ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with our unaudited financial statements and the notes thereto. This discussion and analysis may contain forward-looking statements based on assumptions about our future business.
In General
We presently sell our ancillary gaming products in the United States but contemplate selling and leasing our products worldwide.
We are controlled by two individuals (our President and Chief Financial Officer) who devote approximately 25 hours a week each of their time to the business of the Company.
Although the Company has obtained the license for the manufacturing, sale, marketing and licensing of the four roulette patents, and certain other patents, we have not yet applied to any State Gaming Commission(s) to seek approval to sell any of our products. The Company has not, as of yet, arranged for any lines of credit, and we have no commitments, written or oral, from officers, directors or shareholders to provide the Company with advances, loans or other funding for our operations.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.
Liquidity and Capital Resources
We believe that the Company currently does not have the necessary working capital to support existing operations through 2013 since the Company has had minimal revenues and net losses consisting of pre-operating and start-up expenses, of $611,640 from May 10, 2010 to September 30, 2013. Our primary capital source will be loans from Stockholders We anticipate reaching profitability in 2014. We are seeking to develop and market the patented technologies, manufacture and sell gaming equipment that will generate cash from operations.
For the remainder of the fiscal year ending December 31, 2013, we anticipate incurring a loss as a result of continued expenses associated with compliance with the reporting requirements of the Exchange Act.
Plan of Operations
During the remainder of the fiscal year ending December 31, 2013, we plan to continue with efforts to develop and market the patented technologies, a pick 3 lotto evaluation and analysis program, manufacture and sell gaming equipment that will generate cash from operations. We also plan to file all required periodic reports and to maintain our status as a fully-reporting company under the Exchange Act.
Based upon our current cash reserves, although we feel it will be adequate, we may not have adequate resources to meet our short term or long-term cash requirements. No specific commitments to provide additional funds have been made by management, the principal stockholders or other stockholders, and we have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities. Accordingly, there can be no assurance that any additional funds will be available to us to allow us to cover our expenses.
Nine Months Ended September 30, 2013 compared to September 30, 2012
The following table summarizes the results of our operations during the nine months ended September 30, 2013 and 2012, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current nine month period to the prior nine month period:
|
|
9/30/13
|
|
|
9/30/12
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
Variance
|
|
|
Percentage
|
|
Revenue
|
|
$
|
10,749
|
|
|
$
|
6,127
|
|
|
$
|
4,622
|
|
|
|
75.44
|
%
|
Cost of goods sold
|
|
|
3,356
|
|
|
|
3,305
|
|
|
|
51
|
|
|
|
1.54
|
%
|
Operating expenses
|
|
|
258,366
|
|
|
|
82,652
|
|
|
|
175,714
|
|
|
|
212.59
|
%
|
Net loss
|
|
$
|
(250,973
|
)
|
|
$
|
(79,830
|
)
|
|
$
|
(171,143
|
)
|
|
|
214.38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share of common stock
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
The difference between the net loss of $250,973 for the nine months ended September 30, 2013 compared to the net loss of $79,830 for the same period was primarily attributable to an increase in consulting, legal and professional fees.
Three Months Ended September 30, 2013 Compared to September 30, 2012
The following table summarizes the results of our operations during the three months ended September 30, 2013 and 2012, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current three month period to the prior three month period:
|
|
9/30/13
|
|
|
9/30/12
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
Variance
|
|
|
Percentage
|
|
Revenue
|
|
$
|
230
|
|
|
$
|
3,780
|
|
|
$
|
(3,550
|
)
|
|
|
-93.92
|
%
|
Cost of goods sold
|
|
|
24
|
|
|
|
1,132
|
|
|
|
(1,108
|
)
|
|
|
-97.88
|
%
|
Operating expenses
|
|
|
94,861
|
|
|
|
23,001
|
|
|
|
71,860
|
|
|
|
312.42
|
%
|
Net loss
|
|
$
|
(94,655
|
)
|
|
$
|
(20,353
|
)
|
|
$
|
(74,302
|
)
|
|
|
365.07
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share of common stock
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
The difference between the net loss of $94,655 for the three months ended September 30, 2013 compared to the net loss of $79,830 for the same period was primarily attributable to an increase in consulting, legal, and professional fees.
Commitment and Contingencies
None.
Off-Balance Sheet Arrangements
At September 30, 2013, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company are detected.
Changes in Internal Control over Financial Reporting
There has been no change since December 31, 2012 in our internal control over financial reporting identified in connection with the evaluation of disclosure controls and procedures discussed above that occurred during the three months ended September 30, 2013, or subsequent to that date, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.