UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

 
For the quarter period ended September 30, 2014

 (  )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

 
For the transition period form                                                       to
   
 
Commission File number:    000-53502

 
Gamzio Mobile, Inc.
  (Exact name of registrant as specified in its charter)

Nevada
 
47-1056063
(State of other jurisdiction of
 
(I.R.S. Employer Identification No.)
incorporation or organization)
   
 
                    7260 W. Azure Dr., Ste 140-911, Las Vegas , NV 89130
                   (Address of principal executive offices)
 
         (415) 839-1055
                         (Registrant’s telephone number, including area code)

              N/A
                     (Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
Yes [X]
 
No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.

Large accelerated filer
[ ]
Accelerated filer
[ ]
       
Non-accelerated filer
[ ]
Smaller reporting company
[X]
(Do not check if a smaller reporting company)
     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
 
 
Yes [ ]
 
No [X]
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
November 18, 2014: 58,180,130 common shares

 
 

 
Gamzio Mobile, Inc.
Table of Contents
   
Page
Number
PART I.
FINANCIAL INFORMATION
 
     
Financial Statements (unaudited)
3
     
Management’s Discussion and Analysis of Financial Condition and Results of Operations
4
     
Quantitative and Qualitative Disclosures about Market Risk
6
     
Controls and Procedures
7
     
PART II.
OTHER INFORMATION
 
     
Legal Proceedings
8
     
Risk Factors
8
     
Unregistered Sales of Equity Securities and Use of Proceeds
8
     
Defaults Upon Senior Securities
8
     
Mine Safety Disclosures
8
     
Other Information
8
     
Exhibits
9
     
 
10
 
 
2

 
PART I – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

The accompanying balance sheets of Gamzio Mobile, Inc. and Subsidiary (the “Company”) at September 30, 2014 (with comparative figures as at December 31, 2013) and the statements of operations for the three and nine months ended September 30, 2014 and 2013 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the year ending December 31, 2014.

 
Index
Pages
 
Condensed Consolidated Balance Sheets as at September 30, 2014 and December 31, 2013
F-1
 
Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2014 and 2013
F-2
 
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013
F-3
 
F-4 to F-7
 
 
3

Gamzio Mobile Inc. and Subsidiary
Condensed Consolidated Balance Sheets

   
September 30, 2014
(Unaudited)
   
December 31,
2013
 
             
ASSETS
           
             
Current assets
           
  Cash
  $ 1,959     $ 25,856  
                                 Total current assets
    1,959       25,856  
                 
Property & Equipment
               
   Furniture and equipment - net of accumulated depreciation of $4,250 and $2,975
    850       2,125  
  Computer equipment - net of accumulated depreciation of $5,324 and$3,727
    1,065       2,662  
  Computer software - net of accumulated depreciation of $1,883 and $0
    9,417       -  
Total Property and Equipment
    11,332       4,787  
                 
Total Assets
  $ 13,291     $ 30,643  
                 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
               
                 
Current liabilities
               
  Accounts payable
  $ 75,326     $ 47,653  
  Due to related party
    30,000       -  
  Accrued interest
    8,335       232,534  
  Advance from third party
    -       59,000  
  Line of credit
    163,612       -  
  Advances from related parties
    27,523       27,523  
  Convertible notes payable
    -       363,162  
Total current liabilities
    304,796       729,872  
                 
Total Liabilities
    304,796       729,872  
                 
                                 Commitments and contingencies
               
                 
STOCKHOLDERS' EQUITY
               
  Common stock
     59,000,000 shares authorized, at $0.001 par value
     58,180,130 and 55,658,252 shares issued and outstanding, respectively
    58,180       55,658  
  Additional paid-in capital
    193,627       (435,870 )
  Accumulated deficit
    (543,312 )     (319,017 )
Total stockholders' deficiency
    (291,505 )     (699,229 )
                 
Total liabilities and stockholders' deficiency
  $ 13,291     $ 30,643  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

 
F-1

 
Gamzio Mobile Inc. and Subsidiary
Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2014 and 2013
(Unaudited)

