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EX-32.1 - CERTIFICATIONS PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - Face Up Entertainment Group, Inc.f10q0311ex32i_gameface.htm
EX-31.1 - CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - Face Up Entertainment Group, Inc.f10q0311ex31i_gameface.htm



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C 20549
 
FORM 10-Q
 
x    QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2011

COMMISSION FILE NUMBER: 333-164651

GAME FACE GAMING, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)

Florida
 
27-1551007
(State or Other Jurisdiction of
Incorporation or Organization)
  
(I.R.S Employer Identification No.)

20 East Sunrise Highway
Valley Stream, New York 11581
(Address of Principal Executive Offices)

(516) 303-8100
(Issuer's Telephone Number, Including Area Code)

_________________
(Former address, if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months ( or for such shorter period that the registrant was required to submit and post such files) Yes ¨ No x .
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.
 
Large accelerated filer ¨
Accelerated filer ¨
   
Non- accelerated filer ¨
Small reporting company x

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of  May 18, 2011, 50,600,000 shares of common stock, $.001 par value per share, of the issuer were outstanding. 

Transitional Small Business Disclosure Format (check one): Yes ¨    No x

 
 
 

 
 

GAME FACE GAMING, INC.

 
INDEX
 
   
Page
     
PART I.
FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements (Unaudited)
 
     
 
Condensed  Balance Sheets
1
     
 
Condensed  Statements of Operations
2
     
 
Condensed  Statements of Stockholder's Equity
3
     
 
Condensed  Statements of Cash Flows
 4
     
 
Notes to Interim Condensed  Financial Statements
5
     
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
11
     
Item 4.
Controls and Procedures
12
     
PART II.
OTHER INFORMATION
13
     
Item 1.
Legal Proceedings
13
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
13
     
Item 3.
Defaults Upon Senior Securities
13
     
Item 4.
Submission of Matters to a Vote of Security Holders
13
     
Item 5.
Other Information
13
     
Item 6.
Exhibits
13
     
 
Signatures
14

 
 
 

 
 
Game Face Gaming, Inc.  
(f/k/a Intake Communications, Inc)  
(A Development Stage Company)  
Balance Sheets  
             
ASSETS
   
March 31,
   
December 31,
 
   
2011
   
2010
 
   
Unaudited
   
Audited
 
             
CURRENT ASSETS
           
 Cash and cash equivalents
  $ 155,820       584  
      Total current assets   $ 155,820       584  
                 
FIXED ASSETS
               
 Computer Hardware
    9,427       -  
                 
 OTHER ASSETS
               
 Intangible Assets
    100,000       -  
                 
 TOTAL ASSETS
  $ 265,247       584  
                 
                 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                 
LIABILITIES AND EQUITY
               
LIABILITIES
               
  Current Liabilities
               
  Accounts payable
  $ 2,500       3,000  
  Accrued Expenses
    1,660       -  
  Loan from officer
            3,000  
  Convertible notes payable
    175,000       -  
     Total Current Liabilities
    179,160       6,000  
                 
 TOTAL LIABILITIES
  $ 179,160     $ 6,000  
                 
 STOCKHOLDERS' EQUITY (DEFICIT)
               
  Capital Stock
               
    Authorized:
               
     250,000,000 common shares, $0.0001 par value
               
    Issued and outstanding shares:
               
     10,200,000 and 9,000,000 shares issued and outstanding at
               
     December 31, 2010 and December 31, 2009, respectively
  $ 3,287     $ 1,020  
  Additional paid in capital
    117,714       19,980  
  Deficit accumulated during the development stage
    (34,913 )     (26,416 )
  Total Stockholders' Equity (Deficit)
  $ 86,087     $ (5,416 )
                 
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 265,247     $ 584  
 
The accompanying notes are an integral part of these financial statements.
 
1

 
 
Game Face Gaming, Inc.  
(f/k/a Intake Communications, Inc)  
(A Development Stage Company)  
Statements of Operations  
                   
                   
               
For the Period
 
               
from Inception
 
               
December 24, 2009
 
   
For the three months ended
   
 to
 
   
March 31,
   
March 31,
   
March 31,
 
   
2011
   
2010
   
2011
 
                   
REVENUES
                 
White Label Solutions Contract
    105,000             105,000  
Cancellation of Debt Income
    2,416             2,416  
Interest Income
  $ 1     $ -     $ 1  
TOTAL REVENUES
    107,417               107,417  
                         
