SunGame Corp - FORM 10-Q/A

Attached files

file	filename
EX-31.2 - CERTIFICATION - SunGame Corp	sungame_10qa-3102.htm
EX-32.1 - CERTIFICATION - SunGame Corp	sungame_10qa-ex3201.htm
EX-31.1 - CERTIFICATION - SunGame Corp	sungame_10qa-ex3101.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Amendment 1

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, as amended

For The Quarterly Period Ended March 31, 2011

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, as amended

For The Transition Period from __________ To _________

Commission file number: 333-158946

SUNGAME CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		20-8017623
(State or other jurisdiction		(IRS Employer Identification No.)
of incorporation or organization)

501 Silverside Road, Suite 105, Wilmington, DE		19809
(Address of principal executive offices)		(zip code)

(310) 666-0051

(Registrant’s telephone number, including area code)

(Former Name, former address and former fiscal year, if changed since last report)

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 þ No o

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 o No o

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

Large accelerated filer o		Accelerated filer o
Non-accelerated filer o		Smaller reporting company þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act) Yes o No þ

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No þ

The number of shares of common stock are:

As of 31 March 2011 - 250,014

As of 9 May 2011- 177,550,014 issued, 250,014 outstanding

(issuances from the merger have not been processed through transfer)

SUNGAME CORPORATION

For The Quarterly Period Ended March 31, 2011

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		3

Item 1.	Financial Statements - Sungame Corporation	3

	Financial Statements - Freevi Corporation	11

	Consolidated Financial Statements	26

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44

Item 4.	Controls and Procedures	44

PART II - OTHER INFORMATION		45

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities.	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Removed and Reserved.	45

Item 5.	Other Information.	45

Item 6.	Exhibits.	45

SIGNATURES		46

Note: Amendment 1 includes the addition of Freevi Corp. financials, the pro forma combined financial statements and the adjustment to certain warrants outstanding.

Part I. Financial Information.

Item 1. Financial Statements.

SUNGAME CORPORATION

(A DEVELOPMENT STAGE COMPANY)

Balance Sheets

	March 31,			December 31,
	2011			2010
	Unaudited
ASSETS:

Current Assets:
Cash	$	26		$	60
Accounts Receivable		21,650			17,600

Total Current Assets		21,676			17,660

Fixed Assets
Office Equipment		2,140			2,140
Accumulated Depreciation		(779	)		(672	)
Total Fixed Assets		1,361			1,468

Other Assets
Investment - Freevi Corp

TOTAL ASSETS	$	23,037		$	19,128

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY):

Current Liabilities:
Accounts Payable	$	112,035		$	112,035
Credit Cards Payable		9,229			8,751
Loans Payable - Stockholder		161,872			161,272

Total Current Liabilities		283,136			282,058

Stockholders' Equity (Deficiency):
Common stock, par value, $0.001 300,000,000 authorized with: 250,000 issued and outstanding		250			250
Paid in Capital		2,153,035			2,153,035
Preferred Stock, par value $0.001 5,000,000 authorized with none outstanding		-			-

Accumulated deficit		(2,413,384	)		(2,416,215	)

Total Stockholders' (Deficiency)		(260,099	)		(262,930	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	23,037		$	19,128

The accompanying notes are an integral part of these financial statements

SUNGAME CORPORATION

(A DEVELOPMENT STAGE COMPANY)

Statements of Operations

							November 13,
	Three months ended						2006, (Inception)
	March 31,						to March 31,
	2011			2010			2011
	Unaudited			Unaudited			Unaudited

Revenue:	$	31,150		$	6,265		$	106,262

Total Revenue		31,150			6,265			106,262

Costs and Expenses:
Software development		27,140			17,108			1,440,575
Stock based compensation		-			-			587,300
Depreciation		107			69			779
Consulting costs		-			-			302,500
Bad debts		-			-			4,214
Startup costs		765			19,018			178,156

Total Expenses		28,012			36,195			2,513,524

Net Income (Loss) From Operations		3,138			(29,930	)		(2,407,262	)


Other Income and (Expenses)
Interest expense		(307	)		(5,108	)		(6,122	)
		(307	)		(5,108	)		(6,122	)

Net Income (Loss)	$	2,831		$	(35,038	)	$	(2,413,384	)

Per Share Information
Income (Loss) per common share	$	0.01		$	(0.14	)


Weighted average number of shares outstanding		250,000			250,000

The accompanying notes are an integral part of these financial statements

SUNGAME CORPORATION

(A DEVELOPMENT STAGE COMPANY)

Statements of Cash Flows

							November 13,
	Three months ended						2006, (Inception)
	March 31,						to March 31,
	2011			2010			2011
	Unaudited			Unaudited			Unaudited
Cash Flows from Operating Activities

Net Income (Loss)	$	2,831		$	(35,038	)	$	(2,413,384	)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation		107			69			779
(Increase) in accounts receivable		(4,050	)		(4,714	)		(21,650	)
Increase in accrued expenses		-			-			190,000
Increase in credit card payable		478			3,520			9,230
Increase/(decrease) in accounts payable		-			(4,000	)		878,037
Compensatory stock issuances		-			-			837,300
Net Cash Used by Operating Activities		(634	)		(40,163	)		(519,688	)

Cash Flows from Investing Activities

(Increase) in Fixed Assets		-			-			(767	)

Net Cash Used for Investing Activities		-			-			(767	)

Cash Flows from Financing Activities

Issuance of Common Stock and Warrants		-			-			251,500
Paid in capital		-			-			107,109
Increase in Loans Payable		600			44,602			161,872

Net Cash Provided by Financing Activities		600			44,602			520,481

Net Increase in Cash & Cash Equivalents		(34	)		4,439			26

Beginning Cash & Cash Equivalents		60			2,011			-

Ending Cash & Cash Equivalents	$	26		$	6,450		$	26

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest expense	$	307		$	-			6,122
Cash paid for income taxes	$	-		$	-		$	-

NON-CASH TRANSACTIONS
Stock issued for services	$	-		$	-			837,300
Paid in capital - debt relief		-			-			182,376
Stock issued for debt relief		-			-			863,369

The accompanying notes are an integral part of these financial statements

Sungame Corporation

Statements of Stockholder's Equity (Deficit)

			Common						Preferred
	Common		Dollars at		Paid in		Preferred		Dollars		Retained			Stockholders'
	Shares (1)		$0.001 Par		Capital		Shares		$0.001 Par		Earnings			Deficiency
Balances 11/14/06		-	$	-	$	-		-	$	-	$	-		$	-
Shares to parent for services		38		1		1,499									1,500
Net loss for year												(1,500	)		(1,500	)
Balances at December 31, 2006		38		1		1,499		-		-		(1,500	)		-

Net loss for year												(890,443	)		(890,443	)
Balances at December 31, 2007		38		1		1,499		-		-		(891,943	)		(890,443	)

Shares issued to parent for debt relief		103,088		103		774,897									775,000
Shares issued for services		96,874		97		587,203									587,300
Shares issued for cash		12,500		12		119,988									120,000
Warrants issued for cash						5,000									5,000
Additional paid-in capital from parent						107,109									107,109
Net loss for year												(980,353	)		(980,353	)
Balances at December 31, 2008		212,500		213		1,595,696				-		(1,872,296	)		(276,387	)

