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EX-31.2 - CERTIFICATION - InterAmerican Gaming, Inc.iagm_ex312.htm
EX-32.1 - CERTIFICATION - InterAmerican Gaming, Inc.iagm_ex321.htm
EX-32.2 - CERTIFICATION - InterAmerican Gaming, Inc.iagm_ex322.htm
EX-31.1 - CERTIFICATION - InterAmerican Gaming, Inc.iagm_ex311.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
 
FORM 10-Q
 
þ
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
   
For the Quarterly Period Ended March 31, 2011
   
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 
For the transition period from ______________ to ________________
 
Commission File No. 000-31639
 
INTERAMERICAN GAMING, INC.
(Exact Name of Registrant as Specified in Its Charter)

 Nevada
 
88-0436364
(State or Other Jurisdiction of  Incorporation)
 
(I.R.S. Employer Identification No.)
 
3565 King Road, Suite 102
King City, Ontario Canada L7B 1M3
 (Address of Principal Executive Offices)
 
(905) 833-9846
(Registrant’s Telephone Number, Including Area Code)
 
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 o No þ
 
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 þ

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 file
o
Non-accelerated filer     
o
Smaller reporting company
þ
(Do not check if a smaller reporting company)      
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes þ No o
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
The number of shares of common stock outstanding as of March 1, 2013: 169,944,901.
 


 
 

 
 
Explanatory Note
 
InterAmerican Gaming, Inc. (the “Company”) is filing this Quarterly Report on Form 10-Q for the period ended March 31, 2011 as part of a process by which the Company intends to remediate a number of delinquent periodic reports which were not filed by the Company for the fiscal periods ending March 31, 2010 until the present.  It is the Company’s intention to remediate and file all of its delinquent periodic filings with the U.S. Securities and Exchange Commission as soon as reasonably possible.
 
 
 
 
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Consolidated Balance Sheets
 
ASSETS
 
   
March 31,
 2011
   
September 30,
2010
 
Current assets
           
Cash and cash equivalents
  $ -     $ 30  
Total current assets
    -       30  
Total assets
  $ -     $ 30  
                 
LIABILITIES
 
Current liabilities
               
Bank overdraft
  $ 119     $ -  
Due to related parties (Note 3)
    654,319       618,460  
Accounts payable
    199,549       197,562  
Accrued liabilities
    25,222       20,000  
Liabilities of discontinued operations
    31,678       31,678  
Total current liabilities
    910,887       867,700  
Total liabilities
  $ 910,887     $ 867,700  
                 
STOCKHOLDERS’ (DEFICIT) EQUITY
 
Common stock, $.00001 par value; 200,000,000 shares authorized, 67,868,234 shares issued and outstanding (September 30, 2010:67,868,234) (Note 5)
  $ 679     $ 679  
Additional paid-in capital
    9,631,633       9,631,633  
Accumulated deficit
    (10,543,199 )     (10,499,982 )
Total stockholders’ (deficit) equity
    (910,887 )     (867,670 )
Total liabilities and stockholders’ (deficit) equity
  $ -     $ 30  

 
INTERAMERICAN GAMING, INC. AND SUBSIDIARIES
For the Three and Six Months Ended March 31, 2011 and 2010

   
Three Months Ended
March 31,
2011
   
Three Months Ended
March 31,
2010
   
Six Months Ended
March 31,
2011
   
Six Months Ended
March 31,
2010
 
Expenses
                       
Management fees – related party
  $ -     $ 12,600     $ -     $ 75,940  
Professional fees
    2,611       7,119       5,223       12,342  
General and administrative
    1,250       3,721       4,419       9,701  
Impairment of assets (Note 8)
    -       16,049       -       16,049  
Total expenses
    3,861       39,489       9,642       114,032  
Net (loss) before other expenses
    (3,861 )     (39,489 )     (9,642 )     (114,032 )
Other expense (gain):
                               
Foreign currency (gain) loss
    14,647       19,413       33,575       29,111  
Total other expenses
    14,647       19,413       33,575       29,111  
                                 
(Loss) before income taxes
    (18,508 )     (58,902 )     (43,217 )     (143,143 )
Provision for income taxes
    -       -       -       -  
(Loss) from continuing operations
    (18,508 )     (58,902 )     (43,217 )     (143,143 )
(Loss) from discontinued operations
    -       (297,461 )     -       (322,041 )
Net (loss)
  $ (18,508 )   $ (356,363 )   $ (43,217 )   $ (465,184 )
Net (loss) per share - continuing operations - basic and diluted
  $ (0.0003 )   $ (0.0009 )   $ (0.0006 )   $ (0.0021 )
Net (loss) per share - discontinued operations - basic and diluted
  $ (0.0000 )   $ (0.0044 )   $ (0.0000 )   $ (0.0047 )
Net (loss) per share
  $ (0.0003 )   $ (0.0053 )   $ (0.0006 )-   $ (0.0069 )
                                 
