NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation and Organization and Significant Accounting Policies
Basis of Presentation and Organization
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included, Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the financial statements and footnotes thereto for the year ending December 31, 2012.
As used in these Notes to the Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to Empire Global Gaming, Inc.
The Company was incorporated in the State of Nevada on May 11, 2010 in order to acquire certain U.S Patent license agreements pertaining to roulette and actively engage in the gaming business worldwide and commenced operations in June, 2010. The Company was founded to develop, manufacture and sell Class II and Class III Casino electronic and table games for the general public and casinos worldwide. The Company owns exclusive rights through license agreements to four U.S. Patents consisting of 14 roulette games patents. These patents are certified by Gaming Laboratories International to minimize any unfairness in the multi-number bets in roulette (American double 0 and European single 0) to both players and casinos. One of the patents controlled by the Company is for a “new number pattern and board layout” that will insure, the various gaming control boards and commissions in the United States and eventually worldwide, that the highest standards of security and integrity are met. We hold licenses for eight patented Class II and III Casino Grade Mechanical and Electronic Games. The games include (i) proprietary 20 sided dice game, (ii) combination game of poker and blackjack, side bet blackjack, and (iii) five patents covering roulette. We also created a new proprietary variation on the standard deck of playing cards (patent pending). EGGI also sells a complete line of public and casino grade gaming products for roulette, blackjack, craps, baccarat, mini baccarat, pinwheels, Sic Bo, slot machines, poker tables and bingo games. We are working on developing some of our patented games into video and slot machine terminals as well as computer and mobile devices. We also are attempting to develop a pick 3 lotto evaluation and analysis program. We have taken certain steps to become fully “e-commerce” operational while awaiting Gaming Board approvals. We operate a website where we sell certain equipment and proprietary games. Our website is located at:
www.empireglobalgaminginc.com
.
The Company has net losses consisting of pre-operating and start-up expenses, of $405,609 from May 10, 2010 to March 31, 2013.
We are controlled by two individuals (our President and Chief Financial Officer) who devote approximately 25 hours each of their time to the business of the Company.
The Company currently has limited operations in accordance with Financial Accounting Standard Board Codification (“FASB ASC”) Development Stage Entities topic. The Company has been in the development stage since its formation. The accompanying financial statements have been prepared in accordance with authoritative guidance for development stage entities. A development stage entity is one in which planned principal operations has not commenced or if its operations have commenced, there has been no significant revenues there from.
NOTE 2. GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. To date, the Company has generated minimal revenues, is considered a development stage Company, has experienced recurring net operating losses, had a net loss of $44,941 for the three months ending March 31, 2013 and $405,608 for the period from inception (May 11, 2010) to March 31, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. We will need to raise funds or implement our business plan to continue operations.
In order to continue as a going concern, the Company may need, if revenues do not continue to grow, among other things, additional capital resources. Management’s plan is to obtain such resources, if needed, for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.
NOTE 4. SUBSEQUENT EVENTS
Management evaluated all activity of the Company through the issue date of the Financial Statements and noted that no subsequent events that would have a material impact on the financial statements as of and for the period ended March 31, 2013.
NOTE 5. RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2013 and for the year ended December 31, 2012, the Company sold $2,040 and $5,971, respectively of inventory to the shareholders of the Company.
NOTE 6. RESTATEMENTS
The tables below show the effects of the restatements on (i) the Company's balance sheets as of March 31, 2013, (ii) the statements of operations for the three months ended March 31, 2013 and from Inception (May 11, 2010) through March 31, 2013, and (iii) the statements of cash flows for the three months ended March 31, 2013 and from Inception (May 11, 2010) through March 31, 2013.
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March 31, 2013
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As Reported
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Adjustment
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Restated
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Prepaid expenses
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-
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275,000
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a, b
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275,000
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Common stock
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50,801
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6,000
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a
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56,801
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Additional paid-in capital
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345,599
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294,000
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a
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639,599
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Deficit accumulated during the development stage
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(380,608
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)
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(25,000
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)
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b
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(405,608
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)
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a - To adjust the common stock and additional paid-in capital for issuance
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b - To write off a portion on prepaid services
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The effect of the restatement on the income statement for the three months ended March 31, 2013 and from Inception (May 11, 2010) through March 31, 2013 is as follows:
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Three months ended March 31, 2013
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As Reported
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Adjustment
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Restated
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General, selling and administrative expenses
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26,578
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25,000
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a
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51,578
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Operating Loss
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(19,941
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)
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(25,000
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)
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a
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(44,941
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)
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Net Loss
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(19,941
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)
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(25,000
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)
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a
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(44,941
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)
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Net loss per common share - basic and diluted
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(.000
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)
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(.001
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)
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(.001
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)
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Weighted average of common shares outstanding
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50,801,000
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2,000,000 -
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52,801,000
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From Inception (May 11, 2010) to
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March 31, 2013
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As Reported
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Adjustment
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Restated
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General, selling and administrative expenses
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387,386
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25,000
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a
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417,867
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Operating Loss
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(380,608
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)
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(25,000
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)
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a
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(405,608
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)
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Net Loss
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(380,608
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)
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(25,000
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)
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a
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(405,608
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)
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a - To write off a portion on prepaid services
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The effect of the restatements on the statement of cash flows for the three months ended March 31, 2013 and from Inception (May 11, 2010) through March 31, 2013 is as follows:
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For the three months ended March 31, 2013
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As Reported
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Adjustment
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Restated
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|
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Net Loss
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(19,941
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)
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(25,000
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)
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a
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(44,941
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)
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|
|
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Stock for services
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-
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300,000
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b
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300,000
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From Inception (May 11, 2010) to
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March 31, 2013
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As Reported
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Adjustment
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|
|
Restated
|
|
|
Net Loss
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|
(380,608
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)
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(25,000
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)
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a
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(405,608
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)
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|
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Stock for services
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49,000
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300,000
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b
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349,000
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|
|
|
|
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|
|
|
|
|
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a - To write off a portion on prepaid services
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b - To adjust common stock and additional paid-in capital for issuance
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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.
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 has the necessary working capital to support existing operations through 2013. Our primary capital source will be cash flow from operations cash on hand and loans from Stockholders We anticipate reaching profitability in 2013. 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.
Three Months Ended March 31, 2013 Compared to March 31, 2012
The following table summarizes the results of our operations during the three months ended March 31, 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:
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3/31/13
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3/31/12
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(unaudited)
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(unaudited)
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Variance
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Percentage
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Restated
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Revenues – related party
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9,408
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2,285
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7,123
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311.73
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%
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Cost of Goods Sold
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2,771
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2,173
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|
|
|
598
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27.52
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%
|
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Operating expenses
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|
|
51,578
|
|
|
|
35,270
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|
|
|
16,308
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|
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46.24
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%
|
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Net loss
|
|
|
(44,941
|
)
|
|
|
(35,158
|
)
|
|
|
(9,783
|
)
|
|
|
27.83
|
%
|
|
Loss per share of common stock
|
|
$
|
(0.001
|
)
|
|
$
|
(0.001
|
)
|
|
|
|
|
|
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|
We recorded a net loss of $44,941 for the three months ended March 31, 2013 as compared with a net loss of $35,158 for the three months ended March 31, 2012. The decrease in net loss was primarily attributable to an increased revenues and decrease in legal and professional fees.
Commitment and Contingencies
None.
Off-Balance Sheet Arrangements
At March 31, 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.
