and rights
(b)
0.48
Number of securities
remaining available
for future issuance
(c)
6,272,349
0
6,870,150
0
0.48
0
6,272,349
Plan category
Equity compensation
plans approved by
security holders
Equity compensation
plans not approved by
security holders
Total
Subsequent to the year ended December 31, 2021, a further 2,550,000 options were awarded at
CAD$0.50 (approximately $0.39) and 210,000 options were cancelled unexercised.
Page 12
ITEM 6. SELECTED FINANCIAL DATA:
2021
2020
2019
$
Consolidated Balance Sheet Data:
Cash
Total assets
Total liabilities
Total stockholders’ equity
(deficit)
Working capital
2,078,607 $
13,925,531
4,574,834
9,350,697
4,536,852
$
1,226,045
10,969,129
2,298,934
8,670,194
3,071,545
967,212
9,786,640
1,379,299
8,407,341
2,192,505
Consolidated Statement of Operations Data for continuing operations:
Revenue
$
12,475,480 $
7,148,029 $
4,517,379
2021
2020
2019
Cost of sales
Trophy Bingo amortization
Gross (loss) profit
Operating expenses
excluding interest and other
income (expenses)
Acquisition of subsidiary
Amortization of right-of-use
assets
Depreciation and
amortization
Gain on derivative liability
– warrants
Impairment of goodwill
Interest and other income
Income tax (expense) /
recovery
Promissory note accretion
and interest
Stock awareness program
Net (loss) income
Basic and diluted net (loss)
income per share from
continuing operations
Weighted average common
shares outstanding
$
$
7,143,148
-
5,332,332
3,800,114
-
3,347,915
2,778,911
-
1,738,468
(4,357,188)
-
(2,681,491)
-
(2,632,399)
(190,228)
(40,851)
(54,071)
(72,416)
(565,540)
(564,628)
(473,854)
60,207
-
241
-
-
1,003
-
(13,877,385)
3,302
(216,677)
55,243
850,280
-
(402,845)
(190,321) $
-
-
103,971 $
-
-
(14,654,232)
(0.00) $
0.00 $
(0.12)
131,340,989
131,124,989
121,208,912
Page 13
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The information contained in this Management's Discussion and Analysis or Plan of Operation contains
"forward looking statements." Actual results may materially differ from those projected in the forward
looking statements as a result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the forward looking
statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to
be correct or that actual future results will not be materially different from the expectations expressed
in this Annual Report. The following discussion should be read in conjunction with the audited
Consolidated Financial Statements and related Notes thereto included in Item 7 and with the Special
Note regarding forward-looking statements included in Part I.
OVERVIEW
Kidoz Inc. (TSXV:KIDZ) owns the leading Children's Online Privacy Protection Rule (“COPPA”) &
General Data Protection Regulation (“GDPR”) compliant contextual mobile advertising network that
safely reaches hundreds of million kids, teens, and families every month. Google certified and Apple
approved, Kidoz provides an essential suite of advertising technology that unites brands, content
publishers and families. Trusted by Disney, Hasbro, Lego and more, the Kidoz Contextual Ad Network
helps the world’s largest brands to safely reach and engage kids across thousands of mobile apps,
websites and video channels. The Kidoz network does not use location or Personally Identifiable
Information (”PII”) data tracking commonly used in digital advertising. Instead, Kidoz has developed
advanced contextual targeting tools to enable brands to reach their ideal customers with complete brand
safety. A focused AdTech solution provider, the Kidoz SDK and Kidoz Programmatic network have
become essential products in the digital advertising ecosystem. Our commitment to advertising privacy
and safety has created one of the fastest growing mobile networks in the world.
Kidoz is the market leader in contextual mobile advertising and the segment is only beginning to
develop as new rules and stricter regulations are enacted and enforced by Google, Apple, and
governments around the world. Kidoz builds and maintains the Kidoz SDK (Software Development
Kit) that app developers install into their apps before releasing them into the App Stores. The Kidoz
SDK is the core of the advertising technology that enables Kidoz to access advertising impressions
available for sale. The Kidoz proprietary advertising system is compliant with COPPA, GDPR-K and
other regulations adopted to protect the privacy and security of minors. The Kidoz proprietary
advertising technology is installed in thousands of different apps, making it the most popular contextual
mobile solution in the market.
Kidoz has established its leadership position through continued investments into research and
development. Mobile devices are the primary tool used for all digital activities in everyday life across
the entire world. The predominance of mobile is well established and Kidoz is well positioned to
benefit from the wide adoption of its technology across thousands of popular apps. As the number of
active campaigns live on Kidoz has increased substantially over the past 18 months, Kidoz has recruited
hundreds of new apps and developers that focus on a wide range of audience segments. As a result of
Kidoz’s rapid growth, the Company is now able to expand beyond its core advertising audience of
children, and begin to contextually target teens and parents for its brand partners.
Mobile AdTech systems are some of the most integrated and most valuable systems in the world. The
scale of users we can reach with the Kidoz network is powerful and it opens many new opportunities
for the Company. Extending our media offering beyond children is the first step we are taking as our
sales and agency partners are interested in accessing these related segments of our traffic. Kidoz is
experiencing a period of rapid growth and we are extending our business model in ways that will fill
our huge available inventory with safe and high performing media.
Driving our revenue growth is strong underlying system growth for both users and publishers that are
accessing the Kidoz technology. Media budgets continue to shift from linear TV to digital platforms
like Kidoz as brands seek to engage their customers where families spend most of their screen time. In
addition, regulation at the government level is positively influencing growth of the KIDOZ Safe Ad
Page 14
Network. COPPA in America and GDPR in Europe have forced advertisers and publishers to ensure
their data and advertising methodologies are safe. Regulators in America are updating COPPA to
further enhance child safety online, and regulators in China, India and other regions are considering
similar measures. As Kidoz is compliant, the Company benefits from all child-safe advertising
regulation.
Building on our performance in 2021, we plan to continue our successful growth strategies in 2022.
Our sales, product, and operational strategies are custom fit to match the favourable regulatory,
consumer, and technological trends occurring in the market. The Kidoz programmatic technology is
live, growing, and actively filling publisher inventory with campaigns safely sourced from the
programmatic marketplace. As Kidoz advances its multiple product offerings, new opportunities arise
in the bountiful mobile advertising ecosystem that is projected by eMarketer to exceed over US$400
billion by 2023 (eMarketer). It is our intention to explore expanding, either through additional uses of
our new technology platforms for the entire mobile advertising market, or via synergistic M&A.
In 2022, the entire company is focused on enabling advertisers to reach children, teens and families at
enormous scale with its enhanced technologies. The Company is committed to achieving our product
development and financial goals for the year. Kidoz is perfectly positioned with powerful technology
in a booming market and management anticipates a record 2022 ahead.
Kidoz's mobile products include the Kid Mode Operating System installed on millions of OEM tablets
worldwide, Rooplay (www.rooplay.com) the cloud-based EduGame system for kids to learn and play,
and Trophy Bingo (www.trophybingo.com), live across mobile platforms.
CRITICAL ACCOUNTING POLICIES
The following discussion of critical accounting policies is intended to supplement the Summary of
Significant Accounting Policies presented as Note 2 to our audited consolidated financial statements
presented elsewhere in this report. Note 2 summarizes the accounting policies and methods used in the
preparation of our consolidated financial statements. The policies discussed below were selected
because they require the more significant judgments and estimates in the preparation and presentation
of our financial statements. On an ongoing basis, management evaluates these judgments and estimates,
including whether there are any uncertainties as to compliance with the revenue recognition criteria
described below, and recoverability of long-lived assets, as well as the assessment as to whether there
are contingent assets and liabilities that should be recognized or disclosed for the consolidated financial
statements to fairly present the information required to be set forth therein. We base our estimates on
historical experience, as well as other events and assumptions that are believed to be reasonable at the
time. Actual results could differ from these estimates under different conditions.
We consider the following accounting policies to be both those most important to the portrayal of our
financial condition and require the most subjective judgment:
- Revenue recognition;
- Software development;
- Impairment of long-lived assets
- Goodwill
Revenue Recognition
In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a
customer obtains control of promised services. The amount of revenue recognized reflects the
consideration to which the Company expects to be entitled to receive in exchange for these services.
We derive substantially all of our revenue from the sale of Ad tech advertising revenue.
To achieve this core principle, the Company applied the following five steps:
1) Identify the contract with a customer
A contract with a customer exists when (i) the Company enters into an enforceable contract with a
customer that defines each party’s rights regarding the services to be transferred, whose impression
count will form the basis of the revenue and identifies the payment terms related to these services, (ii)
Page 15
the contract has commercial substance and, (iii) the Company determines that collection of substantially
all consideration for services that are transferred is probable based on the customer’s intent and ability
to pay the promised consideration. The Company applies judgment in determining the customer’s
ability and intention to pay, which is based on a variety of factors including the customer’s historical
payment experience or, in the case of a new customer, published credit and financial information
pertaining to the customer.
2) Identify the performance obligations in the contract
Performance obligations promised in a contract are identified based on the services that will be
transferred to the customer that are both capable of being distinct, whereby the customer can benefit
from the service either on its own or together with other resources that are readily available from third
parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the
services is separately identifiable from other promises in the contract. To the extent a contract includes
multiple promised services, the Company must apply judgment to determine whether promised services
are capable of being distinct and distinct in the context of the contract. If these criteria are not met the
promised services are accounted for as a combined performance obligation.
3) Determine the transaction price
The transaction price is determined based on the consideration to which the Company will be entitled
in exchange for transferring services to the customer. None of the Company's contracts contain
financing or variable consideration components.
4) Allocate the transaction price to performance obligations in the contract
If the contract contains a single performance obligation, the entire transaction price is allocated to the
single performance obligation. Contracts that contain multiple performance obligations require an
allocation of the transaction price to each performance obligation based on a relative standalone selling
price basis. The Company determines standalone selling price based on the price at which the
performance obligation is sold separately. If the standalone selling price is not observable through past
transactions, the Company estimates the standalone selling price taking into account available
information such as market conditions and internally approved pricing guidelines related to the
performance obligations.
5) Recognize revenue when or as the Company satisfies a performance obligation
The Company satisfies performance obligations at a point in time as discussed in further detail under
"Disaggregation of Revenue" below. Revenue is recognized at the time the related performance
obligation is satisfied by transferring a promised service to a customer.
Disaggregation of Revenue
All of the Company's performance obligations, and associated revenue, are generally transferred to
customers at a point in time. The Company has the following revenue streams:
1) Ad tech advertising revenue - The Company generally offers these services under a customer
contract Cost-per-Impression (CPM), Cost-Per-Install or CPI arrangements, Cost per completed
video view or CPC and/or Cost-Per-Action or CPA arrangements with third-party advertisers and
developers, as well as advertising aggregators, generally in the form of insertion orders that specify
the type of arrangement (as detailed above) at particular set budget amounts/restraints. These
advertiser customer contracts are generally short term in nature at less than one year as the budget
amounts are typically spent in full within this time period. These agreements typically include the
delivery of Ad tech advertising through partner networks, defined as publishers / developers, to
home screens of devices and agree on whose results will be relied on from a revenue point of view.
Page 16
The Company has concluded that the delivery of the Ad tech advertising is delivered at a point in
time and, as such, has concluded these deliveries are a single performance obligation. The Company
invoices fees which are generally variable based on the arrangement, which would typically include
the number of impressions delivered at a specified price per application. For impressions delivered,
revenue is recognized in the month in which the Company delivers the application to the end
consumer.
2) Content revenue – The Company recognizes content revenue on the following forms of revenue:
a) Carriers and OEMs - The Company generally offers these services under a customer contract per
tablet device license fee model with OEMs. Monthly or quarterly license fees are based on the
OEM agreement with the number of devices the Kidoz Kid Mode is installed upon.
b) Rooplay - The Company generates revenue through subscriptions or premium sales of Rooplay,
(www.rooplay.com) the cloud-based EduGame system for kids to learn and play within its games
on smartphones and tablet devices, such as Apple’s iPhone and iPad, and mobile devices utilizing
Google’s Android operating system. Users can download the Company’s games through Digital
Storefronts and decide to subscribe to the multiple of educational and fun games in the Rooplay,
cloud-based EduGame system or make a premium per purchase of particular games. The revenue
is recognized net of platform fees.
c) Rooplay licensing - The Company licenses its branded educational games under a monthly cost
per game agreement license fee model. Monthly license fees are based on the number of games
licensed.
d) In App purchases - The Company generates revenue through in-application purchases (“in-app
purchases”) within its games; (i.e. Trophy Bingo (www.trophybingo.com)) on smartphones and
tablet devices, such as Apple’s iPhone and iPad, and mobile devices utilizing Google’s Android
operating system. Users can download the Company’s free-to-play games through Android,
Amazon, iOS and Facebook Messenger (this was discontinued in fiscal 2021) and pay to acquire
virtual currency which can be redeemed in the game for power plays. The initial download of the
mobile game from the Digital Storefront does not create a contract under ASC 606 because of the
lack of commercial substance; however, the separate election by the player to make an in-
application purchase satisfies the criterion thus creating a contract under ASC 606.
The Company has identified the following performance obligations in these contracts:
i. Ongoing game related services such as hosting of game play, storage of customer content,
when and if available content updates, maintaining the virtual currency management
engine, tracking gameplay statistics, matchmaking as it relates to multiple player
gameplay, etc.
ii. Obligation to the paying player to continue displaying and providing access to the virtual
items within the game.
Neither of these obligations are considered distinct since the actual mobile game and the related
ongoing services are both required to purchase and benefit from the related virtual items. As such,
the Company’s performance obligations represent a single combined performance obligation which
is to make the game and the ongoing game related services available to the players. The revenue is
recognized net of platform fees.
Software Development Costs
The Company expenses all software development costs as incurred for the year ended December 31,
2021 and 2020. As at December 31, 2021 and 2020, all capitalized software development costs have
been fully amortized and the Company has no capitalized software development costs.
Page 17
Total software development costs were $10,559,601 as at December 31, 2021 (2020 - $8,880,753).
Impairment of Long-lived Assets
The Company accounts for long-lived assets in accordance with the provisions of ASC 360, Property,
Plant and Equipment and ASC 350, Intangibles-Goodwill and Others. During the periods presented,
the only long-lived assets reported on the Company’s consolidated balance sheet are equipment, and
security deposits. These provisions require that long-lived assets and certain identifiable recorded
intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash flows expected to be
generated by the asset.
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount
by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount and the fair value less costs to sell.
The Company identified the following intangible assets in the acquisition of Kidoz Ltd. Intangible
assets are recorded at cost less accumulated amortization. Amortization is provided for annually on the
straight-line method over the following periods:
Ad Tech technology
Kidoz OS technology
Customer relationships
Goodwill
Amortization period
5 years
3 years
8 years
The Company accounts for goodwill in accordance with the provisions of ASC 350, Intangibles-
Goodwill and Others. Goodwill is the excess of the purchase price over the fair value of identifiable
assets acquired, less liabilities assumed, in a business combination. The Company reviews goodwill for
impairment. Goodwill is not amortized but is evaluated for impairment at least annually or whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable.