Weighted average number of common shares outstanding during the year – basic and diluted
    67,868,234       67,868,234       67,868,234       67,868,234  

 
INTERAMERICAN GAMING, INC. AND SUBSIDIARIES

   
For the Six
months ended March 31,
2011
   
For the Six
months ended March 31,
2010
 
Operating activities
           
Net (loss) from continuing operations
  $ (43,217 )   $ (143,143 )
Items not involving cash:
               
Impairment of assets
    -       16,049  
Changes in operating assets and liabilities:
               
Increase (decrease) in accounts payable
    1,987       (1,147 )
Increase (decrease) in accrued liabilities
    5,222       (1,725 )
Net cash provided by (used in) operating activities
    (36,008 )     (129,966 )
Financing activities
               
      Bank Overdraft
    119       115  
      Increase in due to/from related parties
    35,859       129,851  
Net cash provided by (used in) financing activities
    35,978       129,966  
                 
                 
Increase (decrease) in cash from continuing operations
    (30 )     -  
Increase (decrease in cash from discontinuing operations
    -       (15,643 )
Increase (decrease) in cash
    (30 )     (15,643 )
Cash and cash equivalents, beginning of year
    30       15,643  
                 
Cash and cash equivalents, end of year
  $ -     $ -  
                 
Supplemental Information
               
Interest paid
    -       -  
Income tax paid
    -       -  
 
Non cash activities:
 
During the six months ended March 31, 2011 and 2010 the Company had no non-cash activities.

 
INTERAMERICAN GAMING, INC. AND SUBSIDIARIES
March 31, 2011
 
1.        Nature of Business and Basis of Presentation

The Company was incorporated on September 2, 1999 in the State of Nevada as LMC Capital Corp. and was organized for the purpose of creating a corporate vehicle to locate and acquire an operating business.  On December 12, 2001, the Company changed its name to K-Tronik International Corp. ("KTI").

By the agreement dated November 29, 2001 and approved by the board of directors effective December 12, 2001, KTI issued 14,285,714 shares of restricted common stock to the shareholders of K-Tronik Int'l Corporation, a Nevada corporation, in exchange for 100% interest in K-Tronik Asia Corporation ("KTA"), a Korean corporation.  In connection with this transaction, K-Tronik Int'l Corporation changed its name effective December 12, 2001 to K-Tronik N.A. Inc. ("KTNA").

The acquisition resulted in the former shareholders of KTNA acquiring 93.4% of the outstanding shares of KTI and has been accounted for as a reverse acquisition with KTNA being treated as the accounting parent and KTI, the legal parent, being treated as the accounting subsidiary.  Accordingly, the consolidated results of operations of KTI included those of KTNA for all periods shown and those of the KTI since the date of the reverse acquisition.

KTNA and KTA were engaged in the manufacture and distribution of various types of electronic stabilizers and illuminator ballasts for fluorescent lighting fixtures.  KTNA granted credit, on an unsecured basis, to distributors and installers located throughout the United States.

On December 15, 2004, KTI entered into an agreement to sell all of its interest in KTNA and the fixed assets of its subsidiary, KTA.  KTI is no longer engaged in the business of manufacturing, distributing or selling electronic ballasts and is considered to have re-entered the development stage at December 15, 2004.

On June 13, 2006, KTI announced it would implement a new corporate strategy focusing on horseracing track development opportunities.  An agreement was signed on June 19, 2006 to buy exclusive rights for a racetrack and casino (racino) development opportunity in Saskatchewan, Canada.  As part of the new strategy the Company incorporated 6584292 Canada Inc. under which it would operate the new development opportunity.  On July 5, 2006, KTI changed its name to Racino Royale, Inc. (“RR”) to reflect its intention to engage in the business of owning or leasing race-courses and/or conduct horse-races.

On January 28, 2008, the Company acquired all of the issued and outstanding shares of InterAmerican Gaming Corp. (“InterAmerican”) a private casino management company focused on Latin America. InterAmerican provides experience in the Latin American gaming markets with specialization in implementing technology, systems and marketing programs.
 
On June 19, 2008, the Company formed a new subsidiary called IAG Peru S.A.C. (“IAG Peru”) to begin to organize the development of certain Peruvian opportunities. IAG Peru is 99% owned by InterAmerican Operations, Inc. and 1% by InterAmerican Gaming, Inc.

