UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31~~June 30, 2017

Commission file number: 000-55212

Modern Round Entertainment Corporation

(Exact Name of Registrant as Specified in Its Charter)

Nevada	90-1031365	~~90-1031365~~
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)	~~(I.R.S. Employer Identification No.)~~

7333 East Doubletree Ranch Road, Suite D-250

Scottsdale, Arizona 85258

(Address of Principal Executive Offices and Zip Code)

(480) 219-8439

(Registrant’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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 Exchange Act. ☐

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

AsAt ofAugust ~~May~~ 2, 2017, there were outstanding 36,112,641 shares of the registrant’s common stock, $0.001 par value.

Table of Contents

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets	2	2
Condensed Consolidated Statements of Operations	3	3
Condensed Consolidated Statement of Changes in Stockholders’ Deficit	4	4
Condensed Consolidated Statements of Cash Flows	5	5
Notes to Unaudited Condensed Consolidated Financial Statements		7
Unaudited Notes to the Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21	22
Item 4. Controls and Procedures	21	22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22	23
Item 1A. Risk Factors	22	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22	23
Item 3. Defaults Upon Senior Securities	22	23
Item 4. Mine Safety Disclosures	22	23
Item 5. Other Information	22	23
Item 6. Exhibits	22	23
Signatures	23	24

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

MODERN ROUND ENTERTAINMENT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,2017			December 31,2016
	June 30, 2017			December 31, 2016
	(Unaudited)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2940,~~951~~899		$	35,014
Accounts receivable - trade		2127,~~754~~845			35,473
Inventory		27,714			29,335
Prepaid expenses		3027,~~885~~847			48,978
Available for sale securities		—480,000			84,000
Total current assets		~~110~~604,~~304~~305			232,800
Property and equipment, net		32,~~011~~882,~~286~~473			3,141,026
Other assets		6,900			6,900
Total assets	$	3,~~128~~493,~~490~~678		$	3,380,726
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	~~468~~589,~~181~~451		$	539,725
Accrued expenses		1,~~089~~417,~~422~~913			1,010,804
Deferred revenue		~~128~~174,~~450~~038			126,483
Convertible notes payable - short-term		12,~~370~~500,000			775,000
Convertible notes payable - related parties - short-term		500,000			500,000
Notes payable - other		~~368~~275,~~785~~348			235,920
Total current liabilities		35,~~924~~456,~~838~~750			3,187,932
Long-term liabilities:
Convertible notes payable - long-term		1275,~~280,~~000			1,875,000
Deferred rent		~~330~~325,~~094~~595			247,308
Secured revolving line of credit - related parties		23,~~777~~187,000			2,391,000
Total liabilities		89,~~311~~244,~~932~~345			7,701,240
Stockholders’ deficit:
Stockholders' deficit:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding at March 31, 2017 and December 31, 2016		—			—
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding at June 30, 2017 and December 31, 2016		—			—
Common stock, $0.001 par value; 200,000,000 shares authorized, 36,112,641 and 37,637,080 shares issued, 36,112,641 outstanding at March 31, 2017 and December 31, 2016, respectively		36,113			36,113
Common stock, $0.001 par value; 200,000,000 shares authorized, 36,112,641 and 37,637,080 shares issued, 36,112,641 outstanding at June 30, 2017 and December 31, 2016, respectively		36,113			36,113
Additional paid-in capital		3,~~456~~467,~~287~~139			3,564,652
Accumulated deficit		(89,~~675~~253,~~842~~919	)		(7,800,848	)
Treasury stock at cost, 0 and 1,524,439 shares at March 31, 2017 and December 31, 2016, respectively		—			(120,431	)
Treasury stock at cost, 0 and 1,524,439 shares at June 30, 2017, and December 31, 2016, respectively		—			(120,431	)
Total stockholders’ deficit		(5,183,442	)		(4,320,514	)
Total stockholders' deficit		(5,750,667	)		(4,320,514	)
Total liabilities and stockholders’ deficit	$	3,128,490		$	3,380,726
Total liabilities and stockholders' deficit	$	3,493,678		$	3,380,726

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MODERN ROUND ENTERTAINMENT CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Food and beverage revenues	$	~~391~~376,~~756~~870		$	—93,058		$	768,626		$	93,058
Amusement and other revenues		~~291~~324,~~101~~518			1266,~~000~~823			615,619			78,823
Discounts and comps		(72107,~~358~~464	)		—(15,860	)		(179,822	)		(15,860	)
Total revenue, net		~~610~~593,~~499~~924			12144,~~000~~021			1,204,423			156,021
Cost of food and beverage		9695,~~415~~360			—30,550			191,775			30,550
Cost of amusement and other		34,~~644~~375			—386			8,019			386
Total cost of products		~~100~~99,~~059~~735			—30,936			199,794			30,936
Operating payroll and benefits expense		328,040			—
Operating payroll and benefits		304,586			152,762			632,626			152,762
Other store operating expense		182,501			—
Other store operating expenses		202,456			78,976			384,957			78,976
General and administrative expense		650,237			984,518
General and administrative expenses		807,151			848,098			1,457,388			1,832,616
Depreciation expense		~~129~~131,~~740~~211			241,~~444~~310			260,951			43,754
Pre-opening expense		—			87,216
Pre-opening costs		—			253,651			—			340,867
Total operating costs		1,~~390~~545,~~577~~139			1,~~074~~405,~~178~~733			2,935,716			2,479,911
Loss from operations		(~~780~~951,~~078~~215	)		(1,~~062~~261,~~178~~712	)		(1,731,293	)		(2,323,890	)
Interest expense		94106,~~916~~862			3265,~~254~~350			201,778			97,604
Net loss before income taxes		(874,994	)		(1,094,432	)
Other income		480,000			—			480,000			—
Provision for income taxes		—			—
Net loss before income taxes		(578,077	)		(1,327,062	)		(1,453,071	)		(2,421,494	)
Net loss	$	(874,994	)	$	(1,094,432	)
Provision for income taxes		—			—			—			—
Net loss per share
Net loss	$	(578,077	)	$	(1,327,062	)	$	(1,453,071	)	$	(2,421,494	)
Basic and diluted	$	(0.02	)	$	(0.03	)
Net loss per share
Weighted average common shares outstanding
Basic and diluted	$	(0.02	)	$	(0.04	)	$	(0.04	)	$	(0.07	)
Basic and diluted		36,112,641			35,914,667
Weighted average common shares outstanding
Basic and diluted		36,112,641			35,960,333			36,112,641			35,937,626

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

MODERN ROUND ENTERTAINMENT CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE ~~THREE~~SIX MONTHS ENDED ~~MARCH 31~~JUNE 30, 2017

					Additional									Total
	Common Stock				Paid-in			Accumulated			Treasury			Stockholders’'
	Shares		Par Value		Capital			Deficit			Stock			Deficit
Balance, December 31, 2016		36,112,641	$	36,113	$	3,564,652		$	(7,800,848	)	$	(120,431	)	$	(4,320,514	)
Stock-based compensation - stock options		—		—		1222,~~066~~918			—			—			1222,~~066~~918
Retirement of treasury stock		—		—		(120,431	)		—			120,431			—
Net loss for the three months ended March 31, 2017		—		—		—			(874,994	)		—			(874,994	)
Net loss for the six months ended June 30, 2017		—		—		—			(1,453,071	)		—			(1,453,071	)
Balance, March 31, 2017		36,112,641	$	36,113	$	3,456,287		$	(8,675,842	)	$	—		$	(5,183,442	)
Balance, June 30, 2017		36,112,641	$	36,113	$	3,467,139		$	(9,253,919	)	$	—		$	(5,750,667	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

MODERN ROUND ENTERTAINMENT CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	Six Months Ended June 30,
	2017			2016
Cash flows from operating activities:
Net loss	$	(~~874~~1,~~994~~453,071	)	$	(12,~~094~~421,~~432~~494	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		~~129~~260,~~740~~951			243,~~444~~754
Deferred rent		8278,~~786~~287			58143,~~503~~226
Stock option expense		1222,~~066~~918			822,~~504~~456
Amortization of VirTra shares and warrant		—			2449,~~263~~193
Amortization of stock prepayment for professional fees		—			61123,~~542~~084
Other income from available for sale warrant securities		(480,000	)		—
Changes in operating assets and liabilities:
Accounts receivable - related parties		—			(1224,000	)
Accounts receivable - trade		137,~~719~~628			—(7,765	)
Inventory		1,621			—(35,755	)
Prepaid expenses		1821,~~093~~131			(933,~~917~~497	)
Other assets		—			(5,385	)
Accounts payable		61182,~~321~~591			~~115~~397,~~969~~584
Accrued expenses		~~(16~~209,~~298~~324	)		13141,~~301~~720
Accrued interest		94197,~~916~~785			3297,~~254~~604
Deferred revenue		147,~~967~~555			—12,913
Net cash used in operating activities		(~~475~~903,~~063~~280	)		(~~804~~1,~~954~~491,362	)
Cash flows from investing activities:
Construction in progress		—			(656,965	)
Purchase of property and equipment		(2,398	)		(2,261,244	)
Proceeds from sale of available for sale securities		84,000			—
Net cash provided by (used in) investing activities		8481,~~000~~602			(~~656~~2,~~965~~261,244	)
Cash flows from financing activities:
Proceeds from related party secured revolving line of credit		~~386~~796,000			~~250~~1,500,000
Proceeds from convertible notes		—			595,000
Principal payments on notes payable - other		(93,437	)		—
Net cash provided by financing activities		386,000			845,000
Proceeds from convertible promissory notes		125,000			1,725,000
Net decrease in cash and cash equivalents		(5,063	)		(616,919	)
Net cash provided by financing activities		827,563			3,225,000
Net change in cash and cash equivalents		5,885			(527,606	)
Cash and cash equivalents at beginning of period		35,014			823,541
Cash and cash equivalents at end of period	$	2940,~~951~~899		$	~~206~~295,~~622~~935

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Six Months Ended June 30,
	2017		2016
Supplemental disclosure of cash flow information:
Cash paid during period for interest	$	3,690	$	—
Cash paid during period for income taxes	$	—	$	—
Non-cash investing and financing activities:
- Stock-based compensation - options	$	22,918	$	22,456
- Change in warrant liability value	$	—	$	19,128
- Property and equipment purchases in accounts payable and accrued expenses	$	—	$	427,791
- Accounts payable converted to notes payable	$	132,865	$	—
- Reclassification of warrant liability to equity	$	—	$	55,467
- Other income from available for sale securities	$	480,000	$	—
- Convertible promissory note and accrued interest converted to common stock	$	—	$	28,150

5The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Table of Contents~~5

~~MODERN~~Table ~~ROUND~~of ~~ENTERTAINMENT CORPORATION AND SUBSIDIARIES~~ Contents

~~UNAUDITED~~MODERN ~~CONDENSED~~ROUND ~~CONSOLIDATED~~ENTERTAINMENT ~~STATEMENTS~~CORPORATION OFAND ~~CASH FLOWS~~ SUBSIDIARIES

	Three Months Ended March 31,
	2017		2016
Supplemental disclosure of cash flow information:
Cash paid during period for interest	$	—	$	—
Cash paid during period for income taxes	$	—	$	—
Non-cash investing and financing activities:
- Stock-based compensation - options and warrants	$	12,066	$	8,504
- Change in warrant liability value	$	—	$	16,326
- Property and equipment purchases in accounts payable and accrued expenses	$	—	$	403,487
- Accounts payable converted to notes payable	$	132,865	$	—
- Convertible promissory note and accrued interest converted to common stock	$	—	$	28,150

UNAUDITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~Note ~~accompanying notes are an integral part of these condensed consolidated financial statements.~~ 1

6The Company, Description of Business, and Liquidity

~~Table~~The accompanying condensed consolidated financial statements include the accounts of ~~Contents~~Modern Round Entertainment Corporation and its subsidiaries, Modern Round, Inc., MR Peoria, LLC, and MR Las Vegas, LLC (collectively, “we,” “us,” “our,” or “our company”).

~~Note~~Operations - Our principal operations focus on securing and developing suitable sites for implementing our combined dining and entertainment concept that centers around an indoor simulated shooting experience. We expect that we will continue to secure, develop, and operate sites for our entertainment concept, initially in North America. We opened our first, and currently only, location in Peoria, Arizona, on June 1, 2016.

~~The~~Liquidity ~~Company,~~– ~~Description~~We had working capital deficits of ~~Business~~$ 4,852,445 and ~~Liquidity~~$2,955,132 at June 30, 2017 and December 31, 2016, respectively. Net cash outflow from operations was $903,280 for the six months ended June 30, 2017. Major cash uses during the six months ended June 30, 2017 were operating costs for our Peoria, Arizona location and general and administrative expenses.

~~The~~We ~~accompanying~~anticipate ~~condensed~~incurring ~~consolidated~~additional ~~financial statements~~expenses ~~include~~to ~~the~~pursue ~~accounts~~our ofbusiness ~~Modern~~operations ~~Round~~for ~~Entertainment~~fiscal ~~Corporation~~2017. ~~and~~We ~~its~~anticipate ~~subsidiaries,~~incurring ~~Modern~~increased ~~Round,~~capital ~~Inc.~~expenditures in relation to opening additional locations, MRincurring ~~Peoria~~increased sales, ~~LLC~~marketing, and MRoperating ~~Las~~expenses ~~Vegas~~in line with our operational growth, ~~LLC~~and ~~(collectively~~incurring increased research and development costs to continue to develop our entertainment concept, ~~“we~~products,” ~~“us~~and technology. Our plans will require substantially more cash to operate,” ~~“our~~depending upon how quickly we open additional entertainment facilities and the sales volume generated by those additional locations. However,” orwe “will adjust our ~~company”)~~strategy and business plans accordingly if funding is not obtained and sales generate insufficient cash flow.

~~Operations~~To -date, ~~Our~~we ~~principal~~have ~~operations~~been ~~focus~~highly ondependent ~~securing~~upon funding from related parties and ~~developing~~convertible ~~suitable~~debt ~~sites~~offerings ~~for~~to ~~implementing~~support our ~~combined~~operations, ~~dining~~ and ~~entertainment concept~~anticipate ~~that~~we ~~centers~~will ~~around~~need anadditional ~~indoor~~funding ~~simulated~~to ~~shooting~~support ~~experience.~~our Webusiness ~~expect~~for ~~that~~at weleast ~~will~~the ~~continue~~next 12 to ~~secure~~24 months. Given our current operations, ~~develop~~traditional debt financing from banking sources may be difficult to obtain, and ~~operate~~we ~~sites~~may ~~for~~have ~~our~~to ~~entertainment~~continue ~~concept,~~to ~~initially~~rely inon ~~North~~equity ~~America~~or debt investments from non-banking sources. We ~~opened~~will ~~our~~also ~~first~~need to obtain additional financing, which may come through private placement offerings or possibly from the public equity markets. There can be no assurance as to the availability or terms upon which such financing and capital might be available, if at all. We currently ~~only~~plan to meet future cash needs, ~~location in~~beyond ~~Peoria~~our cash reserves, ~~Arizona~~through cash from operations, onproceeds ~~June 1~~from our line of credit, ~~2016.~~and proceeds from selling debt and equity securities in the public and private securities markets.

~~Liquidity~~Note ~~– We had working capital deficits of $3,814,534 and $~~2,955,132 at March 31, 2017 and December 31, 2016, respectively. Net cash outflow from operations for the three months ended March 31, 2017 was $475,063. Major cash uses during the three months ended March 31, 2017 were operating costs for our Peoria, Arizona location and general and administrative expenses.

WeSummary ~~anticipate~~of ~~incurring~~Significant ~~additional~~Accounting expenses to pursue our business operations through fiscal 2017. We anticipate incurring increased capital expenditures in relation to opening additional locations, incurring increased sales, marketing, and operating expenses in line with our operational growth, and incurring increased research and development costs to continue to develop our entertainment concept, products, and technology. Our plans will require substantially more cash to operate, depending upon how quickly we open additional entertainment facilities and the sales volume generated by those additional locations. However, if funding is not obtained and sales do not generate sufficient cash flow, we will adjust our strategy and business plans accordingly. Policies

ToPrinciples date, we have been highly dependent upon funding from related parties and convertible debt offerings to support our operations, and anticipate we will need additional funding to support our business for at least the next 12 to 24 months. Given our current operations, traditional debt financing from banking sources may be difficult to obtain, and we may have to continue to rely on equity or debt investments from non-banking sources. We will also need to obtain additional financing, which may come through private placement offerings or possibly from the public equity markets. There can be no assurance as to the availability or terms upon which such financing and capital might be available, if at all. We currently plan to meet future cash needs, beyond our cash reserves, through cash from operations, proceeds from line of ~~credit,~~Presentation and ~~proceeds from selling debt and equity securities in the public and private securities markets.~~ Consolidation

~~Note~~The 2condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2016. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading.