The goodwill impairment test is used to identify both the existence of impairment and the amount of
impairment loss, and compares the fair value of a reporting unit with its carrying amount and is based
on discounted future cash flows, based on market multiples applied to free cash flow. The determination
of the fair value of our reporting units requires management to make significant estimates and
assumptions including the selection of control premiums, discount rates, terminal growth rates,
forecasts of revenue and expense growth rates, income tax rates, changes in working capital,
depreciation, amortization and capital expenditures. Changes in assumptions concerning future
financial results, exogenous market conditions, or other underlying assumptions could have a
significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment
charge. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized
in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting
unit.
During the year ended December 31, 2021 and 2020, the Company deemed there was no impairment
of the goodwill.
SOURCES OF REVENUE AND REVENUE RECOGNITION
We generate our revenue from the following:
- The sale of Ad Tech advertising including banners, in-game advertising, completed view
videos, cost per install and playable ads on all gaming aps containing the Kidoz SDK.
- The sale of licensing including our KIDOZ OS platform loaded on new machines and tablets
- The sale of in-app purchases in, our online gaming Aps such as Garfield’s Bingo and Trophy
Bingo in the Google play, Apple iOS, Facebook Messenger (discontinued in fiscal 2021) and
Amazon App stores.
In-game advertising on all gaming aps containing the Kidoz SDK, whereby players watch
advertising to gain in-game currency.
-
Page 18
- Consumer subscription from players paying to unlock the Rooplay game catalog and Kidoz
OS platform.
- The sale of premium purchases of Rooplay Originals (Branded EdTech games for children
and families) in the Google play and Apple iOS stores.
- Sales of licenses for our Rooplay Originals games.
SUPPLEMENTARY FINANCIAL INFORMATION
Quarterly Results of Operations
The following tables present our unaudited consolidated quarterly results of operations for each of our
last eight quarters. This data has been derived from unaudited consolidated financial statements that
have been prepared on the same basis as the annual audited consolidated financial statements and, in
our opinion, include all normal recurring adjustments necessary for the fair presentation of such
information. These unaudited quarterly results should be read in conjunction with our audited
consolidated financial statements, included in Item 8 of this report.
Revenue
Cost of sales
Gross profit
Operating expenses and other
income / (expenses)
Stock awareness program
Depreciation and amortization
Income (Loss) before income taxes
Income tax (expense) recovery
Income (Loss) after tax
Basic and diluted Income (loss) per
share
Weighted average common shares,
basic
Weighted average common shares,
diluted
$
$
Three Months Ended
December 31,
2021
(Unaudited)
September 30
2021
(Unaudited)
June 30
2021
(Unaudited)
March 31
2021
(Unaudited)
$
5,925,391 $
2,814,642 $
2,177,505 $
1,557,942
3,528,967
2,396,424
1,588,108
1,226,534
1,153,172
1,024,333
(1,213,015)
(51,596)
(141,285)
990,528
(213,688)
776,840 $
(1,094,865)
(65,392)
(141,326)
(75,049)
9
(75,040)
(1,139,458)
(285,857)
(141,097)
(542,079)
(2,998)
(545,077)
872,901
685,041
(890,253)
-
(141,832)
(347,044)
-
(347,044)
0.01 $
(0.00)
(0.00) $
(0.00)
$
131,424,989
131,424,989
131,384,769
131,124,989
132,853,132
131,424,989
131,384,769
131,124,989
Page 19
Three Months Ended
December 31,
2020
(Unaudited)
September 30
2020
(Unaudited)
June 30
2020
(Unaudited)
March 31
2020
(Unaudited)
$
3,507,250 $
1,919,973 $
736,827 $
1,843,936
1,663,314
(824,706)
(141,191)
697,417
$
$
55,243
752,660 $
0.01 $
1,005,316
914,657
(657,338)
(140,685)
116,634
-
116,634
411,058
325,769
(545,747)
(141,421)
(361,399)
-
(361,399)
983,979
539,804
444,175
(706,768)
(141,331)
(403,924)
-
(403,924)
$
0.00
(0.00) $
(0.00)
131,124,989
131,124,989
131,124,989
131,124,989
131,275,099
131,124,989
131,124,989
131,124,989
Revenue
Cost of sales
Gross profit
Operating expenses and other
income / (expenses)
Depreciation and amortization
Income (Loss) before income taxes
Income tax recovery
Income (Loss) after tax
Basic and diluted Income (loss) per
share
Weighted average common shares,
basic
Weighted average common shares,
diluted
Our financial statements and related schedules are described under “Item 8. Financial Statements”.
RESULTS OF OPERATIONS
Years Ended December 31, 2021 and 2020
Revenue
Total revenue, net of platform fees (to Apple, Google and Amazon) and withholding taxes, for the year
ended December 31, 2021 increased to $12,475,480, an increase of 75% over total revenue net of fees
and withholding taxes of $7,148,029 for fiscal 2020. Ad Tech advertising revenue for the year ended
December 31, 2021, was $12,243,866 an increase of 81% over Ad Tech advertising revenue of
$6,748,064 for fiscal 2020. Content revenue for year ended December 31, 2021 decreased to $231,614,
a decrease of 42% over content revenue of $399,965 for fiscal 2020. The increase in total revenue over
fiscal 2020 is due to the growth of our publisher reach and our advertising customers increasing their
advertising budgets with the Kidoz safe mobile network. The decrease in content revenue is due to the
reduced OEM sales of kids tablets.
Selling and marketing expenses
Sales and marketing expenses for the year ended December 31, 2021 were $641,393, an increase of
61% over selling and marketing expenses of $397,948 for fiscal 2020. The increase in sales and
marketing expenses over fiscal 2020 is due to an increase in the sales and marketing team to serve our
clients better. Selling and marketing expenses consist primarily of sales staff salaries and benefits and
publishing services and user acquisition costs incurred to acquire game players.
We expect to incur increased sales and marketing expenses in growing the Ad tech advertising revenue
and to bring new players to Rooplay; our Rooplay Originals; and our bingo games. There can be no
assurances that these expenditures will result in increased traffic or significant additional revenue.
General and administrative expenses
General and administrative expenses consist primarily of premises costs for our offices and
development facilities, legal and professional fees, and other general corporate and office expenses.
General and administrative expenses increased to $604,882 for the year ended December 31, 2021, an
increase of 14% over general and administrative expenses of $528,708 in fiscal 2020. The increase in
general and administrative expenses is due an increase in fees paid to our professional advisors. The
Page 20
Company continues to maintain its current office space despite the large majority of our staff working
from home since early March 2020.
We expect to continue to incur general and administrative expenses to support the business, and there
can be no assurances that we will be able to generate sufficient revenue to cover these expenses.
Salaries, wages, consultants and benefits
Salaries, wages, consultants and benefits increased to $693,964 for the year ended December 31, 2021,
an increase of 47% over salaries, wages, consultants and benefits of $470,658 for fiscal 2020. The
increase in salaries, wages, consultants and benefits over fiscal 2020, is due to an increase in the overall
headcount of staff employed by the Company to service its rapid growth and bonuses paid.
Depreciation and amortization
Intangible assets are amortized using a straight-line method over three to eight years. These intangible
assets include customer lists, the technology for Kidoz OS and the software development kits for
advertising platform. These intangible assets are as result of the acquisition of Kidoz Ltd. The
amortization for the year ended December 31, 2021, was $565,540 compared to $556,073 in fiscal
2020.
Equipment is depreciated using the declining balance method over the useful lives of the assets, ranging
from three to five years. Depreciation decreased to $9,468 during the year ended December 31, 2021,
over depreciation of $8,555 in fiscal 2020. This increase in depreciation and amortization compared to
fiscal 2020, is due to the acquisition of new equipment and the write off of old equipment.
Content and software development
We do not capitalize our development costs. Content and software development costs of $1,678,848
were expensed for year ended December 31, 2021, an increase of 46% from content and software
development costs of $1,149,902 expensed for fiscal 2020. These increases over fiscal 2020, is due to
the hiring of additional development staff as a result of an increased focus in development of our base
technology and the development of our safe programmatic ad sourcing solution Kidoz Connect.
Stock-based compensation expense
During the year ended December 31, 2021, the Company incurred non-cash stock compensation
expenses of $660,266 compared to non-cash stock compensation expenses of $158,883 for fiscal 2020.
During the year ended December 31, 2021, the Company granted 2,675,000 options. The options
granted in fiscal 2021, are issued to consultants and employees as per the Company’s 2015 Rolling
Stock Option Plan. The non-cash stock compensation program is an integral part of the Companies
overall Staff Compensation Program.
Stock awareness program
During the year ended December 31, 2021, the Company commenced a corporate stock awareness
program. The Company engaged Research Capital Corporation, Agora Internet Relations Corp.,
Stockhouse Publishing Ltd. and Proactive for financial and capital markets advisory services and to
assist with general market outreach to increase investor awareness as the Company continues to achieve
important milestones and grow its investor base.
The Company incurred stock awareness expenses of $402,845 during the year ended December 31,
2021, of which $316,237 is a non-cash expense from the issuance of shares and warrants.
Other income and expenses
During the year ended December 31, 2021, the Company has a foreign exchange loss of ($69,835)
compared to foreign exchange gain of $32,856 in the prior year. These (losses) / gains are due to the
exchange rate movements of the US Dollar compared to the Pound Sterling, Israeli Shekel and the
Canadian Dollar. The Company does not hedge its cash assets.
During the year ended December 31, 2021, we received interest income of $241 compared to interest
income of $1,003 in the prior year. The interest income is received from bank term deposits from
investing our cash. The decrease in interest income is due to lower bank account balances in interest
earning bank accounts in fiscal 2021 compared to fiscal 2020.
Page 21
During the year ended December 31, 2021, the Company had a gain on the derivative liability –
warrants of $60,207 from the issuance of the 230,000 warrants to Research Capital Corporation during
the year ended December 31, 2021.
Amortization of right-of-use assets
On January 1, 2020, the Company adopted ASC Topic 842 using the modified retrospective transition
method. Topic 842 requires the recognition of lease assets and liabilities for operating leases. The
Company recognized right-of-use assets relating to the brand licenses and the Vancouver, Canada and
Anguillian office rental. During the year ended December 31, 2021, the Company amortized $40,851
compared to right-of-use assets amortization of $54,071 in fiscal 2020. The decrease over fiscal 2020,
is due to certain licensing expiring.
Income taxes
During the year ended December 31, 2021, had tax expense of $216,677. Our Israeli subsidiary had a
deferred tax liability of $210,449 from the acquisition of Kidoz Ltd. intangible assets and a subsidiary
of the Company of tax expense of $6,178. During the year ended December 31, 2020, a subsidiary of
the Company applied for a Canadian tax credit in relation to fiscal 2019. The Company received a tax
credit of $55,243 in fiscal 2020. The Company is no longer eligible to receive the Canadian Tax credit,
so no funds were received in fiscal 2021.
During the year ended December 31, 2005, Bingo.com, Inc. merged with its subsidiary Bingo.com,
Ltd. in Anguilla, British West Indies. Anguilla is a zero-tax jurisdiction.
Net (loss) income and (loss) income per share
The net loss after taxation for the year ended December 31, 2021, amounted to ($190,321) a loss of
($0.00) per share, compared to a net income of $103,971, an income of $0.00 per share, in the year
ended December 31, 2020. The net loss increased for the year ended December 31, 2021, despite an
increase in revenue due to the initiation of the stock awareness program, a one-time bonuses paid to
our staff and consultants in fiscal 2021 in recognition of their dedicated service during the stressful
COVID-19 period and the deferred tax liability on the intangibles assets acquired in the acquisition of
Kidoz Ltd.
Adjusted earnings before interest; depreciation and amortization; stock awareness program; stock-
based compensation and impairment of goodwill (“Adjusted EBITDA”) for the year ended December
30, 2021, amounted to $1,507,951, an increase of 96%, compared to an Adjusted EBITDA of $771,236
in the prior year.
Our Adjusted EBITDA is reconciled as follows:
(Loss) Income for the year
Depreciation and amortization
Stock awareness program
Stock-based compensation
Gain on derivative liability – warrants
Interest and other income
Income tax expense
$
2021
(190,321) $
565,540
316,237
660,266
(60,207)
(241)
216,677
Adjusted EBITDA
$
1,507,951 $
2020
103,971
564,628
-
158,883
-
(1,003)
(55,243)
771,236
We use Adjusted EBITDA internally to evaluate our performance and make financial and operational
decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that
supplement the information provided by our GAAP measures. Adjusted EBITDA is defined by us as
EBITDA (net income (loss) plus depreciation expense, amortization expense, interest, stock-based
compensation and impairment of goodwill), further adjusted to exclude certain non-cash expenses and
other adjustments. We use Adjusted EBITDA because we believe it more clearly highlights business
trends that may not otherwise be apparent when relying solely on GAAP financial measures, since
Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our
core operating performance.
Page 22
Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial
measures and may be different from non-GAAP measures used by other companies. These non-GAAP
measures should not be considered a substitute for, or superior to, financial measures calculated in
accordance with generally accepted accounting principles in the United States of America (“GAAP”).
We encourage investors to review the GAAP financial measures included in this Annual Report,
including our consolidated financial statements, to aid in their analysis and understanding of our
performance and in making comparisons.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $2,078,607 and working capital of $4,536,852 as at December 31, 2021. This compares
to cash of $1,226,045 and working capital of $3,071,545 as at December 31, 2020.
During the year ended December 31, 2021, we provided cash of $851,533 in operating activities
compared to providing cash of $256,978 in the prior year.
Net cash provided by financing activities was $1,413 in the year ended December 31, 2021, which
compares to cash provided by financing activity of $23,392 in fiscal 2020.
Cash of ($384) was used in investing activities in fiscal 2021, compared to cash used of ($21,537) in
the prior year.
Our future capital requirements will depend on a number of factors, including costs associated with the
further development of the Ad tech advertising business, the further development of the content
platform including, Rooplay; Rooplay Originals; and Trophy Bingo; the cost of marketing and player
acquisition costs for Rooplay; Rooplay Originals; and Trophy Bingo, the development of new products,
the acquisition of new companies and the success of Rooplay; Rooplay Originals; and Trophy Bingo.
Off Balance Sheet Arrangements
We did not have any Off Balance sheet arrangements for the year ended December 31, 2021 and 2020.
AUDIT COMMITTEE
Our audit committee consists of three directors and reports to the Board of Directors. The audit
committee meets regularly throughout the year and met with the independent auditors on March 29,
2022, and approved the financial statements for the year ended December 31, 2021.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Page 23
KIDOZ INC. and subsidiaries
Consolidated Financial Statements
Years ended December 31, 2021 and 2020
Report of Independent Registered Public Accounting Firm
for the years ended December 31, 2021 and 2020
Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive (Loss) Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
25
27
28
29
30
31
Page 24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Shareholders and Directors of
Kidoz Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Kidoz Inc. (the “Company”) as of
December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive
(loss) income, stockholders’ equity, and cash flows for the years ended December 31, 2021 and 2020,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December
31, 2021 and 2020, and the results of its operations and its cash flows for years ended December 31,
2021 and 2020, in conformity with accounting principles generally accepted in the United States of
America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is
to express an opinion on these financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and
are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our
audits we are required to obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial
reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the
financial statements that were communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing separate opinions on the critical
audit matter or on the accounts or disclosures to which it relates.