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2014
   
2013
   
2014
   
2013
 
                         
Revenues
  $ 4,402     $ -     $ 8,608     $ -  
                                 
Expenses
                               
Selling, general and administrative
    59,893       5,517       194,545       60,228  
Total operating costs and expenses
    59,893       5,517       194,545       60,228  
                                 
Other (income) expense
                               
Interest expense
    4,081       1,371       38,358       1,371  
Total (income) expense
    4,081       1,371       38,358       1,371  
                                 
Net income (loss)
  $ (59,572 )   $ (6,888 )   $ (224,295 )   $ (61,599 )
                                 
Net income (loss per common share – basic and diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
Weighted average common shares outstanding – basic and diluted
    58,180,130       30,000,000       56,766,879       30,000,000  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
F-2

 
Gamzio Mobile Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2014 and 2013
(Unaudited)
 
   
For the nine months ended
September 30,
2014
   
For the nine months ended
September 30,
 2013
 
                 
Operating Activities                
Net loss
  $ (224,295 )   $ (61,599 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
   Depreciation and amortization
    4,755       -  
   Expenses paid by third parties
    74,612       -  
   Expenes paid by related parties            64,373  
   Imputed interest on debt            1,371  
Changes in balances of assets and liabilities:
               
    - Changes in accounts payable
    27,673       (4,145 )
    -  Due to related party
    30,000       -  
   - Changes in accrued interest
    38,358       -  
Net Cash Used in Operating Activities
    (48,897 )     -  
                 
Investing Activities
               
  Purchase of software
    (5,000 )     -  
Net Cash Used in Investing Activities
    (5,000 )     -  
                 
Financing Activities
               
  Proceeds from line of credit
    30,000       -  
Net Cash Provided by Financing Activities
    30,000       -  
                 
Net decrease in cash
    (23,897 )     -  
                 
Cash, beginning of year
    25,856       -  
                 
Cash, end of year
  $ 1,959     $ -  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
               
  Stock issued for conversion of notes payable
  $ 625,720     $ -  
  Stock issued for acquisition of software
  $ 6,300     $ -  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
F-3

 
Gamzio Mobile, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
September 30, 2014

 1.  BASIS OF PRESENTATION, DESCRIPTION OF THE BUSINESS

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Gamzio Mobile, Inc. and Subsidiary have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2013, included in our Report on Form 10-K filed with the SEC on April 15, 2014.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the nine month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Description of Business

The Company, Gamzio Inc., began activity on January 13, 2012 and was formally incorporated under the laws of the State of Nevada on July 2, 2012 to innovate social casino games.

On October 23, 2013, Gamzio, Inc., (the “Company”) entered into and consummated a voluntary share exchange transaction with , Marine Drive Mobile Corp., a Nevada corporation (“MDMC”) pursuant to a Share Exchange Agreement by and among the MDMC, Gamzio and the Selling Stockholder (the “Exchange Agreement”).  Marine Drive Mobile Corp. is involved in technology to do with customer loyalty programs.

Effective November 15, 2013, the Company amended its Articles of Incorporation to change its name from “Marine Drive Mobile Corp.” to “Gamzio Mobile, Inc.”

The Company operates in the technology industry with products in social and mobile casino gaming.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.
 
Principles of Consolidation

The consolidated financial statements include the accounts of Gamzio Mobile, Inc. and I Like A Deal, LLC (ILAD). All significant intercompany balances and transactions have been eliminated in consolidation.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.
 
Basic and Diluted Net Loss Per Share
 
Basic net loss per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net loss per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. At September 30, 2014 and 2013, we had no common stock equivalents outstanding.
 
F-4

 
Gamzio Mobile, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
September 30, 2014
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
Evaluation of Long-Lived Assets

The Company periodically reviews its long term assets for impairment and makes adjustments, if the carrying value exceeds fair value.

Property and Equipment
 
Property and equipment is stated at historical cost and depreciated over its estimated useful life.
 
Furniture and Equipment
 
Furniture and equipment is depreciated on a straight line basis over 3 years. Total depreciation expense for the nine months ended September 30, 2014 and 2013 was $1,275 and $0, respectively.
 