~~Summary~~The accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at June 30, 2017 and the results of ~~Significant~~our ~~Accounting~~operations ~~Policies~~and cash flows for the periods presented. We derived the December 31, 2016 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results of operations for the three and six months ended June 30, 2017 and 2016 are not necessarily indicative of the results to be expected for the full year.

~~Principles of Presentation and Consolidation~~ 6

~~The~~Table ~~condensed consolidated financial statements included herein have been prepared by us without audit pursuant to the rules and regulations~~ of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our audited financial statements for the year ended December 31, 2016. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted, as permitted by the SEC, although we believe the disclosures that are made are adequate to make the information presented herein not misleading. Contents

~~The~~Note accompanying condensed consolidated financial statements reflect, in our opinion, all normal recurring adjustments necessary to present fairly our financial position at March 31, 2017 and the results of our operations and cash flows for the periods presented. We derived the December 31, 2016 condensed consolidated balance sheet data from audited financial statements, but did not include all disclosures required by GAAP. 2

~~All~~Summary ~~intercompany accounts and transactions have been eliminated in consolidation. Interim results are subject to seasonal variations, and the results~~ of ~~operations~~Significant ~~for~~Accounting ~~the~~Policies ~~three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year.~~ (continued)

~~Reclassification~~Earnings of(Loss) ~~Prior~~per ~~Year Presentation~~ Share

~~Certain~~We ~~prior~~follow ~~year~~Financial ~~amounts~~Accounting ~~have~~Standards ~~been~~Board ~~reclassified~~(“FASB”) ~~for~~Accounting ~~consistency~~Standards ~~with~~Codification ~~the~~(“ASC”) ~~current~~Topic ~~period~~260, ~~presentation~~Earnings per Share, to calculate earnings or loss per share. ~~These~~We ~~reclassifications~~compute ~~had~~basic nonet ~~effect~~loss onper share by dividing net loss applicable to common stockholders by the ~~reported results~~weighted ofaverage ~~operations.~~number Weof ~~opened~~shares ~~our~~of ~~first~~common ~~location~~stock outstanding during the ~~year~~period. ~~ended~~We ~~December 31,~~have ~~2016,~~potentially ~~which~~dilutive ~~resulted~~securities outstanding that are not shown in ~~expanded~~a ~~revenue~~diluted ~~and~~net ~~expense~~loss ~~reporting~~per onshare ~~the~~calculation ~~Condensed~~because ~~Consolidated~~their ~~Statements~~effect offor ~~Operations~~both 2017 and 2016 would be anti-dilutive. These potentially dilutive securities include options, warrants, and convertible promissory notes.

7The following table sets forth the anti-dilutive securities excluded from diluted loss per share:

	June 30,
	2017		2016
Anti-dilutive securities excluded from diluted loss per share:
Stock options		5,275,543		5,186,927
Warrants		—		1,676,747
Shares issuable upon conversion of convertible promissory notes including accrued interest		8,816,772		7,527,441
Total		14,092,315		14,391,115

~~Note~~Revenue 2 Recognition

~~Summary~~We currently derive revenue from sales of ~~Significant~~ ~~Accounting~~food ~~Policies~~and beverages, membership fees, and simulated shooting lounge fees. We recognize revenue when all the following criteria are met: (~~continued~~i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) seller price is fixed or determinable; and (iv) collectability is reasonably assured. We recognize food and beverage sales and simulated shooting lounge fees on the transaction date, as payment is required at the time of service.

~~Reclassification~~Deferred revenue consists of ~~Prior~~membership ~~Year~~fees, ~~Presentation~~gift ~~(continued)~~card sales, and banquet event deposits received. Membership fees are due annually and are not refundable. We recognize membership fee revenue ratably over 12 months, starting in the month the fees are received. We record gift card sales and banquet event deposits as deferred revenue and recognize sales revenue when the gift cards and banquet event deposits are utilized by our guests. We did not record gift card breakage income at June 30, 2017, as we do not have sufficient purchase and utilization history to use as a basis for a breakage policy. Banquet event deposits are generally non-refundable, although guests can re-schedule their events with sufficient notice. We expect that our guests will utilize their deposits or that we will retain any unused deposits.

WeFair ~~reclassified~~Values ~~$53,548~~ of ~~prior~~Financial ~~year~~Assets ~~research~~ and development expense and $174,953 of prior year software development expense to general and administrative expense on the current period financial statement presentation. The change on the first quarter 2016 classification does not affect previously reported cash flows from operations in the Condensed Consolidated Statement of Cash Flows, and had no effect on the previously reported net loss in the Condensed Consolidated Statements of Operations, for any period. Liabilities

~~Revenue~~We ~~Recognition~~measure and disclose certain financial assets and liabilities at fair value. ASC Topic 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

WeThe ~~currently~~standard ~~derive~~describes ~~revenue~~three ~~from sales~~levels of ~~food~~inputs ~~and~~that ~~beverages,~~may ~~membership~~be ~~fees,~~used ~~and~~to ~~simulated~~measure ~~shooting~~fair ~~lounge fees. We recognize revenue when all the following criteria are met~~value: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) seller price is fixed or determinable; and (iv) collectability is reasonably assured. We recognize food and beverage sales and simulated shooting lounge fees on the transaction date, as payment is required at the time of service.

~~Deferred~~Level ~~revenue~~1 ~~consists~~- ofQuoted ~~membership~~prices ~~fees, gift card sales, and banquet event deposits received. Membership fees are due annually and are not refundable. We recognize membership fee revenue ratably over 12 months, starting~~ in ~~the~~active ~~month~~markets the fees are received. We record gift card sales and banquet event deposits as deferred revenue and recognize sales revenue when the gift cards and banquet event deposits are utilized by our guests. We did not record gift card breakage income at March 31, 2017, as we do not have sufficient purchase and utilization history to use as a basis for aidentical ~~breakage~~assets ~~policy. Banquet event deposits are generally non-refundable, although guests can re-schedule their events with sufficient notice. We expect that our guests will utilize their deposits~~ or ~~that we will retain any unused deposits~~liabilities. ~~We recorded ancillary licensing revenue of $0 and $12,000 for the three months ended March 31, 2017 and 2016, respectively.~~

~~Investments~~Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or 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 or liabilities.

WeLevel ~~determine~~3 ~~the~~- ~~appropriate~~Unobservable ~~classification of~~inputs ~~our~~that ~~investments~~are insupported ~~equity~~by ~~securities~~little ator ~~the~~no ~~time~~market ofactivity ~~acquisition~~ and ~~reevaluate such determinations at each balance sheet date. We classify investments in equity securities~~ that are ~~bought~~significant ~~and~~to ~~held, principally for selling them in~~ the ~~near term, as trading securities. We report trading securities at~~ fair value, ~~with~~of the ~~unrealized~~assets ~~gains~~or ~~and losses recognized in earnings~~liabilities. ~~We had no trading securities at March 31, 2017 and December 31, 2016.~~

We classify investments in equity securities not classified as trading, as available for sale, and carry them at fair value, with any unrecognized gains and losses, net of tax, included in the determination of other comprehensive income (loss) and reported in stockholders’ deficit. We review our investments in equity securities classified as available for sale at each reporting period to determine if there has been a decline in fair value and, if warranted, whether the decline is other-than-temporary. This evaluation is based upon several factors, including stock price performance, financial condition, and near-term prospects of the issuer, as well as our intent and ability to retain the investment for a period sufficient to allow for any anticipated recovery in market value, and any subsequent sales. 7

WeTable ~~record other-than-temporary impairments~~ of available for sale equity securities as impairment expense on the Condensed Consolidated Statement of Operations. We recorded $216,000 in impairment expense on the Consolidated Statement of Operations for other-than-temporary impairment during the year ended December 31, 2016. We sold our available for sale equity securities in March 2017 for proceeds of $84,000. Contents

~~Earnings~~Note ~~(Loss) per Share~~ 2

~~We follow~~Summary ~~FASB~~of Significant Accounting ~~Standards~~Policies ~~Codification~~ (~~“ASC”~~continued) ~~Topic 260, Earnings per Share, to calculate earnings or loss per share.~~

WeFair ~~compute basic~~Values ~~net loss per share by dividing net loss applicable to common stockholders by the weighted average number~~ of ~~shares~~Financial ofAssets ~~common stock outstanding during the period. We have potentially dilutive securities outstanding that are not shown in a diluted net loss per share calculation because their effect for both 2017~~ and ~~2016~~Liabilities ~~would be anti-dilutive. These potentially dilutive securities include options, warrants, and convertible promissory notes.~~ (continued)

8The following sets forth the classes of assets and liabilities measured at fair value on a recurring basis at June 30, 2017 and December 31, 2016 using the levels defined above:

Available for sale securities

Level 1:

Quoted

Prices in Active

Markets for

Identical Assets

Level 2:

Significant

Other

Observable

Inputs

Level 3:

Significant

Unobservable

Inputs

Total

At June 30, 2017:

—

480,000

—

480,000

At December 31, 2016:

—

84,000

—

84,000

~~Note~~Stock-Based 2 Compensation

~~Summary~~We expense all share-based payments to employees, including grants of ~~Significant~~ ~~Accounting~~employee ~~Policies~~stock ~~(continued)~~options, based on their estimated fair values at the grant date, in accordance with ASC 718, Stock Compensation. We record compensation expense for stock options over the vesting period using the estimated fair value on the date of grant as calculated using the Black-Scholes model.

~~The~~We ~~following~~record ~~table~~compensation ~~sets~~cost ~~forth~~on ~~the~~a ~~anti~~straight-~~dilutive~~line ~~securities~~basis ~~excluded~~over ~~from~~the ~~diluted~~requisite ~~loss~~service period for the entire award, unless vesting occurs earlier for awards with service only conditions that have graded vesting schedules. Significant inputs in this model include our company’s estimated market value per share:, expected term, and expected volatility. We determine expected term under the simplified method using a weighted average of the contractual term and vesting period of the award. In estimating expected volatility, we utilize the historical information of a similar publicly traded entity, taking into consideration the industry, stage of life cycle, size, and other factors that are deemed relevant. We account for non-employee stock-based compensation based on the fair value of the related options or warrants using the Black-Scholes model, or the fair value of the goods or services on the grant date, whichever is more readily determinable.

	March 31,
	2017		2016
Anti-dilutive securities excluded from diluted loss per share:
Stock options		5,336,927		5,186,927
Warrants		—		1,676,748
Shares issuable upon conversion of convertible promissory notes including accrued interest		8,353,228		4,653,958
Total		13,690,155		11,517,633

Option holders must send an exercise notice to our corporate office, via certified mail or via hand delivery, to exercise their option to purchase shares of our common stock. The notice must include specific information and warranties as noted in the holder’s option agreement, along with payment of the exercise price. Options are considered exercised after (1) we receive the notice and the exercise price amount and (2) the option holder pays, or makes other arrangements that are satisfactory to our directors to pay, any applicable state or federal withholding requirements. Our directors approve the issuance of shares of common stock once the exercise requirements have been met. We issue treasury shares if available at the time of exercise, otherwise we issue new shares of our common stock at the time of exercise.

~~Fair Values of Financial Assets and Liabilities~~ Investments

We ~~measure~~determine ~~and~~the ~~disclose~~appropriate ~~certain~~classification ~~financial~~of ~~assets~~our ~~and~~investments ~~liabilities~~in atequity ~~fair~~securities ~~value.~~at ~~ASC Topic 820, Fair Value Measurement, defines fair value as~~ the ~~exchange~~ ~~price~~time ~~that~~of ~~would~~acquisition beand ~~received~~reevaluate ~~for~~such andeterminations ~~asset~~at oreach ~~paid~~balance tosheet ~~transfer~~date. aWe ~~liability~~classify ~~(an~~investments ~~exit~~in ~~price)~~equity insecurities ~~the~~that ~~principal~~are orbought ~~most~~and ~~advantageous~~held, ~~market~~principally for ~~the~~selling ~~asset~~them ~~or liability~~ in anthe ~~orderly~~near ~~transaction~~term, ~~between~~as ~~market~~trading ~~participants on the measurement date~~securities. ~~ASC~~ ~~Topic~~We ~~820~~report ~~also~~trading ~~establishes~~securities aat fair value ~~hierarchy~~, ~~which~~with ~~requires an entity to maximize~~ the ~~use~~unrealized ofgains ~~observable inputs~~ and ~~minimize~~losses ~~the~~recognized ~~use~~in ~~of unobservable inputs when measuring fair value~~earnings. ~~The~~We ~~standard~~had ~~describes~~no ~~three~~trading ~~levels~~securities ofat ~~inputs~~June ~~that~~30, ~~may~~2017 ~~be used~~and toDecember ~~measure~~31, ~~fair~~2016. ~~value:~~

~~Level~~We 1classify investments in equity securities not classified as trading, as available for sale, and carry them at fair value, with any unrecognized gains and losses, net of tax, included in the determination of other comprehensive income (loss) and reported in stockholders’ deficit. We review our investments in equity securities classified as available for sale at each reporting period to determine if there has been a decline in fair value and, if warranted, whether the decline is other-than-temporary. ~~Quoted~~This ~~prices~~evaluation is based upon several factors, including stock price performance, financial condition, and near-term prospects of the issuer, as well as our intent and ability to retain the investment for a period sufficient to allow for any anticipated recovery in ~~active~~market ~~markets~~value, and any subsequent sales. We recorded $480,000 in available for ~~identical~~sale ~~assets~~securities orat ~~liabilities~~June 30, 2017, based on the estimated fair value of our warrants to purchase VirTra, Inc. common stock shares using the Black-Scholes model. See the Collaborative Arrangement section of Note 2 to the Condensed Consolidated Financial Statements for further details.

~~Level~~We 2record other-than-temporary ~~Observable~~impairments ~~inputs~~of ~~other~~available ~~than~~for ~~Level 1~~sale ~~prices,~~equity ~~such~~securities as ~~quoted~~impairment ~~prices~~expense ~~for~~on ~~similar~~the ~~assets~~Condensed orConsolidated ~~liabilities,~~Statement ~~quoted~~of ~~prices~~Operations. We recorded $216,000 in ~~markets~~impairment ~~that~~expense ~~are~~on ~~not active,~~the orConsolidated Statement of Operations for other-than-temporary ~~inputs~~impairment ~~that~~during ~~are~~the ~~observable~~year orended ~~can~~December be31, ~~corroborated~~2016. byWe ~~observable~~sold ~~market~~our ~~data~~available for ~~substantially~~sale ~~the~~Bollente ~~full~~equity ~~term~~securities ofin ~~the~~March ~~assets~~2017 orfor ~~liabilities.~~proceeds of $84,000.

~~Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.~~ 8

~~The~~Table ~~following sets forth the classes~~ of ~~assets and liabilities measured at fair value on a recurring basis at March 31, 2017 and December 31, 2016 using the levels defined above:~~ Contents

March 31, 2017

Level 1: Quoted

Prices in Active

Level 2:

Level 3:

Markets for

Significant Other

Significant

Total

Identical

Observable

Unobservable

March 31,

Assets

Inputs

2017

Available for sale securities

—

December 31, 2016

Level 1: Quoted

Prices in Active

Level 2:

Level 3:

Markets for

Significant Other

Significant

Total

Identical

Observable

Unobservable

December 31,

Assets

Inputs

2016

Available for sale securities

—

84,000

—

84,000

Note 2

9Summary of Significant Accounting Policies (continued)

~~Table~~Collaborative ~~of Contents~~Arrangement

~~Note~~We 2entered into a Co-Venture Agreement with VirTra, Inc. (“VirTra”) in January 2015 in regards to the Modern Round operating concept. We have evaluated the Co-Venture Agreement and have determined that it is a collaborative arrangement under FASB ASC Topic 808 “Collaborative Arrangements” and that we are the principal participant. As the principal participant, we record costs incurred and revenue generated from third parties on a gross basis in the Condensed Consolidated Financial Statements. We will reevaluate whether an arrangement qualifies or continues to qualify as a collaborative arrangement whenever there is a change in either the roles of the participants or the participants’ exposure to significant risks and rewards, dependent upon the ultimate commercial success of the endeavor.

~~Summary~~Under the Co-Venture Agreement, Affiliates of ~~Significant~~ ~~Accounting~~Modern ~~Policies~~Round received conditional warrants to purchase 1,838,760 shares of common stock (~~continued~~post one-for-ten reverse stock split) of VirTra, Inc. Warrants to purchase 919,380 shares of VirTra, Inc. common stock (post one for ten reverse stock split) became exercisable on June 1, 2017, upon the anniversary date of our first Modern Round location opening. We estimated the value of the warrants to purchase shares at $480,000 at June 30, 2017, using Level 2 inputs and the Black-Scholes model. The estimated fair value was calculated based on the following inputs: 0.13 year expected life, $1.36 exercise price, 25% volatility, zero dividend rate, and 0.94% risk free interest rate.