Shares issued for cash		12,500		12		124,988									125,000
Shares issued for services		25,000		25		249,975									250,000
Net loss for year												(430,182	)		(430,182	)
Balances at December 31, 2009		250,000		250		1,970,659		-		-		(2,302,478	)		(331,569	)

Forgiveness of debt						182,376									182,376
Net loss for year												(113,737	)		(113,737	)
Balances at December 31, 2010		250,000		250		2,153,035		-		-		(2,416,215	)		(262,930	)

Net income for period												2,831			2,831

Balances at March 31, 2011 - Unaudited		250,000	$	250	$	2,153,035	$	-	$	-	$	(2,413,384	)	$	(260,099	)


(1) As retroactively restated for a 40 for 1 reverse stock split on January 10, 2011

The accompanying notes are an integral part of these financial statements

SUNGAME CORPORATION

NOTES TO FINANCIAL STATEMENTS

1.	Business and Summary of Significant Accounting Policies

Business

The accompanying financial statements include the accounts of SunGame Corporation (“the Company”), a Delaware corporation. The Company is an early development stage company that intends to become a leader in providing virtual worlds and online games. The Company believes that it can exploit the market that is at the confluence of social games and social virtual world, and that this market is very significant. The Company will provide various types of Games in an online Virtual World where the users, regardless of location can play games, chat, buy virtual goods and where our customers are corporations and game aggregators.

The main activity will be to provide a social games and social virtual worlds that attracts players who interact in a seamless environment. The main goal will be to introduce competitive and unique products in an already established market place. The Company will be a premier marketer of money related activities that will have distinct comparative advantages compared to both direct and indirect competitors.

The Company was incorporated in Delaware on November 14, 2006. The Company’s fiscal year end is December 31st.

Summary of Significant Accounting Policies

Development Stage Company

The Company is a development stage company as defined by Accounting Standards Codified No.915. The Company is devoting substantially all of its present efforts to establish a new business. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

Risks and Uncertainties

The Company operates in an emerging industry that is subject to market acceptance and technological change. The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging business, including the potential risk of business failure.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenue and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and assumptions are based on management’s future expectations for the Company’s operations. The Company’s actual results could vary materially from management’s estimates and assumptions.

Property and Equipment

Property and equipment, when acquired, will be stated at cost. Depreciation will be computed using the straight-line method to allocate the cost of depreciable assets over the estimated useful lives of the assets.

Software Costs

The costs for internal use software, whether developed or obtained, are assessed to determine whether they should be capitalized or expensed in accordance with American Institute of Certified Public Accountants’ Statement (“SOP”) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Capitalized software costs are reflected as property and equipment on the balance sheet and are to be depreciated when the Company begins recording revenue the deemed date that the software is placed in service. As of the date of these financial statements the development of the software necessary to achieve the business purposes of the Company is in an undeterminable state causing the Company to deem the asset to be impaired. This conclusion requires that the costs incurred to date be treated as expenses as opposed to the capitalizing of the software.

Start-up Costs

Start-up costs that would commonly be capitalized as Other Assets to be amortized over a period of five years have also been deemed to be impaired for the same reasons stated in the paragraph on “Software Costs”. Based on these circumstances, management has elected to expense these start-up costs as well.

“Long-lived assets” are reviewed for impairment of value whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable or at least at the end of each reporting period. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying value of an asset is not recoverable. For Long-lived assets to be held and used, management measures fair value based on quoted market prices or based on discounted estimates of future cash flows.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations and credit risk primarily consist of amounts due to related parties. The Company presently uses one vendor for all of its software development.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such asset will not be recovered.

At March 31, 2011 and 2010 the Company had net operating loss carry forwards of approximately $1,521,000 and $1,445,000 which begin to expire in 2026. The deferred tax asset of approximately $593,200 and $563,600 in 2011 and 2010 created by the net operating losses have been offset by a 100% valuation allowance. The change in the valuation allowance in 2011 and 2010 was $29,600 and $44,300.

2. Going Concern Uncertainty and Managements’ Plans

In the Company’s audited financial statements for the fiscal year ended December 31, 2010, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. The Company’s interim financial statements for the year ended December 31, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $113,737 for the year ended December 31, 2010, and an accumulated deficit of $2,416,215 as of December 31, 2010. As of March 31, 2011 the accumulated deficit is $2,413,384. At December 31, 2010, the Company’s total current liabilities exceed total current assets by $103,126. At March 31, 2011 this amount was $99,589.

The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.

3. Property and Equipment

The Company has incurred software costs in the development of its virtual world in the amount of $1,413,435 as of December 31, 2010. By March 31 this total had increased to $1,440,575. Per the discussion under “Software Costs” this amount has been expensed at this time.

4. Contracts Payable

During the year ended December 31, 2008, the Company entered into a Corporate Finance Advisory Services Agreement with Friedland Global Capital Markets, LLC (Friedland) the Agreement provides that the Company would pay a total of $190,000 for services as set forth in the Agreement. In July 2008, Friedland agreed to suspend payment of the fees until the completion of financing. These funds are non-interest paying and due on demand. During the year ended December 31, 2009 the Company made payments in the amount of $25,000 against this obligation. In the second quarter of 2010 the Company completed negotiations for the mutual release of all obligations under this contract with no further liability. The cancellation of the contract was treated as an additional contribution to Paid-in-Capital.

5. Advance Payable, Related Party

At December 31, 2009, the Company’s had working capital advances due to the Company’s majority shareholder, Adversor, Inc. (“Adversor”) of $117,470. These funds are non interest bearing and are due on demand. Also included in the Company’s $51,582 in accounts payable at end 2009 were $26,600 owed to Adversor. In 2009 the Company recorded consulting fees to Adversor of $26,600. At December 31, 2010 the Company had working capital advances due to Adversor of $161,272, also non-interest bearing and due on demand. At March 31, 2011 Adversor advances had increased to $162,372. Included in the Company’s $112,035 in the Company’s accounts payable at end 2010 were $106,013 owed to Adversor. In 2010 the Company recorded consulting fees to Adversor of $45,000.

6. Stockholders’ Deficiency

Common Stock

In October 2008, the Company entered into a Security Purchase Agreement (Security Purchase Agreement) with a third party, the Company received cash of $125,000 in exchange for 500,000 shares of restricted common stock and a warrant exercisable for 500,000 shares of the Company’s restricted common stock. The warrant has an exercise price of $0.80 per share and a term of three years. The shares were sold at a price of $0.25 per share with $0.24 per share allocated to the common stock and $0.01 per share allocated to the warrant. However, Sungame reversed its stock in Q1 2011, effective 11 January 2011, (See 8K dated 11 January 2011) and the resultant warrants are now priced at $32.00 per warrant with 12,500 warrants remaining outstanding, adjusted for the reverse split of 40:1. The exercise dates remain the same.