Page 25
Evaluation of intangible asset and goodwill impairment analysis
As described in Notes 6 and 7 to the consolidated financial statements, the carrying amount of the
Company’s sole reporting unit, consisting of intangible assets, goodwill, and the associated deferred
tax liability was $4,785,857 as at December 31, 2021 and is a significant portion (36%) of the
Company’s total assets. As discussed in notes 2(l) and 2(m) to the consolidated financial statements,
the Company performs impairment testing on an annual basis or whenever events or changes in
circumstances indicate that the carrying value of a reporting unit may exceed its recoverable amount.
During the year ended December 31, 2021, the Company determined that no impairment was necessary.
We identified the evaluation of the goodwill impairment analysis as a critical audit matter. The
estimated recoverable amount of the reporting unit uses forward-looking estimates that involved a high
degree of subjective auditor judgment, in addition to specialized skills and knowledge to evaluate. The
sensitivity of reasonably possible changes to those assumptions could have a significant impact on the
determination of the recoverable amount of the reporting unit and the Company’s assessment of
impairment.
Addressing the matter involved performing procedures and evaluating audit evidence in connection
with forming our overall opinion on the consolidated financial statements. These procedures include,
among others:
• Evaluating projected earnings before interest, taxes, depreciation, and amortization
(“EBITDA”) by comparing historical EBITDA forecasts to actual results and by examining the
historical trend analysis of both increases and decreases in actual revenues and costs as
compared to forecasted amounts;
Involving our valuation specialists to assist in testing certain significant assumptions described
above, such as discount rates and long-term growth rates;
•
• Performing sensitivity analyses on significant assumptions to evaluate the changes in fair value
that would result from changes in these assumptions; and
• Assessing the adequacy of the associated disclosures in the financial statements.
Reliability of internally-generated reports supporting revenues
The Company uses an underlying operating system to track ad tech advertising revenue and report this
information to customers and suppliers. As disclosed in Note 2(c) of the consolidated financial
statements, the Company records revenues when a customer obtains control of promised services,
which in certain instances, is determined by the Company’s underlying operating and ad tech systems.
We identified relying on internally-generated reports as a critical audit matter. Assessing the reliability
of information produced by the Company as audit evidence requires significant judgment with respect
to testing and evaluating the information to determine if it is sufficient and appropriate for purposes of
the audit. Auditing the Company’s accounting for revenue from contracts with customers was
challenging and complex due to the dependency on these internally-generated reports.
Addressing the matter involved performing procedures and evaluating audit evidence in connection
with forming our overall opinion on the consolidated financial statements. These procedures include,
among others:
• Testing, on a sample basis, the completeness and accuracy of the underlying data within the
Company’s billing system;
• Testing, on a sample basis, credit notes issued to customers to determine if there is a history of
modification;
• Comparing the Company’s internally-generated reports to similar reports as provided by key
customers to determine if any difference were within an acceptable range of variance; and
• Confirming, on a sample basis, revenues directly with customers.
We have served as the Company’s auditor since 2010.
Vancouver, Canada
March 30, 2022
Page 26
/s/ DAVIDSON & COMPANY LLP
Chartered Professional Accountants
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Consolidated Balance Sheets
As at December 31,
Assets
Current assets:
Cash
Accounts receivable, less allowance for doubtful accounts
$56,605 (2020 - $55,660) (Note 3)
Prepaid expenses (Note 4)
Total Current Assets
Equipment (Note 5)
Goodwill (Note 7)
Intangible assets (Note 6)
Long term cash equivalent
Operating lease right-of-use assets (Note 14)
Security deposit
Total Assets
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Accrued liabilities
Accounts payable and accrued liabilities - related party
(Note 15)
Derivative liability – warrants (Note 2i and 10)
Operating lease liabilities – current portion (Note 14)
Total Current Liabilities
Deferred tax liability (Note 13)
Government CEBA loan (Note 9)
Operating lease liabilities – non-current portion (Note 14)
Total Liabilities
Commitments (Note 12)
Stockholders’ Equity (Note 10):
Common stock, no par value, unlimited shares
authorized, 131,424,989 shares issued and outstanding
(December 31, 2020 - 131,124,989)
Accumulated deficit
Accumulated other comprehensive income:
Foreign currency translation adjustment
Total Stockholders’ Equity
2021
2020
$
2,078,607
$
1,226,045
$
$
6,627,864
105,468
8,811,939
20,523
3,301,439
1,694,917
23,624
65,464
7,625
3,933,540
89,970
5,249,555
21,839
3,301,439
2,250,989
31,392
106,315
7,600
13,925,531
$
10,969,129
3,693,944
471,882
53,829
23,365
32,068
4,275,088
210,499
47,248
41,999
4,574,834
$
1,722,066
375,089
50,772
-
30,083
2,178,010
-
47,089
73,835
2,298,934
49,964,919
(40,638,802)
24,580
9,350,697
49,094,096
(40,448,481)
24,580
8,670,195
Total Liabilities and Stockholders’ Equity
$
13,925,531
$
10,969,129
See accompanying notes to consolidated financial statements.
Page 27
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
INCOME
2021
2020
Years ended December 31,
Revenue:
Ad tech advertising revenue
Content revenue
Total revenue
Cost of sales:
Total cost of sales
Gross profit
Operating expenses:
Amortization of operating lease right-of-use assets
(Note 14)
Depreciation and amortization (Note 5 and 6)
Directors fees
General and administrative (Note 17)
Salaries, wages, consultants and benefits
Selling and marketing
Stock awareness program (Note 18)
Stock-based compensation (Note 10)
Content and software development (Note 8)
Total operating expenses
Income before other income (expense) and income taxes
Other income (expense):
Foreign exchange (loss) gain
Gain on derivative liability – warrants (Note 2i)
Interest and other income
Net income before income taxes
(Provision for) recovery of income taxes (Note 13)
Deferred taxation expense (Note 13)
$
12,243,866
231,614
12,475,480
7,143,148
7,143,148
5,332,332
40,851
565,540
8,000
604,882
693,964
641,393
402,845
660,266
1,678,848
5,296,589
35,743
(69,835)
60,207
241
26,356
(6,178)
(210,499)
Net (loss) income after tax
$
(190,321)
Other comprehensive income (loss)
-
Comprehensive (loss) income
$
(190,321)
Basic and diluted (loss) income per common share (Note 2)
$
(0.00)
$
$
$
$
6,748,064
399,965
7,148,029
3,800,114
3,800,114
3,347,915
54,071
564,628
8,248
528,708
470,658
397,948
-
158,883
1,149,902
3,333,046
14,869
32,856
-
1,003
48,728
55,243
-
103,971
-
103,971
0.00
Weighted average common shares outstanding, basic
(Note 2)
Weighted average common shares outstanding, diluted
(Note 2)
See accompanying notes to consolidated financial statements.
131,340,989
131,340,989
131,124,989
131,124,989
Page 28
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Years ended December 31, 2021 and 2020
Common stock
Shares
131,124,989
Amount
$48,935,213
Accumulated
Deficit
($40,552,452)
Accumulated
Other
Comprehensive
income
Foreign currency
translation
adjustment
$ 24,580
Total
Stockholders’
Equity
$8,407,341
Balance, December 31, 2019
Stock-based compensation
-
158,883
-
-
158,883
Net income
Balance, December 31, 2020
-
131,124,989
-
$49,094,096
103,971
($40,448,481)
-
$ 24,580
103,971
$8,670,195
Shares issued
230,000
179,293
Options exercised
70,000
31,264
Stock-based compensation
-
660,266
-
-
-
-
-
-
179,293
31,264
660,266
Net loss
Balance, December 31, 2021
-
131,424,989
-
$49,964,919
(190,321)
($40,638,802)
-
$ 24,580
(190,321)
$9,350,697
See accompanying notes to consolidated financial statements.
Page 29
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Consolidated Statements of Cash Flows
Years ended December 31,
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Amortization of operating lease right-of-use assets
Gain on derivative liability – warrants
Shares issued for services
Stock awareness program – warrants granted for services
Deferred income tax expense
Stock-based compensation
Unrealized foreign exchange loss
Changes in operating assets and liabilities:
Accounts receivable
Prepaid expenses
Accounts payable and accrued liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of equipment
Long-term cash equivalent
Acquisition of right-of-use assets
Security deposits
Net cash used in investing activities
Cash flows from financing activities:
Options exercised
Proceeds of short-term loan
Repayment of short-term loan
Government CEBA loan
Payments on operating lease liabilities
Net cash provided by financing activities
Change in cash
Cash, beginning of year
Cash, end of year
Supplementary information:
Interest paid
Income taxes paid (recovery)
See accompanying notes to consolidated financial statements.
2021
$
(190,321)
$
565,540
40,851
(60,207)
179,293
83,572
210,499
660,266
134
(2,694,324)
(15,498)
2,071,728
851,533
(8,152)
7,768
-
-
(384)
31,264
200,000
(200,000)
-
(29,851)
1,413
852,562
1,226,045
2,078,607
987
2,989
$
$
$
$
$
$
2020
103,971
564,628
54,071
-
-
-
-
158,883
-
(1,540,762)
19,944
896,243
256,978
(3,212)
7,020
(25,472)
127
(21,537)
-
-
-
47,089
(23,697)
23,392
258,833
967,212
1,226,045
-
(55,243)
Page 30
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
1. Introduction:
Nature of business
Kidoz Inc., incorporated in Anguilla, British West Indies in 2005, is a focused AdTech solution
provider. Owner of the Kidoz SDK and Kidoz Connect Programmatic network, a Children's
Online Privacy Protection Rule (“COPPA”) & General Data Protection Regulation (“GDPR”)
compliant contextual mobile advertising network that reaches kids, teens, and families every
month. Google certified and Apple approved, Kidoz provides a suite of advertising technology
that connects brands, content publishers and families. The Company has created a network that
app developers use to compliantly monetize traffic and advertisers rely on to reach their customers.
Kidoz has developed a contextual targeting tools to enable brands to reach their ideal customers.
Continuing operations
These consolidated financial statements have been prepared assuming the realization of assets and
the settlement of liabilities in the normal course of operations. The Company expects to continue
to achieve profitable operations to generate sufficient cash flows to fund continued operations for
the next 12 months, or, in the absence of adequate cash flows from operations, obtaining additional
financing.
Management continues to review operations in order to identify additional strategies designed to
generate cash flow, improve the Company’s financial position, and enable the timely discharge of
the Company’s obligations.
In March 2020 the World Health Organization declared coronavirus COVID-19 a global
pandemic. This contagious disease outbreak, which has continued to spread, and any related
adverse public health developments, has adversely affected workforces, economies, and financial
markets globally, has led to an economic downturn. It has also disrupted the normal operations of
many businesses, including the Company’s. In early March 2020, the Company’s employees
commenced working from home and commenced social distancing. This outbreak has affected
spending, thereby affecting demand for the Company’s product and the Company’s business and
results of operations. It is not possible for the Company to predict the duration or magnitude of
the outbreak and at this time its full effects on the Company’s business, its future results of
operations, or ability to raise funds.
2. Summary of significant accounting policies:
(a) Basis of presentation:
These consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“US GAAP”) applicable to
annual financial information and with the rules and regulations of the United States Securities
and Exchange Commission.
Page 31
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(a) Basis of presentation:
The financial statements include the accounts of the Company’s subsidiaries:
Company
Registered
% Owned
Shoal Media (Canada) Inc.
British Columbia, Canada
Coral Reef Marketing Inc.
Anguilla
Kidoz Ltd.
Israel
Rooplay Media Ltd.
British Columbia, Canada
Rooplay Media Kenya Limited
Kenya
Shoal Media Inc.
Anguilla
Shoal Games (UK) Plc
United Kingdom
Shoal Media (UK) Ltd.
United Kingdom
100%
100%
100%
100%
100%
100%
99%
100%
In addition, there are the following dormant subsidiaries; Bingo.com (Antigua) Inc.,
Bingo.com (Wyoming) Inc., and Bingo Acquisition Corp.
All inter-company balances and transactions have been eliminated in the consolidated
financial statements.
(b) Use of estimates:
The preparation of consolidated financial statements in conformity with US GAAP, requires
management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and recognized revenues and expenses for the reporting periods.
Significant areas requiring the use of estimates include the collectability of accounts
receivable, the valuation of stock-based compensation, the useful lives of intangible assets,
assessment of recoverable amount on goodwill and intangible assets, and the estimated
interest rate of 12% for the license right-of-use assets, 4.12% - 5% for the rental units right-
of-use asset and the derivative liability – warrants valuation. Actual results may differ
significantly from these estimates.
(c) Revenue recognition:
In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized
when a customer obtains control of promised services. The amount of revenue recognized
reflects the consideration to which the Company expects to be entitled to receive in exchange
for these services.
We derive substantially all of our revenue from the sale of Ad tech advertising revenue.
Page 32
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(c) Revenue recognition: (Continued)
To achieve this core principle, the Company applied the following five steps:
1) Identify the contract with a customer
A contract with a customer exists when (i) the Company enters into an enforceable contract
with a customer that defines each party’s rights regarding the services to be transferred,
whose impression count will form the basis of the revenue and identifies the payment terms
related to these services, (ii) the contract has commercial substance and, (iii) the Company
determines that collection of substantially all consideration for services that are transferred
is probable based on the customer’s intent and ability to pay the promised consideration. The
Company applies judgment in determining the customer’s ability and intention to pay, which
is based on a variety of factors including the customer’s historical payment experience or, in
the case of a new customer, published credit and financial information pertaining to the
customer.
2) Identify the performance obligations in the contract
Performance obligations promised in a contract are identified based on the services that will
be transferred to the customer that are both capable of being distinct, whereby the customer
can benefit from the service either on its own or together with other resources that are readily
available from third parties or from the Company, and are distinct in the context of the
contract, whereby the transfer of the services is separately identifiable from other promises
in the contract. To the extent a contract includes multiple promised services, the Company
must apply judgment to determine whether promised services are capable of being distinct
and distinct in the context of the contract. If these criteria are not met the promised services
are accounted for as a combined performance obligation.
3) Determine the transaction price
The transaction price is determined based on the consideration to which the Company will
be entitled in exchange for transferring services to the customer. None of the Company's
contracts contain financing or variable consideration components.
4) Allocate the transaction price to performance obligations in the contract
If the contract contains a single performance obligation, the entire transaction price is
allocated to the single performance obligation. Contracts that contain multiple performance
obligations require an allocation of the transaction price to each performance obligation based
on a relative standalone selling price basis. The Company determines standalone selling price
based on the price at which the performance obligation is sold separately. If the standalone
selling price is not observable through past transactions, the Company estimates the
standalone selling price taking into account available information such as market conditions
Page 33
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(c) Revenue recognition: (Continued)
and internally approved pricing guidelines related to the performance obligations.