~~Stock-Based Compensation~~ Inventory

WeInventory ~~expense~~consists ~~all~~of ~~share-based~~products ~~payments~~used tofor ~~employees,~~food ~~including~~and ~~grants~~beverage ~~of employee stock options~~sales, ~~based~~and onare ~~their~~stated ~~estimated fair values~~ at the ~~grant~~lower ~~date,~~of ~~in accordance~~cost ~~with ASC 718~~(first-in, ~~Stock~~first-out) ~~Compensation.~~or Wenet ~~record~~realizable ~~compensation expense for stock options over the vesting period using the estimated fair~~ value ~~on the date of grant as calculated using the Black-Scholes model~~.

WeRecently ~~record~~Issued ~~compensation~~Accounting cost on a straight-line basis over the requisite service period for the entire award, unless vesting occurs earlier, for awards with service only conditions that have graded vesting schedules. Significant inputs in this model include our company’s estimated market value per share, expected term, and expected volatility. We determine expected term under the simplified method using a weighted average of the contractual term and vesting period of the award. In estimating expected volatility, we utilize the historical information of a similar publicly traded entity, taking into consideration the industry, stage of life cycle, size, and other factors that are deemed relevant. We account for non-employee stock-based compensation based on the fair value of the related options or warrants using the Black-Scholes model, or the fair value of the goods or services on the grant date, whichever is more readily determinable. Pronouncements

~~Option~~In ~~holders~~May ~~must~~2014, ~~send~~the anFASB ~~exercise~~issued ~~notice~~Accounting toStandards ~~our corporate~~Update ~~office~~(“ASU”) 2014-9, ~~via~~Revenue ~~certified~~from ~~mail~~Contracts orwith ~~via~~Customers ~~hand~~(Topic ~~delivery~~606), tosuperseding ~~exercise~~prior ~~their~~revenue ~~option~~recognition torequirements. The ~~purchase~~effective ~~shares~~date of ~~our~~the ~~common~~new ~~stock.~~standard ~~The~~was ~~notice~~deferred ~~must~~by ~~include~~one ~~specific~~year ~~information~~by ~~and~~ASU ~~warranties~~2015-14, asRevenue ~~noted~~from inContracts ~~the~~with ~~holder’s~~Customers ~~option~~(Topic ~~agreement,~~606) ~~along~~Deferral ~~with payment~~ of ~~the~~Effective ~~exercise price~~Date. ~~Options~~In ~~are~~January ~~considered~~2017, ~~exercised~~the ~~after~~FASB ~~(1) we~~issued ~~receive~~ASU ~~the~~2017-03, ~~notice~~which ~~and~~provides ~~the~~clarifications ~~exercise~~relating ~~price~~to ~~amount and (2)~~ the ~~option~~accounting ~~holder~~standard ~~pays,~~updates ornoted ~~makes~~above. ~~other~~We ~~arrangements~~will ~~that~~adopt ~~are~~the ~~satisfactory~~amendments toin ~~our~~these ~~directors~~standards toupdates ~~pay,~~for ~~any applicable~~the ~~state~~year orending ~~federal~~December ~~withholding~~31, ~~requirements~~2018. ~~Our~~In ~~directors approve~~ the ~~issuance~~fourth quarter of ~~shares~~2017, ofwe ~~common~~will ~~stock~~determine ~~once~~whether to show the ~~exercise~~changes ~~requirements~~retrospectively ~~have~~or ~~been~~through ~~met~~current-year retained earnings. We ~~issue~~do ~~treasury~~not ~~shares,~~anticipate ifthat ~~available at~~ the ~~time~~updates, ofonce ~~exercise~~adopted, ~~but~~will wehave ~~generally~~a ~~issue new~~material ~~shares~~impact ofon our ~~common~~consolidated ~~stock~~financial ~~at the time of exercise~~statements.

~~Inventory~~In January 2016, the FASB issued ASU 2016-01, Financial Instruments, which requires all equity investments to be measured at fair value with changes in fair value recognized through net income. We plan on adopting the amendments in this pronouncement for the first quarter of 2018 and do not anticipate that the adoption will have a material impact on our consolidated financial statements. We recorded available for sales securities in the current period and do not anticipate that adopting these provisions will have a material impact on their treatment.

~~Inventory~~In ~~consists~~February 2016, the FASB issued ASU 2016-02, Leases, which provides guidance on the classification of ~~products~~lease ~~used~~types and their presentation. In January 2017, the FASB issued ASU 2017-03, which contained refinements to the treatment called for ~~food~~under ASU 2016-02. We are currently evaluating the impact of this new guidance and ~~beverage~~are ~~sales~~presently unable to determine if adoption of these amendments will have a material effect on our consolidated financial statements. Upon adoption, we anticipate that we will need to create right of use asset and ~~are~~operating ~~stated~~lease atliability accounts, reclassify our deferred rent balance, and update the ~~lower~~presentation of ~~cost~~certain ~~(first-in,~~rent ~~first-out)~~costs oron ~~net~~the ~~realizable~~Consolidated ~~value~~Statement of Operations and the Consolidated Statements of Cash Flows. We are considering early adoption of this update in late 2017 and will make our determination primarily based on the quantity of our leases and whether the impact on our consolidated financial statements is anticipated to be material.

~~Recently~~In ~~Issued~~March ~~Accounting~~2016, ~~Pronouncements~~the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20) Recognition of Breakage for Certain Prepaid Stored-Value Products. The amendments in this update prescribe that the sale of stored-value products are financial liabilities and provide a narrow scope exception to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606, Revenue from Contracts with Customers. We plan on adopting this update in the fourth quarter of 2017, once we have sufficient redemption history to use as a basis for significant estimates we anticipate utilizing in our breakage calculation methodology. We anticipate using redemption percentage and gift card balance aging. At June 30, 2017, we did not recognize any gift card breakage income.

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-~~9, Revenue from Contracts with Customers (Topic 606), an accounting standard that supersedes prior revenue recognition requirements. New disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers are also required. The effective date of the new standard was deferred by one year by ASU 2015-14, Revenue from Contracts with Customers (Topic 606) Deferral of Effective Date. This accounting guidance will be effective for public business entities in annual financial reporting periods beginning after December 15, 2017. Early adoption is permitted for periods beginning after December 15, 2016. ASU 2014-9 may be applied retrospectively (a) to each reporting period presented or (b) with the cumulative effect in retained earnings at the beginning of the adoption period. In January 2017, the FASB issued ASU 2017-03, which provides clarifications relating to the accounting standard updates noted above. We will adopt the amendments in this standard’s update for the year ending December 31, 2018. In the fourth quarter of 2017, we will determine whether we will elect to show the changes retrospectively or through current-year retained earnings. We do not anticipate that the update, once adopted, will have a material impact on our consolidated financial statements.

InTable January 2016, the FASB issued ASU 2016-01, Financial Instruments, which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. We plan on adopting the amendments in this pronouncement for the first quarter of 2018 and do not anticipate that the adoption will have a material impact on our consolidated financial statements. We sold our available for sale investment in March 2017 and do not anticipate acquiring equity investments in the near-term future. Contents

10Note 2

~~Table~~Summary of ~~Contents~~Significant Accounting Policies (continued)

~~Note~~Recently 2Issued Accounting Pronouncements (continued)

~~Summary~~In ~~of Significant~~May ~~Accounting~~2017, ~~Policies~~the FASB issued ASU 2017-09, Compensation – Stock Compensation (~~continued~~Topic 718). The amendments in this update provide guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounts in Topic 718. The amendments in this update are effective for public business entities for financial statements issued for interim and fiscal years beginning after December 15, 2017. We will assess the impact of these amendments in the fourth quarter of 2017. We do not anticipate that the provisions of this pronouncement will have a material impact on our consolidated financial position or consolidated results of operations.

~~Recently~~Other ~~Issued~~than ~~Accounting~~as ~~Pronouncements~~noted ~~(continued)~~above, we have not implemented any pronouncements that had a material impact on the consolidated financial statements, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or consolidated results of operations.

InNote February 2016, the FASB issued ASU 2016-02, Leases. The update calls for leases to be classified as finance or operating leases with both types requiring the recording of a lease-related asset and liability. In addition, finance lease principal payments are to be classified as financing activity on the consolidated statement of cash flows and variable lease payments and interest are to be classified as operating activities. The amendments in this update are effective for fiscal years beginning after December 31, 2018 for public entities, with early adoption allowed. In January 2017, the FASB issued ASU 2017-03, which contained refinements to the treatment called for under ASU 2016-02. We are currently evaluating the impact of this new guidance and are presently unable to determine if adoption of these amendments will have a material effect on our consolidated financial statements. Upon adoption, we will need to create a right of use asset and an operating lease liability, and reclassify our deferred rent balance to the appropriate accounts. We will also need to reclassify how certain rent costs, deferred rent amortization, and rent payments are presented on the Consolidated Statement of Operations and the Consolidated Statements of Cash Flows. We are considering early adoption of this update in late 2017 and will make our determination primarily based on whether we sign new leases in the upcoming year and whether the impact on our consolidated financial statements is determined to be material. 3

InFair ~~March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20) Recognition of Breakage for Certain Prepaid Stored-~~Value ~~Products. The amendments in this update prescribe that the sale~~ of ~~stored-value~~ ~~products~~Financial are financial liabilities and provide a narrow scope exception to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606, Revenue from Contracts with Customers. The amendments in this update are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2017. Earlier adoption is permitted, including adoption in an interim period. We plan on adopting this update in the fourth quarter of 2017 once we have redemption history on which to base our significant estimates in our breakage calculation methodology. Metrics will include the percentage of redemptions versus gift cards sold and the estimated time for gift card redemptions. At March 31, 2017, we did not recognize any gift card breakage income. Instruments

InOur ~~October~~financial ~~2016~~instruments consist of cash and cash equivalents, accounts receivable, prepaid expenses, available for sale securities, accounts payable, accrued expenses, notes payable, and a secured revolving line of credit. The carrying values of these financial instruments approximate fair value, due to their short maturities, or for notes payable and the ~~FASB~~secured ~~issued ASU~~revolving ~~2016~~line of credit, based on borrowing rates currently available to us for loans with similar terms and maturities, which represent Level 3 inputs. We recorded our available for sale securities in Bollente, Inc. at the original cost basis and based the fair value of available for sale securities on an analysis of the stock’s trading volume and price as well as guidance from our efforts to sell the securities, which represent Level 2 and Level 3 inputs, respectively. We sold these available for sale securities in March 2017. We recorded our available for sale warrants to purchase VirTra, Inc. common stock shares based on their estimated value using primarily Level 2 inputs and the Black-17Scholes valuation method. Our balance at June 30, ~~Consolidation~~2017 ~~(Topic~~consists ~~810)~~of –the ~~Interests~~warrants ~~Held~~to ~~through~~purchase ~~Related~~VirTra ~~Parties~~common ~~That~~stock ~~Are~~shares. ~~under~~

~~Common~~Activity ~~Control. This pronouncement amends the consolidation guidance for single decision making reporting entities~~ of aavailable ~~Variable Interest Entity (VIE) and are effective~~ for ~~public~~sale ~~business~~securities ~~entities~~ for ~~fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted this pronouncement for~~ the ~~three~~six months ended ~~March 31~~June 30, 2017, ~~and~~was ~~the adoption~~as ~~did not have an impact on our consolidated financial statements.~~ follows:

Other than as noted above, we have not implemented any pronouncements that had a material impact on the consolidated financial statements, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or consolidated results of operations.

Beginning balance		84,000
Bollente investment sale		(84,000	)
Investment in VirTra, Inc. warrants		480,000
Ending balance	$	480,000

Note 3 4

~~Inventory~~ Secured Revolving Line of Credit – Related Parties

~~Inventory~~We ~~consisted~~entered into a Loan and Security Agreement (the “Loan Agreement”) through our wholly owned subsidiary, Modern Round, Inc. (“Modern Round”), dated May 11, 2016, with related parties, (i) Black Powder Management, L.L.C., a Nevada limited liability company (“Black Powder”), and (ii) BK Entertainment LLC, an Arizona limited liability company (“BK Entertainment”), and together with Black Powder, each, a Lender and collectively, Lenders. The principal of Black Powder serves on our Board of Directors and is an indirect stockholder of more than 10% of our company. The principal of BK Entertainment also serves on our Board of Directors, and BK Entertainment is a stockholder of more than 10% of our company. Pursuant to the ~~following~~Loan Agreement, as amended, Lenders agreed to make a revolving credit loan to Modern Round during the Commitment Period (as defined below), in an aggregate principal amount at: any one-time outstanding not to exceed $3,500,000.

	March 31,2017		December 31,2016
Food products	$	8,108	$	9,632
Liquor products		9,293		8,962
Beer products		2,224		2,319
Wine products		8,089		8,422
Total inventory	$	27,714	$	29,335

The Loan Agreement calls for interest to be payable at 5% per annum on the outstanding unpaid principal amount. We are required to pay each Lender, in accordance with such Lender’s proportionate share of the outstanding advances, all accrued and unpaid interest in arrears commencing on June 1, 2016, and on the first day of each month thereafter until the principal amount outstanding is paid in full. The Lenders agreed to defer interest payments from the date of the Loan Agreement through December 31, 2017. The principal balance outstanding under the Loan Agreement, together with all accrued interest and other amounts payable thereunder, if not sooner paid as provided in the Loan Agreement, will be due and payable on the Termination Date.

11 10

Table of Contents

Note 4

Secured Revolving Line of Credit – Related Parties (continued)

~~We entered~~As ~~into~~used ain the Loan Agreement, as amended, “Commitment Period” means the period from and ~~Security~~including ~~Agreement~~the (date of the “first advance under the Loan Agreement to and including the Termination Date. “Termination Date” means June 30, 2019, or (i) ~~through~~such ~~our~~earlier ~~wholly~~date ~~owned~~upon ~~subsidiary,~~which the commitment shall terminate as provided in the Loan Agreement or (ii) such later date upon Modern Round,’s ~~Inc~~election to extend the Termination Date in accordance with the Loan Agreement. Lenders may extend the Termination Date for successive one-year periods by providing written notice no later than 90 days prior to the Termination Date then being extended.

~~(“Modern Round”),~~Pursuant ~~dated~~to ~~May 11,~~the ~~2016,~~Loan ~~with related parties~~Agreement, ~~(i) Black~~we ~~Powder~~granted ~~Management,~~to ~~L.L.C.,~~the Lenders a ~~Nevada~~security ~~limited~~interest ~~liability~~in ~~company~~substantially ~~(“Black~~all ~~Powder”),~~the ~~and~~personal ~~(ii) BK~~property ~~Entertainment~~assets ~~LLC,~~of anModern ~~Arizona~~Round. ~~limited~~Modern ~~liability~~Round ~~company~~will ~~(“BK Entertainment”),~~be ~~and~~subject ~~together~~to ~~with~~customary ~~Black~~negative ~~Powder,~~covenants ~~each,~~as aset ~~Lender~~forth ~~and~~in ~~collectively,~~the ~~Lenders~~Loan Agreement. ~~The~~Additionally, ~~principal~~each of ~~Black~~Modern ~~Powder~~Round’s ~~serves~~wholly onowned ~~our~~subsidiaries, ~~Board~~MR ofLas ~~Directors~~Vegas, LLC and isMR anPeoria, ~~indirect~~LLC, ~~stockholder~~entered ofinto ~~more~~a ~~than~~Guaranty ~~10%~~and ofSecurity ~~our~~Agreement ~~company.~~for ~~The~~the ~~principal~~benefit of ~~BK Entertainment~~Lenders ~~also~~to ~~serves~~guarantee onand ~~our~~secure ~~Board~~the obligations of ~~Directors,~~Modern ~~and~~Round BKunder ~~Entertainment~~the isLoan aAgreement. ~~stockholder~~We ofincurred ~~more~~$37,816 ~~than~~and ~~10%~~$17,211 ofin ~~our~~interest ~~company.~~expense ~~Pursuant~~for tothis debt for the ~~Loan~~three ~~Agreement,~~months asended ~~amended~~June 30, ~~Lenders~~2017 ~~agreed~~and to2016, ~~make~~respectively. aWe ~~revolving~~incurred ~~credit~~$70,595 ~~loan~~and to$17,211 ~~Modern~~in ~~Round~~interest ~~during~~expense for the ~~Commitment~~ ~~Period~~six ~~(as~~months ~~defined~~ended ~~below)~~June 30, in2017 anand ~~aggregate~~2016, ~~principal~~respectively. ~~amount~~We athad ~~any~~an ~~one~~outstanding ~~time~~line ~~outstanding~~of ~~not~~credit tobalance ~~exceed~~of $3,187,000 and an available balance of $313,000. at June 30, 2017.