In October 2008, the Company entered into a Services Agreements with two parties. The Services Agreements provides for the Company to receive services totaling up to $625,000 in connection with the development of its website and gaming software to be paid for by the issuance of up to 2,500,000 shares of the Company’s common stock. During the year ended December 31, 2008, the Company issued 1,600,000 of these shares in exchange for services performed at that time totaling $400,000. The shares were issued at a price of $0.25 per share.

In October 2008, the Company issued 4,123,500 shares of its restricted common stock to its majority shareholder, Adversor, in exchange for their efforts in the settlement of $775,000 of outstanding accounts payable owed to an unrelated third party vendor. The shares were issued at a price of $0.188 per share.

In September 2008, the Company issued 1,373,000 shares of its restricted common stock to a director, Mr. Goss, of the Company as payment for services totaling $1,373,000. The shares were issued at a price of $0.10 per share.

In June 2008, the Company issued 902,000 shares of its restricted common stock to Friedland, in exchange for services totaling $50,000 provided under the Finance Advisory Services Agreement. The shares were issued at a price of $0.055 per share.

In March of 2009, pursuant to the Securities Purchase Agreement the Company received further cash of $125,000 in exchange for 500,000 shares of restricted common stock and a warrant exercisable for 500,000 shares of the Company’s restricted common stock. The warrant has an exercise price of $0.80 per share and a term of three years. The shares were sold at a price of $0.25 per share with $0.24 per share allocated to the common stock an $0.01 per share allocated to the warrant. The Company also issued 100,000 shares of its restricted common stock in exchange for consulting services valued at $25,000. However, Sungame reversed its stock in Q1 2011, effective 11 January 2011, (See 8K dated 11 January 2011) and the resultant warrants are now priced at $32.00 per warrant with 12,500 warrants remaining outstanding, adjusted for the reverse split of 40:1. The exercise dates remain the same.

In October of 2009, the Company issued 900,000 shares of its restricted common stock in exchange for consulting services valued at $225,000.

For clarification purposes, Adversor has been characterized as a holding company by nature. As fair and accurate depiction, Adversor owned a majority share of Sungame, and thus could be interpreted as a parent subsidiary relationship, particularly under accounting rules. However, Adversor was never intended to exert control over Sungame, and was intended to relinquish the stock, which it did, and therefore Sungame takes the founded position it was never a subsidiary, regardless of the classification for accounting purposes; although we do understand the source of confusion. We trust this adequately explains our position.

Warrants

At January 11, 2011, the following warrants to purchase common stock were outstanding:

Number of common shares covered by warrants	Exercise Price	Expiration Date

12,500	$32.00	October 2011
12,500	$32.00	March 2012
25,000

Other Capital Transactions

During the year ended December 31, 2010 the Company negotiated a settlement on a contract in the amount of $165,000 and was forgiven accounts payable in the amount of $17,376. The Company has treated such amounts as capital contributions and as such has increased Additional Paid in Capital by $182,376.

8. 8K Information filed

On November 3, 2010, the Company filed form 8K with the Securities and Exchange Commission (SEC) reporting the Company’s signing of a binding letter of intent with Freevi, Inc., a Nevada corporation and having their headquarters in Canada, to merge the two entities. Freevi, Inc. is a private corporation that is entering into the social networking business space, with acumen in multimedia.

This merger is proposed to be a “stock only” transaction. The Company will cause a reverse split in its outstanding shares of 1 new share for each 40 shares now outstanding. After this reverse split the shares will be exchanged on a 1 for 1 basis as this is considered to be the approximate fair value for each entity.

On January 10, 2011, The Company filed a form 8K with the SEC reporting the reverse split of the outstanding shares. In addition, the Company increased the authorized shares from 100,000,000 to 300,000,000.

Subsequent events

On April 15, 2011 The Company filed form 8K with the SEC reporting that the acquisition with Freevi has been completed. The Company issued 177,000,000 post reverse split shares to facilitate the transaction.

RONALD R. CHADWICK, P.C.

Certified Public Accountant

2851 South Parker Road, Suite 720

Aurora, Colorado 80014

Telephone (303)306-1967

Fax (303)306-1944

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Freevi Corporation

Las Vegas, Nevada

I have audited the accompanying balance sheet of Freevi Corporation (a development stage company) as of December 31, 2010, and the related statements of operations, stockholders' deficiency and cash flows for the period from October 21, 2010 (inception) through December 31, 2010. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Freevi Corporation as of December 31, 2010, and the results of its operations and its cash flows for the period from October 21, 2010 (inception) through December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements the Company has suffered a loss from operations and has a working capital deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Aurora, Colorado	Ronald R. Chadwick, P.C.
April 8, 2011	RONALD R. CHADWICK, P.C.

Freevi Corporation

(a development stage company)

Balance Sheet


	March 31, 2011			December 31, 2010
ASSETS:

Current Assets:
Cash and cash equivalents	$	3,584		$	10,650
Other receivable		8,844			0
Prepaid Expenses		2,725			225

TOTAL ASSETS	$	15,153		$	10,875

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:

Current Liabilities:
Accounts Payable	$	45,121		$	26,520
Accrued Liabilities		1,872			2,083
Due to Chandran Holding Media Inc		234,424			95,925

Total Current Liabilities		281,417			124,528

Stockholders' Deficiency:

Common Stock, par value, $.001 350,000,000 authorized with: 177,000,000 issued and outstanding		177,000			177,000
Deficit Accumulated During the Development Stage		(443,264	)		(290,653	)

Total Stockholders' Deficiency		(266,264	)		(113,653	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	15,153		$	10,875

Freevi Corporation

(a development stage company)

Statement of Operations

	For the three			For the period from
	months ended			October 21, 2010 (inception)
	March 31, 2011			to March 31, 2011

Revenue:	$	2,269		$	2,269

Costs and Expenses:
Software development		33,443			233,770
Compensation		95,395			115,310
Consulting and professional fees		8,571			89,202
Other general and administrative expenses		17,471			17,987
Total Costs and Expenses		154,880			456,269

Net Loss	$	(152,611	)	$	(443,264	)

Per Share Information
Loss per common share	$	(0.01	)	$	(0.01	)

Weighted average number of shares outstanding		177,000,000			177,000,000

Freevi Corporation

(a development stage company)

Statement of Cash Flows

				For the period from
	For the three months			October 21, 2010 (inception)
	ended March 31, 2011			to March 31, 2011

Net loss	$	(152,611	)	$	(443,264	)
Adjustments to reconcile net loss to net cash used by operating activities
Common stock issued for licensing agreement		- 0 -			165,000
Common stock issued for services		- 0 -			12,000
Increase in prepaid expenses		(2,500	)		(3,225	)
Increase of other receivables		(8,844	)		(9,344	)
Increase/decrease in accounts payable		18,601			44,871
Increase/decrease in accrued liabilities		(211	)		1,872
Net cash used by operating activities		(85,275	)		(244,591	)

Net cash used for investing activities		- 0 -			- 0 -

Cash flows from financing activities
Borrowings from Chandran Holding Media Inc		138,499			249,808
Net cash provided by financing activities		138,499			249,808