On October 20, 2008, Racino Royale, Inc. changed its name to InterAmerican Gaming, Inc. (“IAG” or the “Company”) to better reflect its business direction to invest in Latin American horseracing and gaming opportunities.

During the 2008 fiscal year, the Company leased video lottery terminal slot machines from a related party and began deploying the assets in non-owned gaming locations. In 2009, the Company installed slot machines at Fantasy Club Del Peru SA (“Fantasy”) locations, operating under various brands throughout the country: “Slot City” in Chiclayo, “Colibri Dorado” in Chincha and “Monos Dorados” in Huacho and Huaral.


Recent Developments

During fiscal 2010, the Company made the decision to step back from gaming operations.  During the second quarter the Company began moving the slot machines into storage and by the end of the third quarter the Company no longer had machines installed in any casinos.

On August 30, 2010, the Company entered into a settlement agreement with the related party, by virtue of common officers and directors, which held the lease on the slot machines resulting in the disposition of the assets and liabilities associated with the gaming operations.

On October 3, 2011, the Company entered into a settlement agreement with Gamecorp Ltd. (“Gamecorp”) a related party by virtue of common officers and directors, in which the Company transferred 10,000,000 of its common shares and 100% of its shares of IAG Peru to extinguish $457,875 in liabilities.

On October 3, 2011, the Company executed a share exchange agreement with NowPhit and its shareholders (the “Share Exchange”) pursuant to which the Company purchased 80.1% of NowPhit in exchange for 77,800,000 of the Company’s common shares valued at $240,000.

On October 21, 2011, the Company settled amounts of $106,262 owing to directors, officers and consultants with 2,500,000 common shares.

On January 30, 2012, NowPhit changed its name to SoFit Mobile Inc. (“SoFit”), short for Social Fitness, as it was determined to better reflect the business of the Company’s subsidiary.

On April 17, 2012, the Company closed an equity financing of $400,000 at a price of $0.02 per share for a total issuance of 20,000,000 shares.  The equity financing was completed on a non-brokered basis and no warrants or options were issued. The proceeds of the financing are being used to advance the Company's SoFit platform and for general corporate purposes.

On June 13, 2012, the Company closed its second equity financing of $225,000 at a price of $0.03 per share for a total issuance of 7,500,000 shares. The equity financing was completed on a non-brokered basis and no warrants or options were issued. The proceeds of the financing were being used to complete the commercialization of the SoFit platform, to execute SoFit’s summer 2012 launch strategy, and for general corporate purposes to update IAG’s financial reporting and accounting.

On September 30, 2012, the Company settled $4,000 in accounts payable, owing to unrelated parties with 133,333 common shares of the Company.  These shares have not yet been issued.

On September 30, 2012, the Company entered into a settlement agreement with a former consultant to settle fees and expenses in the amount of $16,445 with 774,710 common shares of the Company. These shares have not yet been issued.

On October 11, 2012, Mr. John Ryan was appointed to the Board of Directors.

On October 31, 2012, two consultants of the Company exercised their options, purchasing 1,750,000 common shares and 1,442, 222 common shares at $0.02 and $0.03 respectively. These options were granted in fiscal 2012. These shares have not yet been issued.

SoFit products include integrated mobile applications and complementary wireless devices that enable athletes to track, train, and compete with each other in real-time via the SoFit platform. Athletes can earn virtual rewards, such as trophies and medals, as well as real-life rewards, such as location-based coupons and special offers. The SoFit platform also features a charity and event function that allows athletes to raise donations for a charity of their choice and remotely compete in athletic events from anywhere around the world in real-time.  The SoFit mobile applications were launched in July 2012.

 
Going Concern
 
The accompanying consolidated financial statements have been prepared on a going concern basis, in accordance with accounting principles generally accepted in the United States of America.
 
The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and contingencies in the normal course of operations.
 
There is substantial doubt about the Company's ability to continue as a going concern as it has a working capital deficit of $910,887 and an accumulated deficit of $10,543,199 as at March 31, 2011.  The Company's ability to continue as a going concern is dependent upon the Company's ability to raise additional capital and successfully complete a business acquisition or business opportunity.  The outcome of these matters cannot be predicted at this time.
 
The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classifications of the assets and liabilities that would be necessary if the going concern basis was not appropriate.
 
2.        Summary of Significant Accounting Policies
 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for a full year.  There have been no significant changes of accounting policies since September 30, 2010.  These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2010, as filed with the Securities and Exchange Commission.
 
The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America. Outlined below are those policies considered particularly significant:

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 period.  Actual results could differ from these estimates, and such differences could be material.