5) Recognize revenue when or as the Company satisfies a performance obligation
The Company satisfies performance obligations at a point in time as discussed in further
detail under "Disaggregation of Revenue" below. Revenue is recognized at the time the
related performance obligation is satisfied by transferring a promised service to a customer.
Disaggregation of Revenue
All of the Company's performance obligations, and associated revenue, are generally
transferred to customers at a point in time. The Company has the following revenue streams:
1) Ad tech advertising revenue - The Company generally offers these services under a
customer contract Cost-per-Impression (CPM), Cost-Per-Install or CPI arrangements, Cost
per completed video view or CPC and/or Cost-Per-Action or CPA arrangements with third-
party advertisers and developers, as well as advertising aggregators, generally in the form of
insertion orders that specify the type of arrangement (as detailed above) at particular set
budget amounts/restraints. These advertiser customer contracts are generally short term in
nature at less than one year as the budget amounts are typically spent in full within this time
period. These agreements typically include the delivery of Ad tech advertising through
partner networks, defined as publishers / developers, to home screens of devices and agree
on whose results will be relied on from a revenue point of view.
The Company has concluded that the delivery of the Ad tech advertising is delivered at a
point in time and, as such, has concluded these deliveries are a single performance obligation.
The Company invoices fees which are generally variable based on the arrangement, which
would typically include the number of impressions delivered at a specified price per
application. For impressions delivered, revenue is recognized in the month in which the
Company delivers the application to the end consumer or the month when the campaign ends.
2) Content revenue – The Company recognizes content revenue on the following forms of
revenue:
a) Carriers and OEMs - The Company generally offers these services under a customer
contract per tablet device license fee model with OEMs. Monthly or quarterly license
fees are based on the OEM agreement with the number of devices the Kidoz Kid Mode
is installed upon.
b) Rooplay - The Company generates revenue through subscriptions or premium sales of
Rooplay, (www.rooplay.com) the cloud-based EduGame system for kids to learn and
play within its games on smartphones and tablet devices, such as Apple’s iPhone and
Page 34
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(c) Revenue recognition: (Continued)
iPad, and mobile devices utilizing Google’s Android operating system. Users can
download the Company’s games through Digital Storefronts and decide to subscribe to
the multiple of educational and fun games in the Rooplay, cloud-based EduGame system
or make a premium per purchase of particular games. The revenue is recognized net of
platform fees.
c) Rooplay licensing - The Company licenses its branded educational games under a
monthly cost per game agreement license fee model. Monthly license fees are based on
the number of games licensed.
d) In App purchases - The Company generates revenue through in-application purchases
(“in-app purchases”) within its games; (i.e. Trophy Bingo (www.trophybingo.com)) on
smartphones and tablet devices, such as Apple’s iPhone and iPad, and mobile devices
utilizing Google’s Android operating system. Users can download the Company’s free-
to-play games through Android, Amazon, iOS and Facebook Messenger (this was
discontinued in fiscal 2021) and pay to acquire virtual currency which can be redeemed
in the game for power plays. The initial download of the mobile game from the Digital
Storefront does not create a contract under ASC 606 because of the lack of commercial
substance; however, the separate election by the player to make an in-application
purchase satisfies the criterion thus creating a contract under ASC 606.
The Company has identified the following performance obligations in these contracts:
i.
Ongoing game related services such as hosting of game play, storage of
customer content, when and if available content updates, maintaining the virtual currency
management engine, tracking gameplay statistics, matchmaking as it relates to multiple
player gameplay, etc.
ii.
Obligation to the paying player to continue displaying and providing access
to the virtual items within the game.
Neither of these obligations are considered distinct since the actual mobile game and the
related ongoing services are both required to purchase and benefit from the related virtual
items. As such, the Company’s performance obligations represent a single combined
performance obligation which is to make the game and the ongoing game related services
available to the players. The revenue is recognized net of platform fees.
(d) Foreign currency:
The consolidated financial statements are presented in United States dollars, the functional
currency of the Company and its subsidiaries. The Company accounts for foreign currency
transactions and translation of foreign currency financial statements under ASC 830, Foreign
Currency Matters. Transaction amounts denominated in foreign currencies are translated at
Page 35
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(d) Foreign currency: (Continued)
exchange rates prevailing at the transaction dates. Carrying values of monetary assets and
liabilities are adjusted at each balance sheet date to reflect the exchange rate at that date. Non-
monetary assets and liabilities are translated at the exchange rate on the original transaction
date.
Gains and losses from restatement of foreign currency monetary and non-monetary assets
and liabilities are included in operations. Revenues and expenses are translated at the rates of
exchange prevailing on the dates such items are recognized in earnings.
(e) Cash and Cash Equivalents:
Cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions and other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash, collateral accounts with
maturities greater than 1 year and subject to an insignificant risk of change in value.
(f) Accounts receivable:
Trade and other accounts receivable are reported at face value less any provisions for
uncollectible accounts considered necessary. Accounts receivable includes receivables from
online platforms and trade receivables from customers. The Company estimates doubtful
accounts on an item-by-item basis and includes over-aged accounts as part of allowance for
doubtful accounts, which are generally ones that are greater than ninety-days overdue. Bad
debt expense, for the year ended December 31, 2021 was $945 (2020 - $1,952). (Note 3)
(g) Equipment:
Equipment is recorded at cost less accumulated depreciation. Depreciation is provided for
annually on the declining balance method over the following periods:
Equipment and computers
Furniture and fixtures
3 years
5 years
Expenditures for maintenance and repairs are charged to expenses as incurred. Major
improvements are capitalized. Gains and losses on disposition of equipment are included in
operations as realized.
In accordance with ASU No. 2016-02 “Leases (Topic 842), leasehold improvements are
accounted as a prepayment of rental payments since they are deemed to be an asset of the
lessor.
Page 36
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(h) Software Development Costs:
The Company expenses all software development costs as incurred for the year ended
December 31, 2021 and 2020. As at December 31, 2021 and 2020, all capitalized software
development costs have been fully amortized and the Company has no capitalized software
development costs.
Total software development costs were $10,559,601 as at December 31, 2021 (2020 -
$8,880,753) (Note 8).
(i) Derivative liability – warrants
The Company’s warrants have an exercise price in Canadian dollars whilst the Company’s
functional currency is US Dollars. Therefore, in accordance with ASU 815 – Derivatives and
Hedging, the warrants have a derivative liability value. This liability value has no effect on
the cashflow of the Company and does not represent a cash payment of any kind.
(j) Stock-based compensation:
The Company accounts for stock-based compensation under the provisions of Accounting
Standard Codification (“ASC”) 718, “Compensation-Stock Compensation”. Under the fair
value recognition provisions, stock-based compensation expense is measured at the grant date
for all stock-based awards to employees, directors and non-employees and is recognized as
an expense over the requisite service period, which is generally the vesting period. The Black-
Scholes option valuation model is used to calculate fair value.
The fair value of each option grant has been estimated on the date of the grant using the
Black-Scholes option-pricing model with the following weighted average assumptions:
Expected dividend yield
Volatility
Risk-free interest rate
Expected life of options
Forfeiture rate
(k) Right-of-use assets:
2021
-
107.06%
0.52%
5 years
5%
2020
-
123%
0.32%
5 years
5%
The Company determines if an agreement is a lease at inception. The Company evaluates the
lease terms to determine whether the lease will be accounted for as an operating or finance
lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating
lease liabilities, current portion, and operating lease liabilities, net of current portion in the
consolidated balance sheets.
ROU assets represent the Company’s right to use an underlying asset for the lease term and
lease liabilities represent our obligation to make lease payments arising from the lease.
Operating lease ROU assets and liabilities are recognized at commencement date based on
the present value of lease payments over the lease term. As most of the Company leases do
Page 37
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(k) Right-of-use assets: (Continued)
not provide an implicit rate, the Company uses the incremental borrowing rate based on the
information available at commencement date in determining the present value of lease
payments. The Company uses the implicit rate when readily determinable. The operating
lease ROU asset also includes any lease payments made and excludes lease incentives. The
Company’s lease terms may include options to extend or terminate the lease when it is
reasonably certain that we will exercise that option. Lease expense for lease payments is
recognized on a straight-line basis over the lease term.
A lease that transfers substantially all of the benefits and risks incidental to ownership of
property are accounted for as finance leases. At the inception of a finance lease, an asset and
finance lease obligation is recorded at an amount equal to the lesser of the present value of
the minimum lease payments and the property’s fair market value. Finance lease obligations
are classified as either current or long-term based on the due dates of future minimum lease
payments, net of interest.
(l) Impairment of long-lived assets and long-lived assets to be disposed of:
If such assets are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying amount and the fair value
less costs to sell.
The Company identified the following intangible assets in the acquisition of Kidoz Ltd.
Intangible assets are recorded at cost less accumulated amortization. Amortization is provided
for annually on the straight-line method over the following periods:
Ad Tech technology
Kidoz OS technology
Customer relationships
(m) Goodwill:
Amortization period
5 years
3 years
8 years
The Company accounts for goodwill in accordance with the provisions of ASC 350,
Intangibles-Goodwill and Others. Goodwill is the excess of the purchase price over the fair
value of identifiable assets acquired, less liabilities assumed, in a business combination. The
Company reviews goodwill for impairment. Goodwill is not amortized but is evaluated for
impairment at least annually or whenever events or changes in circumstances indicate that it
is more likely than not that the carrying amount may not be recoverable.
The goodwill impairment test is used to identify both the existence of impairment and the
amount of impairment loss, and compares the fair value of a reporting unit with its carrying
amount and is based on discounted future cash flows, based on market multiples applied to
Page 38
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(m) Goodwill: (Continued)
free cash flow. The determination of the fair value of our reporting units requires management
to make significant estimates and assumptions including the selection of control premiums,
discount rates, terminal growth rates, forecasts of revenue and expense growth rates, income
tax rates, changes in working capital, depreciation, amortization and capital expenditures.
Changes in assumptions concerning future financial results, exogenous market conditions, or
other underlying assumptions could have a significant impact on either the fair value of the
reporting unit or the amount of the goodwill impairment charge. If the carrying value of the
reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to
that excess, limited to the total amount of goodwill allocated to that reporting unit.
During the year ended December 31, 2021 and 2020, the Company deemed there was no
impairment of the goodwill.
(n) Income taxes:
The Company follows the asset and liability method of accounting for income taxes. Under
this method, current income taxes are recognized for the estimated income taxes payable for
the current period. The Company recognizes the income tax recovery from the receipt of tax
credits upon receipt of funds. Deferred income taxes are provided based on the estimated
future tax effects of temporary differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases, as well as the benefit of losses available
to be carried forward to future years for tax purposes.
Deferred tax assets and liabilities are measured using the enacted tax rates that are expected
to apply to taxable income in the years in which those temporary differences are expected to
be recovered and settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in operations in the period that includes the enactment date. A valuation
allowance is recorded for deferred tax assets when it is not more likely than not that such
future tax assets will be realized.
(o) Net income (loss) per share:
ASC 260, “Earnings Per Share”, requires presentation of basic earnings per share (“Basic
EPS”) and diluted earnings per share (“Diluted EPS”). Basic earnings (loss) per share is
computed by dividing earnings (loss) available to common stockholders by the weighted
average number of common shares outstanding during the period. Diluted earnings per share
reflects the potential dilution, using the treasury stock method, that could occur if outstanding
options or warrants were exercised and converted into common stock. In computing diluted
earnings per share, the treasury stock method assumes that outstanding options and warrants
are exercised and the proceeds are used to purchase common stock at the average market
price during the period.
Page 39
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(o) Net income (loss) per share: (Continued)
Options and warrants will have a dilutive effect under the treasury stock method only when
the average market price of the common stock during the period exceeds the exercise price
of the options and warrants. In periods where losses are reported, the weighted average
number of common shares outstanding excludes common stock equivalents because their
inclusion would be anti-dilutive. A total of 6,870,150 (2020 - 5,875,750) stock options were
excluded as at December 31, 2021.
The earnings per share data for the year ended December 31, 2021 and 2020 are summarized
as follows:
(Loss) Income for the year
Basic and diluted weighted average number of
common shares outstanding
Basic and diluted (loss) income per common
share outstanding
$
$
2021
(190,321) $
2020
103,971
131,340,989
131,124,989
(0.00) $
0.00
(p) New accounting pronouncements and changes in accounting policies:
In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740):
Simplifying the Accounting for Income Taxes”. The ASU is expected to reduce cost and
complexity related to the accounting for income taxes by removing specific exceptions to
general principles in Topic 740 (eliminating the need for an organization to analyze whether
certain exceptions apply in a given period) and improving financial statement preparers’
application of certain income tax-related guidance. This standard is effective for fiscal years
beginning after December 15, 2020, and interim periods within those fiscal years. Early
adoption of this standard is permitted. The Company concluded that the adoption did not
have a material impact on these consolidated financial statements.
There have been no other recent accounting standards, or changes in accounting standards,
during the year ended December 31, 2021, that are of material significance, or have potential
material significance, to us.
(q) Financial instruments and fair value measurements:
(i) Fair values:
Fair value is 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 measurement date. The Company
classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon
the observability of inputs used in valuation techniques. Observable inputs (highest level)
reflect market data obtained from independent sources, while unobservable inputs (lowest
Page 40
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(q) Financial instruments and fair value measurements: (Continued)
level) reflect internally developed market assumptions. The fair value measurements are
classified under the following hierarchy:
Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets
and liabilities in active markets;
Level 2—Observable inputs, other than quoted market prices, that are either directly or
indirectly observable in the marketplace for identical or similar assets and liabilities, quoted
prices in markets that are not active, or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets and liabilities; and
Level 3—Unobservable inputs that are supported by little or no market activity that are
significant to the fair value of assets or liabilities.
When available, we use quoted market prices to determine fair value, and we classify such
measurements within Level 1. In some cases where market prices are not available, we make
use of observable market-based inputs to calculate fair value, in which case the measurements
are classified within Level 2. If quoted or observable market prices are not available, fair
value is based upon valuations in which one or more significant inputs are unobservable,
including internally developed models that use, where possible, current market-based
parameters such as interest rates, yield curves and currency rates. These measurements are
classified within Level 3.
Fair value measurements are classified according to the lowest level input or value-driver that
is significant to the valuation. A measurement may therefore be classified within Level 3
even though there may be significant inputs that are readily observable.
Fair value measurement includes the consideration of nonperformance risk. Nonperformance
risk refers to the risk that an obligation (either by a counterparty) will not be fulfilled.
For financial assets traded in an active market (Level 1 and certain Level 2), the
nonperformance risk is included in the market price. For certain other financial assets and
liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted
accordingly.
The fair value of accounts receivable, accounts payable, accrued liabilities, and accounts
payable and accrued liabilities - related party approximate their financial statement carrying
amounts due to the short-term maturities of these instruments and are therefore carried at their
historical cost basis.