~~The~~Note ~~Loan Agreement calls for interest to be payable at~~ 5.0% per annum on the outstanding unpaid principal amount. We are required to pay each Lender, in accordance with such Lender’s proportionate share of the outstanding advances, all accrued and unpaid interest in arrears commencing on June 1, 2016, and on the first day of each month thereafter until the principal amount outstanding is paid in full. The Lenders agreed to defer interest payments through December 31, 2017. The principal balance outstanding under the Loan Agreement, together with all accrued interest and other amounts payable thereunder, if not sooner paid as provided in the Loan Agreement, will be due and payable on the Termination Date. As used in the Loan Agreement, “Commitment Period” means the period from and including the date of the first advance under the Loan Agreement to and including the Termination Date. “Termination Date” means June 30, 2018, or (i) such earlier date upon which the commitment shall terminate as provided in the Loan Agreement or (ii) such later date upon Modern Round’s election to extend the Termination Date in accordance with the Loan Agreement. Lenders may extend the Termination Date for successive one-year periods by providing written notice no later than 90 days prior to the Termination Date then being extended.

~~Pursuant~~Notes to the Loan Agreement, we granted to the Lenders a security interest in substantially all the personal property assets of Modern Round. Modern Round will be subject to customary negative covenants as set forth in the Loan Agreement. Additionally, each of Modern Round’s wholly owned subsidiaries, MR Las Vegas, LLC and MR Peoria, LLC, entered into a Guaranty and Security Agreement for the benefit of Lenders to guarantee and secure the obligations of Modern Round under the Loan Agreement. We incurred $32,779 and $0 in interest expense on this debt for the three months ended March 31, 2017 and 2016, respectively. We had an outstanding line of credit balance of $2,777,000 and an available balance of $223,000 at March 31, 2017. Payable

~~Note~~Notes 5Payable – Other

We converted three vendor accounts payable balances into notes payable in December 2016 and January 2017, all with maturity dates of March 31, 2017. In April 2017, the noteholders agreed to extended repayment terms. Two noteholders agreed to receive monthly payments through March 31, 2018, with the balance subject to 8% interest. The third noteholder agreed to receive monthly payments through December 2017 with 0% interest. We incurred $3,690 in interest expense on this debt for the three and six months ended June 30, 2017. We incurred no interest expense for the comparable quarter and period in the prior year. Notes ~~Payable~~payable – other of $275,348 and $235,920 were outstanding at June 30, 2017 and December 31, 2016, respectively.

Convertible Notes Payable

In November and December 2015, prior to the merger, our wholly owned subsidiary, Modern Round, Inc., issued 8% convertible promissory notes in a private placement in the aggregate principal amount of $1,275,000, of which $775,000 was issued to independent third parties and $500,000 was issued to certain related parties. In January 2016, we approved a private placement of up to $5,000,000 of 8% convertible promissory notes. On August 10, 2016, we closed our convertible debt offering, pursuant to which investors subscribed to $1,875,000 in aggregate principal amount of convertible promissory notes.

~~All~~On ofApril ~~our~~3, ~~convertible notes payable mature between November~~ 2017 ~~and August 2018. Eight percent interest is accrued and compounds annually~~, ~~and~~we isapproved ~~due~~a inprivate ~~one~~placement ~~payment with the principal at the notes’ maturity. The holders have the right to convert their principal and accrued interest balance into common stock~~ of ~~our~~up ~~company at a post-merger adjusted price equal~~ to $~~0.41 per share. At March 31~~5, ~~2017~~000,000 ~~the~~of ~~notes~~8% ~~and accrued interest were~~ convertible ~~into~~promissory ~~approximately 8~~notes,~~353,228~~ ~~shares~~(the of“Series ~~our~~2017 ~~common stock~~Notes”). WeAt ~~incurred~~June ~~$62~~30,~~137~~ ~~and~~2017, $32125,~~254~~000 inhad ~~interest expense~~been onsubscribed under this ~~debt for the three months ended March 31, 2017 and 2016, respectively~~offering.

~~Notes~~Our ~~Payable~~convertible –promissory ~~Other~~notes mature between November 2017 and May 2019. Eight percent interest is accrued and compounds annually, and is due in one payment with the principal at the notes’ maturity. The holders have the right to convert their principal and accrued interest balance into common stock of our company at a post-merger adjusted price equal to $0.41 per share. At June 30, 2017, the notes and accrued interest were convertible into approximately 8,816,772 shares of our common stock. We incurred $65,052 and $48,139 in interest expense on this debt for the three months ended June 30, 2017 and 2016, respectively. We incurred $127,189 and $80,393 in interest expense on this debt for the six months ended June 30, 2017 and 2016, respectively.

We converted two vendor accounts payable balances into notes payable in December 2016 and another in January 2017. The three notes were payable on March 31, 2017, or sooner if specific conditions were met. The notes do not bear a stated interest rate and imputed interest was deemed immaterial due to low market interest rates and the short interest bearing period on the notes. In April 2017, two of the noteholders agreed to extended repayment terms, and we were in negotiations with the third noteholder. See Note ~~9, Subsequent Events, for details on the payment extensions. Notes payable – other of $368,785 and $235,920 were outstanding at March 31, 2017 and December 31, 2016, respectively.~~ 6

12 Inventory

	June 30, 2017		December 31, 2016
	(unaudited)
Inventory consisted of the following at:
Food products	$	8,822	$	9,632
Liquor products		8,974		8,962
Beer products		2,628		2,319
Wine products		7,290		8,422
Total inventory	$	27,714	$	29,335

~~Note 6~~ 11

~~Fair~~Table ~~Value~~ of ~~Financial~~ ~~Instruments~~ Contents

~~Our~~Note financial instruments consist of cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable, accrued expenses, notes payable, and a secured revolving line of credit. The carrying values of these financial instruments approximate fair value, due to their short maturities, or for notes payable and the secured revolving line of credit, based on borrowing rates currently available to us for loans with similar terms and maturities, which represent Level 3 inputs. 7

WeAccrued recorded available for sale securities at the original cost basis and based the fair value of available for sale securities on an analysis of the stock’s trading volume and price as well as guidance from our efforts to sell the securities, which represent Level 2 and Level 3 inputs, respectively. We sold our available for sale securities in March 2017. Expenses

~~Activity~~Accrued expenses consist of ~~available~~unit-level ~~for~~operating ~~sale~~expense, ~~securities~~corporate ~~for~~general and administrative expense, and interest expense. We determine the ~~quarter~~balances ~~ended~~based ~~March 31~~on actual amounts billed or reasonable estimates calculated based on historical costs. Accrued expenses at June 30, 2017 ~~was~~and asDecember ~~follows:~~31, 2016 consisted of the following:

Beginning balance	$	84,000
	June 30, 2017			December 31, 2016
Investment sales		(84,000	)
Accrued:	(unaudited)
Credit losses		—
G&A and other operating expenses	$	828,281		$	576,170
Other than temporary impairment		—
Payroll and related expenses		89,171			119,723
Ending balance	$	—
Sales and use taxes		18,461			30,696
Interest expense		320,048			167,544
Interest expense - related party		161,952			116,671
Total accrued expenses	$	1,417,913		$	1,010,804

Note 7 8

~~Accrued~~Related ~~Expenses~~ Party Transactions

~~Accrued~~During ~~expenses~~the ~~consist~~six months ended June 30, 2017 and 2016, we recorded expenses of ~~unit~~$204,279 and $116,873, respectively, relating to our Co-~~level operating~~Venture ~~expense~~Agreement with VirTra, ~~corporate~~a ~~general~~public company in which certain of our officers and ~~administrative~~directors ~~expense~~have a minority interest. We recorded $480,000 and ~~interest~~$0 ~~expense~~in other income for the three and six months ended June 30, 2017 and 2016, respectively. We ~~determine~~recorded the ~~balances~~estimated ~~based~~fair onvalue ~~actual~~of ~~amounts~~warrants ~~billed~~to orpurchase ~~reasonable~~common ~~estimates~~stock ~~calculated~~shares ~~based~~of VirTra to other income on ~~historical~~the ~~costs.~~Condensed ~~Accrued~~Consolidated ~~expenses~~Statement of Operations at ~~March 31~~June 30, 2017. The warrants became earned and ~~December 31,~~ ~~2016~~exercisable ~~consisted~~in ofthe current quarter. We had the following balances with VirTra at June 30, 2017: $480,000 in available for sale securities, $27,714 in accounts payable, and $132,704 in accrued royalty expense.

	March 31,2017		December 31,2016
Accrued:
G&A and other operating expense	$	644,598	$	576,170
Payroll and related expense		46,435		119,723
Sales and use taxes		19,258		30,696
Interest expense		219,819		167,544
Interest expense - related party		159,312		116,671
Total Accrued Expenses	$	1,089,422	$	1,010,804

We owed $29,009 and $17,209 in expense reimbursements to our officers and directors at June 30, 2017 and December 31, 2016, respectively. The balances are recorded in accounts payable in our Condensed Consolidated Balance Sheets.

~~Note~~We 8recorded related party revenue of $0 and $24,000 for the six months ended June 30, 2017 and 2016, respectively.

~~Related~~Note ~~Party Transactions~~ 9

~~During~~Subsequent the three months ended March 31, 2017 and 2016, we recorded expenses of $43,455 and $63,697, respectively, in connection with our Co-Venture Agreement with VirTra, a public company in which certain of our officers and directors have a minority interest. At March 31, 2017, we had the following balances with VirTra: $14,492 in accounts payable and $14,888 in accrued royalty expense. Events

WeIn ~~owed~~June ~~$21~~2017,~~118~~ ~~and~~we ~~$17,209~~entered ininto ~~expense~~a ~~reimbursements~~game torevenue ~~our~~sharing ~~officers~~agreement ~~and~~to ~~directors~~provide asthe use of ~~March 31,~~several ~~2017~~simulated ~~and~~shooting ~~December 31,~~lounges ~~2016~~at another entertainment company’s location. In July 2017, ~~respectively~~the simulated shooting lounges were placed into operation. ~~The balances~~Related ~~are~~revenues will be recorded in ~~accounts~~the ~~payable~~period in ~~our~~which ~~Condensed~~they are earned under Amusement and Other Revenue on the Consolidated ~~Balance~~Statements ~~Sheets.~~of Operations.

13In July 2017, we entered into an Equipment Lease (the “Equipment Lease”) through our wholly owned subsidiary, Modern Round, Inc., with related parties, (i) Black Powder Management, L.L.C., and (ii) BK Entertainment LLC, each, a Lessor and collectively, Lessors. Pursuant to the Equipment Lease, we lease from the Lessors $39,500 in equipment related to the game revenue sharing agreement noted above. We lease such equipment for monthly payments of $1,408 over a 36-month term.

~~Table of Contents~~12

~~Note~~Table 9of Contents

~~Subsequent~~Item 2. ~~Events~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations

OnYou ~~April~~should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 327A of the Securities Act of 1933, ~~2017~~as amended, weor ~~approved~~the ~~a private~~Securities ~~placement~~Act, and Section 21E of upthe toSecurities $5Exchange Act of 1934,~~000~~ as amended,~~000~~ ofor 8%the ~~convertible~~Exchange ~~promissory~~Act, ~~notes~~including statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. ~~The~~In ~~convertible~~some ~~promissory~~cases, ~~notes~~you ~~have~~can aidentify ~~two~~forward-~~year~~looking ~~term~~statements by terms such as “anticipate,” ~~eight~~“believe,” ~~percent~~“estimate,” ~~annual~~“expect,” ~~interest~~“intend,” ~~and~~“may,” ~~noteholders~~“might,” “plan,” “project,” “will,” ~~have~~“would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the ~~right~~negative of these terms, and similar expressions intended to ~~convert their~~identify ~~principal~~forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and ~~accrued~~involve ~~interest~~known ~~balances~~risks, ~~into~~uncertainties, ~~common~~and ~~stock~~other offactors that may cause our ~~company~~actual atresults, alevels ~~price~~of ~~equal~~activity, performance, or achievement to ~~$0.41~~be ~~per~~materially ~~share~~different from those expressed or implied by the forward-looking statements. ~~Subsequent~~Factors that could cause or contribute to ~~March 31~~such differences include those identified below, ~~2017~~and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~$125~~2016. Furthermore,~~000~~ ~~has~~such ~~been~~forward-looking ~~subscribed~~statements ~~under~~speak only as of the date of this ~~offering~~report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

InOur April 2017, we negotiated with three vendors holding notes payable that were due March 31, 2017. We executed a 12-month extension with one noteholder that calls for an eight percent annualized interest rate and monthly payments through March 2018. We issued the first payment on this extension on April 15, 2017. We negotiated an eight-month extension with the second noteholder to repay the note via eight equal installment payments through December 2017. We issued the first payment on this extension on May 1, 2017. We are negotiating an extension with the third vendor but have not formalized the extension agreement. We have discussed extending the note via monthly payments through March 2018, subject to an eight percent annualized interest rate. We issued a payment on April 29, 2017 based on the extension that has been discussed. Business

14We created and are rolling out nationally, an entertainment concept centered around a one-of-a-kind, safe, virtual interactive shooting experience utilizing laser technology-based replica firearms with the look, feel, and weight of real firearms and extensive food and beverage offerings, featuring popular menu items and a variety of liquors, beers, and wines in an upscale environment. As of August 2, 2017, we had approximately 45,000 members with a return rate of approximately 17%. Our entertainment concept is intended to appeal to a very broad customer base of male and female entertainment seekers of all ages, which may include friends, couples, and sponsors of corporate and other events regardless of their experience with shooting. Our entertainment concept is based on the “savor, sip, and shoot” experience of our guests. Guests can savor a broad menu of food items throughout our facilities, including in our virtual shooting lounges. Our menu features items designed to appeal to a very broad spectrum of guests and includes a wide variety of appetizers, soups, salads, flatbreads, sandwiches, pastas, steaks, seafood, burgers, and desserts. Our menu items are intended to compare favorably with upscale casual restaurants. We also offer our guests the opportunity to experience a wide variety of domestic and imported, popular priced and premium liquors, beers, wines, and signature cocktails. Beverages are available in each of our entertainment facilities at our main lounge bar, full service restaurant, and shooting lounges, allowing for multiple points of sale.

~~Table~~Virtual shooting is the centerpiece of ~~Contents~~our entertainment experience. Our facilities generally will contain between 20 and 28 virtual shooting lounges. Each virtual shooting lounge offers a relaxed environment for groups of two to six people in a semi-private space measuring approximately 12 feet by 16 feet. Each virtual shooting lounge is anchored by a projection screen and is furnished with plush lounge seating and a table for sharing food and drinks. Whether an expert marksman or first-time shooter, our upscale entertainment facilities offer guests the opportunity to test their skills in a wide variety of carefully designed scenarios in a completely safe environment. Our guests can take aim in one of our interactive games, skills drills, or advanced training simulations using our state-of-the-art laser technology-based replica firearms. These replica firearms cannot be converted into a traditional firearm. The replica firearms contain a laser that is engaged with each trigger pull. Hit detection cameras capture the laser beam strike on the screen and transmit the data to our scenario software. Multiplayer modes allow guests to simultaneously compete against each other or work together as a team in a number of our interactive games and skills drills. Our facilities can also accommodate corporate events, bachelor and bachelorette parties, birthday parties, and other events. In addition, we use our entertainment platform as an opportunity to promote firearm safety and to offer training for our guests.

~~Item~~We 2were incorporated in Nevada in November 2013 under the name Nuvola, Inc. Prior ~~Management’s~~to ~~Discussion~~November 24, 2014, we operated as a subsidiary of Bollente Companies, Inc., or Bollente, a company specializing in the manufacturing and ~~Analysis~~sale of ~~Financial~~high-quality, ~~Condition~~whole-house, electric tankless water heaters. On November 24, 2014, Bollente spun off our company by declaring a dividend of the shares of our common stock to the Bollente stockholders. Because of the dividend, we became a company independent of Bollente. On December 31, 2015, we closed a merger transaction, or the Merger, in which our newly formed, wholly owned subsidiary merged with and ~~Results~~into Modern Round, L.L.C., a Nevada limited liability company, or Modern Round, pursuant to which (a) Modern Round survived the Merger and became our wholly owned subsidiary; (b) we ceased being a shell company; and (c) we experienced a change in control in which the former members of ~~Operations~~Modern Round acquired control of our company.