Consolidated financial statements

The consolidated financial statements include the accounts of the Company, its three wholly-owned subsidiaries 6584292 Canada, Inc., InterAmerican Operations, Inc., and IAG Peru S.A.C.  6584292 Canada, Inc.  is incorporated under the laws of the Province of Ontario, Canada and is inactive.  InterAmerican Gaming, Inc. and InterAmerican Operations, Inc. are incorporated under the laws of Nevada.  InterAmerican Gaming Peru S.A.C. is incorporated under the laws of Peru.  All inter-company transactions have been eliminated.

Foreign Currency Transaction

Assets and liabilities, denominated in a currency other than US dollars, are translated at the exchange rate at the balance sheet date and revenue and expenses are translated at the exchange rate at the date those elements are recognized. Exchange gains and losses are included in income.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an initial maturity date of three months or less and money market accounts to be cash equivalents.

Equipment

Equipment is recorded at cost less accumulated depreciation.  Depreciation is provided over estimated useful life of the assets using the following annual rates:

Office equipment
5 years straight-line
Gaming equipment
5 years straight-line

Equipment is reviewed for impairment in accordance with FASB ASC 360-10 (prior authoritative literature SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”), which was adopted effective January 1, 2002.  Under FASB ASC 360-10, these assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.  An impairment charge is recognized for the amount, if any, when the carrying value of the asset exceeds the fair value.

Revenue Recognition
 
The Company recognizes as gaming revenues its proportionate share of the net win from slot machines.  Net win is the difference between coins and currency deposited into the machines and payments made to customers.

Capital Leases

The Company’s policy is to record leases, which transfer substantially all benefits and risks incidental to ownership of property, as acquisitions of property and equipment and to record the incurrence of corresponding obligations as liabilities. Obligations under capital leases are reduced by rental payments net of imputed interest.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximates fair value because of the short maturity of these instruments.  The carrying value of long-term debt also approximates fair value.  Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risk arising from these financial instruments.

Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is determined based upon assumptions that market participants would use in pricing an asset or liability. Fair value measurements are rated on a three-tier hierarchy as follows:

Level 1 inputs: Quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 inputs: Inputs, other than quoted prices included in Level 1 that are observable either directly or indirectly; and

Level 3 inputs: Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

Basic and Diluted Earnings (Loss) Per Share

The Company reports basic earnings (loss) per share in accordance with FASB ASC 260 (prior authoritative literature, SFAS No. 128, “Earnings Per Share”).  Basic earnings (loss) per share is computed using the weighted average number of shares outstanding during the year.  Diluted earnings per share include the potentially dilutive effect of outstanding common stock options and warrants which are convertible to common shares.  Diluted loss per share is not presented if the results would be “anti-dilutive”.

Recently Issued Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying consolidated financial statements.


3.        Due to Related Parties

Periodically, the Company advances funds and pays expenses on behalf of related parties and funds are advanced and expenses are paid by related parties on behalf of the Company.  These transactions result in non-interest bearing payables or receivables to related parties.

Amounts due to related parties were:

   
March 31,
2011
   
September 30,
2010
 
             
Entities with common directors and /or officers
  $ 528,798     $ 500,192  
Officers and directors
    125,521       118,268  
Total
  $ 654,319     $ 618,460  

Amounts due to related parties are non-interest bearing, unsecured and do not have any specific repayment terms.

On October 3, 2011, the Company entered into a settlement agreement with a related party, by virtue of common officers and directors, in which the Company transferred 10,000,000 of its common shares and 100% of its shares of IAG Peru to extinguish $457,875 in liabilities.
 
5.        Capital Stock
 
The Company has authorized capital of 200,000,000 shares of common stock with a par value of $0.00001 of which 67,868,234 shares are issued and outstanding as of March 31, 2011 and 2010.
 
During the six months ended March 31, 2011 and 2010, the Company issued no shares of its common stock.
 
6.        Obligations Under Capital Lease

On August 31, 2008 the Company obtained lease purchase financing totaling $294,000 from a related party for gaming equipment.  The Company was obligated to pay monthly payments of $11,275 based on a term of 36 months and an effective lease rate of 18%.  The equipment was provided as security for the financing.

On August 30, 2010, the Company entered into a settlement agreement with the related party holding the lease, fully settling the obligation.
 