                         
EXPENSES
                       
Bank Service Charges
    150       150       372  
Filing Fee
            0       150  
Organizational Expense
            0       227  
SEC Filing Fee
            230       1,823  
Transfer Agent Fee
            0       2,030  
Consulting Services
    19,800               19,800  
Interest Expense
    1,167               1,167  
Miscellaneous
    339               339  
Payroll Expenses
    12,669               12,669  
Payroll Taxes
    1,525               1,525  
Promotions/Trade Show Expense
    20,645               20,645  
Software Development
    31,500               31,500  
Software Expense
    7,595               7,595  
Telephone Expense
    173               173  
Professional Fees
    20,351       4,693       42,316  
      115,915       5,073       142,331  
                         
Loss Before Income Taxes
    (8,498 )   $ (5,073 )   $ (34,914 )
                         
Provision for Income Taxes
    -       -       -  
                         
                         
Net Loss
    (8,498 )   $ (5,073 )   $ (34,914 )
                         
PER SHARE DATA:
                       
                         
Basic and diluted loss per common share
    (0.000 )   $ (0.000 )   $ (0.000 )
                         
Weighted Average Common shares outstanding     84,022,222       126,445,479       118,002,160  
                         
 
 
The accompanying notes are an integral part of these financial statements.
 
2

 
 
Game Face Gaming, Inc.  
(f/k/a Intake Communications, Inc)  
(A Development Stage Company)  
Statements of Stockholders' Equity (Deficit)  
                                     
                           
Deficit
       
                           
Accumulated
       
               
Additional
   
Stock
   
During the
       
   
Common Stock
   
Paid-in
   
Subscriptions
   
Development
       
 
 
Shares
   
Amount
   
Capital
   
Receivable
   
Stage
   
Total
 
                                     
Inception -December 24, 2009
    -     $ -     $ -     $ -     $ -     $ -  
                                                 
Common shares issued to Founder
                                               
for cash  at $0.001 per share
    117,000,000       900       8,100       (3,000 )     -       6,000  
(par value $0.0001) on 12/24/2009
                                               
                                                 
Loss for the period from inception on
                                               
December 24, 2009 to December 31, 2009
    -       -       -       -       (3,579 )     (3,579 )
                                                 
Balance - December 31, 2009
    117,000,000       900       8,100       (3,000 )     (3,579 )     2,421  
                                                 
Payment of Subscription Receivable
                            3,000               3,000  
                                                 
Loss for the quarter ended March 31, 2010
                                    (5,073 )     (5,073 )
                                                 
Balance - March 31, 2010
    117,000,000       900       8,100       -       (8,652 )     348  
                                                 
Common shares issued to Investors
                                               
for cash  at $0.01 per share
                                               
(par value $0.0001) on 5/26/2010
    15,600,000       120       11,880                       12,000  
                                                 
Loss for the quarter ended June 30, 2010
                                    (1,235 )     (1,235 )
                                                 
Balance - June 30, 2010
    132,600,000       1,020       19,980       -       (9,887 )     11,113  
                                                 
                                                 
Loss for the quarter ended September 30, 2010
                                    (13,034 )     (13,034 )
                                                 
Balance - September 30, 2010
    132,600,000       1,020       19,980       -       (22,921 )     (1,921 )
                                                 
                                                 
Loss for the quarter ended December 31, 2010
                                    (3,495 )     (3,495 )
                                                 
Balance - December 31, 2010
    132,600,000     $ 1,020     $ 19,980     $ 0     $ (26,416 )   $ (5,416 )
                                                 
Common shares cancelled by
                                               
the Corporation on 02/10/2011
    (104,666,667 )                                        
                                                 
Common shares issued to
                                               
Lemberg Consulting at $0.0001 per share
                                               
(par value $0.0001) for the contribution
                                               
of Intangible Assets on 02/22/2011
    22,666,667       2,267       97,733                      
100,000
 
                                                 
Loss for the quarter ended March 31, 2011
                                  $ (8,498 )   $ (8,498 )
                                                 
Balance - March 31, 2011
    50,600,000     $ 3,287     $ 117,713     $ -     $ (34,914 )   $ 86,086  
                                                 
 
 
The accompanying notes are an integral part of these financial statements.
 