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve substantial risks and uncertainties. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including statements regarding our expectations, beliefs, intentions, strategies, future operations, future financial position, future revenue, projected expenses, and plans and objectives of management. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements reflect our current views about future events and involve known risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievement to be materially different from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. 13

~~Our~~Table ~~Business~~of Contents

WeConcurrent ~~created and are rolling out nationally, an entertainment concept centered around a one-of-a-kind, safe, virtual interactive shooting experience utilizing laser technology-based replica firearms~~ with the ~~look~~Merger, ~~feel,~~Modern ~~and~~Round ~~weight~~was ofconverted ~~real~~into ~~firearms~~a ~~and extensive~~Nevada ~~food~~corporation ~~and~~named ~~beverage~~Modern ~~offerings~~Round, ~~featuring popular menu items and a variety of liquors, beers, and wines in an upscale environment~~Inc. AsFor ofaccounting ~~May 15~~purposes, ~~2017,~~the weMerger ~~had~~was ~~approximately~~accounted ~~37,000~~for ~~members~~as ~~with~~ a ~~return~~reverse ~~rate of approximately 16%. Our entertainment concept is intended to appeal to a very broad customer base of male and female entertainment seekers of all ages~~acquisition, ~~which may include friends, couples, and sponsors of corporate and other events regardless of their experience~~ with ~~shooting.~~ ~~Our~~Modern ~~entertainment~~Round ~~concept~~as ~~is based on~~ the ~~“savor,~~accounting ~~sip, and shoot” experience of our guests~~acquirer. ~~Guests~~The ~~can~~condensed ~~savor~~consolidated afinancial ~~broad~~statements ~~menu~~included ~~of food items throughout our facilities, including~~ in our ~~virtual~~Quarterly ~~shooting~~Report ~~lounges.~~on ~~Our~~Form ~~menu features~~10-Q ~~items~~for ~~designed~~the tothree ~~appeal to a very broad spectrum of guests~~ and ~~include~~six amonths ~~wide~~ended ~~variety~~June ~~of appetizers~~30, ~~soups~~2017, ~~salads,~~represent flatbreads, sandwiches, pastas, steaks, seafood, burgers, and desserts. Our menu items are intended to compare favorably with upscale casual restaurants. We also offer our guests the opportunity to experience a ~~wide~~continuation ~~variety~~ of ~~domestic~~the ~~and~~financial ~~imported,~~statements ~~popular priced and premium liquors, beers, wines, and signature cocktails. Beverages are available in each~~ of ~~our entertainment~~Modern ~~facilities at our main lounge bar, full service restaurant, and shooting lounges, allowing for multiple points of sale~~Round.

~~Virtual~~On ~~shooting~~February is11, ~~the~~2016, ~~centerpiece~~we offiled ~~our~~Amended ~~entertainment experience. Our facilities generally will contain between 20~~ and 28Restated ~~virtual~~Articles ~~shooting lounges. Each virtual shooting lounge offers a relaxed environment for groups~~ of ~~two~~Incorporation, to six people in a semi-private space measuring approximately 12 feet by 16 feet. Each virtual shooting lounge is anchored by a projection screen and is furnished with plush lounge seating and a table for sharing food and drinks. Whether an expert marksman or ~~first-time~~Restated ~~shooter~~Articles, ~~our~~with ~~upscale~~the ~~entertainment~~Secretary ~~facilities~~of ~~offer~~State ~~guests~~of the ~~opportunity~~State ~~to test their skills in a wide variety~~ of ~~carefully designed scenarios in a completely safe environment~~Nevada. Our ~~guests~~Restated ~~can~~Articles ~~take~~(i) ~~aim~~changed inthe ~~one~~name of our ~~interactive~~company ~~games,~~to ~~skills~~Modern ~~drills,~~Round orEntertainment ~~advanced~~Corporation, ~~training~~(ii) ~~simulations~~increased ~~using~~the ~~our~~number ~~state-~~of~~-the-art~~ ~~laser~~authorized ~~technology-based~~shares ~~replica~~of firearms. These replica firearms cannot be converted into a traditional firearm. The replica firearms contain a laser that is engaged with each trigger pull. Hit detection cameras capture the laser beam strike on the screen and transmits the data to our ~~scenario~~common ~~software.~~stock ~~Multiplayer~~from ~~modes~~100,000,000 ~~allow~~shares ~~guests simultaneously~~ to ~~compete~~200,000,000 ~~against~~shares, ~~each~~(iii) ~~other~~created ~~or work together as~~ a ~~team~~classified inBoard ~~a number~~ of ~~our interactive~~Directors, ~~games~~ and ~~skills~~(iv) ~~drills.~~opted ~~Our~~into ~~facilities~~certain ~~can~~anti-takeover ~~also~~statutes ~~accommodate~~under ~~corporate~~Nevada ~~events, bachelor and bachelorette parties, birthday parties, and other events~~law. We Inopened ~~addition, we use~~ our ~~entertainment~~first ~~platform~~location asin anJune ~~opportunity~~2016 toin ~~promote~~Peoria, ~~firearm safety and to offer training for our guests~~Arizona.

WeResults ~~were incorporated in Nevada in November 2013 under the name Nuvola, Inc. Prior to November 24, 2014, we operated as a subsidiary~~ of ~~Bollente~~Operations ~~Companies,~~for ~~Inc., or Bollente, a company specializing in~~ the ~~manufacturing~~three and ~~sale~~six ofmonths ~~high-quality,~~ended ~~whole-house,~~June ~~electric tankless water heaters. On November 24~~30, ~~2014,~~2017 ~~Bollente spun~~compared off our company by declaring a dividend of the shares of our common stock to the Bollente stockholders. Because of the dividend, we became a company independent of Bollente. On December 31, 2015, we closed a merger transaction, or the Merger, in which our newly formed, wholly owned subsidiary merged with ~~and into Modern Round, L.L.C., a Nevada limited liability company, or Modern Round, pursuant to which (a) Modern Round survived~~ the ~~Merger~~three and ~~became~~six ~~our~~months ~~wholly~~ended ~~owned subsidiary;~~June ~~(b) we ceased being a shell company; and (c) we experienced a change in control in which the former members of Modern Round acquired control of our company. Concurrent with the Merger~~30, ~~Modern Round was converted into a Nevada corporation named Modern Round, Inc.~~ 2016

15Revenue, Net

~~Table~~Revenue, net increased $449,903 to $593,924 for the three months ended June 30, 2017, compared with $144,021 for the comparable quarter last year. The increase was due to our Peoria, Arizona location operating for the full quarter ended June 30, 2017 versus operating for only one month in the comparable quarter last year. The Peoria location opened in June 2016. Revenue, net increased $1,048,402 to $1,204,423 for the six months ended June 30, 2017, compared with $156,021 for the comparable period last year. The increase for the six months ended June 30, 2017 was due to our Peoria location operating for six months in fiscal 2017 compared with one month in the comparable period last year. We anticipate a modest increase in revenue for the third and fourth quarters of ~~Contents~~fiscal 2017, compared with the comparable quarters last year. The potential increase is anticipated to be due to new games, our service performance generating greater customer awareness regarding our Peoria, Arizona location, and revenues from game revenue sharing agreements.

~~For~~Cost accounting purposes, the Merger was accounted for as a reverse acquisition, with Modern Round as the accounting acquirer. The March 31, 2017 condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for three months ended March 31, 2017 represent a continuation of ~~the~~ ~~financial statements of Modern Round.~~ Products

OnCost ~~February 11~~of products increased $68,799 ~~2016~~to $99,735 wefor ~~filed~~the ~~Amended~~three ~~and~~months ~~Restated~~ended ~~Articles~~June of30, ~~Incorporation~~2017, orcompared ~~Restated Articles~~with $30,936 ~~with~~for the ~~Secretary~~comparable ofquarter ~~State~~last year. Our costs of ~~the~~products ~~State~~consisted mainly of ~~Nevada.~~food ~~Our~~and ~~Restated~~beverage ~~Articles~~products ~~(i) changed~~that ~~the~~were ~~name~~purchased ofand used to generate sales revenue at our ~~company~~Peoria, Arizona location. The increase was related to ~~Modern~~being ~~Round~~open ~~Entertainment~~three ~~Corporation~~months for the quarter ended June 30, ~~(ii) increased~~2017, compared with one month in the ~~number~~comparable ofquarter ~~authorized~~last ~~shares~~year. Cost of ~~our~~products ~~common~~increased ~~stock~~$168,858 ~~from 100~~to $199,~~000,000~~794 ~~shares~~for tothe ~~200~~six months ended June 30,~~000~~ 2017,~~000~~ ~~shares~~compared with $30,936 ~~(iii) created~~for athe ~~classified~~comparable ~~Board~~period oflast ~~Directors,~~year. ~~and~~The ~~(iv) opted~~increase ~~into~~for ~~certain~~the ~~anti-takeover~~six ~~statutes~~months ~~under~~ended ~~Nevada~~June ~~law.~~30, We2017 ~~opened~~was due to our ~~first~~Peoria location operating for six months in ~~June~~fiscal ~~2016~~2017, compared with one month in the comparable period last year. We anticipate that our cost of products, as a percentage of revenue, will remain flat through the end of fiscal 2017, due to the impact of increased event sales at our Peoria, Arizona location and continued menu engineering.

~~Results~~Operating ofPayroll ~~Operations for the Three Months Ended March 31, 2017~~ and ~~2016~~ Benefits

~~Revenue~~Operating payroll and benefits expense increased $151,824 ~~Net~~to $304,586 for the three months ended June 30, 2017, compared with $152,762 for the comparable quarter last year. The increase was primarily driven by our Peoria, Arizona location operating for the entire quarter ended June 30, 2017, compared with one month in the comparable quarter last year. The increase in operating payroll and benefits expense was partially offset by high wages in June 2016 due to the first month of operations at our Peoria location. Operating payroll and benefits expense consisted of salaries, wages, taxes, and other benefit costs related to operating the Peoria, Arizona location. Operating payroll and benefits expense increased $479,864 to $632,626 for the six months ended June 30, 2017, compared with $152,762 for the comparable period last year. The increase for the six months ended June 30, 2017 was due to our Peoria location operating for six months in fiscal 2017, compared with one month for the comparable period last year. We anticipate that operating payroll and benefits expense, as a percentage of revenue, will decrease over the remaining quarters in fiscal 2017. The anticipated decrease is primarily due to our estimation that incremental sales gains will be greater than the additional variable labor costs incurred.

~~Revenue,~~Other ~~net~~Store ~~was~~Operating $610,499 and $12,000 for the three months ended March 31, 2017 and 2016, respectively. Our Peoria, Arizona location was in operation for the 2017 period compared to no locations being open in the 2016 period. We recorded $0 and $12,000 in licensing revenue in the three months ended March 31, 2017 and 2016, respectively. Expense

~~Cost~~Other store operating expense increased $123,480 to $202,456 for the three months ended June 30, 2017, compared with $78,976 for the comparable quarter last year. The increase was primarily related to the Peoria location operating longer for the current fiscal year, as noted under Revenue, Net above. Other store operating expense consisted primarily of ~~Products~~marketing, occupancy, supplies, services, utilities and other general expenses related to operating the Peoria, Arizona location. Other store operating expense increased $305,981 to $384,957 for the six months ended June 30, 2017, compared with $78,976 for the comparable period last year. The increase for the six months ended June 30, 2017 was due to our Peoria location operating for six months in fiscal 2017, compared with one month in the comparable period last year. Other store operating expense is expected to remain relatively flat, as a percentage of revenue, over the remaining quarters in fiscal 2017, largely due to high margin sales being anticipated in the fourth quarter.

Cost of products was $100,059 and $0 for the three months ended March 31, 2017 and 2016, respectively. We did not incur cost of products in the 2016 period as no locations were open. Our costs of products for the 2017 period consisted mainly of food and beverage products that were purchased and used to generate revenue at our Peoria, Arizona location. 14

~~Operating~~Table ~~Payroll~~of ~~and Benefits~~ Contents

~~Operating payroll~~General and ~~benefits~~Administrative expense was $328,040 and $0 for the three months ended March 31, 2017 and 2016, respectively. We did not incur operating payroll and benefits expense in the 2016 period as we had no open locations. Our operating payroll and benefits expense for the 2017 period consisted of salaries, wages, taxes, and other benefit costs related to operating the Peoria, Arizona location. Effective January 1, 2017, the minimum wage in the state of Arizona increased $1.95 per hour to $10.00 per hour. The rate increase led to approximately $14,000 in additional hourly wages for our Arizona team members in the three months ended March 31, 2017. Expense

~~Other~~General ~~Store~~and ~~Operating~~administrative ~~Expense~~expense for the three months ended June 30, 2017 and 2016 was $807,151 and $848,098, respectively, or a decrease of $40,947. The decrease was driven primarily by a reduction in payroll costs of approximately $57,000, a reduction in software development and research and development costs of approximately $130,000, partially offset by an increase in royalty expense of approximately $150,000.

~~Other store~~The ~~operating~~decrease ~~expense~~in payroll related cost was ~~$182~~due primarily to a reduction in benefits expense for fiscal 2017,~~501~~ a reduction in bonus expense due to the comparable quarter last year including a one-time bonus, and $0reduced salaries due to lower corporate headcount for the three months ended ~~March 31~~June 30, 2017. Software development expenses were elevated for the comparable quarter and ~~2016~~period last year, ~~respectively.~~as Wewe ~~did~~were ~~not~~using ~~incur~~several ~~other~~third-party ~~operating~~vendors ~~expense~~to inprepare ~~the~~for our June 2016 ~~period~~opening asof nothe ~~locations~~Peoria, ~~were~~Arizona ~~open~~location. ~~Our~~There ~~other~~were ~~store~~no ~~operating~~such ~~expense~~additional costs for the ~~2017 period~~comparable ~~consisted~~quarter ~~primarily~~and ofperiod ~~marketing,~~this ~~occupancy~~year. Lastly, ~~supplies~~royalty expense increased due to higher sales for the three months ended June 30, ~~services~~2017, ~~utilities~~compared with the comparable quarter last year, and ~~other~~due ~~general~~to ~~expenses~~accruing ~~incurred~~a inminimum ~~operating~~royalty ~~the~~amount ~~Peoria,~~under ~~Arizona~~the ~~location~~co-venture agreement.

General and ~~Administrative~~administrative ~~Expense~~expense decreased $375,228 to $1,457,388 for the six months ended June 30, 2017, compared with $1,832,616 for the comparable period last year. The decrease was primarily due to an approximate $335,000 reduction in software development and research costs and an approximate $234,000 reduction in professional fees, partially offset by an approximate increase of $194,000 in royalty expense. The six-month changes were due to the same factors as described above for the three-month changes, except for the decrease in professional fees, which was primarily due to the comparable period last year, including professional fees expense related to the December 31, 2015 reverse merger.

~~General~~Depreciation and administrative expense for the three months ended March 31, 2017 was $650,237 compared with $984,518 for the three months ended March 31, 2016, or a decrease of $334,281. The decrease was driven primarily by reduced professional fees expense of approximately $238,000, software and development expense of approximately $152,000, and research and development expense of approximately $53,000, offset by the addition of royalty expense for the current year of approximately $44,000 and smaller increases in payroll and related costs that total approximately $38,000. Expense

~~Professional~~Depreciation ~~fee~~ expense ~~decreased $238,000~~ for the three months ended ~~March 31~~June 30, 2017 ~~compared~~was to$131,211, ~~the~~compared ~~three~~with ~~months~~$41,310 ~~ended~~for ~~March 31, 2016,~~the ~~primarily~~comparable ~~due~~quarter tolast ~~higher~~year, ~~fees~~or ~~from~~an ~~services~~increase inof ~~the~~$89,901. The ~~2016~~increase ~~period~~was ~~related~~due to the ~~Merger~~assets onfor ~~December 31~~the Peoria, ~~2015~~Arizona ~~and~~location ~~for~~being ~~the~~placed ~~fiscal~~in ~~2015~~service ~~audit~~in June 2016 and ~~Form~~incurring ~~10-K~~three ~~filing.~~months ~~Software~~of ~~development~~depreciation ~~costs~~expense for the ~~three months~~quarter ended ~~March 31~~June 30, 2017, ~~decreased~~ compared towith ~~the~~one ~~same~~month ~~period~~ in ~~2016 due to~~ the ~~2016~~comparable ~~period~~quarter ~~including~~last ~~costs~~year. ~~from~~Depreciation ~~several~~expense ~~outside~~increased ~~vendors~~$217,197 ~~that~~to ~~were~~$260,951 ~~needed~~ for ~~our~~the ~~June~~six ~~2016~~months ~~location~~ended ~~opening.~~June ~~There~~30, ~~were~~2017, nocompared ~~such~~with ~~software~~$43,754 ~~development~~for ~~costs in~~ the ~~current~~comparable period. ~~Research~~last ~~and~~year. ~~development~~The ~~costs~~increase for the ~~three~~six-month ~~months ended March 31, 2017 decreased compared with the same~~ period in ~~2016~~fiscal ~~primarily~~2017 was due to ~~the~~our ~~three~~Peoria ~~months~~location ~~ended~~operating ~~March 31, 2016 including costs~~ for the ~~development~~full ofperiod ~~an electronic~~ending ~~replica~~June ~~firearm~~30, ~~that were not incurred in the~~ 2017, ~~period.~~compared ~~There~~with ~~were~~one nomonth ~~such research and development costs~~ in the ~~three~~comparable ~~months~~period ~~ended~~last ~~March 31, 2017~~year.