Net increase/decrease in cash and cash equivalents		(7,066	)		6,986
Beginning cash and cash equivalents		10,650			- 0 -
Ending cash and cash equivalents	$	3,504		$	6,986

	$	3,584.00
Noncash investing & financing activities
None

Cash paid for interest & income taxes:
None

Freevi Corporation

(a development stage company)

Statement of Stockholders' Deficiency



	Common		Common Stock Dollars		Deficit Accumulated During the			Stockholders'
	Shares		at $.001 Par		Development Stage			Deficiency

Balances at October 21, 2010 (Inception)		-0-	$	-0-	$	-0-		$	-0-

Shares to founders for services		12,000,000		12,000.00					12,000.00

Shares issued for Licensing arrangement		165,000,000		165,000.00					165,000.00

Net loss for the period from October 21 2010 (inception) to December 31 2010						(290,653	)		(290,653	)

Balances at December 31, 2010		177,000,000	$	177,000	$	(290,653	)	$	(113,653	)

Net loss for the three months ended March 31 2011						(152,611	)		(152,611	)

Balances at March 31,2011		177,000,000	$	177,000	$	(443,264	)	$	(266,264	)

Freevi Corporation

(a development stage company)

Notes to the Financial Statements

1.	Business and Summary of Significant Accounting Policies

Business

The accompanying financial statements include the accounts of Freevi Corporation (“the Company”) a Nevada corporation. The Company is an early development stage company that is a rich media platform revolving around its core product the “Freevi Flightdeck” tm, a graphical user interface that allows users to consume video and audio content, network with other Freevi users, engage in e-commerce transactions, and access games and other applications. Freevi’s proprietary technologies have been licensed from Chandran Holding Media Inc.

The Company was incorporated in Nevada on October 21, 2010. The Company’s fiscal year end is December 31.

Summary of Significant Accounting Policies

Development Stage Company

The Company is a development stage company as defined by ASC 915. The Company is devoting substantially all of its present efforts to establish new business. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

Risk and Uncertainties

Our business is rapidly evolving and intensely competitive, and is subject to changing technology, shifting user needs and frequent introductions of new products and services. We have many competitors in different industries, including traditional search engines, vertical search engines, e-commerce sites, social networking sites, traditional media companies, and providers of online products and services. Our current and potential competitors range from large and established companies to emerging start ups. Established companies have longer operating histories and more established relationships with customers and end users, and they can use their experience and resources against us in a variety of competitive ways, including by making acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites. Emerging start ups may be able to innovate and provide products and services faster than we can. If our competitors are more successful than we are in developing competing products or in attracting and retaining users, advertisers, and content providers, our revenues and growth rates could decline.

advertisements in an appropriate and effective manner. In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. If we are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would negatively harm our revenues and business.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America required management to make certain estimates and assumptions that affect the reported amounts and timing of revenue and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and assumptions are based on management’s future expectations for the Company’s operations. The Company’s actual results could vary materially from management’s estimates and assumptions.

Property and Equipment

Property and equipment, when acquired, will be stated at cost. Depreciation will be computed using the straight line method to allocate the cost of depreciable assets over the estimated useful lives of the assets.

Software Costs

The costs for internal use software, whether developed or obtained, are assessed to determine whether they should be capitalized of expensed in accordance with American Institute of Certified Public Accountants’ Statement (“SOP”) 98-1 “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Capitalized software costs are reflected as property and equipment on the balance sheet and are to be depreciated when the Company begins recording revenue the deemed date that the software is placed in service. As of the date of these financial statements the development of the software necessary to achieve the business purposes of the Company is in an undeterminable state causing the Company to deem the asset to be impaired. This conclusion required that the costs incurred to date be treated as expenses as opposed to the capitalizing of the software.

Start-up Costs

“Long-lived assets” are reviewed for impairment of value whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable at the end of each reporting period. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying value of an asset is not recoverable. For Long-lived assets to be held and used, management measures fair value based on quoted market prices or based on discounted estimates of future cash flows.

Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of an amount due to Chandran Holding Media Inc, a related party (see Note 4)

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carry amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measure using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for significant tax assets when it is more likely than not that such asset will not be recovered.

	March 31, 2011

Deferred tax assets at December 31, 2010	$	155,764
Valuation allowance		(155,764	)
Net deferred tax assets		-0-

2.	Going Concern Uncertainty and Management’s Plans

In the Company’s audited financial statements for the period from October 21, 2010 (inception) to December 31, 2010, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements for the three months ended March 31, 2011 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $152,611 for the three months ended March 31, 2011, and an accumulated deficit of $443,264 as at March 31, 2011. At March 31, 2011, the Company’s total current liabilities exceed total current assets by $266,264.

The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being take to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.

3.	Property and Equipment

The Company has incurred software costs in the development of its products in the amount of $33,443 for the three months ended March 31, 2011 per the discussion under “Software Costs” in Note 1 this amount has been expensed at this time.

4.	Advance Payable, Related Party

During the period from October 21, 2010 (inception) to March 31, 2011, the Company’s majority shareholder, Chandran Holding Media Inc (Chandran) advanced funds to the Company for operations. The Company and Chandran also share certain members of executive management and certain employees. At March 31, 2011, Chandran is owed $234,424. These funds are non-interest bearing and due on demand.

5.	Stockholders’ Deficiency

On October 21, 2010, the Company issued 12,000,000 of common stock to its founders for services rendered. On November 2, 2010, the Company entered into a license agreement with its related party, Chandran Holding Media Inc. for proprietary technologies. The Company issued 165,000,000 shares of common stock to Chandran for this licensing arrangement. Both of these equity transactions were valued at $.001 par value.

6.	Planned Merger

On November 3, 2010 the Company was named in a Form 8-K filed with the Securities and Exchange Commission (SEC) reporting the Company’s signing of a binding letter of intent with Sungame Corporation, a Delaware corporation and an early stage development corporation to merge the two entities. Sungame Corporation hopes to become a leader in providing seamless skill gaming in a virtual world. The merger is proposed to be a “stock only” transaction with the shares being exchanged on a 1 for 1 basis as this is considered to be the approximate fair value of each entity (Sungame Corporation will cause a reverse split in its outstanding shares of 1 new share for each 40 shares now outstanding prior to the merger being completed.)