7.        Discontinued Operations
 
During fiscal 2010 the Company classified IAG Peru as discontinued operations. The summarized operating results for discontinued operations for the three and six month periods ended March 31, 2011 and 2010 are as follows:

   
Three Months Ended
March 31,
2011
   
Three Months Ended
March 31,
2010
   
Six Months Ended
March 31,
2011
   
Six Months Ended
March 31,
2010
 
                                 
Revenues
  $ -     $ 27,453     $ -     $ 67,086  
Cost of revenues
    -       5,056       -       11,233  
Gross profit
    -       22,397       -       55,853  
Expenses
    -       19,966       -       43,101  
Net gain (loss) before other expenses
    -       2,431       -       12,752  
Depreciation
    -       2,194       -       18,730  
Impairment of assets
    -       277,237       -       277,237  
Foreign Exchange
    -       5,140       -       8,159  
Interest expense
    -       15,321       -       30,667  
Net (loss)
  $ -     $ (297,461 )   $ -     $ (322,041 )

 
Impairment of assets of discontinued operations for the six months ended Mach 31, 2010 can be segregated into the following subcategories:
 
Computer equipment (i)
  $ 3,915  
Equipment under capital lease (ii)
    273,322  
    $ 277,237  
 
(i)  The Company classified the office equipment as impaired as it was being held by the former general manager of IAG Peru with whom the Company was involved in a labor dispute.
 
(ii)  Management determined that the equipment under capital lease was impaired and as such wrote down their value recording a loss of $273,322.
 
Liabilities of discontinued operations as at March 31, 2011 are summarized as follows:

   
March 31,
2011
   
September 30,
2010
 
                 
Accounts payable
  $ 3,500     $ 3,500  
Accrued liabilities
    28,178       28,178  
Total liabilities
  $ 31,678     $ 31,678  


Cashflows of discontinued operations for the six months ended March 31, 2011 and 2010 are as follows:
 
   
Six Months Ended
March 31,
2011
   
Six Months Ended
March 31,
2010
 
Operating activities
           
Net (loss) from continuing operations
  $ -     $ (322,041 )
Items not involving cash:
               
Depreciation
    -       18,730  
Impairment of assets
    -       277,237  
Changes in operating assets and liabilities:
               
Decrease (increase) in accounts receivable
    -       (23,515 )
Increase (decrease) in accounts payable
    -       (14,677 )
Increase (decrease) in accrued liabilities
    -       41,100  
Net cash provided by (used in) operating activities
    -       (23,166 )
Financing activities
               
Leasing liability
    -       7,665  
Increase in due to/from related parties
    -       (142 )
Net cash provided by (used in) financing activities
    -       7,523  
(Decrease) in cash from discontinuing operations
  $ -     $ (15,643 )
 
8.        Impairment of Asset
 
Gate To Wire Solutions Inc. (a related party by virtue of common officers and directors) was indebted to the Company in the amount of $16,049.  During the period ended March 31, 2010, management determined the amount to be impaired as substantial doubt exists as to the collectability of the amount.  The Company provided for a loss in the full amount due.
 
9.        Contingencies

On December 18, 2009, the Company’s wholly owned subsidiary IAG Peru S.A.C. was served a labour claim for $78,750 (plus expenses) by a former general manager.  The claim is for unpaid consulting fees, other stock based compensation, bonuses, vacation and other employee benefits.  The dispute involves the start date of employment and the Company believes it has fully accrued for the potential loss in the normal course during the year ended September 30, 2009.  Amount is recorded in accounts payable on the balance sheet.
 
10.      Subsequent Events

On July 7, 2011, the Company entered into a letter of intent with Baron Group Ventures ("BGV") to acquire an 80.1% interest in NowPhit Operations Inc. (“NowPhit”).

On October 3, 2011, the Company entered into a settlement agreement with Gamecorp Ltd. (“Gamecorp”) a related party by virtue of common officers and directors, in which the Company transferred 10,000,000 of its common shares and 100% of its shares of IAG Peru to extinguish $457,875 in liabilities.

On October 3, 2011, the Company executed a share exchange agreement with NowPhit and its shareholders (the “Share Exchange”) pursuant to which the Company purchased 80.1% of NowPhit in exchange for 77,800,000 of the Company’s common shares valued at $240,000.

On October 21, 2011 the Company settled amounts of $106,262 owing to directors, officers and consultants with 2,500,000 common shares.

In conjunction with the signing of the Share Exchange, all of the directors and officers of IAG, excluding J. Graham Simmonds, resigned and were replaced by nominees of BGV. As of October 3, 2011, the Board of Directors of IAG were made up of J. Graham Simmonds, Gary Schwartz, and Marc Askenasi.

Officers of the Company are now as follows:

Marc Askenasi
President & Chief Executive Officer
J. Graham Simmonds
Chairman & Interim Chief Financial Officer

On January 17, 2012, the Company appointed Henry J. Kloepper and Gerald Goldberg to its Board of Directors.

On January 30, 2012, NowPhit changed its name to SoFit Mobile Inc. (“SoFit”), short for Social Fitness, as it was determined to better reflect the business of the Company’s subsidiary.