3

 
 
Game Face Gaming, Inc.  
(f/k/a Intake Communications, Inc)
(A Development Stage Company)
Statements of Cash Flows
 
                   
               
For the Period
 
               
from Inception
 
               
December 24,
 
   
For the three months ended
   
2009 to
 
   
March 31,
   
March 31,
   
December 31,
 
   
2011
   
2010
   
2010
 
                   
OPERATING ACTIVITIES
                 
                   
    Net loss
  $ (8,498 )     (5,073 )     (34,914 )
                         
    Changes in Operating Assets and Liabilities:
                       
     Increase (decrease) in Accounts payable and accrued liabilities
    1,161       1,114       4,161  
    Net cash used in operating activities
    (7,337 )     (3,959 )     (30,753 )
                         
INVESTMENT ACTIVITIES
                       
    Computer Hardware Purchased for cash
  $ (9,427 )             (9,427 )
    Net cash provided by investment activities
    (9,427 )             (9,427 )
                         
FINANCING ACTIVITIES
                       
    Common stock issued for cash
    -       3,000       21,000  
    Proceeds from issue of Convertible notes
    175,000               175,000  
    Loan from officer
  $ (3,000 )             -  
    Net cash provided by financing activities
    172,000       3,000       196,000  
                         
INCREASE IN CASH AND CASH EQUIVALENTS
    155,236       (959 )     155,820  
                         
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    584       6,000       -  
                         
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 155,820       5,041       155,820  
                         
                         
Supplemental Cash Flow Disclosures:
                       
                         
    Cash paid for:
                       
     Interest expense
  $ -       -       -  
     Income taxes
  $ -       -       -  
Non cash transactions:
                       
    Intangible assets purchased with common stock
  $ 100,000             $ 100,000  
                         
 
 
The accompanying notes are an integral part of these financial statements.
 
4

 
 
GAME FACE GAMING, INC.
(F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)
 
 
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
 
Game Face Gaming, Inc. (f/k/a Intake Communications, Inc.) the Company is a development stage company, incorporated in the State of Florida on December 24, 2009 looking to provide the activity of playing games with the ability to interact with real users in real-time. We expect to update the provisional patent as we add games to our platform. Our software is designed in ASP.Net 2 and Flash, and the database is built in MS SQL and Flash Media Server. Utilizing this approach, we hope to provide video streaming and voice quality capabilities to more than 1 million players at one time. Because our infrastructure exists on cloud based technology, our platform enables rapid and immediate response to higher demand. Our first game offering will be poker.  Poker was selected as the Company’s inaugural game product because our platform and technology (live, interactive video and chat) will enable players to see and speak to each other in real-time. Our technology will allow play not merely based on the cards being held in hand but also using the skill required to see and read the opponent’s face; the proverbial ‘poker face’. We hope to offer people the opportunity to participate in tournaments, which are the ultimate poker players' thrill. A tournament is a poker game in which each player starts with an equal amount of chips. All of the players in the tournament continue to play until one player has amassed all of the chips
 
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Accounting Basis

The Company is currently a development stage enterprise reporting under the provisions of FASB ASC 915, Development Stage Entity. These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Cash and Cash Equivalents

Cash and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased.

Earnings (Loss) per Share
 
The Company adopted FASB ASC 260, Earnings per Share. Basic earnings (loss) per share is calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There were no diluted or potentially diluted shares outstanding for all periods presented.
 
 

 
5

 



GAME FACE GAMING, INC.
  (F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)
 
NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)

 
Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the period shown, and none are contemplated in the near future.
 
Income Taxes

The Company adopted FASB ASC 740, Income Taxes, at its inception. 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. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply 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. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of March 31, 2011.

Advertising
 
The Company will expense advertising as incurred. Since inception, the advertising dollars spent have been $0.00.

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 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

 Revenue Recognition

The company adopted the following  revenue recognition guidelines.

Sale of subscriptions

Revenue from sale of subscriptions is recognized when the following conditions are satisfied:
* The user properly registered with the website of the Company, and provided the Company with a valid proof of identity and address. Furthermore the Company had set up a valid user account for the user;
* The amount of revenue can be measured reliably;
* The costs incurred or to be incurred in respect of the transaction can be measured reliably.


 
6

 

GAME FACE GAMING, INC.
  (F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)
 
NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)


Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable.

Whitepaper Solution income
 
Revenue from sale of Whitepaper Solutions is recognized when the following conditions are met:
* The contract for the solutions clearly specifies the price and payment options with the transfer of ownership;
* The Company is reasonably expected to complete the project in the time frame that the contract sets forth;
* As the milestones set forth in the contract are met, the Company will recognize revenue as set forth in the contract;
* As set forth in the contract the amount of revenue can be measured reliably;
* There is a reasonable belief that buyer is expected to pay the whole amount as the milestones are met.

Property

The Company does not own any real estate or other properties. The Company's office is located 20 East Sunrise Highway, Suite 202, Valley Stream, NY 11581. Our contact number is 516-303-8118. The business office is located at the office of one of our consultants at no charge.

Property and Equipment
 
Property and equipment is stated at cost.  Depreciation and amortization expense is computed using principally accelerated methods over the estimated useful life of the related assets ranging from 3 to 7 years. When assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of operations.
 