Freevi Corporation

(a development stage company)

Balance Sheet

	December 31, 2010
ASSETS:

Current Assets:
Cash and cash equivalents	$	10,650
Prepaid Expenses		225

TOTAL ASSETS	$	10,875

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:

Current Liabilities:
Accounts Payable	$	26,520
Accrued Liabilities		2,083
Due to Chandran Holding Media Inc		95,925

Total Current Liabilities		124,528

Stockholders' Deficiency:

Common Stock, par value, $.001350,000,000 authorized with: 177,000,000 issued and outstanding		177,000
Deficit Accumulated During the Development Stage		(290,653	)

Total Stockholders' Deficiency		(113,653	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	10,875

Freevi Corporation

(a development stage company)

Statement of Operations


Revenue:		- 0 -

Costs and Expenses:
Software development		199,000
Compensation		13,841
Consulting and professional fees		77,381
Other general and administrative expenses		431
Total Costs and Expenses		290,653

Net Loss	$	(290,653	)

Per Share Information
Loss per common share	$	(0.01	)

Weighted average number of shares outstanding		151,436,620

Freevi Corporation

(a development stage company)

Statement of Cash Flows

Net loss	$	(290,653	)
Adjustments to reconcile net loss to net cash used by operating activities
Common stock issued for licensing agreement		165,000
Common stock issued for services		12,000
Increase in prepaid expenses		(225	)
Increase in accounts payable		26,520
Increase in accrued liabilities		2,083
Net cash used by operating activities		(85,275	)

Net cash used for investing activities		- 0 -

Cash flows from financing activities
Borrowings from Chandran Holding Media Inc		95,925
Net cash provided by financing activities		95,925

Net increase in cash and cash equivalents		10,650
Beginning cash and cash equivalents		- 0 -
Ending cash and cash equivalents	$	10,650


Noncash investing & financing activities
None

Cash paid for interest & income taxes:
None

Freevi Corporation

(a development stage company)

Statement of Stockholders' Deficiency



	Common		Common Stock Dollars		Deficit Accumulated During the			Stockholders'
	Shares		at $.001 Par		Development Stage			Deficiency

Balances at October 21, 2010 (Inception)		-0-	$	-0-	$	-0-		$	-0-

Shares to founders for services		12,000,000	$	12,000				$	12,000

Shares issued for Licensing arrangement		165,000,000	$	165,000				$	165,000

Net loss for the period from October 21 2010 (inception) to December 31 2010					$	(290,653	)	$	(290,653	)

Balances at December 31, 2010		177,000,000	$	177,000	$	(290,653	)	$	(113,653	)

Freevi Corporation

(a development stage company)

Notes to Financial Statements

1.	Business and Summary of Significant Accounting Policies

Business

The Company was incorporated in Nevada on October 21, 2010. The Company’s fiscal year end is December 31.

Summary of Significant Accounting Policies

Development Stage Company

Risk and Uncertainties

Our business is rapidly evolving and intensely competitive, and is subject to changing technology, shifting user needs and frequent introductions of new products and services. We have many competitors in different industries, including traditional search engines, vertical search engines, e-commerce sites, social networking sites, traditional media companies, and providers of online products and services. Our current and potential competitors range from large and established companies to emerging start ups. Established companies have longer operating histories and more established relationships with customers and end users, and they can use their experience and resources against us in a variety of competitive ways, including by making acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites. Emerging start ups may be able to innovate and provide products and services faster than we can. If our competitors are more successful than we are in developing completing products or in attracting and retaining users, advertisers, and content providers, our revenues and growth rates could decline.

We will generate our revenues almost entirely from advertising, and the reduction in spending by or loss of advertisers could seriously harm our business. Our advertisers will be able to terminate their contracts with us at any time. Advertisers will not continue to do business with us if their investment in advertising with us does not generate sales leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner. In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. If we are unable to remain competitive and provide value to our advertisers, they may stop placing ads with us, which would negatively harm our revenues and business.

Use of Estimates

Property and Equipment

Software Costs

Start-up Costs

Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of an amount due to Chandran Holding Media Inc, a related party (see Note 4)

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carry amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measure using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for significant tax assets when it is more likely than not that such asset will not be recovered.

Deferred tax assets at December 31, 2010	$	101,729
Valuation allowance		(101,729	)
Net deferred tax assets		-0-

2.	Going Concern Uncertainty and Management’s Plans

In the Company’s audited financial statements for the period from October 21, 2010 (inception) to December 31, 2010, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements for this period since inception have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $290,653 for the period of October 21, 2010 (inception) to December 31, 2010, and an accumulated deficit of $290,653 as of December 31, 2010. At December 31, 2010, the Company’s total current liabilities exceed total current assets by $113,653.

The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. Management believes that actions presently being take to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.

3.	Property and Equipment

The Company has incurred software costs in the development of its products in the amount of $199,000 as of December 31, 2010. Per the discussion under “Software Costs” in Note 1 this amount has been expensed at this time.

4.	Advance Payable, Related Party

During the period from October 21, 2010 (inception) to December 31, 2010, the Company’s majority shareholder, Chandran Holding Media Inc (Chandran) advanced funds to the Company for operations. The Company and Chandran also share certain members of executive management and certain employees. At December 31, 2010, Chandran is owed $95,925. These funds are non-interest bearing and due on demand.

5.	Stockholders’ Deficiency

6.	Planned Merger

Sungame Corporation

(A Development Stage Company)

Pro Forma Consolidated Financial Statements

December 31, 2010

SUNGAME CORPORATION AND FREEVI CORPORATION

Pro Forma Consolidated Balance Sheet

December 31, 2010

	Sungame			Freevi		Adjustments
	Corporation			Corporation		(See Notes)			Consolidated
Assets:
Cash	$	60		$	10,650				$	10,710
Accounts receivable and other		17,600								17,600
Prepaid expenses					225					225
Total current assets		17,660			10,875					28,535

Fixed Assets
Office equipment		2,140								2,140
Accumulated depreciation		(672	)							(672	)
		1,468								1,468
Total assets	$	19,128		$	10,875				$	30,003

Liabilities and Stockholders’ Deficiency
Current liabilities:
Accounts payable	$	112,035		$	26,520				$	138,555
Accrued liabilities					2,083					2.083
Due to Chandran Holding Media, Inc.					95,925					95,925
Credit cards payable		8,751								8,751
Loans payable - Stockholder		161,272								161,272
		282,058			124,528					406,586

Common stock, par value, .001, 350,000,000 shares authorized with 177,250,000 issued and outstanding		250					177,000	(1)		177,250
Paid-in-capital		2,153,035					(290,653	)		1,862,382
Accumulated deficit		(2,416,215	)							(2,416,215	)
Total Stockholders’ Deficiency		(262,930	)				(113,653	)		(376,583	)

Total Liabilities and Stockholders’
Deficiency	$	19,128		$	124,528	$	(113,653	)	$	30,003

SUNGAME CORPORATION AND FREEVI CORPORATION

Pro Forma Consolidated Statement of Operations

	Sungame Corporation			Freevi Corporation			Consolidated
	For the year ended December 31, 2010			For the period from October 21, 2010 (Inception) to December 31, 2010

Revenue:	$	50,112			-0-		$	50,112

Total Revenue		50,112			-0-			50,112

Costs and Expenses:
Software development		57,151			199,000			256,151
Compensation		-0-			13,841			13,841
Depreciation		420			-0-			420
Consulting and professional fees		45,000			77,381			122,381
Other general and administrative expenses		4,214			431			4,645
Startup costs		51,249			-0-			51,249

Total Expenses		158,034			290,653			448,687

Net Loss from Operations		(107,922	)		(290,653	)		(398,575	)

Other Income and (Expense)		(5,815	)		-0-			(5815	)

Net Loss	$	(113,787	)	$	(290,653	)	$	(404,390	)


Per Share Information:

Net Loss per share	$	(0.01	)	$	(0.01	)	$	(0.01	)

Weighted average number of shares outstanding		250,000			151,436,620			151,686,620

Sungame Corporation

(A Development Stage Company)

Note to Pro Forma Consolidated Financial Statements

December 31, 2010

Basis of Presentation

The following pro forma consolidated balance sheet as of December 31, 2010 and the pro forma consolidated statements of operation for the year ended December 31, 2010 between Sungame Corporation and Freevi Corporation are presented to show what effects the merger of Freevi Corporation into Sungame Corporation might have had on historical financial information had the transaction taken place on January 1, 2010. The pro forma consolidated financial statements are derived from the historical financials of Sungame Corporation and Freevi Corporation and assume that for balance sheet purposes the transaction took place on December 31, 2010, and for statement of operations purposes on January 1, 2010 with resulting effects through December 31, 2010. The pro forma consolidated financial statements should be read in conjunction with the historical financial information. The pro forma consolidated financial statements are not necessarily indicative of the result that would have been attained had the transaction actually taken place earlier.