On April 17, 2012, the Company closed an equity financing of $400,000 at a price of $0.02 per share for a total issuance of 20,000,000 shares.  The equity financing was completed on a non-brokered basis and no warrants or options were issued. The proceeds of the financing are being used to advance the Company's SoFit platform and for general corporate purposes.

On June 13, 2012, the Company closed its second equity financing of $225,000 at a price of $0.03 per share for a total issuance of 7,500,000 shares. The equity financing was completed on a non-brokered basis and no warrants or options were issued. The proceeds of the financing were being used to complete commercialization of the SoFit platform, to execute SoFit’s summer 2012 launch strategy, and for general corporate purposes to update IAG’s financial reporting and accounting.

On September 30, 2012, the Company settled $4,000 in accounts payable, owing to unrelated parties with 133,333 common shares of the Company.  These shares have not yet been issued.

On September 30, 2012, the Company entered into a settlement agreement with a former consultant to settle fees and expenses in the amount of $16,445 with 774,710 common shares of the Company. These shares have not yet been issued.

On October 11, 2012, Mr. John Ryan was appointed to the Board of Directors.

On October 31, 2012, two consultants of the Company exercised their options, purchasing 1,750,000 common shares and 1,442, 222 common shares at $0.02 and $0.03 respectively. These options were granted in fiscal 2012. These shares have not yet been issued.

SoFit products include integrated mobile applications and complementary wireless devices that enable athletes to track, train, and compete with each other in real-time via the SoFit platform. Athletes can earn virtual rewards, such as trophies and medals, as well as real-life rewards, such as location-based coupons and special offers. The SoFit platform also features a charity and event function that allows athletes to raise donations for a charity of their choice and remotely compete in athletic events from anywhere around the world in real-time.  The SoFit mobile applications were launched in July 2012.

 
 
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included herein.  In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission.  Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments.  Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf.  We disclaim any obligation to update forward looking statements.

Overview

The Company’s focus in fiscal 2009 was on gaming opportunities in Latin America.  On August 30, 2010, the Company entered into a settlement agreement with the related party, by virtue of common officers and directors, which held the lease on the slot machines resulting in the disposition of the assets and liabilities associated with the gaming operations.  As a result, the Company classified IAG Peru as discontinued operations during fiscal 2010.  There were no activities from discontinued operations during the six months ended March 31, 2011.

RESULTS OF OPERATIONS

Continuing Operations

For the three month period ended March 31, 2011 compared to the three month period ended March 31, 2010

General and administrative expenses

General and administrative expenses were $1,250 during the three month period ended March 31, 2011 and $3,721 during the three month period ended March 31, 2009.  General and administrative expenses include miscellaneous costs.  The decrease in expenses is the result of decreased business activity in relation to the Company’s exit from the Latin American gaming market.

Management fees – related parties

Accrued and/or paid management fees to related parties were $Nil during the three month period ended March 31, 2011 and $12,600 during the three month period ended March 31, 2010. Management fees are for the executive management services of our officers. Administrative and financial management services provided by a related party ceased at December 31, 2009 and the remainder of the management fees ceased at March 31, 2010.

Professional fees

Professional fees were $2,611 during the three month period ended March 31, 2011 and $7,119 during the three month period ended March 31, 2010. Professional fees consist of fees related to the audit and review of the Company’s financial statements.

Impairment of assets

Gate To Wire Solutions Inc. (a related party by virtue of common officers and directors) was indebted to the Company in the amount of $16,049.  During the three months ended March 31, 2010, management determined the amount to be impaired as substantial doubt exists as to the collectability of the amount.  The Company provided for a loss in the full amount due.

 
Other expenses

During the three months ended March 31, 2011, the Company recorded a foreign currency loss of $14,647 compared to a foreign exchange loss of $19,413 in the comparative period in the prior year.  A substantial portion of the Company’s liabilities and expenses are recorded in Canadian Dollars.

Operating loss

The loss from continuing operations during the three month period ended March 31, 2011 was $18,508 (approximately $0.0003 per share) compared to $58,902 (approximately $0.0009 per share) during the comparative period in the prior year.

The Company expects the operating losses to continue until breakeven operations are achieved under the new business’ opportunities. Additional financing will be required in order to fund operating losses.
 
For the six month period ended March 31, 2011 compared to the six month period ended March 31, 2010

General and administrative expenses

General and administrative expenses were $4,419 during the six month period ended March 31, 2011 and $9,701 during the six month period ended March 31, 2010.  General and administrative expenses include consultant fees, director fees and miscellaneous costs.  The decrease in expenses is the result of decreased business activity in relation to the Company’s exit from the Latin American gaming market.   General and administrative expenses during the six month period ended March, 2010 included the abatement of a $20,000 late filing tax penalty by the IRS.