The government CEBA loan is classified as a financial liability and its fair value was
determined using the effective interest rate method, and is carried at amortized cost.
Page 41
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
2. Summary of significant accounting policies (Continued):
(q) Financial instruments and fair value measurements: (Continued)
Fair values determined by Level 3 inputs are unobservable data points for the asset or liability,
and included situations where there is little, if any, market activity for the asset. The
Company’s cash and long-term cash equivalents were measured using Level 1 inputs. Stock-
based compensation and derivative liability – warrants were measured using Level 2 inputs.
Goodwill impairment was measured using Level 3 inputs.
(ii) Foreign currency risk:
The Company operates internationally, which gives rise to the risk that cash flows may be
adversely impacted by exchange rate fluctuations. The Company has not entered into any
forward exchange contracts or other derivative instrument to hedge against foreign exchange
risk.
3. Accounts Receivable:
The accounts receivable as at December 31, 2021, is summarized as follows:
Accounts receivable
Provision for doubtful accounts
Net accounts receivable
2021
6,684,469
(56,605)
6,627,864
$
$
2020
3,989,200
(55,660)
3,933,540
$
$
The Company had bank accounts with the National Bank of Anguilla. During the year ended
December 31, 2016, the National Bank of Anguilla filed for chapter 11 protection. The Company
expensed the balance on account of $27,666 in fiscal 2016 as a doubtful debt. The Company has
a doubtful debt provision of $28,939 (2020 - $27,994) for existing accounts receivable.
4. Prepaid expenses
The Company has other prepaid expenses of $105,468 (2020 - $89,970) including leasehold
improvements of $16,499 (2020 - $23,831), which is recognized as prepaid rent for the year
ended December 31, 2021.
5. Equipment:
2021
Equipment and computers
Furniture and fixtures
Cost
152,967
16,517
169,484
$
$
Accumulated
depreciation
139,590
9,371
148,961
$
$
Net book
Value
13,377
7,146
20,523
$
$
Page 42
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
5. Equipment: (Continued)
2020
Equipment and computers
Furniture and fixtures
Cost
146,545
14,787
161,332
$
$
Accumulated
depreciation
130,798
8,695
139,493
$
$
Net book
Value
15,747
6,092
21,839
$
$
Depreciation expense was $9,468 (2020 - $8,555) for the year ended December 31, 2021.
6. Intangible assets:
2021
Ad Tech technology
Kidoz OS technology
Customer relationship
2020
Ad Tech technology
Kidoz OS technology
Customer relationship
Cost
1,877,415
31,006
1,362,035
3,270,456
Cost
1,877,415
31,006
1,362,035
3,270,456
$
$
$
$
Accumulated
amortization
1,063,869
29,283
482,387
1,575,539
Accumulated
amortization
688,386
18,948
312,133
1,019,467
$
$
$
$
Net book
Value
813,546
1,723
879,648
1,694,917
Net book
Value
1,189,029
12,058
1,049,902
2,250,989
$
$
$
$
Amortization expense was $556,072 (2020 - $556,073) for the year ended December 31, 2021.
7. Goodwill:
The Company has a goodwill balance of $3,301,439 for year ended December 31, 2021 and
2020 from the acquisition of Kidoz Ltd.
The Company’s annual goodwill impairment analysis performed during the fourth quarter of
fiscal 2021 and 2020 included a quantitative analysis of the Kidoz Ltd. reporting unit (consisting
of intangible assets (Note 6), deferred taxation (Note 13) and goodwill). The reporting unit has
a carrying amount of $4,785,857 (2020 - $5,552,428) as at December 31, 2021. The Company
performed a discounted cash flow analysis for the Company. These discounted cash flow models
included management assumptions for expected sales growth, margin expansion, operational
leverage, capital expenditures, and overall operational forecasts. The Company classified these
significant inputs and assumptions as Level 3 fair value measurements. Based on the annual
impairment test described above there was no additional impairment determined for fiscal 2021
or fiscal 2020.
Page 43
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
8. Content and software development costs:
Since the year ended December 31, 2014, the Company has been developing software
technology and content for our business. This software technology and content includes the the
continued development of the KIDOZ Safe Ad Network, the KIDOZ Kid-Mode Operating
System, and the KIDOZ publisher SDK, development of Trophy Bingo, a social bingo game,
the license, the development of the Rooplay platform and the development of the Rooplay
Originals games.
During the year ended December 31, 2021 and 2020, the Company has expensed the
development costs of all products as incurred and has expensed the following development costs.
Opening total software technology and content
development costs
Software technology and content development during
the year
Closing total software technology and content
development costs
2021
2020
$
8,880,753
$
7,730,851
1,678,848
1,149,902
$
10,559,601
$
8,880,753
9. Government CEBA loan:
During the year ended December 31, 2020, the Company was granted a loan of $47,089
(CAD$60,000) under the Canada Emergency Business Account (CEBA) loan program for small
businesses. The CEBA loan program is one of the many incentives the Canadian Government
put in place in response to COVID-19. The loan is interest free and a quarter of the loan $11,812
(CAD$20,000) is eligible for complete forgiveness if $35,436 (CAD$40,000) is fully repaid on
or before December 31, 2022. If the loan cannot be repaid by December 31, 2022, it can be
converted into a 3-year term loan charging an interest rate of 5%. Subsequent to the year ended
December 31, 2021, the repayment of the loan was extended by the Canadian Government to
December 31, 2023.
During the year ended December 31, 2021, the Company drew $200,000 from its line of credit
with the Leumi Bank in Israel. The loan was repaid in full during the year ended December 31,
2021 with interest costs of $987.
10. Stockholders’ Equity:
The holders of common stock are entitled to one vote for each share held. There are no
restrictions that limit the Company’s ability to pay dividends on its common stock. The Company
has not declared any dividends since incorporation. The Company’s common stock has no par
value per common stock and there is only one class of common shares. The Company has an
unlimited number of common shares authorized for issue.
Page 44
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
10. Stockholders’ Equity: (Continued)
(a) Common stock issuances:
Fiscal 2021
During the year ended December 31, 2021, the Company engaged Research Capital
Corporation (“RCC”) as a financial and capital markets advisor. As part of the compensation
for its services, RCC will receive a monthly fee of $5,119 (CAD$6,500) for its trading
advisory services for a minimum of 6 months with extension by mutual agreement and a
financial advisory fee to be satisfied by the issuance of 230,000 common shares of the
Company valued at $179,293. In addition, the Company granted 230,000 common share
purchase warrants to RCC (Note 2(i)). Each warrant will entitle the holder thereof to purchase
one common share in the capital of the Company at an exercise price of $0.77 (CAD$0.98)
at any time up to 24 months following the date of issuance. During the year ended December
31, 2021, the Company issued the shares and granted the warrants.
During the year ended December 31, 2021, the holder of 70,000 stock options exercised their
options for 70,000 shares for $31,264 at an average exercise price of $0.45 (CAD$0.54) per
share.
Fiscal 2020
There were no common stock issuances for the year ended December 31, 2020.
(b) Warrants
A summary of warrant activity for the year ended December 31, 2021 are as follows:
Outstanding, December 31, 2020 and
2019
Granted
Outstanding December 31, 2021
Number of
options
Exercise price
Expiry date
-
$
-
230,000
230,000
CAD$0.98
CAD$0.98
April 3, 2023
A fair value of the derivative liability of $83,572 was been estimated on the date of the
subscription using the Binomial Lattice pricing model. Since the warrant was issued there
was a gain on derivative liability - warrants of $60,207 and the derivative liability – warrants
value reduced to $23,365 with the following assumptions:
Exercise price
Stock price
Expected term
Expected dividend yield
Expected stock price volatility
Risk-free interest rate
December 31, 2021
CAD$0.98
CAD$0.59
1.25 years
-
88.33%
1.18%
April 1, 2021
CAD$0.98
CAD$0.98
2 years
-
145.71%
0.73%
Page 45
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
10. Stockholders’ Equity: (Continued)
(c) Stock option plans:
2015 stock option plan
In the year ended December 31, 2015, the shareholders approved the 2015 stock option plan
and the 1999, 2001 and the 2005 plans were discontinued. The 2015 stock option plan as
amended in November 2020, is intended to provide incentive to employees, directors,
advisors and consultants of the Company to encourage proprietary interest in the Company,
to encourage such employees to remain in the employ of the Company or such directors,
advisors and consultants to remain in the service of the Company, and to attract new
employees, directors, advisors and consultants with outstanding qualifications. The
maximum number of shares issuable under the Plan shall not exceed 10% of the number of
Shares of the Company issued and outstanding as of each Award Date unless shareholder
approval is obtained in advance.
The Board of Directors determines the terms of the options granted, including the number of
options granted, the exercise price and their vesting schedule. The maximum term possible is
10 years. Under the 2015 plan we have reserved 10% of the number of Shares of the Company
issued and outstanding as of each Award Date. During the year ended December 31, 2020,
the Rolling Stock Option plan was amended by inclusion of an Israeli Taxpayers Appendix.
During the year ended December 31, 2021, the Company granted to employees and
consultants the following options:
• 1,040,000 options at CAD$0.50 ($0.39) where 10% vests on grant date, 15% one
year following and 2% per month thereafter and expire on February 1, 2026. 400,000
of these options were granted to directors and officers of the Company.
• 35,000 options at CAD$0.50 ($0.39) which vested immediately and expire on
February 1, 2026.
• 1,300,000 options at CAD$1.02 ($0.80) where 2% vests per month and expire on
April 6, 2026. 400,000 of these options were granted to directors and officers of the
Company.
• 300,000 options at CAD$0.66 ($0.52) where 2% vests per month and expire on July
12, 2026.
During the year ended December 31, 2020, the Company granted to employees and
consultants 2,745,000 options with an exercise price of CAD$0.45 ($0.33) expiring on June
30, 2025, of which 60,000 options were fully vested, 2,595,000 options were issued where
2.08% vests per month commencing June 30, 2021, and 90,000 options were issued where
2% vests per month commencing on grant date. 1,250,000 of these options were granted to
directors and officers of the Company.
Subsequent to the year ended December 31, 2021, a further 2,550,000 options were awarded
where 2% vests per month, with an exercise price of CAD$0.50 ($0.39) and 210,000 options
were cancelled.
Page 46
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
10. Stockholders’ Equity: (Continued)
(c) Stock option plans: (Continued)
A summary of stock option activity for the stock option plans for the years ended December
31, 2021 and 2020 are as follows:
Outstanding December 31, 2019
Granted
Exercised
Cancelled
Outstanding December 31, 2020
Granted
Exercised
Expired
Cancelled
Outstanding December 31, 2021
Number of
options
3,200,750
2,745,000
-
(70,000)
5,875,750
2,675,000
(70,000)
(570,000)
(1,040,600)
6,870,150
$
$
$
Weighted average
exercise price
0.45
0.33
-
(0.42)
0.39
0.60
(0.45)
(0.43)
(0.42)
0.48
The aggregate intrinsic value for options as of December 31, 2021 was $334,897 (2020 -
$137,250).
The following table summarizes information concerning outstanding and exercisable stock
options at December 31, 2021:
Exercise
prices per share
CAD$0.45
CAD$0.50
CAD$0.54
CAD$0.54
CAD$0.66
US$0.50
CAD$1.02
Number
outstanding
2,030,400
889,600
506,150
713,000
300,000
1,275,000
1,156,000
6,870,150
Number
exercisable
399,672
124,600
506,150
713,000
20,000
1,275,000
190,000
3,228,422
Expiry date
June 30, 2025
February 1, 2026
November 8, 2022
June 4, 2023
July 12, 2026
June 4, 2023
April 6, 2026
The Company recorded stock-based compensation of $660,266 on the options granted and
vested (2020 – $158,883) and as per the Black-Scholes option-pricing model, with a weighted
average fair value per option grant of $0.45 (2020 - $0.27).
Page 47
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
11. Fair value measurement:
The following table sets forth the fair value of the Company’s financial assets and
liabilities measured at fair value on a recurring basis based on the three-tier fair value
hierarchy.
Level 1
Level 2
Level 3
Total
As at December 31, 2021
Assets
Cash
Long term cash equivalent
Liabilities
Derivative liability – warrants
Total assets (liabilities) measured and
recorded at fair value
$2,078,607
23,624
$-
-
-
(23,365)
$2,102,231
($23,365)
$-
-
-
$-
$2,078,607
23,624
(23,365)
$2,078,866
Level 1 Level 2
Level 3
Total
As at December 31, 2020
Assets
Cash
Long term cash equivalent
Total assets measured and recorded at
fair value
$1,226,045
31,392
$1,257,437
12. Commitments:
$-
-
$-
$-
-
$-
$1,226,045
31,392
$1,257,437
The Company leases office facilities in Vancouver, British Columbia, Canada, The Valley,
Anguilla, British West Indies and Netanya, Israel. These office facilities are leased under
operating lease agreements.
During the year ended December 31, 2020, the Company signed a five-year lease for a facility
in Vancouver, Canada, commencing April 1, 2020 and ending March 2024. This facility
comprises approximately 1,459 square feet. The Company accounts for the lease in accordance
with ASU 2016-02 (Topic 842) and recognizes a right-of-use asset and operating lease liability.
The Netanya, Israel operating lease expired on July 14, 2017 but unless 3 months’ notice is given
it automatically renews for a future 12 months until notice is given. During the year ended
December 31, 2021, the lease was extended for a further 12 months. This facility comprises
approximately 190 square metres. The renewal of this lease is uncertain, hence the Company
has accounted for this lease as a short-term lease.
The Anguillan operating lease expired on April 1, 2011 but unless 3 months’ notice is given it
automatically renews for a further 3 months. The Company expects this lease to continue.
Therefore, the Company accounts for the lease in accordance with ASU 2016-02 (Topic 842)
and recognizes a right-of-use asset and operating lease liability.
Page 48
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
12. Commitments: (Continued)
Minimum lease payments under these leases are approximately as follows:
2022
2023
2024
$
64,516
50,002
12,572
The Company paid rent expense totaling $129,250 for the year ended December 31, 2021 (2020
- $119,055).
The Company has the following management consulting agreements with related parties.
Minimum
Monthly
amount
Maximum
Monthly
amount
$11,000
$25,000
GBP£5,000 GBP£5,000
$25,000
$7,500
Company
Person
Role
Executive
Chairman
J. M. Williams Co-CEO
J. M. Williams Co-CEO
T.M. Williams (ROW), Inc. T. M. Williams
Jayska Consulting Ltd.
LVA Media Inc.
Bromley Accounting
Services Ltd.
Farcast Operations Inc.
H. W. Bromley CFO
CAD$15,000 CAD$15,000
T. H. Williams VP Product CAD$15,000 CAD$15,000
As at December 31, 2021, the Company had a number of renewable license commitments with
large brands, including, Mr. Men and Little Miss and Mr. Bean. These agreements have
commitments to pay royalties on the revenue from the licenses subject to the minimum guarantee
payments. As at December 31, 2021, there were no further minimum guarantee payments
commitments.