~~The~~Interest decreased expenses discussed above were partially offset by the addition of royalty expense of approximately $44,000 in the three months ended March 31, 2017, as well as increases in salaries and related costs of approximately $27,000 and Directors and Officers, or D&O, insurance of approximately $11,000. Expense

16Interest expense increased $41,512 to $106,862 for the three months ended June 30, 2017, compared with $65,350 for the comparable quarter last year. Interest expense was $201,778 and $97,604 for the six months ended June 30, 2017 and 2016, respectively, an increase of $104,174. The three-month and six-month increases were due to higher debt balances that were subject to interest in fiscal 2017, compared with the comparable quarter and period last year. The increased debt balances were primarily driven by increased subscriptions to our convertible note offerings and increased draws on our secured line of credit.

~~Table~~Other ~~of Contents~~Income

~~There~~Other income was no$480,000 ~~royalty~~and ~~expense~~$0 for the three and six months ended ~~March 31~~June 30, ~~2016~~2017 asand we2016, ~~opened~~respectively. ~~our first~~We ~~location~~recorded inthe ~~June~~estimated ~~2016.~~fair ~~Payroll~~value ~~related~~of ~~costs~~warrants ~~increased due~~ to ~~increased~~purchase ~~headcount~~common instock ~~the~~shares ~~three~~of ~~months ended March 31~~VirTra, ~~2017~~Inc. ~~compared~~at ~~with~~June ~~the 2016 period. Lastly~~30, ~~we did not procure D&O insurance until March 2016~~2017, soas the ~~three~~warrants ~~months ended~~became ~~March 31,~~exercisable ~~2017~~in ~~include~~June ~~approximately~~2017. There ~~three~~was ~~times~~no ~~the~~such ~~expense~~transaction asfor ~~was incurred in~~ the ~~three~~comparable ~~months~~quarter ~~ended~~and ~~March 31,~~period ~~2016~~last year.

~~Depreciation Expense~~Net Loss

~~Depreciation~~Net ~~expense~~loss for the three months ended June 30, 2017 was ($~~129~~578,~~740~~077), ~~and~~compared with a net loss of ($21,~~444~~327,062) for the ~~three~~comparable quarter last year, or a decreased loss of $748,985. Net loss for the six months ended ~~March 31~~June 30, 2017 and 2016 was ($1,453,071) and ($2,421,494), respectively., ~~The~~ or a decreased loss of $~~127~~968,~~296~~423. ~~increase~~Our losses decreased in ~~expense~~the ~~was~~current periods primarily due to ~~the~~reduced ~~assets~~general ~~for~~and ~~our~~administrative ~~Peoria,~~expenses ~~Arizona~~and ~~location~~pre-opening ~~being~~expense, ~~placed~~and inincreased ~~service~~revenues, inas ~~June~~discussed ~~2016~~above.

~~Interest~~Non-GAAP ~~Expense~~Financial Measures

~~Interest~~In ~~expense~~addition ~~for~~to the ~~three~~results ~~months~~provided ~~ended~~in ~~March 31,~~accordance ~~2017~~with ~~and~~accounting ~~2016~~principles ~~was~~generally ~~$94~~accepted in the United States of America,~~916~~ ~~and~~or ~~$32~~GAAP,~~254,~~ ~~respectively~~we provide non-GAAP measures that present operating results on an adjusted basis. EBITDA, ~~The~~Adjusted ~~$62~~EBITDA,~~662~~ ~~increase~~and ~~was~~Unit-Level ~~due~~EBITDA ~~to our~~are ~~convertible~~supplemental ~~promissory~~measures ~~notes~~of performance that are not required by or presented in accordance with GAAP. These non-GAAP measures do not represent and ~~secured~~should ~~revolving~~not ~~line~~be ofconsidered ~~credit~~as ~~balances~~an ~~increasing~~alternative to ~~$5,927,000~~net income or cash flows from $1operations,~~870,000~~ atas ~~March 31~~determined in accordance with GAAP, ~~2017~~and our calculations thereof may not be comparable to similarly titled measures reported by other companies and ~~2016~~should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Although we use these non-GAAP measures to assess the operating performance of our business, ~~respectively~~they have significant limitations as an analytical tool because they exclude certain material costs.

~~Net Loss~~ 15

WeTable ~~incurred net losses~~ of ~~$874,994~~ ~~and $1,094,432 for the three months ended March 31, 2017 and 2016, respectively. The decreased loss of $219,438 was primarily due to the factors described above.~~ Contents

~~Non~~For example, Adjusted EBITDA does not include several significant items, including our interest expense and depreciation and amortization expense, as applicable. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. In addition, Adjusted EBITDA excludes pre-~~GAAP~~opening ~~Financial~~expense, ~~Measures~~other non-cash expense, and other income because these amounts vary from period to period and do not directly relate to the ongoing operations of our current underlying business, and thus complicate comparison of the underlying business between periods. Because of the limitations described above, management does not view Adjusted EBITDA in isolation and also uses other measures, such as net sales, income (loss) from operations, and net income (loss), to measure operating performance.

In addition to the results provided in accordance with accounting principles generally accepted in the United States, or GAAP, we provide non-GAAP measures that present operating results on an adjusted basis. EBITDA, Adjusted EBITDA, and Unit-Level EBITDA are supplemental measures of performance that are not required by or presented in accordance with GAAP. These non-GAAP measures do not represent and should not be considered as an alternative to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Although we use these non-GAAP measures to assess the operating performance of our business, they have significant limitations as an analytical tool because they exclude certain material costs.

~~For~~We ~~example,~~define ~~Adjusted~~ “EBITDA” ~~does~~as ~~not~~earnings ~~include~~before ~~several~~interest, ~~significant~~income ~~items~~tax, ~~including our interest expense and~~ depreciation, and amortization ~~expense, as applicable~~. We ~~Because~~calculate ~~Adjusted~~this ~~EBITDA~~metric ~~does~~by ~~not~~adding ~~account~~interest, ~~for~~income ~~these expenses~~tax, ~~its~~and ~~utility~~depreciation asand aamortization ~~measure~~costs, ofif ~~our~~applicable, ~~operating~~to ~~performance~~our ~~has~~net ~~material limitations~~loss. InWe ~~addition,~~present ~~Adjusted~~ EBITDA ~~excludes pre-opening expense~~ because ~~these~~we ~~amounts~~believe ~~vary~~it ~~from~~provides ~~period~~useful toinformation ~~period and do not directly relate~~ to ~~the~~investors ~~ongoing~~regarding ~~operations of~~ our ~~current~~performance. ~~underlying~~We ~~business,~~believe ~~and~~that ~~thus~~EBITDA ~~complicate~~is ~~comparison~~used ofby ~~the~~many ~~underlying business~~investors ~~between~~as ~~periods.~~a ~~Because~~measure of ~~the~~performance ~~limitations~~as ~~described~~it ~~above,~~adjusts ~~management~~for ~~does~~non-cash ~~not~~and ~~view~~non-recurring ~~Adjusted~~items. However, ~~EBITDA~~because inthis ~~isolation~~measure ~~and~~excludes ~~also~~significant ~~uses other measures~~items, ~~such~~the asvalue ~~net~~of ~~sales,~~this ~~income~~measure ~~(loss)~~is ~~from~~limited ~~operations,~~as ~~and~~a ~~net~~measure ~~income~~of ~~(loss),~~our toconsolidated ~~measure~~financial ~~operating~~ performance.

EBITDA

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net loss	$	(578,077	)	$	(1,327,062	)	$	(1,453,071	)	$	(2,421,494	)
Interest expense		106,862			65,350			201,778			97,604
Income tax expense		—			—			—			—
Depreciation expense		131,211			41,310			260,951			43,754
Amortization expense		—			—			—			—
EBITDA	$	(340,004	)	$	(1,220,402	)	$	(990,342	)	$	(2,280,136	)

WeAdjusted ~~define “~~EBITDA” as earnings before interest, income tax, depreciation, and amortization. We calculate this metric by adding interest, income tax, and depreciation and amortization costs, if applicable, to our net loss. We present EBITDA because we believe it provides useful information to investors regarding our performance. We believe that EBITDA is used by many investors as a measure of performance as it adjusts for non-cash and non-recurring items. However, because this measure excludes significant items, the value of this measure is limited as a measure of our consolidated financial performance.

	Three Months Ended March 31,
	2017			2016
Net loss	$	(874,994	)	$	(1,094,432	)
Interest expense		94,916			32,254
Income tax expense		—			—
Depreciation expense		129,740			2,444
Amortization expense		—			—
EBITDA	$	(650,338	)	$	(1,059,734	)

Our definition of “Adjusted EBITDA” differs from EBITDA, as described above, as we further adjust net loss for pre-opening expense, other income, comprising the estimated fair value of warrants held as investments, and other non-cash expenses, which include deferred rent, stock option expense, amortization of equity-based prepayments, and impairment expense. We present Adjusted EBITDA because we believe it provides useful information to investors regarding our performance. We believe that Adjusted EBITDA is used by many investors as a measure of performance as it adjusts for non-cash and non-recurring items. However, because this measure excludes significant items, the value of this measure is limited as a measure of our consolidated financial performance.

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net loss	$	(578,077	)	$	(1,327,062	)	$	(1,453,071	)	$	(2,421,494	)
Interest expense		106,862			65,350			201,778			97,604
Income tax expense		—			—			—			—
Other non-cash expense		6,353			185,147			101,205			337,959
Depreciation expense		131,211			41,310			260,951			43,754
Amortization expense		—			—			—			—
Pre-opening expense		—			253,651			—			340,867
Other income		(480,000	)		—			(480,000	)		—
Adjusted EBITDA	$	(813,651	)	$	(781,604	)	$	(1,369,137	)	$	(1,601,310	)

~~Table of Contents~~16

~~Adjusted~~Table ~~EBITDA~~of Contents

~~Our definition of “Adjusted EBITDA” differs from EBITDA, as described above, as we further adjust net loss for pre~~Unit-~~opening~~level ~~expense and other non-cash expenses, including deferred rent, stock option expense, amortization of equity-based prepayments, and impairment expense. We present Adjusted~~ EBITDA because we believe it provides useful information to investors regarding our performance. We believe that Adjusted EBITDA is used by many investors as a measure of performance as it adjusts for non-cash and non-recurring items. However, because this measure excludes significant items, the value of this measure is limited as a measure of our consolidated financial performance.

	Three Months Ended March 31,
	2017			2016
Net loss	$	(874,994	)	$	(1,094,432	)
Interest expense		94,916			32,254
Income tax expense		—			—
Other non-cash expense		94,852			152,812
Depreciation expense		129,740			2,444
Amortization expense		—			—
Pre-opening expense		—			87,216
Impairment expense		—			—
Adjusted EBITDA	$	(555,486	)	$	(819,706	)

Our definition of “Unit-level EBITDA” differs from EBITDA, as defined above, because we further adjust net loss to exclude licensing revenue, general and administrative expense, pre-opening expense, and non-cash deferred rent expense incurred for unit-level leases. We believe Unit-level EBITDA to be a useful measure of evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store-level, and the costs of opening new stores, which are non-recurring at the store-level. We also believe that Unit-level EBITDA is a useful measure in evaluating our operating performance within our industry as it permits the evaluation of unit-level productivity, efficiency, and performance. However, because this measure excludes significant items, the value of this measure is limited as a measure of our consolidated financial performance.

Unit-level EBITDA

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net loss	$	(578,077	)	$	(1,327,062	)	$	(1,453,071	)	$	(2,421,494	)
Interest expense		106,862			65,350			201,778			97,604
Income tax expense		—			—			—			—
Depreciation expense		131,211			41,310			260,951			43,754
Amortization expense		—			—			—			—
Licensing revenue		—			(12,000	)		—			(24,000	)
Other income		(480,000	)		—			(480,000	)		—
General and administrative		807,151			848,098			1,457,388			1,832,616
Pre-opening expense		—			253,651			—			340,867
Deferred rent - unit-level		(2,945	)		26,150			23,206			26,150
Unit-level EBITDA	$	(15,798	)	$	(104,503	)	$	10,252		$	(104,503	)

~~Our~~Liquidity ~~definition of “Unit-level EBITDA” differs from EBITDA, as defined above, because we further adjust net loss to exclude licensing revenue, general~~ and ~~administrative~~Capital expense, pre-opening expense, and non-cash deferred rent expense incurred for unit-level leases. We believe Unit-level EBITDA to be a useful measure of evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store-level, and the costs of opening new stores, which are non-recurring at the store-level. We also believe that Unit-level EBITDA is a useful measure in evaluating our operating performance within our industry as it permits the evaluation of unit-level productivity, efficiency, and performance. However, because this measure excludes significant items, the value of this measure is limited as a measure of our consolidated financial performance. Resources

	Three Months Ended March 31,
	2017			2016
Net loss	$	(874,994	)	$	(1,094,432	)
Interest expense		94,916			32,254
Income tax expense		—			—
Depreciation expense		129,740			2,444
Amortization expense		—			—
Licensing revenue		—			(12,000	)
Impairment expense		—			—
General and administrative		650,237			984,518
Pre-opening expense		—			87,216
Deferred rent - unit-level		26,151			—
Unit-level EBITDA	$	26,050		$	—

Our principal liquidity to date has come primarily from the following sources: sales of shares of common stock; subscriptions of convertible promissory notes; and a secured revolving line of credit. We sold 30,691,914 shares (as adjusted for the Merger conversion ratio) for aggregate proceeds of $2,500,000 for the year ended December 31, 2014. Starting in November 2015, prior to the Merger, our wholly owned subsidiary, Modern Round, issued convertible promissory notes in the aggregate principal amount of $1,275,000 to independent third parties and certain related parties in a private placement. During fiscal 2016, an additional $1,875,000 of convertible promissory notes were subscribed, and we received $2,391,000 from our secured line of credit. During the six months ended June 30, 2017, $125,000 of Series 2017 Notes were subscribed, and we received $796,000 from our secured line of credit.

18We had working capital deficiencies of $4,852,445 and $2,955,132 at June 30, 2017 and December 31, 2016, respectively. Our working capital deficiency increased at June 30, 2017 primarily due to an increase in convertible promissory notes being reclassified to current liabilities as their remaining terms decreased below 12 months. Net operating losses, as described in the “Results of Operations” above, also contributed to the increased working capital deficit and were partially offset by the sale of our available for sale securities. Lastly, the decrease was partially offset by our other income in the current fiscal period, as described above.

~~Table~~Our wholly owned subsidiary, MR Peoria, LLC, conducts operations for our first entertainment facility in Peoria, Arizona. The lease commenced on November 1, 2015 and has a term of ~~Contents~~10 years with an initial commitment of approximately $2,363,000. The facility opened in June 2016.

~~Liquidity~~We anticipate incurring additional expenses for fiscal 2017 and ~~Capital~~2018 ~~Resources~~to pursue our planned business operations, including additional sales and marketing expenditures as well as possible increases in expenditures for research and development of products and technology and the opening of entertainment facilities and licensed locations. The opening of future standalone facilities and game revenue sharing locations is anticipated to be funded primarily with proceeds from future debt and equity private placement offerings and equipment financing. Our ability to continue to execute our business depends upon our ability to generate additional cash from investment proceeds and sales from operations. If we are unable to raise the necessary funds, we will have to modify our current business. In addition, we may not be able to attract enough guests to generate positive income from operations, which may require us to modify our business plan to address our liquidity needs.

Our ~~principal~~historical ~~liquidity~~operating toexpenses ~~date~~and ~~has~~cash ~~come~~needs ~~primarily~~are ~~from~~not ~~the~~indicative ~~following three sources: sales~~ of ~~shares~~our ofcurrent ~~common~~planned ~~stock; subscriptions of convertible promissory notes; and a secured revolving line of credit. We sold 30~~operations,~~691,914~~ ~~shares (~~as ~~adjusted~~we ~~for~~continue ~~the~~to ~~Merger~~develop ~~conversion~~our ~~ratio)~~eatertainment ~~for~~concept ~~aggregate~~and ~~proceeds~~focus ofon $2sales,~~500,000~~ ~~in the year ended December 31~~marketing, ~~2014~~and operations. We ~~Starting~~will inrequire ~~November~~substantially ~~2015, prior~~more cash to ~~the~~operate ~~Merger,~~depending ~~our~~upon ~~wholly~~how ~~owned~~quickly ~~subsidiary,~~we ~~Modern~~open ~~Round,~~additional ~~issued~~entertainment ~~convertible~~facilities ~~promissory~~and ~~notes in~~ the ~~aggregate~~sales ~~principal~~volume ~~amount~~at ofthose ~~$1,275,000~~entertainment ~~to independent third parties and certain related parties in a private placement~~facilities. ~~During fiscal 2016~~ However, an ~~additional~~if ~~$1,875,000~~funding ofis ~~convertible~~not ~~promissory~~obtained ~~notes were subscribed,~~ and wesales ~~received~~do ~~$2,391,000~~not ~~from~~generate ~~our~~sufficient ~~secured~~cash ~~line~~flow, ofwe ~~credit.~~will Weadjust ~~received $386,000 from~~ our ~~secured~~strategy ~~line of credit in the three months ended March 31, 2017~~accordingly.