The Company recognizes an impairment loss on property and equipment when evidence, such as the sum of expected future cash flows (undiscounted and without interest charges), indicates that future operations will not produce sufficient revenue to cover the related future costs, including depreciation, and when the carrying amount of the asset cannot be realized through sale. Measurement of the impairment loss is based on the fair value of the assets.
 
Impairment of Long-Lived Assets
 
The Company assesses long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. Recoverability of asset groups to be held and used in measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group.  If the carrying amount exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds the fair value of the asset group. The Company evaluated its long-lived assets and no impairment charges were recorded for any of the periods presented.
 

 
7

 

GAME FACE GAMING, INC.
  (F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)
 
NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)


 
NOTE 3. INCOME TAXES:
 
The Company provides for income taxes under the provisions of FASB ASC 740, Income Taxes. FASB ASC Topic 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.

ASC Topic 718 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company's opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset.

The components of the Company's income tax expenses at March 31, 2011 are as follows:
 
   
Year Ended December 31, 2010
 
Deferred Tax Asset
 
$
32,413
 
Valuation Allowance
 
$
(32,413
)
Current Taxes Payable
   
-
 
Income Tax Expense
   
-
 
 
At March 31, 2011, the Company had estimated net loss carry forwards of approximately $32,000 which expires through its tax year ending 2030. Utilization of these net operating loss card forwards may be limited in accordance with IRCD Section 3.82 in the event of certain shifts in ownership.

NOTE 4. STOCKHOLDERS' EQUITY

Common Stock
 
On December 24, 2009, the Company issued 117,000,000 of its $0.0001 par value common stock at $0.001 per share for $6,000 cash and $3,000 in a subscription receivable to the founder of the Company. The issuance of the shares was made to the sole officer and director of the Company and an individual who is a sophisticated and accredited investor, therefore, the issuance was exempt from registration of the Securities Act of 1933 by reason of Section 4 (2) of that Act.

On May 26, 2010 the Company issued 15,600,000 shares of common stock to investors in accordance with Form S-1 for cash in the amount of $12,000.

On February 22, 2011 the Company issued 22,666,667 shares at $0.0001 par value  to Lemberg Consulting for their intellectual property and pending patents.
 
 
 
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GAME FACE GAMING, INC.
  (F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)
 
NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)

There are 250,000,000 Common Shares at $0.0001 par value authorized with 50,600,000 shares issued and outstanding at March 31, 2010.

On January 6, 2011, the Board of Directors and majority shareholder of the Company approved an amendment to the Company’s Articles of Incorporation (the “Amendment”) to (i) affect a 13 for 1 forward stock split of the Company’s issued and outstanding common stock in the form of a dividend.  Accordingly there were 10,200,000 pre-split common shares and following the forward split there were 132,600,000 common shares issued and outstanding.  All share amounts, including those stated above, have been adjusted to reflect the forward split. On February 10, 2011, Ron Warren, the principal shareholder and sole officer and director of the Company cancelled 104,666,667 of his own shares, and on February 22, 2011 the Company issued an additional 22,666,667 shares in an intangible asset purchase. As of March 31, 2011 there are 50,600,000 shares outstanding.

NOTE 5. RELATED PARTY TRANSACTIONS

The officers and directors of the Company are involved in business activities outside of the company and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.
 
NOTE 6. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the period December 24, 2009 (date of inception) through March 31, 2011 the Company has had a net loss of $32,413. As of March 31, 2010, the Company has not emerged from the development stage. In view of these matters, recoverability of any asset amounts shown in the accompanying financial statements is dependent upon the Company's ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities from the sale of equity securities, and obtaining loans. The Company intends on financing its future development activities and its working capital needs largely from loans and the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations, if ever, are sufficient to fund working capital requirements.
 
 NOTE 7. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The company has adopted all recently issued accounting pronouncements.  The Adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

NOTE 8. CONCENTRATIONS OF RISKS

Cash Balances
 
The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured institutions were insured up to at least $250,000 per depositor until March 31, 2011. On April 1, 2011, FDIC deposit insurance for all deposit accounts, except for certain retirement accounts, returned to $100,000 per depositor. Our cash balance at March 31, 2011 was below the FDIC insurance threshold.