The Company expensed the minimum guarantee payments over the life of the agreement and
recognized license expense of $18,512 (2020 - $46,841) for the year ended December 31, 2021.
13. Income taxes:
Kidoz Inc. is domiciled in the tax-free jurisdiction of Anguilla, British West Indies. However
certain of the Company’s subsidiaries incur income taxation.
Page 49
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
13. Income taxes: (Continued)
The tax effects of temporary differences that give rise to significant portions of the deferred tax
assets and deferred tax liabilities at December 31, 2021 and 2020, are presented below:
Computed “expected” tax expense
Change in statutory, foreign tax, foreign
exchange rates and other
Permanent differences
Adjustment to prior years provision versus
statutory tax returns
Change in valuation allowance
(Provision for) Recovery of current income
taxes
Deferred income taxes
Total taxation
$
$
$
2021
(5,535)
(231,545)
(227)
(17,161)
37,791
(6,178)
(210,499)
(216,677)
$
$
$
2020
(10,192)
150,835
(180,123)
55,243
39,480
55,243
-
55,243
The tax effects of temporary differences that give rise to significant portions of the deferred tax
assets and deferred tax liabilities at December 31, 2021 and 2020 are presented below:
Deferred tax (liabilities) assets:
Net operating loss carry forwards
Equipment
Intangible assets
Other
Valuation Allowance
Total deferred tax (liability) asset
2021
285,045
74
(389,831)
193,220
(299,007)
(210,499)
$
$
2020
694,814
5,173
(517,727)
147,989
(330,249)
-
$
$
As at December 31, 2021, the Company’s had $1,130,369 of non-capital losses expiring through
December 31, 2041.
In assessing the realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in assessing the realizability of deferred tax assets.
During the year ended December 31, 2020, Shoal Media (Canada) Inc., a subsidiary of Kidoz
Inc., received the British Columbia Interactive Digital Media Tax Credit of CAD$73,828
($55,243) from the British Columbia Provincial Government. No British Columbia Interactive
Digital Media Tax Credit was received in 2021.
The Company recognized this tax credit as a recovery of income tax expense on the statement of
operations and comprehensive (loss) income upon receipt of funds.
Page 50
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
14. Right-of-use assets:
There is no discount rate implicit in the Anguilla office operating lease agreement, so the
Company estimated a 5% discount rate for the incremental borrowing rate for the lease as of the
adoption date, January 1, 2020. There is no discount rate implicit in the license agreement, so
the Company estimated a 12% discount rate for the incremental borrowing rate for the licenses
as of the adoption date, January 1, 2019.
Effective April 1, 2019, we recognized lease assets and liabilities of $125,474, in relation to the
Vancouver office. We estimated a discount rate of 4.12%.
We elected the package of practical expedients permitted under the transition guidance within
Topic 842, which allowed us to carry forward prior conclusions about lease identification,
classification and initial direct costs for leases entered into prior to adoption of Topic 842.
Additionally, we elected to not separate lease and non-lease components for all of our leases.
For leases with a term of 12 months or less, our current offices, we elected the short-term lease
exemption, which allowed us to not recognize right-of-use assets or lease liabilities for
qualifying leases existing at transition and new leases we may enter into in the future, as there is
significant uncertainty on whether the leases will be renewed.
The right-of-use assets as at December 31, 2021, is summarized as follows:
Opening balance for the year
Capitalization of additional license leases
Amortization of operating lease right-of use assets
Closing balance for the year
2021
106,315
-
(40,851)
65,464
$
$
$
$
2020
134,914
25,472
(54,071)
106,315
The operating lease as at December 31, 2021, is summarized as follows:
As at December 31, 2021
2022
2023
2024
Total lease payments
Less: Interest
Present value of lease liabilities
Amounts recognized on the balance sheet
Current lease liabilities
Long-term lease liabilities
Total lease payments
Office lease
34,021
35,170
8,114
77,305
(3,238)
74,067
32,068
41,999
74,067
$
$
$
$
$
Page 51
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
14. Right-of-use assets: (Continued)
Opening balance for the year
Payments on operating lease liabilities
Closing balance for the year
Less: current portion
Operating lease liabilities – non-current portion as at end of year $
$
2021
103,918 $
(29,851)
74,067
(32,068)
41,999 $
2020
127,615
(23,697)
103,918
(30,083)
73,835
As of December 31, 2021, the ROU assets of $65,464 are included in non-current assets on the
balance sheet, and lease liabilities of $74,067 are included in current liabilities and non-current
liabilities on the balance sheet.
15. Related party transactions:
As at and for the year ended December 31, 2021, the Company has the following related party
transactions:
Directors fees
Salaries, wages, consultants and benefits
Selling and marketing
Stock-based compensation (Note 10)
Content and software development (Note 8)
Closing balance for the year
$
$
2021
8,000 $
612,492
77,906
237,348
214,843
1,150,589 $
2020
8,248
456,042
57,498
61,701
156,522
740,011
The Company has liabilities of $53,829 (2020 - $50,772) as at December 31, 2021, to current
directors, officers and companies owned by the current directors and officers of the Company
for employment, director and consulting fees.
During the year ended December 31, 2021, the Company granted the following options to related
a) 400,000 options with an exercise price of CAD$0.50 ($0.39) per share
parties:
b) 400,000 options with an exercise price of CAD$1.02 ($0.80) per share
During the year ended December 31, 2020, the Company granted the 1,250,000 options with an
exercise price of CAD$0.45 ($0.33) per share, to related parties.
The related party transactions are in the normal course of operations and were measured at the
exchange amount, which is the amount of consideration established and agreed to by the related
parties.
16. Segmented information:
The Company operates in reportable business segments, the sale of Ad tech advertising and
content revenue, including the sale of in-app purchases on Trophy Bingo and Garfield’s Bingo;
the premium purchase for Rooplay Originals and recurring subscription revenues from Rooplay
and Kidoz OS and the sale of licenses of Kidoz OS.
Operating segments are identified as components of an enterprise about which separate discrete
financial information is available for evaluation by the chief operating decision maker, or
decision-making group, in making decisions on how to allocate resources and assess
Page 52
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
16. Segmented information: (Continued)
performance. The Company’s chief operating decision makers are the Co-chief executive
officers. The Company and the chief decision makers view the Company’s operations and
manage its business as two operating segments, namely Ad tech and content revenue.
The Company had the following revenue by geographical region.
2021
2020
Ad tech advertising revenue
Western Europe
Central, Eastern and Southern Europe
North America
Other
Total ad tech advertising revenue
Content revenue
Western Europe
Central, Eastern and Southern Europe
North America
Other
Total content revenue
Total revenue
Western Europe
Central, Eastern and Southern Europe
North America
Other
Total revenue
Equipment
$
$
$
$
$
$
3,927,191
193,085
7,702,386
421,204
12,243,866
84,884
1,517
47,390
97,823
231,614
4,012,075
194,602
7,749,776
519,027
12,475,480
$
$
$
$
$
$
1,911,627
-
4,702,565
133,872
6,748,064
100,625
38,741
182,676
77,923
399,965
2,012,252
38,741
4,885,241
211,795
7,148,029
The Company’s equipment is located as follows:
Net Book Value
2021
2020
Anguilla
Canada
Israel
United Kingdom
Total equipment
17. General and administrative:
General and administrative expenses were as follows:
Professional fees
Rental (Note 12)
Other general and administrative expenses
Total general and administrative expenses
Page 53
$
$
$
$
91
8,542
11,055
835
20,523
2021
211,873
129,250
263,759
604,882
$
$
$
$
164
7,482
12,870
1,323
21,839
2020
183,475
119,055
226,178
528,708
KIDOZ INC. and subsidiaries
(Expressed in United States Dollars)
Notes to Consolidated Financial Statements
Years ended December 31, 2021 and 2020
18. Stock awareness program
During the year ended December 31, 2021, the Company commenced a corporate stock
awareness program. The Company engaged Research Capital Corporation, Agora Internet
Relations Corp., Stockhouse Publishing Ltd. and Proactive for financial and capital markets
advisory services and to assist with general market outreach to increase investor awareness as
the Company continues to achieve important milestones and grow its investor base.
The Company incurred stock awareness expenses of $402,845 during the year ended December
31, 2021, of which $179,293 is from the issuance of 230,000 common shares to RCC (Note 10)
and a derivative liability of $83,572 (Note 10) from the warrants granted.
19 Concentrations:
Major customers
During the year ended December 31, 2021, and 2020, the Company sold Ad tech revenue; sold
subscriptions on its site Rooplay; sold in-app purchases on its social bingo sites, Trophy Bingo
and Garfield’s Bingo and premium purchases of Rooplay Originals. During the year ended
December 31, 2021, the Company had revenues of $3,373,241, $2,522,559 and $1,381,678 from
three customers (December 31, 2020 - two customers for $2,661,595 and $1,551,661) which was
more than 10% of the total revenue. The Company is reliant on the Google App, iOS App and
Amazon App Stores to provide a content platform for Rooplay, Trophy Bingo and Garfield’s
Bingo to be played thereon and certain advertising agencies for the Ad tech revenue.
20. Concentrations of credit risk:
Financial instruments that potentially subject the Company to concentrations of credit risk
consist primarily of cash and accounts receivable. The Company places its cash and cash
equivalents with high quality financial institutions and limits the amount of credit exposure with
any one institution.
The Company currently maintains a substantial portion of its day-to-day operating cash and
long-term cash equivalents balances at financial institutions. At December 31, 2021, the
Company had total cash of $2,102,231 (2020 - $1,257,437) at financial institutions, where
$1,793,265 (2020 - $970,453) is in excess of federally insured limits.
The Company has concentrations of credit risk with respect to accounts receivable, the majority
of its accounts receivable are concentrated geographically in the United States amongst a small
number of customers.
As of December 31, 2021, the Company had three customers, totaling $1,952,040, $1,165,807,
and $1,054,625 respectively who accounted for greater than 10% of the total accounts receivable.
As of December 31, 2020, the Company had two customers, totaling $1,618,244 and $807,346
who accounted for greater than 10% of the total accounts receivable.
The Company controls credit risk through monitoring procedures and receiving prepayments of
cash for services rendered. The Company performs credit evaluations of its customers but
generally does not require collateral to secure accounts receivable.
Page 54
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
On February 4, 2010, we engaged Davidson & Company LLP, as its independent registered public
accounting firm, to audit our financial statements. The decision to engage Davidson & Company
LLP was approved by our Board of Directors at a Board meeting called for such purpose.
There have not been any changes in or disagreements with accountants for the years ended
December 31, 2021 and 2020.
ITEM 9A. CONTROLS AND PROCEDURES
(a)
Management’s responsibility
Our management acknowledges its responsibility for establishing and maintaining adequate
internal control over financial reporting of the Company.
(b)
Evaluation of disclosure controls and procedures.
Our management, including the Executive Chairman, Chief Executive Officers and the Chief
Financial Officer, evaluated the disclosure controls and procedures of the Company within 90 days
prior to the date of this report, and found them to be operating efficiently and effectively to ensure
that information required to be disclosed by us under the general rules and regulations promulgated
under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported,
within the time periods specified by rules and regulations of the SEC.
These disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us is accumulated and
communicated to our management, including our principal executive officers and principal
financial officer as appropriate to allow timely decisions regarding required disclosure. However,
our management recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control objectives, and
our management necessarily is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal control system was designed to provide reasonable assurance to
the Company’s management and board of directors regarding the preparation and fair presentation
of published financial statements. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation. Because of
its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Our management evaluated of the effectiveness of the Company’s design and operation of its
disclosure controls and procedures as defined in Exchange Act Rule 13a-15(f), based on the
framework set forth in the Internal Control—Integrated Framework (1992) issued by the by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our
evaluation, we believe that, as of December 31, 2021, the Company’s internal control over financial
reporting is effective under the COSO framework.
Page 55
(c)
Changes in internal controls.
There were no significant changes in our internal controls or other factors that could significantly
affect our internal controls during the year ended December 31, 2021, and to the date of filing this
annual report.
ITEM 9B - OTHER INFORMATION
None
Page 56
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
Our directors and executive officers as at December 31, 2021, are as follows:
Age Position
Name
T. M. Williams 81
46
J. M. Williams
51
E. Ben Tora
57
F. Curtis
60
C. Kalborg
M. David
56
H. W. Bromley 51
52
T. H. Williams
X* - Chairman of Committee
Executive Chairman
Co- Chief Executive Officer
Co- Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
VP Product
Audit
Committee
Governance
Committee
Compensation
Committee
X
X*
X
X
X*
X
X
X
X*
T. M. Williams served as President, Chief Executive Officer and Chairman from August 20, 2001
until June 16, 2011. Since June 16, 2011, Mr. Williams has served as the Executive Chairman of
the Company. Since 1984, Mr. Williams has served as a principal of T.M. Williams (ROW), Inc.,
a private consulting firm, and from 1993 until 2008, was Adjunct Professor, Sauder School of
Business at the University of British Columbia. From 1988 to 1991, he was President and Chief
Executive Officer of Distinctive Software, Inc. in Vancouver, BC, and, upon the acquisition of that
company by Electronic Arts Inc., North America's largest developer of entertainment software, he
became President and Chief Executive Officer of Electronic Arts (Canada) Inc., where he continued
until 1993. From 1995 to 2012, Mr. Williams was a director of YM Biosciences, Inc., a
biotechnology company, until its acquisition by Gilead Sciences, Inc. In addition, he is a director
of several other private corporations.
Mr. J.M. Williams has been a director since July, 2007 and from June, 2011 to March, 2019, Mr.
Williams served as the sole Chief Executive Officer of the Company. Since the acquisition of Kidoz
Ltd. in 2019 to present he has served as Co- Chief Executive Officer. Prior to his employment with
Kidoz Inc., he was a Business Analyst with Blue Zone Inc. (a technology company) and RBC
Dominion Securities. Mr. J. M. Williams has a Bachelor of Commerce degree from the University
of Victoria and a Masters of Business Administration degree, specializing in strategic marketing,
from the University of Warwick. In addition, Mr. J. M. Williams is a Non-Executive Director of
Adventurebox Technology AB (publ). Mr. J. M. Williams is the son of Mr. T. M. Williams, the
Company’s Executive Chairman.
Mr. E. Ben Tora has served as Co-Chief Executive Officer following the acquisition by the
Company of Kidoz Ltd. Mr. E. Ben Tora was a co-founder of Kidoz Ltd. and has served as its Chief
Executive Officer and Chief Revenue Officer since June 2013. Previously he served as General
Manager and Chief Product officer at Bluesnap (formerly Plimus), which was acquired by Great
Hill Partners in 2011. Mr. E. Ben Tora holds a bachelor’s degree in management and
communication from the College of management in Tel Aviv. Mr. E. Ben Tora is a serial
entrepreneur and senior executive in venture-backed and public Internet companies, both early and
growth stage, bringing extensive experience in operating and scaling tech companies.