We had working capital deficiencies of $3,814,534 and $2,955,132 at March 31, 2017 and December 31, 2016, respectively. The increase in working capital deficiency at March 31, 2017 was primarily due to an increase in convertible promissory notes being reclassified to current liabilities as their remaining terms were less than 12 months. Net operating losses and the sale of our available for sale securities also contributed to the increased working capital deficit. 17

~~Our~~Table ~~wholly owned subsidiary, MR Peoria, LLC, conducts operations for our first entertainment facility in Peoria, Arizona. The lease commenced on November 1, 2015 and has a term~~ of ~~10 years with an initial commitment of approximately $2,363,000. The facility opened in June 2016.~~ Contents

WeTo ~~anticipate incurring additional expenses through fiscal 2017 to pursue our planned business operations~~date, ~~including~~we ~~additional~~have ~~sales~~been ~~and marketing~~highly ~~expenditures~~dependent asupon ~~well~~funding asfrom ~~possible~~related ~~increases~~parties ~~in expenditures for research~~ and ~~development~~convertible ofdebt ~~products~~offerings ~~and technology and the opening of entertainment facilities. The opening of future facilities is anticipated~~ to besupport ~~funded~~our ~~primarily~~operations, ~~with proceeds from future debt~~ and ~~equity~~we ~~private~~anticipate ~~placement~~that ~~offerings.~~we ~~Our~~will ~~ability~~need toadditional ~~continue~~funding to ~~execute~~support our business ~~plan~~for ~~depends~~at ~~upon~~least ~~our~~the ~~ability~~next 12 to ~~generate~~24 ~~additional~~months. ~~cash~~Given ~~from~~our ~~investment~~current ~~proceeds and sales and~~ operations., Iftraditional wedebt ~~are~~financing ~~unable~~from tobanking ~~raise the~~sources ~~necessary~~may ~~funds,~~be wedifficult ~~will have~~ to ~~modify our current business plan. In addition~~obtain, and we may ~~not~~have beto ~~able~~continue to ~~attract~~rely ~~the~~on ~~guests~~equity ~~necessary~~or todebt ~~generate~~investments ~~positive income~~ from ~~operations,~~non-banking ~~which may require us to modify our business plan to address our liquidity needs~~sources.

~~Our~~As ~~historical~~described ~~operating~~in ~~expenses~~further ~~and~~detail ~~cash~~elsewhere ~~needs~~on ~~are~~this ~~not~~Quarterly ~~indicative~~Report ofon ~~our~~Form ~~current planned operations~~10-Q, as we ~~continue~~raised ~~to develop our eatertainment concept and focus on sales~~$3, ~~marketing~~150,000 ~~and~~on ~~operations.~~our ~~Our~~previous ~~plans~~convertible ~~will~~debt ~~require~~offerings ~~substantially~~and ~~more~~have ~~cash~~raised toan ~~operate~~additional ~~depending~~$125,000 ~~upon~~through ~~how~~our ~~quickly~~Series we2017 ~~open~~Notes ~~additional~~to ~~entertainment~~address ~~facilities~~our ~~and~~historical ~~the~~liquidity ~~sales~~concerns. ~~volume~~Our atSeries ~~those entertainment~~2017 ~~facilities.~~Notes ~~However,~~offering ~~if funding~~ is ~~not~~approved ~~obtained~~for ~~and~~subscriptions ~~sales~~up doto ~~not generate sufficient cash flow~~$5,000,000. weWe will ~~adjust~~also ~~our~~need ~~strategy~~to ~~accordingly.~~obtain Toadditional ~~date~~financing, wewhich ~~have~~may ~~been~~come ~~highly~~from ~~dependent~~the ~~upon~~public ~~funding~~equity ~~from~~markets ~~related~~or ~~parties~~through ~~and~~private ~~convertible~~placement ~~debt~~ offerings. toThere ~~support~~can ~~our~~be ~~operations,~~no ~~and~~assurance weas ~~anticipate that we will need additional funding~~ to ~~support our business for at least~~ the ~~next~~availability 12or toterms 24upon ~~months.~~which ~~Given~~such ~~our current operations, traditional debt~~ financing ~~from~~and ~~banking~~capital ~~sources~~might ~~may~~ be ~~difficult to obtain~~available, ~~and~~if weat ~~may have to continue to rely on equity or debt investments from non-banking sources~~all.

AsCash ~~described~~Flows in further detail elsewhere on this Quarterly Report on Form 10-Q, we raised $3,150,000 on our previous convertible debt offerings and have opened a new offering in April 2017 to address our present liquidity concerns. We will also need to obtain additional financing, which may come from ~~the~~Operating ~~public equity markets or through private placement offerings. There can be no assurance as to the availability or terms upon which such financing and capital might be available, if at all.~~ Activities

Cash ~~Flows~~used in operating activities was $903,280 and $1,491,362 for the six months ended June 30, 2017 and 2016, respectively. Cash used in operating activities for six months ended June 30, 2017 included a net loss of ($1,453,071) and net non-cash items of $117,844, partially offset by net cash provided by the change in operating assets and liabilities of $667,635. Cash used in operating activities for the comparable period last year included net loss of ($2,421,494) offset by non-cash items of $381,713 and the net change in operating assets and liabilities of $548,419. The non-cash items primarily reflected depreciation, amortization of deferred rent, amortization of equity awards and warrants, and stock-based compensation. The net changes in operating assets and liabilities were primarily related to changes in accounts payable, accrued expenses, and deferred revenue. Our operating activities will likely require additional cash in the future from ~~Operating~~sources ~~Activities~~of debt and/or equity, depending on the ability of our operations to generate positive cash flow.

Cash ~~used~~Flows in operating activities was $475,063 and $804,954 for the three months ended March 31, 2017 and 2016, respectively. Cash used in operating activities for the three months ended March 31, 2017 included a net loss of $874,994, offset by net non-cash items of $224,592 and net cash provided by the change in operating assets and liabilities of $175,339. Cash used in operating activities for the three months ended March 31, 2016 related to the net loss of $1,094,432 offset by non-cash items of $155,256 and the net change in operating assets and liabilities of $134,222. The non-cash items primarily reflected depreciation, amortization of deferred rent, amortization of equity awards, and stock-based compensation. The net changes in operating assets and liabilities were primarily related to changes in accounts payable and accrued expenses. Our operating activities will require additional cash in the future from ~~sources~~Investing ~~of debt and/or equity, depending on the ability of our operations to generate positive cash flow.~~ Activities

~~Cash~~Net ~~Flows~~cash proceeds from ~~Investing~~investing ~~Activities~~activities was $81,602 for the six months ended June 30, 2017, compared with net cash used in investing activities of $2,261,244 for the same period in fiscal 2016. Net cash proceeds for the six months ended June 30, 2017 consisted of $84,000 in proceeds from the sale of available for sale equity securities offset by $2,398 used to acquire a capital asset. Cash used for investing activities in the comparable period last year included construction-in-progress payments related to the development of our Peoria, Arizona location, which opened in June 2016.

Cash ~~provided~~Flows by investing activities for the three months ended March 31, 2017 was $84,000 and cash used in investing activities for the three months ended March 31, 2016 was $656,965. The current period includes proceeds from ~~the~~Financing sale of our available for sale securities while the prior period includes purchases of capital assets related to the development of our Peoria, Arizona location. There were no capital asset purchases in the current period. Activities

19Cash provided by financing activities was $827,563 and $3,225,000 for the six months ended June 30, 2017 and 2016, respectively. Financing activities for the six months ended June 30, 2017 consisted of proceeds from the sale of $125,000 in convertible notes under a private placement and proceeds of $796,000 from our secured revolving line of credit with related parties, partially offset by $93,437 in cash used for principal payments on our notes payable – other balance. We drew $1,500,000 from the secured revolving line of credit and received proceeds of $1,725,000 from convertible notes subscriptions in the comparable period last year.

~~Table~~Critical ofAccounting ~~Contents~~Estimates and Policies

~~Cash~~The ~~Flows~~preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements as well as the reported expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from ~~Financing~~these ~~Activities~~estimates under different assumptions or conditions.

~~Cash~~As ~~provided~~an byemerging ~~financing~~growth ~~activities~~company ~~was~~under ~~$386,000 and $845,000 for~~ the ~~three~~JOBS ~~months ended March 31~~Act, ~~2017~~we ~~and~~have ~~2016,~~elected ~~respectively. Financing~~to ~~activities~~use ~~during~~ the ~~three~~extended ~~months~~transition ~~ended~~period ~~March 31,~~for ~~2017~~complying ~~consisted~~with ofnew ~~proceeds~~or ofrevised ~~$386,000~~accounting ~~from~~standards ~~our~~pursuant ~~secured~~to ~~revolving~~Section 107(b) ~~line~~ of ~~credit~~the ~~with~~JOBS ~~related parties~~Act. Because ~~Financing~~of ~~activities~~this ~~for the three months ended March 31~~election, ~~2016~~our ~~consisted~~condensed ~~of proceeds~~consolidated ~~from~~financial ~~the~~statements ~~sale~~may ofnot ~~$595,000~~be incomparable ~~convertible~~to ~~notes~~companies ~~under~~that acomply ~~private~~with ~~placement~~public ~~and~~company ~~proceeds~~effective ofdates ~~$250,000~~for ~~from~~such ~~our~~new ~~secured~~or ~~revolving~~revised ~~line of credit with related parties~~standards.

~~Critical~~While ~~Accounting~~our ~~Estimates~~significant accounting policies are more fully described in the notes to our June 30, 2017 and ~~Policies~~December 31, 2016 consolidated financial statements, we believe that the following accounting policies and estimates are most critical to a full understanding and evaluation of our reported financial results.

The preparation of these condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements as well as the reported expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions. 18

AsTable ~~an emerging growth company under the JOBS Act, we have elected to use the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b)~~ of the JOBS Act. Because of this election, our condensed consolidated financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. Contents

~~While~~Equity ~~our~~Based significant accounting policies are more fully described in the notes to our December 31, 2016 consolidated financial statements, we believe that the following accounting policies and estimates are most critical to a full understanding and evaluation of our reported financial results. Compensation

We account for compensation for all arrangements under which employees, consultants, and others receive common stock or other equity instruments (including options and warrants) in accordance with FASB ASC Topic 718 “Compensation – Stock Compensation,” or ASC Topic 505-50 “Equity Based ~~Compensation~~Payments to Non-Employees.” Under ASC Topic 718, the fair value of each award is estimated and amortized as compensation expense over the requisite service period.

WeThe ~~account~~fair ~~for compensation~~value ~~for~~of ~~all~~our ~~arrangements~~share-based ~~under~~awards ~~which~~is ~~employees~~estimated on the grant date using the Black-Scholes valuation model. This valuation model requires the input of highly subjective assumptions, ~~consultants~~including our estimated market value per share, expected price volatility, and ~~others~~expected ~~receive~~term. As ~~common~~Modern ~~stock~~Round orwas ~~other~~not ~~equity~~operating ~~instruments~~as ~~(including~~a ~~options~~public company prior to the Merger, we were unable to use actual price volatility and ~~warrants)~~option life data as input assumptions within our Black-Scholes valuation model. We have used expected volatilities based on the historical volatility of comparable public companies in the industry sector in which we operate in accordance with ~~FASB~~the guidance set forth in ASC Topic 718. To ~~“Compensation~~estimate –the ~~Stock Compensation~~expected term,” orwe ~~ASC~~chose ~~Topic~~to ~~505-50~~utilize the “~~Equity~~simplified” ~~Based~~method ~~Payments~~for to“plain ~~Non-Employees.~~vanilla” ~~Under~~options ~~ASC~~as ~~Topic~~discussed ~~718,~~in the ~~fair~~SEC’s ~~value~~Staff ofAccounting ~~each~~Bulletin ~~award~~107, isor ~~estimated~~SAB ~~and amortized~~107. We believe that all factors listed in SAB 107 as ~~compensation~~prerequisites ~~expense~~for ~~over~~utilizing the ~~requisite~~simplified ~~service~~method ~~period~~are true for us and for our share-based payment arrangements. We intend to utilize the simplified method for the foreseeable future until more detailed information about exercise behavior becomes available.

~~The~~Our ~~fair~~risk-free ~~value~~interest ofrates ~~our~~are ~~share-~~based ~~awards is estimated~~ on ~~the~~a ~~grant date using the Black~~zero-~~Scholes~~coupon ~~valuation model~~U.S. ~~This~~treasury ~~valuation~~instrument, ~~model requires~~ the ~~input~~term of ~~highly~~which ~~subjective~~is ~~assumptions,~~consistent ~~including~~with ~~our~~the ~~estimated~~expected ~~market~~term ~~value~~of ~~per~~the ~~share,~~options ~~expected~~and ~~price~~warrants ~~volatility,~~to ~~and~~purchase ~~expected~~shares ~~term.~~of Asour ~~Modern~~common ~~Round~~stock. We ~~was~~have not ~~operating as~~paid aand ~~public~~do ~~company~~not ~~prior~~anticipate topaying ~~the~~cash ~~Merger,~~dividends weon ~~were~~our ~~unable~~shares. Therefore, tothe ~~use~~expected ~~actual~~dividend ~~price~~yield ~~volatility~~is ~~and~~assumed ~~option~~to ~~life~~be ~~data~~zero. The asfair ~~input~~value ~~assumptions~~of ~~within our Black~~share-~~Scholes~~based ~~valuation~~payments ~~model.~~is Wegenerally ~~have~~amortized ~~used~~on ~~expected~~a ~~volatilities~~straight-line ~~based~~basis onover the ~~historical~~requisite ~~volatility~~service periods of ~~comparable~~ ~~public companies in~~ the ~~industry~~awards, ~~sector in~~ which weare ~~operate~~generally ~~in accordance with~~ the ~~guidance~~vesting ~~set forth in ASC Topic 718~~periods.

To We believe there is a high degree of subjectivity involved when using option pricing models to estimate share-based compensation under ASC Topic 718. Currently, there is not a market-based mechanism or other practical application to verify the ~~expected~~reliability ~~term~~and accuracy of the estimates stemming from these valuation models, wenor ~~chose~~is there a means to ~~utilize~~compare and adjust the ~~“simplified”~~estimates ~~method~~to ~~for~~actual ~~“plain~~values. Although ~~vanilla”~~the fair value of share-based options asand ~~discussed~~warrant awards is determined in ~~the~~accordance ~~SEC’s~~with ~~Staff~~ASC ~~Accounting~~Topic ~~Bulletin~~718 ~~107~~using an option pricing model, orthat ~~SAB~~value ~~107.~~may Wenot ~~believe~~be ~~that~~indicative ~~all~~of ~~factors~~the ~~listed~~fair value observed in ~~SAB~~a ~~107~~market ~~as prerequisites~~transaction ~~for~~between ~~utilizing~~a ~~the~~willing ~~simplified~~buyer ~~method~~and ~~are~~a ~~true~~willing ~~for~~seller. If usfactors change and ~~for~~we ~~our~~employ ~~share-based~~different ~~payment~~assumptions ~~arrangements.~~in Wethe ~~intend~~application toof ~~utilize~~ASC ~~the~~Topic ~~simplified~~718 ~~method~~in ~~for~~future periods than those currently applied under ASC Topic 718, the ~~foreseeable~~compensation expense we record in future ~~until~~periods ~~more~~under ~~detailed~~ASC ~~information~~Topic ~~about~~718 ~~exercise~~may ~~behavior~~differ ~~becomes available.~~significantly from what we have historically reported.