Pro Forma Adjustments

Pro forma adjustments from the pro forma consolidated financial statements are referenced below:

(1)

Adjustment to account for the exchange of 177,000,000 shares of Sungame Corporation @ .001 per share for 177,000,000 shares of Freevi Corporation. Freevi Corporation had a stockholders’ deficiency of $113,653 at December 31, 2010. The management of Freevi Corporation believes their technology should be valued at $2 million. However, since they are a development state enterprise and still in a research and development mode, this amount has not been capitalized as an asset under purchase price accounting. Instead the net liabilities of Freevi Corporation have been recorded in purchase price accounting for this business combination as an offset against paid-in-capital.

Sungame Corporation

(A Development Stage Company)

Pro Forma Consolidated Financial Statements

March 31, 2011

SUNGAME CORPORATION AND FREEVI CORPORATION

Pro Forma Consolidated Balance Sheet

March 31, 2011

	Sungame			Freevi		Adjustments
	Corporation			Corporation		(See Notes)			Consolidated
Assets:
Cash	$	26		$	3,584				$	3,610
Accounts receivable and other		21,650			8,844					30,484
Prepaid expenses					2,725					2,725
Total current assets		21,676			15,153					36,829

Fixed Assets
Office equipment		2,140								2,140
Accumulated depreciation		(779	)							(779	)
		1,361								1,361
Total assets	$	23,037		$	15,153				$	38,190

Liabilities and Stockholders’ Deficiency
Current liabilities:
Accounts payable	$	112,035		$	45,121				$	157,156
Accrued liabilities					1,872					1,872
Due to Chandran Holding Media, Inc.					234,424					234,424
Credit cards payable		9,229								9,229
Loans payable - Stockholder		161,872								161,872
		283,136			281,417					564,553

Common stock, par value, .001, 350,000,000 shares authorized with 177,250,000 issued and outstanding		250					177,000	(1)		177,250
Paid-in-capital		2,153,035					(443,264	)		1,709,771
Accumulated deficit		(2,413,384	)							(2,413,384	)
Total Stockholders’ Deficiency		(260,099	)				(266,264	)		(526,363	)

Total Liabilities and Stockholders’ Deficiency	$	23,037		$	283,186	$	(268,033	)	$	38,190

SUNGAME CORPORATION AND FREEVI CORPORATION

Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2011

	Sungame Corporation			Freevi Corporation			Consolidated

Revenue:	$	31,150		$	2,269		$	33,419

Total Revenue		31,150			2,269			33,419

Costs and Expenses:
Software development		27,140			33,443			60,583
Compensation		-0-			95,395			95,395
Depreciation		107			-0-			107
Consulting and professional fees					8,571			8,571
Other general and administrative expenses					17,471			17,471
Startup costs		765			-0-			765

Total Expenses		28,012			154,880			182,892

Net Loss from Operations		3,138			(152,611	)		(149,473	)

Other income and (Expense)		(307	)		-0-			(307	)

Net Income (Loss)	$	2,831		$	(152,611	)	$	(149,780	)


Per Share Information:

Net income (loss) per share	$	0.01		$	(0.01	)	$	(0.01	)


Weighted average number of shares outstanding		250,000			177,000,000			177,250,000

Sungame Corporation

(A Development Stage Company)

Note to Pro Forma Consolidated Financial Statements

March 31, 2011

Basis of Presentation

The following pro forma consolidated balance sheet as of March 31, 2011 and the pro forma consolidated statements of operation for the three months ended March 31 2011 between Sungame Corporation and Freevi Corporation are presented to show what effects the merger of Freevi Corporation into Sungame Corporation might have had on historical financial information had the transaction taken place on January 1, 2011. The pro forma consolidated financial statements are derived from the historical financials of Sungame Corporation and Freevi Corporation and assume that for balance sheet purposes the transaction took place on March 31, 2011, and for statement of operations purposes on January 1, 2011 with resulting effects through March 31, 2011. The pro forma consolidated financial statements should be read in conjunction with the historical financial information. The pro forma consolidated financial statements are not necessarily indicative of the result that would have been attained had the transaction actually taken place earlier.

Pro Forma Adjustments

Pro forma adjustments from the pro forma consolidated financial statements are referenced below:

(1)

Adjustment to account for the exchange of 177,000,000 shares of Sungame Corporation @ .001 per share for 177,000,000 shares of Freevi Corporation. Freevi Corporation had a stockholders’ deficiency of $266,264 at the time of the merger. The management of Freevi Corporation believes their technology should be valued at $2 million. However, since they are a development state enterprise and still in a research and development mode, this amount has not been capitalized as an asset under purchase price accounting. Instead the net liabilities of Freevi Corporation have been recorded in purchase price accounting for this business combination as an offset against paid-in-capital.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation.

Statement Regarding Forward-Looking Information.

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations.

The following discussion should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

Statement Regarding Forward-Looking Information. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements, including, but not limited to, the availability and pricing of additional capital to finance operations.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The following discussion should be read in conjunction with our unaudited consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

Background and History

SunGame Corporation (“We,” “Us,” “Our”) was organized under the laws of the State of Delaware on November 14, 2006 as SunGame International, Inc. On November 17, 2006, we changed our name to SunGame Corporation. We are a Delaware corporation organized for the purpose of engaging in any lawful business with a current plan to engage in the internet virtual world space.

We are an early development stage company in the process of establishing a three dimensional, Virtual World communities. Leveraging the increasing popularity of online communities with this proprietary “virtual world”, we intend to capitalize on the ever increasing popularity of games. With an initial focus on casual and tournament based games, we will also offer visitors a broad spectrum of social activities including group chats, music download, media sharing, content creation, advertisements and other features designed to build the community and generate repeat traffic to the Virtual world.

In addition, we have the mission to become a leading supplier in social games and related services to the business-to-business segment, including customized social games, virtual worlds, virtual eWallets, cross platform solutions and social network branding. In that regard we have been focusing the development during the period on a Facebook based cross platform game for subagames.com by Wicked Interactive.