Ms. F. Curtis has served as a director of the Company since June 10, 2009. She has served as
Compliance Officer and General Corporate Secretary for Counsel Limited, an Anguillian financial
services corporation, since 2006. Ms. F. Curtis is the Managing Director of Counsel Limited. Ms.
F. Curtis has been working in the financial services industry since 1990. She started at the brokerage
Page 57
firm, Burns Fry, in Toronto (now Nesbitt Burns, Bank of Montreal). She completed her Canadian
Securities Course and became a licensed Securities Broker in 1992. She was educated in England,
and attended the University of Toronto, Canada for her undergraduate degree. Ms. F. Curtis's MBA
in Finance & International Affairs was granted by the Rotman School of Business, University of
Toronto. Ms. F. Curtis obtained her Associates Degree in Captive Insurance in 2018. She has also
served as Chairman of the Board of Anguilla Finance (2016 - 2020), the marketing body for
Anguilla Financial Services. Ms. F. Curtis is a Founding Member and Director of the Anguilla
Compliance Association, now serving as Chairman.
Mr. C. Kalborg is a 20-year licensing veteran with experience from leading game companies such
as Rovio (the makers of Angry Birds) and King.com (the makers of Candy Crush). Taking on the
aptly named role of licensing guru, Mr. C. Kalborg has gathered close to 50 licensees and
established a network of regional agents for Candy Crush around the world. Those agents include
Striker Entertainment in the U.S. and Canada; Tycoon Enterprises in Latin America (except
Argentina and Brazil); Tycoon 360 in Brazil; IMC in Argentina; Mediogen in Israel; Sinerji in
Turkey; Pacific Licensing Studio in Southeast Asia; Wild Pumpkin Licensing in Australia and New
Zealand; PPW in greater China; and Voozclub in Korea. Mr. C. Kalborg brings a wealth of
experience and a deep network in licensing and technology to Kidoz Inc. In addition, Mr. C.
Kalborg is a Non-Executive Director of Flexion Mobile Plc, Fragbite, LL Games and Adventurebox
Technology AB (publ).
Mr. M. David is the Chief Executive Officer of the TIBA, a global leader in Parking revenue
systems. Since Mr. M. David joined TIBA in early 2016, the company has quadrupled its revenue
and became the market leader in North America while maintaining high margins. Prior to TIBA,
Mr. David founded several companies and served as an Executive and Board member in several
more, including Kidoz Ltd., Mappo, NlightU, OzVision, TvPoint and Omnisys. Mr. David also
served as deputy CEO managing Ness Technologies Inc. and as President of North America in
Amdocs Limited, in both roles managing businesses of hundreds of millions of USD$ and
thousands of employees around the globe. Mr. David started his career in the Israeli Airforce. He
has a BA in Economics and Computer Science from Bar Ilan University in Israel, and an MBA
Cum Laude from Boston University.
Mr. H. W. Bromley has served as our Chief Financial Officer since July 2002. From 2000 to 2001,
Mr. Bromley was a Director and the Group Financial Officer for Agroceres & Co. Ltd. From 1995
- 1999, he was an employee of Ernst & Young working in South Africa and in the United States of
America. Mr. Bromley has in addition worked for CitiBank, Unilever PLC, Gerrard, Roadhouse
Interactive Ltd. and CellStop Systems Inc. Mr. Bromley is a Chartered Accountant.
Mr. T. H. Williams is VP Product, where he leads technology and product development. A highly
experienced, creative leader who has dedicated his career to building products on the forefront of
technology. Mr. T. H. Williams has led development on a wide variety of platform launches, new
devices, and innovative business models, and has helped build and operate multiple successful
studios and teams, including Electronic Arts Inc. in Vancouver, Canada and Los Angeles, United
States; Relic Entertainment Inc.; Roadhouse Interactive Ltd.; and Blueprint Reality Inc. He is
passionate about his teams, loves solving hard problems, and has produced over $2 billion in retail
product sales across his career. Mr. T. H. Williams is the son of Mr. T. M. Williams, the Company’s
Executive Chairman.
COMPOSITION OF OUR BOARD OF DIRECTORS
We currently have six directors. All directors currently hold office until the next annual meeting of
stockholders or until their successors have been elected and qualified. Our officers are appointed
annually by the Board of Directors and hold office until their successors are appointed and
qualified. Pursuant to the Company's by-laws, the number of directors shall be increased or
Page 58
decreased from time-to-time by resolution of the Board of Directors or the shareholders. Mr. J. M.
Williams and Mr. T. H. Williams are sons of Mr. T. M. Williams. There are no other family
relationships between any of the officers and directors of the Company.
COMMITTEES OF OUR BOARD OF DIRECTORS
We currently have three committees of our Board of Directors.
- Audit Committee - This committee will review the financial statements of the Company
and propose to the board to approve the financial statements. The Committee meets
quarterly to review and approve the quarterly financial statements and to discuss the affairs
of the company with the auditors.
- Governance Committee - This committee reviews the ethics policy of the Company and
ensures compliance. It will make recommendations to the board for improvement in
Corporate Governance. In addition, it will be this committee to whom a whistle blower will
report.
- Compensation Committee - This committee will propose the appointment and
remuneration of the Chief Executive Officer including salary, stock options, and bonuses.
BOARD OF DIRECTORS MEETINGS
Our Board of Directors met, in person or by phone, five times during the last fiscal year and it
regularly approves all material actions required by consent resolutions.
CODE OF ETHICS
On December 21, 2006, the Board of Directors of Kidoz Inc. (the "Board") adopted a new Code
of Business Conduct and Ethics (the "Code"), which applies to the Company's directors, officers
and employees. The Code was adopted to further strengthen the Company's internal compliance
program. The Code addresses among other things, harassment, honesty and integrity, fair dealing,
conflicts of interest, compliance with laws, regulations and policies, including disclosure
requirements under the federal securities laws, and administration of the code. The code is available
at the Company's website at http://investor.shoalgames.com/ under Corporate Governance. A copy
of our Code of Ethics is available upon request at no charge to any shareholder.
DIRECTOR COMPENSATION
The Non-Executive Directors receive a cash compensation for their services as members of the
Board of Directors based on a compensation per meeting. During the year ended December 31,
2021, the Non-Executive Directors collectively received compensation of $8,000 (Fiscal 2020 -
$8,248). The Executive directors currently do not receive cash compensation for their services as
members of the Board of Directors. In addition, both the Non-Executive and the Executive
Directors are reimbursed for expenses in connection with attendance at Board of Directors meetings
and specific business meetings. Directors are eligible to participate in our stock option plans.
Option grants to directors are at the discretion of the Board of Directors acting upon the
recommendation of the Compensation committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers,
and persons who own more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission (the “SEC”) initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of the Company.
Officers, directors and greater than ten percent stockholders are required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file.
Our officers, directors and greater than ten percent beneficial owners filed in a timely manner in
accordance with Section 16(a) filing requirements.
Page 59
ITEM 11. EXECUTIVE COMPENSATION
The following table describes the compensation we paid to our Co-Chief Executive Officers and
directors (the “Named Executive Officer”).
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and
Principal Position
Year
T.M. Williams -
Executive
Chairman (1)
J. M. Williams
Co-CEO (2)
E. Ben Tora
Co-CEO (3)
H. W. Bromley
CFO (4)
T. H. Williams
VP Product (5)
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
Fees
$
132,000
112,200
132,000
172,567
141,067
166,729
Bonus
$
19,800
-
10,000
25,611
-
10,000
22,278
194,680
175,040
-
114,359 125,000
25,742
144,464
-
131,231
10,000
138,434
10,779
157,321
-
110,524
-
103,465
Other Annual
Compensation
$
Long-term Compensation
Securities
Underlying
Options
granted
(#)
Restricted
Stock
Awards
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
50,000
-
100,000
50,000
-
100,000
350,000
-
100,000
50,000
-
100,000
150,000
-
All Other
Compensation
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) All of the compensation paid to the Named Executive Officer is paid to T.M. Williams (ROW), Ltd. for
the services of Mr. T. M. Williams. See additional discussion in Employment Arrangements section of
Item 11 of this report.
(2) All of the compensation paid to the Named Executive Officer is paid to LVA Media Inc. for the services
of Mr. J. M. Williams as Co-CEO of the Company and Jayska Consulting Ltd for the marketing services
of Mr. J. M. Williams. See additional discussion in Employment Arrangements section of Item 11 of this
report.
(3) All of the compensation paid to the Named Executive Officer is paid to Mr. E. Ben Tora as an employee
of Kidoz Ltd.
(4) All of the compensation paid to the Named Executive Officer is paid to Bromley Accounting Services
Ltd. for the services of Mr. H. W. Bromley.
(5) All of the compensation paid to the Named Executive Officer is paid to Farcast Operations Inc. Ltd. for
the services of Mr. T. H. Williams.
OPTION GRANTS IN THE LAST FISCAL YEAR
During the year ended December 31, 2021, the Company granted the following options:
a) 1,040,000 options at CAD$0.50 ($0.39) where 10% vests on grant date, 15% one year
following and 2% per month thereafter and expire on February 1, 2026. 400,000 of these
options were granted to directors and officers of the Company.
b) 35,000 options at CAD$0.50 ($0.39) which vested immediately and expire on February 1,
2026.
Page 60
c) 1,300,000 options at CAD$1.02 ($0.80) where 2% vests per month and expire on April 6,
2026. 400,000 of these options were granted to directors and officers of the Company.
d) 300,000 options at CAD$0.66 ($0.52) where 2% vests per month and expire on July 12,
2026.
During the year ended December 31, 2021, 70,000 (2020 – nil) options were exercised. During the
year ended December 31, 2021, 1,040,600 (2020 – 70,000) options were cancelled and 570,000
(2020 – nil) options expired unexercised.
Subsequent to the year ended December 31, 2021, a further 2,550,000 options were awarded where
2% vests per month thereafter, with an exercise price of CAD$0.50 (approximately $0.39) and
210,000 options were cancelled.
STOCK OPTION PLANS
In the year ended December 31, 2015, the 1999, 2001 and 2005 Stock Option Plans were
discontinued and replaced with the 2015 Stock Option Plan.
Our Board of Directors administers the 2015 Stock Option Plan. Our Board is authorized to
construe and interpret the provisions of the Stock Option Plans, to select employees, directors and
consultants to whom options will be granted, to determine the terms and conditions of options and,
with the consent of the grantee, to amend the terms of any outstanding options. The 2015 Stock
Option Plan provides for the granting of stock options to the employees, directors, advisors and
consultants of the Corporation to encourage proprietary interest in the Corporation, to encourage
such employees to remain in the employ of the Corporation or such directors, advisors and
consultants to remain in the service of the Corporation, and to attract new employees, directors,
advisors and consultants with outstanding qualifications.
Our Board determines the terms and provisions of each option granted under the Stock Option
Plans, including the exercise price, vesting schedule, repurchase provisions, rights of first refusal
and form of payment. The Plan shall not exceed 10% of the number of Shares of the Company
issued and outstanding as of each Award Date, inclusive of all Shares presently reserved for
issuance pursuant to previously granted stock options, unless shareholder approval is obtained in
advance. The Exercise Price shall be that price per Share, as determined by the Board in its sole
discretion, and announced as of the Award Date, at which an Option Holder may purchase a Share
upon the exercise of an Option, provided that it shall not be less than the closing price of the
Company’s Shares traded through the facilities of the Exchange on the day preceding the Award
Date, less any discount permitted by the Exchange, or such other price as may be required or
permitted by the Exchange.
The term of options under the Stock Option Plans will be determined by our Board; however, the
term of the stock option may not be for more than ten years. Where the award agreement permits
the exercise of an option for a period of time following the recipient's termination of service with
us, disability or death, that option will terminate to the extent not exercised or purchased on the last
day of the specified period or the last day of the original term of the option, whichever occurs first.
If a third party acquires the Company through the purchase of all or substantially all of our assets,
a merger or other business combination, except as otherwise provided in an individual award
agreement, all unexercised options will terminate unless assumed by the successor corporation.
EMPLOYMENT ARRANGEMENTS
We entered into a management consulting agreement with T.M. Williams (Row), Inc., an Anguilla
incorporated company and Mr. Williams dated August 20, 2001, (the "Williams Agreement"),
amended August 1, 2013, to provide for a consultancy payment of 2.5% of the monthly social bingo
Page 61
business with a minimum of $11,000 and a maximum of $25,000 per month. This contract is for
the provision of services by Mr. T. M. Williams as Executive Chairman of the Company.
The term of the amended Williams Agreement is for a period of one year, unless terminated sooner
by any of the parties under the terms and conditions contained in the amended Williams Agreement.
If the amended Williams Agreement is not terminated by any of the parties, the term may be
renewed for a further one-year period at the option of T.M. Williams (Row), Ltd., on substantially
the same terms and conditions, by giving three months’ notice in writing to the Company.
During the year ended December 31, 2014, the Company entered into an agreement with Jayska
Consulting Ltd. and Mr. J. M. Williams, Chief Executive Officer of the Company for the provision
of services of Mr. J. M. Williams as Marketing director of the Company. The Consulting agreement
provides for a consultancy payment of GBP£5,000 per month payable in arrears. In addition, during
the year ended December 31, 2014, the Company entered into an agreement with LVA Media Inc.
and Mr. J. M. Williams, for the provision of services of Mr. J. M. Williams as Chief Executive
Officer of Kidoz Inc. The Consulting agreement provides for a consultancy payment equaling of
2.5% of the monthly social bingo business with a minimum of $7,500 and a maximum of $25,000
per month.
Mr. E. Ben Tora is an employee of Kidoz Ltd.
During the year ended December 31, 2012, the Company entered into a management consulting
agreement with Bromley Accounting Services Limited for the services of Mr. H. W. Bromley as
the Chief Financial Officer.
During the year ended December 31, 2019, the Company entered into a management consulting
agreement with Farcast Operations Inc. for the services of Mr. T. H. Williams as the VP Product.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to us with respect to beneficial ownership
of our common stock as of March 30, 2022, by:
-
-
-
-
each person known by us to beneficially own 5% or more of our outstanding common
stock;
each of our directors;
each of the Named Executive Officers; and
all of our directors and Named Executive Officers as a group.
In general, a person is deemed to be a “beneficial owner” of a security if that person has or shares
the power to vote or direct the voting of such security, or the power to dispose or direct the
disposition of such security. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common stock subject to options or
debentures held by that person that are currently exercisable or convertible or exercisable or
convertible within 60 days of March 30, 2022, are deemed outstanding.
Percentage of beneficial ownership is based upon 131,424,989 shares of common stock outstanding
at March 30, 2022. To our knowledge, except as set forth in the footnotes to this table and subject
to applicable community property laws, each person named in the table has sole voting and
investment power with respect to the shares set forth opposite such person’s name.