Management fees – related parties

Accrued and/or paid management fees to related parties were $75,940 during the six month period ended March 31, 2010 and $Nil during the six month period ended March 31, 2011. Management fees are for the executive management services of our officers. Administrative and financial management services provided by a related party ceased at December 31, 2009 and the remainder of the management fees ceased at March 31, 2010.

Professional fees

Professional fees were $5,223 during the six month period ended March 31, 2011 and $12,342 during the six month period ended March 31, 2010. Professional fees consist of fees related to the audit and review of the Company’s financial statements.

Impairment of assets

Gate To Wire Solutions Inc. (a related party by virtue of common officers and directors) was indebted to the Company in the amount of $16,049.  During the six months ended March 31, 2010, management determined the amount to be impaired as substantial doubt exists as to the collectability of the amount.  The Company provided for a loss in the full amount due.

Other expenses

During the six months ended March 31, 2011, the Company recorded a foreign currency loss of $33,575 compared to a foreign exchange loss of $29,111 in the comparative period in the prior year.  A substantial portion of the Company’s liabilities and expenses are recorded in Canadian Dollars

 
Operating loss

The loss from continuing operations during the six month period ended March 31, 2011 was $43,217 (approximately $0.0006 per share) compared to $143,143 (approximately $0.0021 per share) during the comparative period in the prior year.

The Company expects the operating losses to continue until breakeven operations are achieved under the new business’ opportunities. Additional financing will be required in order to fund operating losses.
 
Discontinued Operations

Beginning in fiscal 2009, the Company began to generate revenues from slot machine operations in Latin America.  Slot machines were initially deployed in Lima, Peru but were subsequently moved to the provinces of Peru (Chiclayo, Huacho, and Huaral) where the financial performance improved.

During fiscal 2010, the Company made the decision to step back from gaming operations.  During the second quarter the Company began moving the slot machines into storage and by the end of the third quarter the Company no longer had machines installed in any casinos.

On August 30, 2010 the Company entered into a settlement agreement with the related party which held the lease on the slot machines resulting in the disposition of the assets and liabilities associated with the gaming operations.  As a result there were no activities from discontinued operations during the six months ended March 31, 2011.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make a wide variety of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain.

As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Notes to Unaudited Consolidated Financial Statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of these financials statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
Liquidity and Capital Resources
 
The Company’s total assets decreased from $30 at September 30, 2010 to $Nil at March 31, 2011.

The Company’s total liabilities increased from $867,700 at September 30, 2010 to $910,887 at March 31, 2011. Due to related parties balance increased from $618,460 at September 30, 2010 to $654,319 at March 31, 2011. Due to related party amounts do not have specific repayment terms and it is expected that these amounts will be repaid as the financial position of the Company improves. Accounts payable increased from $197,562 at September 30, 2010 to $199,549 at March 31, 2011.  Accrued liabilities increased from $20,000 at September 30, 2010 to $25,222 at March 31, 2011.  Liabilities of $31,678 were classified to discontinued operations at March 31, 2011 and September 30, 2010, respectively.
 
 
The stockholders’ deficit increased from $867,670 at September 30, 2010 to $910,887 at March 31, 2011.  The change in deficit is attributable to:

  
a $43,217 loss for the period.

At March 31, 2011, the Company had a working capital deficit of $910,887.  The Company had cash balances of $-0- at March 31, 2011 and is largely reliant upon the ability to arrange equity or debt private placements to pay expenses as incurred.  In addition to normal accounts payable of $199,549, the Company owes related companies $654,319 without specific repayment terms.
During the six month period ended March 31, 2011, the Company experienced a net decrease in cash of $30.  The Company used $36,008 in cash in operating activities, arising primarily from operating losses, and generated $35,978 in cash from financing activities, primarily from related parties.

The Company’s sources of cash have been loans or private placements of common stock. Although the Company has been successful in limited third party equity financing, thus far the development of our operations has been substantially funded by Gamecorp, the largest single shareholder of the Company. This initial financing is intended to fund operations only up to project commitment or launch stage. For further clarity, Gamecorp is generally able and willing to fund day to day operating costs, travel expenses, the costs of due diligence and third party feasibility studies.  Although Gamecorp may participate in the financing of project capital costs, we expect that any material project financing will have to be assembled by the Company itself. Such financing could include straight forward senior debt, convertible debt or equity. Shareholders may experience significant dilution.

On October 3, 2011, the Company entered into a settlement agreement with Gamecorp in which the Company transferred 10,000,000 of its common shares and 100% of its shares of IAG Peru to extinguish $457,875 in liabilities.
 