As each generation of computers become more powerful and affordable, and access to broadband internet increasingly available within the home, the game industry has become one of the most successful industries online. The most popular online game, World of Warcraft, a “Massively Multiplayer Online Role- Playing Game” or “MMORPG” enables over 1 million players from around the world to play simultaneously. Released in November 2004, it is estimated that World of Warcraft generated revenues in excess of $100 million in each of several different markets in its first year alone and recently announced it had signed its 10 millionth registered user. The potential for success in this sector has resulted in a perpetual delivery of new games to the market, much to the delight of the consumers, who seem to have a strong appetite for product.

The other component of the Virtual-World experience is the social networking aspect. The original web-based communities were formed to serve people with shared interests and activities, enabling them to communicate through message boards and email services. Relevant content is created and posted by the members. Within relatively short order, social networking revolutionized the way we communicate and share information on an everyday basis. Networks such as Facebook now boast over 500 million members, and the YouTube phenomenon is influencing the nature of presidential elections.

The next generation of the social network is set in a virtual world, members can create avatars to represent themselves and buy “real estate” which is then developed and customized to reflect their own personality and lifestyle. A number of successful Virtual Worlds are growing fast including Mindark’s Entropia and Club Penguin (bought by Disney for $350M, plus possible $350M earn out).

However, while people around the world participate in these communities every day, few social networks have been able to establish a successful business model. We intend to capitalize on the social networking, games and virtual world trends, providing users with a wide variety of games through various partners. At the Virtual World online community, the members can socialize, play games, share content, compete in tournament and buy virtual goods.

We will work to balance the more popular “standard” games such as bowling and golf, with original content created by independent game developers. Like many of the traditional gaming sites, ours has instituted an “outsourcing” strategy, allowing members of the community to develop the content -- for gamers, by gamers.

The developer friendly culture is expected to result in continual generation of original and challenging games to keep residents within the world.

Freevi Development

In addition to our game development efforts, we have been very active developing two specific solutions for Freevi Corporation during the period.

ViDirectory.com

During the three months ended March 31, 2011, we have developed ViDirectory, which is a complex Company Directory Service web environment.

It has a wide number of features, which are being launched in various releases.

The system was already developed by Freevi’s development resources (see Note 8 to the Financial Statements) and had reached Alpha launch, but after analysis from the SunGame Technical Team, the recommendation was to rewrite the service.

This, to ensure that the service would be able to manage a high number of users and to allow us to add various services which are defined below.

DealFreevi.Com

The Sungame technical team has further worked on the system support for the ViDirectory Dealer Campaign called DealFreevi.com.

This service consist of a dealer acquisition web site with application form and detailed information to the ViDirectory Dealer Program.

As soon as a prospective Dealer fills out the above form, the information is stored in a database and is in real time available in a browser based Administrative subsystem.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2011 (Q1 2010)

COMPARED TO THREE MONTHS ENDED MARCH 31, 2011 (Q1 2010)

Revenues

For the three months ended March 31, 2011 we generated revenue of $31,150 compared to $6,265 for the three months ended March 31, 2010. The increase of $24,885 was due to nonrecurring development work performed for a customer.

Operating Expenses

Operating expenses for the three months ended March 31, 2011 were $28,012 compared to $36,195 for the three months ended March 31, 2010. This net decrease of $8,183 was the result of the decrease of 18,253 of expenses attributable to start-up costs, on the one hand, and the increase of 10,032 in software development costs associated with the increase in revenue on the other hand

Interest Expense

We incurred interest expense of $307 for the three months ended March 31, 2011 as compared to $5,108 of interest expense for the three months ended March 31, 2010. This decrease in interest expense is attributable to no interest-bearing contracts payable outstanding during the three months ended March 31, 2011 versus $165,000 outstanding during the three months ended March 31, 2010.

Loss From Operations

Income from operations for the three months ended March 31, 2011 was $3,138 compared to a net loss from operations of ($29,930) for the three months ended March 31, 2010. The $33,068 decrease in net loss is directly attributable to the increase in revenue and decrease in operating expenses described above. As of March 31, 2011, we have an accumulated deficit of $2,413,384.

Net Loss Applicable To Common Stock

Net income applicable to Common Stock was $0.01 for the three months ended March 31, 2011 compared to a net loss per share of $0.01 for the three months ended March 31, 2010.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2011, we had cash on hand of $26 and total assets of $23,037; consisting of cash of $26, accounts receivable of $21,650 and net fixed assets of $1,361. At March 31, 2011, we had total current liabilities of $283,136; consisting of $112,035 of accounts payable, $9,229 of other payables, and a $161,872 loan payable to a stockholder. At March 31, 2011, we had a working capital deficit of $261,460.

During the three months ended March 31, 2011, cash used in operating activities was $634 compared to $40,163 during the three months ended March 31, 2010. During the three months ended March 31, 2011, net income of $2,831 were adjusted for a non-cash item consisting of $107 in depreciation. During the three months ended March 31, 2010, net losses of $35,038 were adjusted for non-cash items consisting of $69 in depreciation.

During the three months ended March 31, 2011 and March 31, 2010, we did not use or receive funds from investing activities. During the three months ended March 31, 2011, we increased our loan payable by $600 in financing activities. During the three months ended March 31, 2010, we increased our loan payable by $44,602 in financing activities.

In October 2008, we entered into a Security Purchase Agreement with a third party pursuant to which we received, in March 2009, cash of $125,000 in exchange for 500,000 shares of restricted common stock and a warrant exercisable for 500,000 shares of our restricted common stock. The warrant had an exercise price of $0.80 per share and a term of three years. The shares were sold at a price of $0.25 per share with $0.24 per share allocated to the common stock and $0.01 per share allocated to the warrant. However, Sungame reversed its stock in Q1 2011, effective 11 January 2011, (See 8K dated 11 January 2011) and the resultant warrants are now priced at $32.00 per warrant with 12,500 warrants remaining outstanding, adjusted for the reverse split of 40:1. The exercise date remains the same.

During the three months ended March 31, 2010, our majority shareholder, Adversor, Inc. advanced additional funds of $44,602 to support operations. During the year ended December 31, 2008, Adversor advanced additional funds of $98,740 to support operations. In 2008 Adversor contributed $107,109 to the Company's capital. During the year ended December 31, 2009, Adversor advanced an additional $7,470 to support operations. The balance owed to Adversor at March 31, 2010 is $162,072. The amounts owed are non-interest bearing and due on demand.

In October 2008, we entered into a Services Agreements with two parties. The Services Agreements provides for us to receive services totaling up to $625,000 in connection with the development of our system and gaming software to be paid for by the issuance of up to 2,500,000 shares of our common stock. During the year ended December 31, 2008, we issued 1,600,000 of these shares in exchange for services performed at that time totaling $400,000. The shares were issued at a price of $0.25 per share.

In October 2008, we issued 4,123,500 shares of our restricted common stock to our majority shareholder, Adversor, in exchange for their efforts in the settlement of $775,000 of outstanding accounts payable owed to an unrelated third party vendor. The shares were issued at a price of $0.188 per share.

In September 2008, we issued 1,373,000 shares of our restricted common stock to our director, Mr. Goss as payment for services totaling $137,300. The shares were issued at a price of $0.10 per share.