Page 62
Name and Address of Beneficial Owner
T. M. Williams (Canada)
J. M. Williams (United Kingdom)
E. Ben Tora (Israel)
F. Curtis (Anguilla)
C. Kalborg (Sweden)
M. David (Israel)
H. W. Bromley (Canada)
T. H. Williams (Canada)
All directors and Named Executive Officers
as a group (8 persons)
Pendinas Limited (Isle of Man)
Wydler Global Equity Fund (Switzerland)
Ordan Enterprises Ltd. (Israel)
Norma Investment Ltd. (Cypress)
Number of Shares
Beneficially Owned
17,015,316
1,408,200
5,714,965
500,000
450,000
1,332,991
875,000
1,076,080
28,372,552
27,839,464
12,200,000
8,670,808
7,700,752
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
Percent of Class
12.30%
1.02%
4.13%
0.38%
0.34%
0.96%
0.63%
0.78%
20.54%
20.12%
8.82%
6.27%
5.57%
(1) Includes 16,515,316 shares held directly by Mr. T. M. Williams and 200,000 shares of common stock that may be
issued upon the exercise of 200,000 stock purchase options with an exercise price of CAD$0.54 (approximately
US$0.42) per share and 50,000 shares of common stock that may be issued upon the exercise of 50,000 stock
purchase options with an exercise price of CAD$0.45 (approximately US$0.33) per share and 200,000 shares of
common stock that may be issued upon the exercise of 200,000 stock purchase options with an exercise price of
CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common stock that may be issued upon the
exercise of 50,000 stock purchase options with an exercise price of CAD$1.02 (approximately US$0.81) per share.
(2) Includes, 908,200 shares held directly by Mr. J. M. Williams and 200,000 shares of common stock that may be
issued upon the exercise of 200,000 stock purchase options with an exercise price of CAD$0.54 (approximately
US$0.42) per share and 50,000 shares of common stock that may be issued upon the exercise of 50,000 stock
purchase options with an exercise price of CAD$0.45 (approximately US$0.33) per share and 200,000 shares of
common stock that may be issued upon the exercise of 200,000 stock purchase options with an exercise price of
CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common stock that may be issued upon the
exercise of 50,000 stock purchase options with an exercise price of CAD$1.02 (approximately US$0.81) per share.
(3) Includes 5,214,965 shares held directly by Mr. E. Ben Tora and 350,000 shares of common stock that may be issued
upon the exercise of 350,000 stock purchase options with an exercise price of CAD$0.45 (approximately US$0.33)
per share and 100,000 shares of common stock that may be issued upon the exercise of 100,000 stock purchase
options with an exercise price of CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common
stock that may be issued upon the exercise of 50,000 stock purchase options with an exercise price of CAD$1.02
(approximately US$0.81) per share.
(4) Includes 50,000 shares held directly by Ms. F. Curtis and 200,000 shares of common stock that may be issued upon
the exercise of 200,000 stock purchase options with an exercise price of CAD$0.54 (approximately US$0.42) per
share and 200,000 shares of common stock that may be issued upon the exercise of 200,000 stock purchase options
with an exercise price of CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common stock that
may be issued upon the exercise of 50,000 stock purchase options with an exercise price of CAD$1.02
(approximately US$0.81) per share.
(5) Includes 25,000 shares of common stock that may be issued upon the exercise of 25,000 stock purchase options
with an exercise price of CAD$0.54 (approximately US$0.42) per share and 275,000 shares of common stock that
may be issued upon the exercise of 275,000 stock purchase options with an exercise price of USD$0.50 per share
and 100,000 shares of common stock that may be issued upon the exercise of 100,000 stock purchase options with
Page 63
an exercise price of CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common stock that may
be issued upon the exercise of 50,000 stock purchase options with an exercise price of CAD$1.02 (approximately
US$0.81) per share.
(6) Includes 543,379 shares held indirectly by Mr. M. David and 339,612 shares indirectly by a Company owned by
Mr. M. David and 300,000 shares of common stock that may be issued upon the exercise of 300,000 stock purchase
options with an exercise price of CAD$0.45 (approximately US$0.33) per share and 100,000 shares of common
stock that may be issued upon the exercise of 100,000 stock purchase options with an exercise price of CAD$0.50
(approximately US$0.39) per share and 50,000 shares of common stock that may be issued upon the exercise of
50,000 stock purchase options with an exercise price of CAD$1.02 (approximately US$0.81) per share.
(7) Includes, 375,000 shares held directly by Mr. H. W. Bromley and 200,000 shares of common stock that may be
issued upon the exercise of 200,000 stock purchase options with an exercise price of CAD$0.54 (approximately
US$0.42) per share and 50,000 shares of common stock that may be issued upon the exercise of 50,000 stock
purchase options with an exercise price of CAD$0.45 (approximately US$0.33) per share and 200,000 shares of
common stock that may be issued upon the exercise of 200,000 stock purchase options with an exercise price of
CAD$0.50 (approximately US$0.39) per share and 50,000 shares of common stock that may be issued upon the
exercise of 50,000 stock purchase options with an exercise price of CAD$1.02 (approximately US$0.81) per share.
(8) Includes, 676,080 shares held directly by Mr. T. H. Williams and 150,000 shares of common stock that may be
issued upon the exercise of 150,000 stock purchase options with an exercise price of CAD$0.45 (approximately
US$0.33) per share and 200,000 shares of common stock that may be issued upon the exercise of 200,000 stock
purchase options with an exercise price of CAD$0.50 (approximately US$0.39) per share and 50,000 shares of
common stock that may be issued upon the exercise of 50,000 stock purchase options with an exercise price of
CAD$1.02 (approximately US$0.81) per share.
(9) Includes 27,839,464 shares held directly by Pendinas Ltd., a company wholly owned by Mr. G. R. Williams. Mr.
G. R. Williams is not related to Mr. T. M. Williams, Mr. J. M. Williams nor Mr. T. H. Williams.
(10) Includes 12,200,000 shares held directly by Wydler Global Equity Fund.
(11) Includes 8,670,807 shares held directly by Ordan Enterprises Ltd.
(12) Includes 7,700,752 shares held directly by Norma Investment Limited.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
As at and for the year ended December 31, 2021, the Company has the following related party
transactions as described in Item 11 – Executive Compensation.
The Company has liabilities of $53,829 (2020 - $50,772) to current directors, officers and
companies owned by the current directors and officers of the Company for employment, director
and consulting fees. The Company incurred employment, director and consulting fees and expenses
of $913,242 (2020 - $678,310) for the year ended December 31, 2021.
During the year ended December 31, 2021, the Company granted the following options to related
parties: a) 400,000 options with an exercise price of CAD$0.50 ($0.39) per share
b) 400,000 options with an exercise price of CAD$1.02 ($0.80) per share
During the year ended December 31, 2020, the Company granted the 1,250,000 options with an
exercise price of CAD$0.45 ($0.33) per share, to related parties.
The Company expensed $237,348 (2020 - $61,701) in stock-based compensation for these options
granted to related parties.
The related party transactions are in the normal course of operations and were measured at the
exchange amount, which is the amount of consideration established and agreed to by the related
parties.
Page 64
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
During the year ended December 31, 2021, the Company incurred fees of $114,694 (2020 -
$77,941) from the principal accountant during fiscal 2021 - Davidson & Company LLP, $114,694
of these fees related to audit fees (2020 - $77,941).
Our Audit Committee reviewed the audit and non-audit services rendered by Davidson & Company
LLP, during the periods set forth above and concluded that such services were compatible with
maintaining the auditors’ independence. All audit and non-audit services performed by our
independent accountants are pre-approved by our Audit Committee to assure that such services do
not impair the auditors’ independence from us.
Page 65
ITEMS 15. EXHIBITS
PART IV
The exhibits required by Item 601 of Regulation S-K are listed in the accompanying Exhibit Index
at the end of this report. Each management contract or compensatory plan or arrangement required
to be filed as an exhibit to this Form 10-K has been identified.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
KIDOZ INC.
By:
By:
/s/ J. M. Williams
J. M. Williams
Co-Chief Executive Officer
/s/ E. Ben Tora
E. Ben Tora
Co-Chief Executive Officer
Date: March 30, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
Signature
By:
/s/ J. M. Williams
J. M. Williams
By:
By:
/s/ E. Ben Tora
E. Ben Tora
/s/ H. W. Bromley
H. W. Bromley
Title
Date
Co-Chief Executive Officer
March 30, 2022
Co-Chief Executive Officer
March 30, 2022
Chief Financial Officer
(Principal Financial and
Principal Accounting Officer)
March 30, 2022
Page 66
I, J. M. Williams, certify that:
1.
I have reviewed this annual report on Form 10-K of Kidoz Inc.;
EXHIBIT 31.1
CERTIFICATIONS
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 Kidoz Inc. as of, and for, the periods presented in this annual report;
4. Kidoz Inc.’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 Kidoz Inc., 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 Kidoz Inc.’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of as of December 31, 2021, covered by this annual report based on
such evaluation; and
(d) Disclosed in this report any change Kidoz Inc.’s internal control over financial reporting
that occurred during Kidoz Inc.’s most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, Kidoz Inc.’s internal control over financial
reporting; and
5. Kidoz Inc.’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to Kidoz Inc.’s auditors and the audit
committee of Kidoz Inc. 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 Kidoz
Inc.’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting.
Signed: /s/ J. M. Williams
J. M. Williams,
Co-Chief Executive Officer,
Date: March 30, 2022
Page 67
I, E. Ben Tora, certify that:
1.
I have reviewed this annual report on Form 10-K of Kidoz Inc.;
EXHIBIT 31.2
CERTIFICATIONS
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 Kidoz Inc. as of, and for, the periods presented in this annual report;
4. Kidoz Inc.’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 Kidoz Inc., 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 Kidoz Inc.’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of as of December 31, 2021, covered by this annual report based on
such evaluation; and
(d) Disclosed in this report any change Kidoz Inc.’s internal control over financial reporting
that occurred during Kidoz Inc.’s most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, Kidoz Inc.’s internal control over financial
reporting; and
5. Kidoz Inc.’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to Kidoz Inc.’s auditors and the audit
committee of Kidoz Inc. 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 Kidoz
Inc.’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting.
Signed: /s/ E. Ben Tora
E. Ben Tora,
Co-Chief Executive Officer,
Date: March 30, 2022
Page 68
I, H. W. Bromley, certify that:
1.
I have reviewed this annual report on Form 10-K of Kidoz Inc.;
EXHIBIT 31.3
CERTIFICATIONS
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 Kidoz Inc. as of, and for, the periods presented in this annual report;
4. Kidoz Inc.’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 Kidoz Inc., 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 Kidoz Inc.’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of as of December 31, 2021, covered by this annual report based on
such evaluation; and
(d) Disclosed in this report any change Kidoz Inc.’s internal control over financial reporting
that occurred during Kidoz Inc.’s most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, Kidoz Inc.’s internal control over financial
reporting; and
5. Kidoz Inc.’s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to Kidoz Inc.’s auditors and the audit
committee of Kidoz Inc. 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 Kidoz
Inc.’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over financial reporting.
Signed: /s/ H. W. Bromley
H.W. Bromley,
Chief Financial Officer
(Principal Accounting Officer)
Date: March 30, 2022
Page 69
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Kidoz Inc. (the “Company”) on Form 10-K for the period
ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, J. M. Williams, Co-Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
b) The information contained in this Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ J. M. Williams
J. M. Williams
Co-Chief Executive Officer
March 30, 2022
A signed original of this written statement required by Section 906 has been provided to Kidoz
Inc. and will be retained by the company and furnished to the Securities and Exchange
Commission or its staff upon request.
Page 70
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Kidoz Inc. (the “Company”) on Form 10-K for the period
ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, E. Ben Tora, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
b) The information contained in this Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ E. Ben Tora
E. Ben Tora
Co-Chief Executive Officer
March 30, 2022
A signed original of this written statement required by Section 906 has been provided to Kidoz
Inc. and will be retained by the company and furnished to the Securities and Exchange
Commission or its staff upon request.
Page 71
EXHIBIT 32.3
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Kidoz Inc. (the “Company”) on Form 10-K for the period
ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, H. W. Bromley, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
b) The information contained in this Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ H. W. Bromley
H. W. Bromley
Chief Financial Officer
March 30, 2022
A signed original of this written statement required by Section 906 has been provided to Kidoz
Inc. and will be retained by the company and furnished to the Securities and Exchange
Commission or its staff upon request.
Page 72
EXHIBIT LIST
The following instruments are included as exhibits to this Report. Exhibits incorporated by
reference are so indicated.
Exhibit
Number
Description
4.4
4.5
10.2
10.24
10.32
10.33
10.37
10.38
10.39
10.41
10.42
31.1
31.2
31.3
32.1
32.2
32.3
Convertible Debenture between the Company and unrelated parties dated July 2, 2002. (b)
Common Stock Purchase Warrant between the Company and unrelated parties dated July 2,
2002. (b)
Asset Purchase Agreement by and between Bingo, Inc. and Progressive Lumber, Corp. dated
January 18, 1999. (a)
Amended Consulting Agreement dated February 28, 2002, between the Company, T.M.
Williams (Row), Ltd., and T.M. Williams. (c)
Code of Business Conduct and Ethics dated December 22, 2006. (d)
Amended Consulting Agreement dated June 16, 2010, between the Company, T.M. Williams
(Row), Ltd., and T.M. Williams. (e)
Amended Consulting Agreement dated August 1, 2013, between the Company, T.M.
Williams (Row), Ltd., and T.M. Williams. (f)
Consulting Agreement dated January 1, 2014, between the Company, Jayska Consulting
Ltd., and J.M. Williams. (f)
Consulting Agreement dated January 1, 2014, between the Company, LVA Media Inc., and
J.M. Williams. (f)
Consulting Agreement dated January 1, 2014, between the Company, Bromley Accounting
Services Limited, and H. W. Bromley. (f)
Share Purchase Agreement for the purchase of Kidoz Ltd. (g)
Certificate of Co-Chief Executive Officer pursuant to the Securities Exchange Act Rules
13a-15(e) and 15d -15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 dated March 30, 2022.
Certificate of Co-Chief Executive Officer pursuant to the Securities Exchange Act Rules
13a-15(e) and 15d -15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 dated March 30, 2022.
Certificate of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-
15(e) and 15d -15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
dated March 30, 2022.
Certification from the Co-Chief Executive Officer of Kidoz Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated
March 30, 2022.
Certification from the Co-Chief Executive Officer of Kidoz Inc. pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated
March 30, 2022.
Certification from the Chief Financial Officer of Kidoz Inc. pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 dated March 30,
2022.
(a) Previously filed with the Registrant’s registration statement on Form 10 on June 9, 1999.
(b) Previously filed with the Company’s quarterly report on Form 10-Q for the period ended
September 30, 2002, on November 14, 2002.
(c) Previously filed with the Company’s quarterly report on Form 10-Q for the period ended June
30, 2002, on August 14, 2002.
Page 73
(d) Previously filed with the Company’s report on Form 8-K on December 26, 2006.
(e) Previously filed with the Company’s report on Form 8-K on June 17, 2010.
(f) Previously filed with the Company’s report on Form 8-K on March 24, 2014.
(g) Previously filed with the Company’s report on Form 8-K on March 12, 2019.
Page 74