On October 3, 2011, the Company executed a share exchange resulting in a reverse merger with SoFit and a change of business for the Company.  SoFit products include integrated mobile applications and complementary wireless devices that enable athletes to track, train, and compete with each other in real-time via the SoFit platform. Athletes can earn virtual rewards, such as trophies and medals, as well as real-life rewards, such as location-based coupons and special offers. The SoFit platform also features a charity and event function that allows athletes to raise donations for a charity of their choice and remotely compete in athletic events from anywhere around the world in real-time.  Products were launched in July 2012.
 
The Company cannot predict to what extent our current lack of liquidity and capital resources will impair our new business operations. However, the Company believes it will incur further operating losses. There is no assurance that the Company can continue as a going concern without continued funding. In the current state of development, the Company is reliant upon the continued funding by related entities. There can be no assurance that this funding will continue in the future.

The Company expects it will require additional financing to cover legal, accounting, consulting, management fees and the miscellaneous costs of being a reporting company in the next fiscal year.

Going concern qualification: The Company has incurred significant losses from operations for the six month period ended March 31, 2011, and such losses are expected to continue.  In addition, we have a working capital deficit of $910,887 and an accumulated deficit of $10,543,199. The foregoing raises substantial doubt about our ability to continue as a going concern. The Company plans to seek additional capital and/or debt financing.  There is no guarantee that additional capital and/or debt financing will be available when and to the extent required, or that if available, it will be available on acceptable terms.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Inflation

Management does not believe that inflation had a material adverse effect on the financial statements for the periods presented.
 
 
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 the information under this item.
 
Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of our Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures, as of March 31, 2011. Based upon, and as of the date of this evaluation.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Exchange Act defines internal control over financial reporting as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

The following material weaknesses were identified in the Company’s internal control over financial reporting as of March 31, 2011.
 
Information and documentation related to operations of the Peru subsidiary were not properly retained by the Company.  Additionally, the Company no longer has contact persons in Peru since the cease of operation and therefore is unable ask questions regarding the information previously obtained or request further information.

Management is aware that there was a lack of accounting competency to assess and record complex transactions.  Multiple complex business transactions occurred during and subsequent to the year ended September 30, 2010 and the Company did not formally assess and document the appropriateness of the accounting treatment.

These control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our consolidated financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above together constitute a material weakness.
 
In light of this material weakness, the Company performed additional analysis and procedures in order to conclude that our consolidated financial statements for the period ended March 31, 2011 included in this Report on Form 10-Q were fairly stated in accordance with US GAAP.

 
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control Over Financial Reporting

The Company will regularly review its system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new and more efficient systems, consolidating activities, and migrating processes.

During the six month period ended March 31, 2011, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to affect materially, our internal control over financial reporting.


 
 
 
 
On December 18, 2009, the Company’s wholly owned subsidiary IAG Peru S.A.C. was served a labour claim for $78,750 (plus expenses) by a former general manager.  The claim is for unpaid consulting fees, other stock based compensation, bonuses, vacation and other employee benefits.  The dispute involves the start date of employment and the Company believes it has fully accrued for the potential loss in the normal course during the year ended September 30, 2009.  Amount is recorded in accounts payable on the balance sheet.
 
 
None
 
 
None
 
 
None.
 
 
None.
 
 
 
(a) Exhibits.  Exhibits included or incorporated by reference herein: See Exhibit Index.
 
EXHIBIT INDEX
 
Number   Exhibit Description
     
3.1
 
Articles of Incorporation (incorporated by reference to Exhibit 3 of the Registration Statement on Form 10-SB filed on September 28, 2000).
     
3.2
 
Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 2 of the Form 10-SB filed on September 28, 2000).
     
3.3
 
Certificate of Amendment to Articles of Incorporation dated October 13, 2000. (incorporated by reference to Exhibit 3.3 of the Form 10-QSB filed on September 28, 2000)
     
3.4
 
ByLaws (incorporated by reference to Exhibit 3.3 of the Form 10-QSB filed on November 7, 2001)
     
 
Section 302 Certification of Chief Executive Officer *
     
 
Section 302 Certification of Chief Financial Officer *
     
 
Section 906 Certification of Chief Executive Officer *
     
 
Section 906 Certification of Chief Financial Officer *
______
* Filed herein.

(b) Reports on Form 8-K:

None


 
Pursuant to the requirements of Section 13 or 15(d) 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.
 

INTERAMERICAN GAMING, INC
 
Dated: March 15, 2013
 
       
/s/ Marc Askenasi
 
/s/ J. Graham Simmonds
 
Name: Marc Askenasi
 
Name: J. Graham Simmonds
 
Title: Chief Executive Officer 
 
Title: Interim Chief Financial Officer
 
 
 
 
 
 
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