Computer Equipment
 
Computer equipment is depreciated on a straight line basis over 3 years. Total depreciation expense for the nine months ended September 30, 2014 and 2013 was $1,597 and $0, respectively.

Computer Software
 
Computer software is depreciated on a straight line basis over 3 years. Total depreciation expense for the nine months ended September 30, 2014 and 2013 was $1,883 and $0, respectively.
 
Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

Foreign Currency

The books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency.  Translations denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statement of Operations:
 
(i)
Monetary items are recorded at the rate of exchange prevailing as at the balance sheet date; 
 
(ii)
Non-Monetary items including equity are recorded at the historical rate of exchange; and 
 
(iii)
Revenues and expenses are recorded at the period average in which the transaction occurred.
 
F-5

 
 
Gamzio Mobile, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
September 30, 2014
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
Revenue Recognition

The Company earns revenue through consulting fees and from transaction fees it charges customers. Consulting fees are recorded in revenue when the service is completed. Transaction fees are recorded in revenue when a customer completes a purchase on the Company’s website and the related transaction fee is charged to the customer’s credit card.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.
 
Financial Instruments

The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.

Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.
 
Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation. Amounts previously reported as “Advances from related parties” have been reclassified to “Due to related parties” on the balance sheet.
 
Recent Accounting Pronouncements

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915):  Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from U.S. GAAP for development stage entities, primarily presentation of inception to date financial information. The provisions of the amendments are effective for annual reporting periods beginning after December 15, 2014, and the interim periods therein. However, early adoption is permitted. Accordingly, the Company has adopted this standard as of June 30, 2014.

The Company does not expect the adoption of any other recent accounting pronouncements will have a material impact on its financial statements.

3. LINE OF CREDIT

On January 1, 2014 the Company entered into a line of credit agreement with a third party for up to $500,000 with interest at 10% per year. Also on January 1, 2014, this third party assumed $59,000 in Company debt and added it to the outstanding balance of this line of credit. During the nine months ended September 30, 2014, this third party paid expenses of $74,612 on behalf of the Company, which added to the outstanding balance on this line of credit. The Company also received $30,000 in cash from this line of credit during the nine months ended September 30, 2014. The balance owing under this line of credit, at September 30, 2014, was $163,612.
 
 
F-6

 
Gamzio Mobile, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements
September 30, 2014
 
  
4. NOTE PAYABLE

On October 23, 2013, as part of the share exchange agreement the Company acquired a convertible note payable of $363,162, plus accrued interest of $219,403. This note payable is convertible into stock at $0.05 per share and bears interest at 12% per year.

During the nine months ended September 30, 2014 the lender converted the balance of the debt and interest into shares of common stock of the Company.

The Company accrued related interest expense of $30,023 during the nine months ended September 30, 2014.

5. RELATED PARTY TRANSACTIONS

During the three month period ended September 30, 2014, the CEO invoiced the Company for $30,000 for management services. This amount is recorded in “Due to related parties” on the balance sheet.
 
6. CAPITAL STOCK

On October 23, 2013, the Company issued 30,000,000 shares of common stock to the shareholders of Gamzio Mobile, Inc. in exchange for their 25,658,000 shares as part of the share exchange agreement.

On May 21, 2014, the Company issued 15,000 shares of common stock for the acquisition of software. These shares were valued using the quoted price of $.42, on that date ($6,300).
 
On May 28, 2014 the Company issued 2,000,000 shares of common stock to the holder of the convertible debt upon conversion of $500,000 of outstanding debt.

On June 27, 2014 the Company issued 506,878 shares of common stock to the holder of the convertible debt upon conversion of the balance of the debt and interest owed, in the amount of $125,720.

7. GOING CONCERN

The Company will need additional working capital to service its debt and for its planned activity, which raises substantial doubt about its ability to continue as a going concern.   Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding, and long term financing, which will enable the Company to operate for the coming year.
 
8 - SUBSEQUENT EVENTS

On November 7, 2014, the Company decreased its authorized common shares to 59,000,000.
 