In June 2008, we issued 902,000 shares of our restricted common stock to Friedland, in exchange for services totaling $50,000 provided under the Finance Advisory Services Agreement. The shares were issued at a price of $0.055 per share.

We anticipate funding operations through private investments and loans made by our current shareholders and management, however, we have no commitments for such funding as of the date of this report. In addition, we anticipate generating revenue in the near future, however, we have no current commitments or contracts that could result in such revenue. Management will have complete discretionary control over the actual utilization of said funds and there can be no assurance as to the manner or time in which said funds will be utilized.

We foresee that we will need a minimum of $1,500,000 to fund our operations for the next 12 months as follows:

System Development and Integration	$	500,000
Professional Fees		125,000
Sales, Marketing, Strategic Partnerships		225,000
General & Administrative		500,000
Working Capital		150,000
Total	$	1,500,000

We will need substantial additional capital to support our proposed future operations. We have minimal revenues. We have no committed source for any funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties.

As a result of becoming a publicly reporting company with the SEC we will incur costs in connection with complying with the reporting requirements of the SEC. Such costs will include annual audits and those legal costs in connection with making filings with the SEC. We have accounted for such costs above in “Professional Fees” and “General & Administrative”.

Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations. Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the virtual world industry and therefore increase the risks associated with our operations due to lack of diversification.

We anticipate generating the vast majority of our revenues from our advertisers. Advertisers can generally terminate their contracts, at any time. Advertisers could decide to not do business with us if their investment in advertising with us does not generate sales leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner. If we are unable to remain competitive and provide value to advertisers, they may stop placing ads with us, which would negatively harm future revenues and business. In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Any decreases in or delays in advertising spending due to general economic conditions could delay or reduce our revenues or negatively impact our ability to grow our revenues.

In the event we are unable to achieve additional capital raising through future private or public offerings, we will limit operations to fit within our capital availability. In such event, we will probably seek loans for operating capital. We have not achieved any commitments for loans from any source. In any event our business can be operated with a skeleton staff and have limited advertising/marketing budget, which could cause us to remain unprofitable and eventually fail.

Going Concern

The independent registered public accounting firm's report on our financial statements as of December 31, 2010 and 2009 includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

We are dependent on raising additional equity and/or, debt to fund any negotiated settlements with our outstanding creditors and meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to be able to negotiate acceptable settlements with our outstanding creditors or fund our ongoing operating expenses. We cannot make any assurances that we will be able to raise funds through such activities.

Capital Resources

We have only common stock as our capital resource.

We have no material commitments for capital expenditures within the next year, however if operations are commenced, substantial capital will be needed to pay for participation, investigation, exploration, acquisition and working capital.

Need For Additional Financing

We do not have capital sufficient to meet our cash needs. We have not generated revenue and have minimal resources to conduct planned operations. We estimate that our monthly expenses to commence planned operations within the next 12 months are approximately $125,000 (approximately $1,500,000 per year). Thus, using currently available capital resources (the primary source of which is non-binding commitments and expectations from management and current shareholders), we expect to be able to conduct planned operations for a minimum period of 1-3 months. We are currently relying solely on current shareholders and management to provide the necessary funds to continue operations. We do not have any commitments for such funding from shareholders or management.

At the present time, we have not made any arrangements to raise additional cash. Management and current shareholders are expected, but have not committed, to provide the necessary working capital so as to permit us to conduct planned operations until such time as we have begun to generate revenue and/or have become sufficiently funded. However, if we do not begin to generate revenue or cannot raise additional needed funds, we will either have to suspend development operations until we do raise the funds, or cease operations entirely.

In addition, the United States and the global business community is experiencing severe instability in the commercial and investment banking systems which is likely to continue to have far-reaching effects on the economic activity in the country for an indeterminable period. The long-term impact on the United States economy and our operating activities and ability to raise capital cannot be predicted at this time, but may be substantial.

Critical Accounting Policies

We have identified the policies below as critical to its business operations and the understanding of our results from operations. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Conditions and Results of Operations where such policies affect our reported and expected financial results. Note that our preparation of this document requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of expenses during the reporting periods. There can be no assurance that actual results will not differ from those estimates. During the three months ended March 31, 2011, there were no significant changes in our critical accounting policies and estimates. You should refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2010 for a more complete discussion of our critical accounting policies and estimates.

Risks And Uncertainties

We operate in an emerging industry that is subject to market acceptance and technological change. Our operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging business, including the potential risk of business failure.

Software Costs

The costs for internal use software, whether developed or obtained, are assessed to determine whether they should be capitalized or expensed in accordance with American Institute of Certified Public Accountants' Statement (“SOP”) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Capitalized software costs are reflected as property and equipment on the balance sheet and are to be depreciated when we begin recording revenue the deemed date that the software is placed in service. As of the date of these financial statements the development of the software necessary to achieve the business purposes of our Company is in an undeterminable state causing us to deem the asset to be impaired. This conclusion requires that the costs incurred to date be treated as expenses as opposed to the capitalizing of the software.

Start-Up Costs

Off-Balance Sheet Arrangements

As of March 31, 20101 we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, that had been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we were engaged in such relationships.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31, 2011. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of such date, at a reasonable level of assurance, in ensuring that the information required to be disclosed by our company in the reports we file or submit under the Exchange Act is: (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission . Based on our evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, 2011. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting pursuant to temporary rules of the Securities and Exchange Commission.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any legal proceedings nor is any of Sungame property the subject of any pending legal proceedings.

Item 1A. Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.

Item 2. Unregistered Sales of Equity Securities

None.

However, it should be noted the Sungame Corp. and Freevi Corp. have successfully engaged in a business combination, with Sungame being the surviving entity, and there was a share exchange where Freevi shares were exchanged for Sungame shares, pursuant to the terms and conditions of the combination. [See 8K dated 15 April 2011]

See Item 5 for further disclosures of unregistered transactions in equity securities after the disclosure period.

Item 3. Defaults Upon Senior Securities

None

Item 4. Removed and Reserved.

Item 5. Other Information

The Board of Directors had held a meeting on 2 May 2011 and appointed Raj Ponniah as Secretary of Sungame Corp. with the understanding that his appointment coincide with the publication of this 10Q to save on costs. Mr. Ponniah currently is a Director of Sungame and recused himself from the vote, but accepted the appointment.

On 2 May 2011, The board of Directors authorized 25,000 for Mundial Financial Group, L.L.C. for investment banking services, and authorized the issuance of 300,000 shares to Marshal Shichtman and Associates, P.C. as a gratuity for services rendered.

Item 6. Exhibits

EXHIBIT
NUMBER	DESCRIPTION

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Section 302 (Sungame Corporation)
31.2	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Section 302 (Freevi Corporation)
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Sarbanes-Oxley Section 906

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.

By: /s/ Guy M. Robert

Name: Guy M. Robert

Title: Principal Executive Officer,

President and Chief Executive Officer,

Chief Financial Officer and Principal

Accounting Officer, Director

Date: May 19, 2011

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