~~Our~~Revenue risk-free interest rates are based on a zero-coupon U.S. treasury instrument, the term of which is consistent with the expected term of the options and warrants to purchase shares of our common stock. We have not paid and do not anticipate paying cash dividends on our shares. Therefore, the expected dividend yield is assumed to be zero. The fair value of share-based payments is generally amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. Recognition

We ~~believe~~currently ~~there~~derive isrevenue afrom ~~high~~sales ~~degree~~ of ~~subjectivity~~food ~~involved~~and ~~when~~beverages, ~~using~~membership ~~option~~fees, ~~pricing~~and ~~models~~simulated toshooting ~~estimate~~lounge ~~share-based~~fees. ~~compensation~~We ~~under~~recognize ~~ASC Topic~~revenue ~~718.~~when ~~Currently,~~all ~~there~~the isfollowing ~~not~~criteria aare ~~market-based~~met: ~~mechanism~~(i) orpersuasive ~~other~~evidence ~~practical~~of ~~application~~an toarrangement ~~verify~~exists; ~~the~~(ii) ~~reliability~~delivery ~~and~~has ~~accuracy~~occurred ofor ~~the~~services ~~estimates~~have ~~stemming~~been ~~from~~rendered; ~~these~~(iii) ~~valuation~~seller ~~models,~~price ~~nor~~ is ~~there~~fixed aor ~~means~~determinable; ~~to compare~~ and ~~adjust~~(iv) ~~the~~collectability ~~estimates~~is ~~to actual~~reasonably ~~values~~assured. ~~Although~~We ~~the~~recognize ~~fair~~food ~~value~~and ofbeverage ~~share-based~~sales ~~options~~ and ~~warrant~~simulated ~~awards~~shooting islounge ~~determined~~fees inon ~~accordance with ASC Topic 718 using an option pricing model, that value may not be indicative of~~ the ~~fair value observed in a market~~ transaction ~~between~~ adate, ~~willing~~as ~~buyer~~payment ~~and~~is arequired ~~willing~~at ~~seller. If factors change and we employ different assumptions in~~ the ~~application~~time of ASC Topic 718 in future periods than those currently applied under ASC Topic 718, the compensation expense we record in future periods under ASC Topic 718 may differ significantly from what we have historically reportedservice.

20Deferred revenue consists of membership fees, gift card sales, and banquet event deposits received. Membership fees are due annually and are not refundable. We recognize membership fee revenue ratably over 12 months, starting in the month the fees are received. We record gift card sales and banquet event deposits as deferred revenue and recognize sales revenue when the gift cards and banquet event deposits are utilized by our guests. We did not record gift card breakage income at June 30, 2017, as we do not have sufficient purchase and utilization history to use as a basis for a breakage policy. Banquet event deposits are generally non-refundable, although guests can re-schedule their events with sufficient notice. We expect that our guests will utilize their deposits or that we will retain any unused deposits.

~~Table~~Research ofand ~~Contents~~Development Costs

~~Revenue~~We ~~Recognition~~charge expenses related to research, design, and development of products to research and development costs as incurred. These expenditures include direct salary costs and/or consultant expenses for research and development personnel and contractors, costs for materials used in research and development activities, and costs for outside services. Research and development costs are included in general and administrative expense on the Condensed Consolidated Statement of Operations.

WeSoftware ~~currently~~Development derive revenue from sales of food and beverages, membership fees, and simulated shooting lounge fees. We recognize revenue when all the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) seller price is fixed or determinable, and (iv) collectability is reasonably assured. We recognize food and beverage sales and simulated shooting lounge fees on the transaction date, as payment is required at the time of service. Costs

~~Deferred~~We ~~revenue~~expense ~~consists~~software ofdevelopment ~~membership~~costs ~~fees,~~as ~~gift~~incurred ~~card~~until ~~sales,~~technological ~~and~~feasibility ~~banquet~~has ~~event~~been ~~deposits~~established, ~~received.~~at ~~Membership~~which ~~fees~~time ~~are~~we ~~due~~capitalize ~~annually~~such ~~and~~costs ~~are not~~until ~~refundable.~~the Weproduct ~~recognize~~is ~~membership~~available ~~fee~~for ~~revenue~~general ~~ratably~~release ~~over~~to ~~12 months starting in the month the fees are received~~customers. WeAt ~~record~~each ~~gift~~balance ~~card~~sheet ~~sales~~date, ~~and~~we ~~banquet~~compare ~~event~~the ~~deposits~~unamortized ascapitalized ~~deferred~~costs ~~revenue~~of ~~and~~a ~~recognize~~computer ~~sales~~software ~~revenue~~product ~~when~~with the ~~gift~~net ~~cards~~realizable ~~and banquet~~value ~~event~~of ~~deposits~~that ~~are utilized by our guests~~product. We ~~did~~write ~~not~~off ~~record~~the ~~gift~~amount ~~card~~by ~~breakage~~which ~~income~~the atunamortized ~~March 31,~~capitalized ~~2017,~~costs asof wea docomputer ~~not~~software ~~have~~product ~~sufficient~~exceed ~~purchase~~the ~~and~~net ~~utilization~~realizable ~~history~~value toof ~~use~~that asasset. aOur ~~basis~~software ~~for~~development aefforts ~~breakage~~primarily ~~policy.~~focus ~~Banquet~~on ~~event~~building ~~deposits~~and ~~are generally~~expanding ~~non-refundable,~~our ~~although~~virtual ~~guests~~shooting ~~can~~concept ~~re-schedule~~scenarios ~~their~~and ~~events~~integrating ~~with~~the ~~sufficient~~systems ~~notice.~~used Weat ~~expect that~~ our ~~guests~~locations. ~~will~~No ~~utilize~~software ~~their~~development ~~deposits~~costs orhave ~~that~~been wecapitalized ~~will retain~~since ~~any unused deposits~~inception. We ~~recorded~~include ~~ancillary~~software ~~licensing~~development ~~revenue~~costs ofin $0general and ~~$12,000~~administrative ~~for~~expense on the ~~three~~Condensed ~~months~~Consolidated ~~ended~~Statement ~~March 31,~~of ~~2017 and 2016, respectively~~Operations.

~~Research and Development Costs~~ 19

WeTable ~~charge expenses related to research, design, and development~~ of products to research and development costs as incurred. These expenditures include direct salary costs and/or consultant expenses for research and development personnel and contractors, costs for materials used in research and development activities, and costs for outside services. Research and development costs are included in general and administrative expense on the Condensed Consolidated Statement of Operations. Contents

~~Software~~Collaborative ~~Development Costs~~ Arrangement

We ~~expense software~~entered ~~development~~into ~~costs~~a asCo-Venture ~~incurred~~Agreement ~~until~~with ~~technological~~VirTra ~~feasibility~~in ~~has~~January ~~been~~2015 ~~established,~~in atregards ~~which~~to ~~time~~the weModern ~~capitalize~~Round ~~such~~operating ~~costs~~concept. We ~~until~~have evaluated the ~~product~~Co-Venture isAgreement ~~available~~and ~~for~~have ~~general~~determined ~~release~~that toit ~~customers.~~is Ata ~~each~~collaborative ~~balance~~arrangement ~~sheet~~under ~~date,~~FASB weASC ~~compare~~Topic ~~the unamortized~~808 ~~capitalized~~“Collaborative ~~costs~~Arrangements” ofand athat ~~computer~~we ~~software~~are ~~product with~~ the ~~net~~principal ~~realizable~~participant. As ~~value~~the ofprincipal ~~that~~participant, ~~product.~~we Werecord ~~write~~costs ~~off~~incurred ~~the~~and ~~amount~~revenue bygenerated ~~which~~from ~~the~~third ~~unamortized~~parties ~~capitalized~~on ~~costs of~~ a ~~computer~~gross ~~software~~basis ~~product~~in ~~exceed~~ the ~~net~~Condensed ~~realizable~~Consolidated ~~value~~Financial ~~of that asset~~Statements. ~~Our~~We ~~software~~will ~~development~~reevaluate ~~efforts~~whether ~~primarily~~an ~~focus~~arrangement onqualifies ~~building~~or ~~and~~continues ~~expanding~~to ~~our~~qualify ~~virtual~~as ~~shooting~~a ~~concept~~collaborative ~~scenarios~~arrangement ~~and~~whenever ~~integrating~~there ~~the~~is ~~systems~~a ~~used~~change atin ~~our~~either ~~locations.~~the Noroles ~~software~~of ~~development~~the ~~costs~~participants ~~have~~or ~~been~~the ~~capitalized~~participants’ ~~since~~exposure ~~inception.~~to ~~We include~~significant ~~software~~risks ~~development costs in general~~ and ~~administrative~~rewards, ~~expense~~dependent onupon the ~~Condensed~~ultimate ~~Consolidated~~commercial ~~Statement~~success of ~~Operations.~~the endeavor.

~~Investments~~Off-Balance Sheet Arrangements

We ~~determine~~have ~~the~~not ~~appropriate~~entered ~~classification~~into ofany ~~our~~other ~~investments~~financial inguarantees ~~equity~~or ~~securities~~other atcommitments to guarantee the ~~time~~payment obligations of ~~acquisition~~any ~~and~~third ~~reevaluate~~parties. We ~~such determinations~~have atnot ~~each~~entered ~~balance~~into ~~sheet~~any ~~date.~~derivative Wecontracts ~~classify~~that ~~investments~~are inindexed ~~equity~~to ~~securities~~our common stock or that are ~~bought~~not ~~and~~reflected ~~held~~in our financial statements. Furthermore, ~~principally~~we ~~for~~do ~~the~~not ~~purpose~~have ofany ~~selling~~variable ~~them,~~interest in ~~the~~any ~~near~~unconsolidated ~~term~~entity asthat ~~trading~~provides ~~securities~~financing, ~~and~~liquidity, ~~report~~market ~~them~~risk, ator ~~fair~~credit ~~value~~support to us or engages in leasing, ~~with~~hedging, ~~the~~or ~~unrealized gains~~research and ~~losses~~development ~~recognized~~services inwith ~~earnings~~us.

We classify investments in equity securities, not classified as trading, as available for sale, and carry them at fair value, with any unrecognized gains and losses, net of tax, included in the determination of other comprehensive income (loss) and reported in stockholders’ deficit. We review our investments in equity securities classified as available for sale at each reporting period to determine if there has been an other than temporary decline in fair value. This evaluation is based upon several factors, including stock price performance, financial condition, and near-term prospects of the issuer, as well as our intent and ability to retain the investment for a period sufficient to allow for any anticipated recovery in market value. We record other than temporary impairments of equity securities classified as available for sale as impairment expense on the Condensed Consolidated Statement of Operations. We recorded $216,000 in impairment expense on the Consolidated Statement of Operations for other-than-temporary impairments during the second half of the year ended December 31, 2016. We sold our available for sale equity securities for proceeds of $84,000 in March 2017. 20

~~Collaborative Arrangement~~Table of Contents

WeItem ~~entered into a Co-Venture Agreement with VirTra in January 2015 in regards to the Modern Round operating concept~~3. WeQuantitative ~~have evaluated the Co-Venture Agreement~~ and ~~have~~Qualitative ~~determined~~Disclosures ~~that~~About itMarket is a collaborative arrangement under FASB ASC Topic 808 “Collaborative Arrangements” and that we are the principal participant. As the principal participant, we record costs incurred and revenue generated from third parties on a gross basis in the Condensed Consolidated Financial Statements. We will reevaluate whether an arrangement qualifies or continues to qualify as a collaborative arrangement whenever there is a change in either the roles of the participants or the participants’ exposure to significant risks and rewards, dependent upon the ultimate commercial success of the endeavor. Risk

21Not applicable.

~~Table~~Item 4. ofControls ~~Contents~~and Procedures

~~Off-Balance~~Evaluation ~~Sheet~~of ~~Arrangements~~Disclosure Controls and Procedures

WeOur ~~have~~management, ~~not~~with ~~entered~~the ~~into~~participation ~~any~~of ~~other~~our ~~financial~~President ~~guarantees~~and orChief ~~other~~Financial ~~commitments~~Officer, tohas ~~guarantee~~evaluated the ~~payment~~effectiveness ~~obligations~~ of ~~any~~our ~~third~~disclosure ~~parties.~~controls Weand ~~have not~~procedures, ~~entered~~as ~~into~~defined ~~any~~in ~~derivative~~Rules ~~contracts~~13a-15(e) ~~that~~and ~~are~~15d-15(e) ~~indexed~~under tothe ~~our~~Exchange ~~common~~Act, ~~stock~~as orof ~~that~~the ~~are~~end ~~not~~of ~~reflected~~the inperiod ~~our~~covered ~~financial~~by ~~statements.~~this ~~Furthermore,~~Quarterly weReport doon ~~not~~Form ~~have~~10-Q. ~~any~~Based ~~variable~~on ~~interest~~such inevaluation, ~~any~~our ~~unconsolidated~~President ~~entity~~and ~~that~~Chief ~~provides~~Financial ~~financing,~~Officer ~~liquidity, market~~have ~~risk,~~concluded orthat ~~credit~~our ~~support~~disclosure tocontrols usand orprocedures ~~engages~~were ineffective ~~leasing,~~at ~~hedging,~~the orreasonable ~~research~~assurance ~~and~~level ~~development~~as ~~services~~of ~~with~~June ~~us.~~30, 2017.

~~Item~~Changes 3.in ~~Quantitative~~Internal ~~and~~Control ~~Qualitative~~Over ~~Disclosures~~Financial ~~About Market Risk~~Reporting

~~Not~~There ~~applicable.~~were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Item~~Limitations 4.on Effectiveness of Controls and Procedures

~~Evaluation~~Our management, including our President and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of ~~Disclosure~~the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and ~~Procedures~~there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, internal controls may become inadequate because of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

Our management, with the participation of our President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our President and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2017. 21

~~Changes~~Table inof ~~Internal Control Over Financial Reporting~~ Contents

~~There~~PART ~~were~~II—OTHER no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. INFORMATION

~~Limitations~~Item 1. onLegal ~~Effectiveness of Controls and Procedures~~ Proceedings

~~Our~~We ~~management,~~may including our President and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be ~~considered~~subject ~~relative~~ to ~~their~~legal ~~costs.~~proceedings ~~Because of the inherent limitations~~ in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. These inherent limitations include the ~~realities that~~ordinary ~~judgments~~course ~~in decision-making can be faulty and that breakdowns can occur because~~ of ~~simple error or mistake~~business. ~~Controls~~As ~~also can be circumvented by the individual acts~~ of ~~some persons, by collusion of two or more people, or by management override of~~ the ~~controls.~~date ~~The design~~ of ~~any~~this ~~system~~Quarterly ofReport ~~controls is based in part~~ on ~~certain~~Form ~~assumptions about the likelihood of future events~~10-Q, ~~and~~we ~~there~~are ~~can~~not beaware ~~no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections~~ of any ~~evaluation~~legal ofproceedings ~~controls effectiveness~~ to ~~future~~which ~~periods~~we are ~~subject~~a toparty ~~risks.~~that ~~Over~~we ~~time,~~believe ~~internal~~could ~~controls~~have ~~may become inadequate as~~ a ~~result~~material ofadverse ~~changes~~effect inon ~~conditions, or through the deterioration of the degree of compliance with policies or procedures~~us.

22Item 1A. Risk Factors

~~Table~~Not ofapplicable. ~~Contents~~

~~PART~~Item 2. ~~II—OTHER~~Unregistered ~~INFORMATION~~Sales of Equity Securities and Use of Proceeds

~~Item~~Not 1Applicable. ~~Legal Proceedings~~

WeItem ~~may be subject to legal proceedings in the ordinary course of business~~3. AsDefaults ofUpon ~~the~~Senior ~~date of this Quarterly Report on Form 10-Q, we are not aware of any legal proceedings to which we are a party that we believe could have a material adverse effect on us.~~ Securities

~~Item 1A~~None. ~~Risk Factors~~

~~Not~~Item ~~applicable~~4. Mine Safety Disclosures

~~Item~~Not 2applicable. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~Not~~Item ~~Applicable~~5. Other Information

~~Item~~(a) 3None. ~~Defaults Upon Senior Securities~~

(b) None.

Item 4 6. ~~Mine Safety Disclosures~~Exhibits

Not applicable.

31.1		Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

~~Item 5. Other Information~~22

~~(a)~~Table ~~None.~~of Contents

~~(b) None.~~SIGNATURES

~~Item~~Pursuant 6to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ~~Exhibits~~

31.1	Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	MODERN ROUND ENTERTAINMENT CORPORATION
31.2	Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Date: August 21, 2017	By:	/s/ William R. Scheidhauer
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	Name:	William R. Scheidhauer
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	Title:	President and Chief Operating Officer
101.INS	XBRL Instance Document
		(Principal Executive Officer)
101.SCH	XBRL Taxonomy Extension Schema Document
Date: August 21, 2017	By:	/s/ Ronald L. Miller, Jr.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	Name:	Ronald L. Miller, Jr.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	Title:	Vice President, Chief Financial Officer, and Secretary
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
		(Principal Financial and Accounting Officer)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MODERN ROUND ENTERTAINMENT CORPORATION
Date: May 15, 2017	By:	/s/ William R. Scheidhauer
	Name:	William R. Scheidhauer
	Title:	President and Chief Operating Officer
		(Principal Executive Officer)
Date: May 15, 2017	By:	/s/ Ronald L. Miller, Jr.
	Name:	Ronald L. Miller, Jr.
	Title:	Vice President, Chief Financial Officer, and Secretary
		(Principal Financial and Accounting Officer)

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