F-7

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 
This Form 10-Q contains statements that constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. The words “expect,” “estimate,” “anticipate,” “predict,” “believe,” and similar expressions and variations thereof are intended to identify forward-looking statements. Such forward-looking statements include statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, including the potential results of any acquisition or similar transaction, (c) anticipated trends in our industry, (d) our future financing plans, (e) our anticipated needs for working capital, and (f) the benefits related to ownership of our common stock. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements for the reasons, among others, described within the various sections of this Form 10-Q, and the section entitled “Risk Factors” in our Annual Report on Form 10K. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Form 10-Q will in fact occur as projected. We undertake no obligation to release publicly any updated information about forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.
 
The risks described below are the ones we believe are most important for you to consider. These risks are not the only ones that we face. If events anticipated by any of the following risks actually occur, our business, operating results or financial condition could suffer and the future price of our common stock could decline.
 
The following discussion should be read in conjunction with the information contained in the financial statements of Gamzio Mobile, Inc. (“we”, “us”, “our”, or the ‘Company’) and the notes which form an integral part of the financial statements which are attached hereto.
 
The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.
 
Our Business
 
We were incorporated under the laws of the State of Nevada on January 18, 2007, under the name “Sona Resources, Inc.”, with authorized capital stock of 250,000,000 shares at $0.001 par value.  We were originally organized for the purpose of acquiring and developing mineral properties.
 
On June 6, 2011, we entered into the Exchange Agreement to acquire Marine Drive Technologies Inc., a corporation organized under the laws of Canada (“MDT”), a developer of scalable m-Commerce applications and services, and on July 6, 2011, we changed our name to “Marine Drive Mobile Corp.”  On August 26, 2011, we entered into a Membership Interests Purchase Agreement for the acquisition of the outstanding membership interests of I Like A Deal, LLC (“ILAD”), a developer of group buying web based software (the “ILAD Transaction”).  On September 12, 2011 we closed the Exchange Agreement with MDT and on October 3, 2011 we closed the Membership Interests Purchase Agreement with ILAD.
   
On September 11, 2013, the Company effected a one-for-one hundred reverse stock split of all of its issued and outstanding shares of common stock. 

On October 23, 2013, we entered into and consummated a voluntary share exchange transaction with Gamzio, Inc., a Nevada corporation and the sole stockholder of Gamzio, Inc. (the “Selling Stockholder”), pursuant to a Share Exchange Agreement by and among the Company, Gamzio, Inc. and the Selling Stockholder (the “Exchange Agreement”).
 
4

 
In accordance with the terms of the Exchange Agreement, the Company issued 30,000,000 shares of its common stock, par value $0.001 (the “Shares”) to the Selling Stockholder in exchange for 100% of the issued and outstanding capital stock of Gamzio, Inc. (the “Exchange Transaction”). As a result of the Exchange Transaction, the Selling Stockholder acquired 54% of the Company’s issued and outstanding shares of common stock, Gamzio, Inc. became the Company’s wholly-owned subsidiary, and the Company acquired the business and operations of Gamzio.

On November 15, 2013, the Company changed its name from "Marine Drive Mobile Corp." to "Gamzio Mobile, Inc.” and was assigned a new stock symbol, “GAMZ” by FINRA. On February 4, 2014, we changed our fiscal year to begin on January 1 and end on December 31.

The Company operates in the technology industry with its suite of exclusive casino-style games, on the internet and mobile devices.          We currently have three casino gaming titles we are working to market and distribute. We advertise on high volume acquisition channels, including Facebook, in order to grow our user-base. In the future, we plan to distribute our games on other high volume distribution channels and partner with proven user acquisition agencies within the casino gaming industry to grow our games and drive overall revenues.

Our flagship social casino game is Slots-O-Luck Adventure for iPhone and iPad, which is available worldwide through Apple’s App Store. We also acquired Go-Go Casino in the second quarter of 2014. Go-Go Casino is currently available on the Facebook desktop platform.  Casino Island Adventure is our first real-money slots game, now available in the U.K. Apple App Store.