 
9

 

GAME FACE GAMING, INC.
  (F/K/A INTAKE COMMUNICATIONS, INC.)
(A Development Stage Company)
 
NOTES TO FINANCIAL STATEMENTS
(MARCH 31, 2011)


Note 9. CONVERTIBLE NOTES PAYABLE
 
In connection with certain Bridge notes offered by the Company in the first quarter of 2011, subscribers have the right anytime after 60 days of their issuance, to convert all or a part of their Notes into common stock. Every dollar may be converted at the greater of $0.25/share or 50% of the average closing price of the shares as quoted on the OTCBB. As of March 17, 2011, the Company’s shares are not yet quoted on the OTCBB and none of the Note holders have elected to convert their shares into common stock. Were each holder to convert their loans into shares at the lowest possible price of $0.25, the Company would be required to issue a total of 700,000 shares of common stock.
 
NOTE 10. INTANGIBLE ASSETS
 
On February 22, 2011, the Company, acquired from Lemberg Consulting an intangible asset worth $100,000 in a non-cash transaction for 22,666,667 shares of the Company. Since this was a non-cash transaction, it was not recorded in the Cash Flow statement prepared by the management.
 
NOTE 11. SUBSEQUENT EVENTS
 
 We evaluated subsequent events through the date and time our financial statements were issued.
 

 
  
 
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GAME FACE GAMING, INC.
 

ITEM 2.
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report and reports included herein by reference. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, and (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.
 
Plan of Operation

We are in the business of operating a non-wagering, non-games of chance (such as chess, poker, and backgammon), multi-platform, multiplayer and social software company. The Company seeks to develop, market and operate a non wagering internet gaming website by incorporating proprietary technologies that will provide players with streaming video, audio and messaging capabilities. We believe that these enhancements will dramatically enhance the players’ online gaming experiences. Management is not aware of any online games sites which offer players the ability to see one another and speak live during game play.
 
Results of Operations

Comparison of Three  Months Ended March 31, 2011 and 2010:

Revenues

During the three months ended March 31, 2011, we generated revenues of $107,417 consisting of $105,000 as a result of the execution and delivery of two license agreements and the balance as a result of cancellation of debt and interest income. We did not generate any revenues during the three months ended March 31, 2010.

Selling, general and administrative expenses
 
Our selling, general and administrative expenses for the three months ended March 31, 2011 increased by $110,842, or 2,184%, to $115,915, as compared to selling, general and administrative expenses for the three months ended March 31, 2010 of $5,073. These expenses are comprised mainly of software development costs($31,500), trade show expense($20,645), consulting expenses ($19,800) and payroll expenses ($12,669).

Net loss
 
As a result of the foregoing, for the three months ended March 31, 2011, net loss was  $8,498.
 
 
 
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LIQUIDITY AND CAPITAL RESOURCES
 
On March 31, 2011, our working capital deficiency was $23,340, compared to a working capital deficiency of $5,416 on December 31, 2010. We had a stockholders’ deficiency of  $5,416  at December 31, 2010. The increase in working capital and stockholders' deficiency was due to the issuance of $175,000 of bridge loans to three investors during the quarter ended March 31, 2011.

We will require additional capital to develop and expand our gaming platform from beta testing to a full launch. We estimate that within the next 12 months we will need approximately $1,000,000 to make our site live, market the site to obtain members and generate revenues from members.

Current cash on hand is insufficient for all of the Company’s commitments for the next 12 months. We anticipate that the additional funding that we require will be in the form of equity financing from the sale of our common stock.  However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our convertible debentures to fund additional development and expansion of our gaming platform from beta testing to a full launch.  Although we are offering up to $300,000 of convertible notes, there is no assurance we will be successful in selling all such notes.  We believe that any other debt financing will not be an alternative source of fund to make our site live, market the site to obtain members and generate revenues from members.  The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as we are able to generate revenues.  We do not have any arrangements in place for any future equity financing.

We cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures.
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities as of the date of the financial statements and during the applicable periods. We base these estimates on historical experience and on other factors that we believe are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and could have a material impact on our financial statements.   

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations or liquidity.
 
ITEM 4. CONTROLS AND PROCEDURES

A. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:
 
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act are accumulated and communicated to management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") , as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon and as of the date of that evaluation, the CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act are recorded, processed, summarized and reported as and when required.

B. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:

There were no changes in our internal controls over financial reporting during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
 

 
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PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None.
 
ITEM 6. EXHIBITS

(a) Exhibits:

31.1 Rule 13a-14(a)/15d-14(a) Certification (CEO)

32.1 Section 1350 Certification (CEO)

 
 
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SIGNATURES
 
In accordance with the requirements of Section 13 or 15(d) of the Securities Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  May 19,  2011
By:
/s/ Felix Elinson
   
Name: Felix Elinson
   
Title: President and Chief Executive Officer
          (Principal Executive, Financial and Accounting Officer)
     
 
 
 
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