On April 15, 2014, we entered into an agreement with Cashbet, a licensed eGambling company, to provide the licensing, compliance, secure banking, and customer support which allows us to operate in the real-money gaming space in the U.K.  Cashbet holds Category 1 and Category 2 gaming licenses from the Alderney Gambling Control Commission in the British Channel Islands.

Critical Accounting Policies
 
Our discussion and analysis of our financial condition and results of operations, including the discussion on liquidity and capital resources, is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.
 
The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business.  Certain conditions, discussed below, currently exists which raise substantial doubt upon the validity of this assumption.  The financial statements do not include any adjustments that might result from the outcome of the uncertainty.
 
Results of Operations
 
The following discussion of the financial condition, results of operations, cash flows, and changes in our financial position should be read in conjunction with our audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal years ended December 31, 2013 and December 31, 2012, filed April 15, 2014. Such financial statements have been prepared in conformity with U.S. GAAP and are stated in United States dollars.
 
Comparison of the Three Month Periods Ended September 30, 2014 and September 30, 2013
 
For the three months ended September 30, 2014, we incurred a net loss of $59,572 compared to $6,888 for the three months ended September 30, 2013.

Net revenue for the three months ended September 30, 2014 totaled $4,402 attributable to revenues from the social casino gaming as compared to no revenues for the three months ended September 30, 2013.
 
General and administrative expenses for the three months ended September 30, 2014 increased by $54,376 to $59,893 from $5,517, when compared to the same period last year. The increase was due primarily to an increase of $5,225 in audit and accounting expense, $30,000 in management fees and $15,477 in legal expense offset by a reduction in game development fees.
 
Interest expense for the three months ended September 30, 2014 increased by $2,710 when compared to the same period last year.  The increase was due to new debt and the loan assumed in the exchange agreement.  
 
5

 
Comparison of the Nine Month Periods Ended September 30, 2014 and September 30, 2013
 
For the nine months ended September 30, 2014, we incurred a net loss of $224,295 compared to $61,599 for the nine months ended September 30, 2013.

Net revenue for the nine months ended September 30, 2014 totaled $8,608 attributable to revenues from the social casino gaming as compared to no revenues for the nine months ended September 30, 2013.
 
General and administrative expenses for the nine months ended September 30, 2014 increased by $134,317 to $195,545 from $60,228, when compared to the same period last year. The increase was due primarily to an increase of $45,300 in audit and accounting expense, $49,520 in consultant fees, $40,000 in management fees, $23,536 in legal expense and $21,577 in advertising expense offset by a reduction in game development fees of $54,195.
 
Interest expense for the nine months ended September 30, 2014 increased by $36,987 when compared to the same period last year.  The increase was due to new debt and the loan assumed in the exchange agreement.     

Cash and Cash Equivalents
 
As of September 30, 2014, we had cash of $1,959 as compared to $25,856 as of December 31, 2013.  We anticipate that a substantial amount of cash will be used as working capital and to execute our strategy and business plan.  As such, we further anticipate that we will have to raise additional capital of approximately $500,000 to fund our operational and research and development needs over the next twelve months.
 
Liquidity and Capital Resources

As of September 30, 2014, we had cash of $1,959 and a working capital deficiency of $302,837 compared to a working capital deficiency of $704,016, at December 31, 2013.  During the nine month period ended September 30, 2014, we funded our operations from loans from third parties.

 For the nine month period ended September 30, 2014, we used net cash of $48,897 in operations

For the nine month period ended September 30, 2014, we $5,000 in investing activities for a purchase of software.

For the nine month period ended September 30, 2014, we had an increase in financing activities of $30,000 from advances under the line of credit.

During the nine months ended September 30, 2014, the outstanding principal balance and accrued interest of certain convertible notes in the aggregate amount of $625,720 were converted into 2,506,878 shares of our common stock.

Our current cash requirements are significant due to the planned development and expansion of our business.  Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve months.  The Company has completed a line of credit agreement for $500,000 with Quarry Bay Capital Ltd. to assist in funding operations.

In order to execute on our business strategy, we will require additional working capital, commensurate with our operational needs.  Such working capital will most likely be obtained through equity or debt financings until such time as our operations are producing revenue in excess of operating expenses.  There are no assurances that we will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed.
 
Off-Balance Sheet Arrangements
 
There are no off-balance sheet arrangements.
 
ITEM 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
At this time this is not applicable.
 
 
6

 
ITEM 4.                      CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures
 
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of September 30, 2014 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2014 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s  rules and forms.  This conclusion is based on findings that constituted material weaknesses.  A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.
 
 In performing the above-referenced assessment, management had concluded that as of September 30, 2014, there were deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers to be material weaknesses including those described below:

 
i)
Lack of Formal Policies and Procedures. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.
 
 
ii)
Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
 
 
iii)
Insufficient Resources. The Company has insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.
 
Our management feels the weaknesses identified above have not had any material affect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.
 
Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
 
Changes in Internal Control Over Financial Reporting
 
There were no changes in our internal controls over financial reporting that occurred during the quarterly period ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.
 
7

 
PART II – OTHER INFORMATION
 
ITEM 1.           LEGAL PROCEEDINGS
 
There are no legal proceedings to which we are a party, nor to the best of management’s knowledge are any material legal proceedings contemplated.
 
ITEM 1A.        RISK FACTORS
 
Not applicable.

ITEM 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None.
 
ITEM 3.          DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.          MINE SAFETY DISCLOSURES
 
Not applicable.
 
ITEM 5.           OTHER INFORMATION
 
Not applicable

 
8

 
ITEM 6.           EXHIBITS

The following exhibits are included as part of this report by reference:

Exhibit No.
Description
 
3.1(a)
Articles of Incorporation (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)
 
3.1(b)
Amendment to Articles of Incorporation (incorporated by reference from registrant’s Current Report on Form 8-K/A filed on December 2, 2011)
 
3.1(c)
Amendment to Articles of Incorporation (incorporated by reference from registrant’s Current Report on Form 8-K filed on November 15, 2013)
 
3.3
By-laws (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)
 
4
Specimen Stock Certificate (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)
 
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
 
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
 
32
Certification of Chief Executive Officer  and  Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
 
101
Interactive Data Files*
*Filed herewith
 
9

 

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.

 
 GAMZIO MOBILE, INC.
 
 
 

Date: November 19, 2014
/s/ Jason Deiboldt
 
 
Jason Deiboldt
 
 
Chief Executive Officer and President (Principal Executive Officer)
 
 
 
Date:November 19, 2014
/s/ Monika Sagar                                           
 
Monika Sagar
 
Chief Financial Officer
 
(Principal Financial Officer and Principal Accounting Officer)



 
10

 





Exhibit 31.1
CERTIFICATION PURSUANT TO
18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 

I, Jason Deiboldt, certify that:

 
1.       I have reviewed this quarterly report on Form 10-Q of Gamzio Mobile, Inc.;

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

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

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

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

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

 
         (c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

 
         (a)   All significant deficiencies and material weaknesses in the design or operation of  internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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

Date: November 19, 2014
By:
/s/ Jason Deiboldt
 
 
Name:
Jason Deiboldt
 
 
Title:
Chief Executive Officer and President(Principal Executive Officer)
 

 
 

 





Exhibit 31.2
CERTIFICATION PURSUANT TO
18 USC, SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 

I, Monika Sagar, certify that:

 
1.       I have reviewed this quarterly report on Form 10-Q of Gamzio Mobile, Inc.;

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

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

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

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

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

 
         (c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

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

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

 
         (a)   All significant deficiencies and material weaknesses in the design or operation of  internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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

Date: November 19, 2014
By:
/s/ Monika Sagar
 
  Name: Monika Sagar  
 
Title:
Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)
 

 
 

 





CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report (the “Report”) on  Form 10-Q of Gamzio Mobile, Inc. (the “Company”) for the period ended September 30, 2014 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

1.  
The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934, as amended; and

2.  
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2014
By:
/s/ Jason Deiboldt
 
 
Name:
Jason Deiboldt
 
 
Title:
Chief Executive Officer and President(Principal Executive Officer)
 
 
 

 
By:
/s/ Monika Sagar
 
 
Name:
Monika Sagar
 
  Title: Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer)