CITRINE GLOBAL, CORP. - FORM 10-Q

Attached files

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EX-31.1 - SECTION 302 CERTIFICATION OF THE SARBANES-OXLEY ACT OF 2002 OF EREZ ZINO, FILED HEREWITH. - CITRINE GLOBAL, CORP.	f10q0613ex31i_progaming.htm
EXCEL - IDEA: XBRL DOCUMENT - CITRINE GLOBAL, CORP.	Financial_Report.xls
EX-32.1 - SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 OF EREZ ZINO, FILED HEREWITH. - CITRINE GLOBAL, CORP.	f10q0613ex32i_progaming.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 10-Q

___________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

Commission file number: 333-168527

PROGAMING PLATFORMS CORP.

(Exact Name Of Registrant As Specified In Its Charter)

Delaware		68-0080601
(State of Incorporation)		(I.R.S. Employer Identification No.)

60 Mazeh Street, Suite 12, Tel Aviv, Israel		65789
(Address of Principal Executive Offices)		(ZIP Code)

Registrant's Telephone Number, Including Area Code: +(972) 54-222-9702

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 x No ¨

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting Company.

Large accelerated filer ¨

Accelerated filer ¨

Non-Accelerated filer ¨

Smaller reporting Company x

On June 30, 2013, the Registrant had 52,197,055 shares of common stock outstanding.

TABLE OF CONTENTS

Item	Description	Page

	PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS - UNAUDITED.	3
	Balance Sheets	3
	Statements of Operations	4
	Statements of Cash Flows	5
	Notes to Financial Statements	6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	15
ITEM 4.	CONTROLS AND PROCEDURES.	15

	PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS.	16
ITEM 1A.	RISK FACTORS.	16
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	16
ITEM 3.	DEFAULT UPON SENIOR SECURITIES.	16
ITEM 4.	MINE SAFTY DISCLOSURE.	16
ITEM 5.	OTHER INFORMATION.	16
ITEM 6.	EXHIBITS.	16

ITEM 1. FINANCIAL STATEMENTS

PART I - FINANCIAL INFORMATION

PROGAMING PLATFORMS CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

As of June 30, 2013 and December 31, 2012

	June 30, 2013			December 31, 2012
	(Unaudited)			(Audited)

ASSETS
Current assets:
Cash and cash equivalents	$	16,402		$	21,392
Restricted cash		42			4,034
Investments in trading securities		7,232			174,234
Total current assets		23,676			199,660
Property and Equipment, net		334			489
Total assets	$	24,010		$	200,149

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	4,833		$	31,941
Related parties payable		787			52,090
Convertible notes payable, net of discount		87,604			33,228
Deferred revenues		5,800			5,800
Total current liabilities		99,024			123,059

Long-term deferred revenues		11,600			14,476
Total Liabilities		110,624			137,535



Stockholders' equity (deficit)
Common stock, par value $.0001 per share, 500,000,000 shares
authorized; 52,197,055 shares issued and outstanding at June 30 2013 and December 31, 2012		522			522
Stock subscription receivable		(300	)		(300	)
Additional paid in capital		565,039			513,538
(Deficit) accumulated during the development stage		(651,875	)		(451,146	)
Total stockholders' equity (deficit)		(86,614	)		62,614
Total liabilities and stockholders' equity (deficit)	$	24,010		$	200,149

The accompanying notes are an integral part of these financial statements.

PROGAMING PLATFORMS CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS For the three and six months ended June 30, 2013 and 2012 and for the period from inception (May 26, 2010) to June 30, 2013
(UNAUDITED)

	For the three months ended						For the six months ended						Period from May 26, 2010 (Date of Inception)
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012			to June 30, 2013

Revenues	$	1,446		$	1,446		$	2,876		$	2,892		$	101,600

Expenses:
Research and development		-			-			-			(29,007	)		(96,133	)
Marketing and selling		(1,290	)		-			(1,290	)		-			(1,290	)
General and administrative		(20,255	)		(45,493	)		(43,662	)		(76,325	)		(439,097	)
Total operating expenses		(21,545	)		(45,493	)		(44,952	)		(105,332	)		(536,520	)

(Loss) from operations		(20,099	)		(44,407	)		(42,076	)		(102,440	)		(434,920	)

Interest expense		(3,435	)		-			(6,627	)		-			(11,490	)
Amortization of debt discount		(22,701	)		-			(43,350	)		-			(71,715	)
Realized loss on trading securities		(39,768	)		-			(67,294	)		-			(67,294	)
Unrealized loss on trading securities		(7,751	)		-			(45,534	)		-			(61,804	)
Other income/ (expense)		588			(1,918	)		4,152			(418	)		(4,652	)

Net (loss)	$	(92,536	)	$	(45,965	)	$	(200,729	)	$	(102,858	)	$	(651,875	)

(Loss) per common share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding		52,197,055			50,464,231			52,197,055			50,437,335

The accompanying notes are an integral part of these financial statements.

PROGAMING PLATFORMS CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

For the three and six months ended June 30, 2013 and 2012 and for the period from inception (May 26, 2010)

to June 30, 2013

(UNAUDITED)

	For the six month ended						From May 26, 2010,
	June 30, 2013			June 30, 2012			to June 30, 2013

Operating Activities:
Net (loss)	$	(200,729	)	$	(102,858	)	$	(651,875	)
Adjustments to reconcile net (loss) to net cash (used in) operating activities:		g			g
Realized loss in trading securities		67,294						67,294
Unrealized loss in trading securities		45,534			-			61,804
Depreciation expenses		155			155			613
Amortization of debt discount		43,350			-			71,715
Shares issued for services		-			21,250			102,870
Changes in net assets and liabilities:
Decrease (increase) in prepaid expenses		-			(12,698	)		(1,460	)
Increase (decrease) in accounts payable and other current liabilities		(16,874	)		(4,722	)		13,412
Increase in related parties payable		(6,000	)		6,303			46,090
Investments in trading securities		4,850						4,850
Increase (Decrease) in deferred revenue		(2,876	)		(2,892	)		17,400
Contribution of services from shareholder		-			-			17,100
Other assets		3,992			103			8,026
Net cash (used) in operating activities		(61,214	)		(95,359	)		(242,161	)

Investing activities:
Sale of trading securities		49,324			-			49,324
Purchases of Property and Equipment		-			-			(947	)
Net cash (used in) investing activities		49,324			-			48,377

Financing activities:
Issuance of convertible note		6,900			-			93,200
Proceeds from issuance of shares (net of issuance expenses)		-			-			116,986
Net cash provided by financing activities		6,900			-			210,186

(Decrease) increase in cash and cash equivalents		(4,990	)		(95,359	)		16,402

Cash and cash equivalents at beginning of period		21,392			110,847			-

Cash and cash equivalents at end of period	$	16,402		$	15,488		$	16,402

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-

Non-cash transactions:
Common stock issued for investment in trading securities		-			-		$	190,504
Debt discount	$	2,500			-		$	88,800
Forgiveness of accrued debt owed to related parties	$	49,000			-		$	49,000

The accompanying notes are an integral part of these financial statements.

PROGAMING PLATFORMS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

(1) General

ProGaming Platforms Corp. (“ProGaming Platforms” or the “Company”), a Delaware corporation incorporated on May 26, 2010. The Company is in the development stage engaged in the business of the development of an online gaming platform and entering into licensing agreements with game servers in the United States and worldwide in order to allow them to offer games of skill on the Company's proprietary platform as part of their member services.

The accompanying unaudited financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for an air presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2012 and the notes thereto included in the Company’s Report on Form 10-K filed with the SEC on April 1, 2013.

(2) Summary of Significant Accounting Policies

Cash and Cash Equivalents

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of June 31, 2013 and December 31, 2012, we had cash and cash equivalents of $16,402 and $21,392, respectively.

Restricted Cash

Restricted cash means cash and cash items which are restricted as to withdrawal or usage. Restricted cash includes legally restricted deposits held as compensating balances against credit cards. As of June 30, 2013 and December 31, 2012, we had restricted cash of $42 and $4,034, respectively.

Revenue Recognition

The Company recognizes revenue from licensing its software to customers for contractually defined periods of time. The Company recognizes revenue ratably over the term of the contract in accordance with ASC 605 (1) when the price is fixed and determinable, (2) persuasive evidence of an arrangement exists, (3) delivery has occurred or services have been provided, and (4) collectability is assured.

Software revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred in accordance with the terms and conditions of the contract, the fee is fixed or determinable, and collection is reasonably assured. For software arrangements involving multiple elements, revenue is allocated to each element based on the relative fair value or the residual method, as applicable, and using vendor specific objective evidence of fair value, which is based on prices charged when the element is sold separately. Revenue related to post-contract support (“PCS”), including technical support and unspecified when-and-if available software upgrades, is recognized ratably over the PCS term for contracts that are greater than one year. For contracts where the post contract period is one year or less, the costs are deemed insignificant, and the unspecified software upgrades are expected to be and historically have been infrequent, revenue is recognized together with the initial licensing fee and the estimated costs are accrued.

Loss per Common Share

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the period ended June 30, 2013 and December 31, 2012.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. The annual depreciation rates are as follows: Computers and electronic equipment 33%

Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. As of June 30, 2013, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

Estimates

The financial statements are prepared on the basis of accounting principles generally accepted in the United States. 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 as of June 30, 2013, and expenses for the six month period ended June 30, 2013, and cumulative from inception. Actual results could differ from those estimates made by management.

Fair value measurements

As defined in ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), fair value is based on the price that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, ASC 820-10 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.

Level 3: Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques in its assessment that maximize the use of observable inputs and minimize the use of unobservable inputs.

The following table presents the Company’s financial assets and liabilities that are carried at fair value, classified according to the three categories described above:

Fair Value Measurements at June 30, 2013

			Quoted Prices in Active Markets for Identical assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Gains (losses)
Investments in Trading securities	$	7,232	$	7,232	$	-	$	-	$	(112,828	)
Total assets at fair value	$	7,232	$	7,232	$	-	$	-	$	(112,828	)

Fair Value Measurements at December 31, 2012

			Quoted Prices in Active Markets for Identical assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)		Gains (losses)
Investments in Trading securities	$	174,234	$	174,234	$	-	$	-	$	(16,270	)
Total assets at fair value	$	174,234	$	174,234	$	-	$	-	$	(16,270	)

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

Recent Accounting Pronouncements

Management has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information. Management has reviewed these new standards and believes that they have no impact on the financial statements of the Company at this time; however, they may apply in the future.

(3) Development Stage Activities and Going Concern

The Company is currently in the development stage, and has limited operations. The Company is in the development stage engaged in the business of the development of an online gaming platform and entering into licensing agreements with game servers in the United States and elsewhere in order to allow them to offer games of skill on the Company's proprietary platform as part of their member services. Our short-term strategy is to market this platform as a means of enhancing traffic at websites. Our long term strategy is to enter into licensing agreements with game servers in the U.S and worldwide to allow them to offer games of skill on our platform as part of their services.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2013, the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

(4) Common Stock

On June 7, 2010, the Company issued 15,250,000 shares of its common stock to individuals who are Directors and officers of the Company for $153 subscriptions receivable.

On June 7, 2010, the Company issued 14,750,000 shares of its common stock to individuals who are founders of the Company for $147 subscriptions receivable.

On December 21, 2010 the Company issued 20,000,000 shares of its common stock to various individuals, for $100,000 in cash. Such funds were raised through public offering, in accordance with the terms and conditions of the Registration Statement.

In April 2011, the Company sold 150,000 restricted shares to Guy Levinson and 250,000 restricted shares to Shlomo Sharbat, both are non-US private investors, for $40,000.

On March 18, 2012, the Company issued 25,000 restricted shares of common stock in consideration for financial advisory services provided to the Company. The shares were valued at $7,950 based on the closing price of the Company's common stock on the date of issuance.

On March 13, 2012, the Company issued 30,000 restricted shares of common stock in consideration for investor relations (IR) services provided to the Company. The shares were valued at $7,500 based on the closing price of the Company's common stock on the date of issuance.

On May 6, 2012, the Company issued 15,000 restricted shares of common stock in consideration for professional services provided to the Company. The shares were valued at $5,250 based on the closing price of the Company's common stock on the date of issuance.

On July 2, September 3 and September 19, 2012, the Company issued a total of 498,000 restricted shares of common stock in consideration for professional services provided to the Company. The shares were valued at $82,170 based on the closing price of the Company's common stock on the date of issuance.

On December 29, 2012, the Company issued 1,229,055 restricted shares of common stock in consideration for share exchange between the Company and Gefen Biomed Investments, a publicly traded Company. The shares were valued at $190,504 based on the closing price of the Company's common stock on the date of issuance.

Share based payment transactions were accounted for in accordance with the requirements of ASC 505-50 Equity Based Payments to Non Employees. Paragraph 505-50-30-6 establishes that share-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The Company measured share-based payment transactions at the fair value of the shares issued at date of grant, the Company believes that the value of the shares is more reliably measurable.

On March 1, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation effecting a forward stock split of the Company’s issued and outstanding shares of Common Stock at a ratio of ten-to-one (the “Forward Split”). The Certificate of Amendment provides that each outstanding share of the Company's Common Stock, par value $0.0001 per share, will be split and converted, automatically, without further action, into ten (10) shares of Common Stock of $0.00001 par value per share. The Forward Split has been reflected in the Company's financial statements for year ended December 31, 2011 and for the periods thereafter.

During the first Half of 2013, the Company did not issue any shares of common stock.

(5) Revenue Recognition

On July 1 2011 and on July 10, 2011, the Company signed license agreements with two separate corporations in Israel and Luxemburg (the "Licensees"). Subject to the terms and condition of each agreement the Company granted each Licensee a license to use the Company's proprietary online gaming platform in certain parts of the world. Each license is, in general, non-exclusive, except for certain countries specified within each agreement. The agreements grant each Licensee the right to develop and operate websites offering online games based on the Company's proprietary technology for a period of 5 years as of the respective agreement's effective date. In the event that by the eighteenth-month anniversary of the each agreement's effective date the respective Licensee fails to have at least one active website in each of the countries that comprise the exclusive territory of the agreement, the Company shall be entitled to either terminate exclusivity for these countries or terminate the entire agreement. In consideration of these agreements, and of support services to be provided by the Company through the license period, the Licensees have paid the Company non-refundable, one-time license fees totaling $119,000. In addition to such license fees, once each Licensee realizes revenues at a certain level specified in its respective agreement from its use of the Company's platform, it shall pay the Company a royalty in the amount of 50% of gross revenues realized from its use of this platform.

On December 26, 2011, the corporation from Luxemburg announced the termination of the agreement due to the economic situation in Europe. As a result, the entire license fee in the amount of $90,000 was recognized immediately as revenues.

As of June 30, 2013 and 2012, the Company recognized a total sum of $2,876 and $2,892, respectively, in revenues out of the total $119,000 license fees paid for both of the aforementioned agreements. The contract in the amount of $90,000 was canceled by the client; therefore we recognized the whole sum as revenues according to the terms of the agreement. The second contract grants the client licenses for a period of 5 years. The remaining sum of $17,400 was deferred on the Company's balance sheet, $5,800 as current and $11,600 as long term liabilities, and is expected to be recognized over the remaining period of the agreements.

As of June 30, 2013 and 2012, no royalties have been paid by or recognized in connection with the aforementioned agreements. One of the aforementioned Licensees is beneficially owned by an individual who holds 25,000 shares of the Company's common stock.

(6) Convertible Notes

During the six months ended June 30, 2013, we received $6,900 through the issuance of two convertible notes, bearing interest at the rate of 15% per annum, have a maturity date of 12 months and are convertible into common stock at $0.02 per share. The Company recorded amortization expenses related to the beneficial conversion features of $43,350 during the six months ended June 30, 2013. The Company recorded total interest expense in the amount of $49,977 during the six months ended June 30, 2013, including a total of $43,350 in amortization of debt discount and $6,627 in accrued interest.

During the six months ended June 30, 2012, there were no borrowings, interest expense or amortization expense.

During the year ended December 31, 2012, the Company received a total of $86,300 through the issuance of six convertible notes. These notes bear interest at the rate of 15% per annum, have a maturity date of 12 months and are convertible into common stock $0.02 per share. The Company recorded amortization expenses related to the beneficial conversion features of $28,365 during the year ended December 31, 2012. The Company recorded total interest expense in the amount of $33,228 during the year ended December 31, 2012 including a total of $28,365 in amortization of debt discount and $4,863 in accrued interest.

From May 26, 2010 (inception) to June 30, 2013, the Company received a total of $93,200 through the issuance of eight convertible notes. The Company recorded total interest expense in the amount of $83,205 from inception to June 30, 2013 including a total of $71,715 in amortization of debt discount and $11,490 in accrued interest.

(7) Related Party Transactions

During 2012, the Company received a total of $86,300 as convertible notes from six shareholders. The notes bear interest at the rate of 15% per annum and having a maturity date of 12 months. The notes are convertible into common stock at $0.001 per share. The Company recorded interest expense in the amount of $4,863 during 2012 and $28,365 in amortization of debt discount during 2012.

During the six-month period ended June 30, 2013, the Company received $6,900 in a related party borrowing evidenced by a note convertible into common stock at $0.001 per share. The Company recorded interest expense in the amount of $6,627 and amortization of debt discount of $43,350 during the six-month period ended June 30, 2013.

As described in Note 4, on June 7, 2010, the Company issued 15,250,000 shares of its common stock to directors and officers for $153 subscriptions receivable.

During the six-month period ended June 30, 2013, the Company, in a non-cash transaction, was forgiven a total of $49,000 in accrued debt owed to related parties.

(8) Investments

Investments in Trading Securities as of June 30, 2013 and December 31, 2012 are summarized below:

	Cost Basis		Unrealized Gains		Realized Losses		Unrealized Losses		Fair Value
June 30, 2013 Trading Securities	$	23,625	$	-	$	67,294	$	45,534	$	7,232
December 31, 2012 Trading Securities	$	190,504	$	-	$	-	$	16,270	$	174,234

The shares owned by the Company of Gefen Biomed Investments, a publicly traded Company, represent approximately 0.6% of the issued and outstanding shares of common stock of Gefen as of June 30, 2013. During the six months ended June 30, 2013, the Company sold shares in the open market for cash proceeds of $49,324 and recorded a realized loss of $67,294. As of June 30, 2013, the unrealized loss on the remaining shares was recorded as $45,534 due to their decreased market value as compared to December 31, 2012.

(9) Subsequent Events

As defined in FASB ASC 855-10, “Subsequent Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued. The Company evaluated all events and transactions that occurred subsequent to the balance sheet date and prior to the date on which the financial statements contained in this report were issued, and the Company determined that no such events or transactions necessitated disclosure.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION

FORWARD-LOOKING STATEMENTS

Certain statements that the Company may make from time to time, including all statements contained in this report that are not statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor provisions set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, market position and expenditures. The Company assumes no obligation to update any forward-looking statements. Additional information concerning factors which could cause differences between forward-looking statements and future actual results is discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, as filed with the SEC on April 1, 2013.

Overview

We are a development stage Company with limited operations and no significant revenues from our business operations. There is substantial doubt that we can continue as a going business for the next twelve months. We do not anticipate that we will generate significant revenues until we enter into licensing agreements with additional online gaming servers, or web advertisers, to permit them to offer games of skill on our platform as part of their member services, or as part of their advertising campaign. Accordingly, we must raise cash from sources other than our operations in order to implement our marketing plan.

In our management’s opinion, there is a potential demand for our technology which will enable online game service providers, and websites engaged in marketing efforts designed to increase traffic, to provide a platform offering financial rewards to winners of online competitive games of skill.

On July 10, 2011, we executed a license agreement with GT-SAT International S.A.R.L ("GT-SAT"), a corporation organized under the laws of Luxemburg. The GT-SAT license agreement granted the licensee a non-exclusive right to develop websites and offer online games based on our proprietary gaming platform in Europe and an exclusive license in Luxembourg, Belgium, and Holland. In consideration of such license, GT-SAT made an upfront, non refundable, payment of $90,000 to the Company and has agreed to pay royalties on future revenues. On December 26, 2011, GT-SAT terminated this agreement due to the prevailing difficult economic climate in Europe.

On July 1, 2011, we executed a license agreement with Yanir Levin Ltd., an Israeli corporation, which granted the licensee a nonexclusive right to develop websites and offer online games based on our proprietary gaming platform in Asia and an exclusive license in Israel. In consideration of the license granted to the licensee, the licensee made an upfront, non refundable, payment of $29,000 and has agreed to pay us royalties on future revenues.

We believe that we have sufficient cash on hand to allow us to market our online gaming platform to potential clients and remain in business through the third quarter of 2013. If, after that, we are unable to generate significant revenues from operations for any reason, or if we are unable to make a reasonable profit, we may have to consider the advisability of suspending or otherwise limiting operations. At the present time, we have not made any arrangements to raise additional cash through either debt or equity financing.

Our initial plan of operations was to license our online gaming platform to third party licensees to permit these licensees to offer games of skill on our platform as part of their member services. However, following a review of current market conditions, and in light of our relatively limited working capital, our management has determined to focus our short-term efforts on marketing our platform as a leverage for web marketing campaigns designed to increase traffic in websites.

In order to carry out this plan and continue our business plan during the next twelve month period, we believe that we will require total cash resources of approximately $120,000. While we plan to raise additional funds through a private offering of our common stock or some form of debt financing, if we are unable to raise such funds at terms satisfactory to the Company, of which there can be no assurance, we will have to reevaluate our plan of operations.

Recent Developments

On February 18, 2013, the Company entered into a Joint Venture Agreement ("JV Agreement") with Zenetek LLC, a Company organized under the laws of the State of Delaware and a wholly-owned subsidiary of Anything Technologies Media (OTCPK: EXMT), with offices located in Vietnam. Pursuant to the terms of the JV Agreement, Zenetek agreed to represent the Company in China, Singapore, Taiwan, Vietnam, Hong Kong and Indonesia (the "Territories") during an initial term of 12 months to: facilitate the Company's ability to enter into JV agreements and/or other transactions with third parties within the Territories; generate revenues for the Company "state-of-the-art" multiplayer puzzle game platform, implementing the platform into major social media networks within the Territories; and negotiating JV transactions with gaming companies within the Territories using the Company's Generic patented GER system.

The JV Agreement further provides that in order for Zenetek to retain its representation rights on an exclusive basis, Zenetek must prepare and present an operating business plan satisfactory to the Company, which shall include potential JV partners. In consideration for the representation and distribution services being provided by Zenetek in the SE Asian Territories, the parties have agreed that net revenues generated from any JV Transaction shall be distributed thirty-five (35%) percent to the Company and sixty-five (65%) percent to Zenetek.

In addition, Zenetek has agreed to assume responsibility for all marketing and related costs and expenses as well as all engineering costs. Furthermore, to the extent that Zenetek shall utilize the services of Company's engineering and/or other personnel in fulfilling its obligations under this Agreement, such personnel costs shall be billed by the Company and paid for by Zenetek under separate subcontracting agreements.

On April 2, 2012, we filed with the U.S. Patent Office a provisional application for a patent for the game event record technology underlying our proprietary multiplayer online gaming and reward-processing platform.

In furtherance of the Company's long term strategy in both the U.S and worldwide, the Company has been negotiating with third parties to allow them to offer games of skill on our platform as part of their services. In August 2012, the Company entered into a licensing agreement with Inhouse Interactive LTD, a Company engaged in the business of creating innovative and interactive media, including online games, using a wide range of media and unique technologies, granting Inhouse rights to upload a flash game, utilizing the Company's platform technology in Israel.

Starting April 1, 2012, the Company had completed it's initial Research and Development stage and began concentrating all efforts in marketing activities. Additional developments may incur following the success of the marketing activities.

Marketing/Advertising Strategy

In addition to advertising our online gaming platform on our website and selected portals and social networks, we currently plan to market our technology and services by approaching internet advertizing companies as well other website administrators, and offer our platform as a mechanism designed to increase traffic in websites. As a proof of concept we are in the final stages of developing a Flash Puzzle game that leverages our core technology, and which we intend to market through our Facebook page.

Results of Operations

Three and Six Months Ended June 30, 2013 Compared to Three and Six Months June 30, 2012

Our revenues for the three and six months ended June 30, 2013 were $1,446 and $2,876, respectively, received from a single licensing agreement, compared to revenues of $1,446 and $2,892, respectively, for the three and six-month periods ended June 30, 2012, from the same licensing agreement.

Our operating expenses for the three and six months ended June 30, 2013 were $21,545 and $44,952, respectively, compared to $45,493 and $105,332, respectively, during the three and six-month periods ended June 30, 2012. The decrease in operating expenses during the tree and six-month periods ended June 30, 2013, is mainly due to the fact that there were no research and development expenses during the three and six months ended June 30, 2013, compared to research and development expenses of $0 and $29,007, respectively, during the three and six-month periods ended June 30, 2012. Also, general and administrative expense decreased by $23,948 and $60,380, respectively, during the three and six-month periods ended June 30, 2013 from the comparable periods of the prior year.

We incurred interest expense of $3,435 and $6,627 during the three and six-month periods ended June 30, 2013 compared to no interest expense during the same periods in the prior year. We recorded amortization of debt discount expense of $22,902 and $44,181, respectively, during the three and six-month periods ended June 30, 2013 as compared to no amortization expenses during the same periods in the prior year. We expensed a realized loss on sale of securities of $39,768 and $67,294, respectively, and an unrealized loss in trading securities of $6,,844 and $44,627, respectively, during the three and six-month periods ended June 30, 2013, compared to no realized or unrealized losses in trading securities during the same periods of the prior year.

We had other income (expense) of $588 and $4,152, respectively, during the three and six-month periods ended June 30, 2013, compared to ($1,918) and ($418), respectively, during the same periods of the prior year. Our net loss for the three and six-month periods ended June 30, 2013 was $92,536 and $200,729, respectively, compared to $45,965 and $102,858, respectively, for the three and six-month period ended June 30, 2012. The increases in our net loss was mainly due to amortization of debt discount and realized and unrealized losses on trading securities during the tree and six-month periods ended June 30, 2013, as noted above.

Liquidity and Capital Resources

We had total current assets of $23,676 consisting of $16,402 in cash and cash equivalents, restricted cash of $42 and trading securities of $7,232 at June 30, 2013, compared to total current assets of $199,660 at December 31, 2012. Our property and equipment, net of depreciation, were $334 at June 30, 2013 compared to $489 as of December 31, 2012.

We had total assets of $24,010 at June 30, 2013 compared to total assets of $200,149 at December 31, 2012.

We had total current liabilities of $99,024 as of June 30, 2013, consisting of $5,620 in accounts payable and accrued liabilities, outstanding convertible notes payable in the amount of $87,604 and deferred revenues of $5,800 compared to total current liabilities of $123,059, consisting of accounts payable and accrued liabilities of $31,941, related parties payable of $52,090, convertible notes payable of $33,228 and deferred revenues of $5,800 as of December 31, 2012.

In addition, we had long-term deferred revenues of $11,600 and $14,476 as of June 30, 2013 and December 31, 2012, respectively.

We had a negative working capital of $75,348 on June 30, 2013 compared to $76,601 on December 31, 2012. We had an accumulated deficit of $651,875 as of June 30, 2013 compared to $451,146 as of December 31, 2012. The Company is operating with limited capital. As a result, the Company is dependent on the procurement of additional financing to continue as a going concern.

We used net cash in our operating activities of $61,214 during the six-month period ended June 30, 2013 compared to net cash used in our operating activities of $95,359 during the same period of the prior year. Our negative cash flow during the six-month period ended June 30, 2013 was principally due to a net loss of $200,729, the decrease in accounts payable and other current liabilities of $16,874 and the increase in related parties payable of $6,000, offset principally by total realized and unrealized losses on trading securities of $112,828 and amortization of debt discount of $43,350. During the six months ended June 30, 2013, the Company generated $49,324 from the sale of trading securities and $6,900 from financing activities related to the issuance of two convertible notes.

We had no material investing activities during the three-month period ended June 30, 2013. Due to our limited cash position, we believe that we have to raise additional funds to continue our operations for approximately the next three months. We believe we will require approximately $6,000 per month to maintain our operations for the next twelve months. We plan to raise additional capital through the sale of debt and/or equity, which sales may cause dilution to our then existing shareholders, moving forward if needed to support our ongoing operations and expenses. There can be no assurances that we will be able to raise additional capital in the future, and/or that such sales of securities will not be on unfavorable terms.

Although we hope to generate meaningful revenues sufficient to support our operations in the next eight to twelve months, if we are unsuccessful in generating such revenues, we will likely need to take steps to raise equity capital or to borrow additional funds, to continue our operations and meet liabilities. We believe that we will require total cash resources of approximately $120,000 in order to carry out this plan and continue our business plan during the next twelve month period.

We have no commitments from officers, Directors or affiliates to provide funding. Our failure to obtain adequate additional financing may require us to delay, curtail or scale back some or all of our operations.

Going Concern Consideration

There is substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures with respect to this matter.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

CRITICAL ACCOUNTNG POLICIES

Financial Reporting Release No. 60, published by the SEC, recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates.

The accounting policies identified as critical are as follows:

Development Stage Company

We are considered a development stage Company as defined by ASC 915 “Development Stage Entities,” as we have no principal operations or revenue from any source. Operations from the inception of the development stage have been devoted primarily to strategic planning, raising capital, and research and development activities.

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 and disclosures in the financial statements. Actual results could differ from those estimates.

Revenue

Research and Development Expenses

The Company incurred costs internally to create its platform product. Such costs have been and will be charged to operations as R&D expenses until technological feasibility has been established. Thereafter, software production costs will be capitalized. Technological feasibility is considered established when all planning, designing, coding, and testing activities have been performed. As evidence that technological feasibility has been established, the Company must have performed the activities as follows:

(a) The product design and the detail program design have been completed and the Company has established that the necessary skills, and technology are available to produce the product.

(b) The completeness of the detail program design and its consistency with the product design have been confirmed by documenting and tracing the detail program design to product specifications.

(c) The detail program design has been reviewed for high-risk development issues (e.g., novel, unique, unproven functions and features or technological innovations) and any uncertainties related to high-risk development issues have been resolved through coding and testing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. As of June 30, 2013, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1. Description of Business, subheading "Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFTY DISCLOSURE.

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

Exhibit No.	Description
31.1	Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Erez Zino, filed herewith.
32.1	Section 906 of the Sarbanes-Oxley Act of 2002 of Erez Zino, filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PROGAMING PLATFORMS CORP.

/s/ Erez Zino
Erez Zino
Chief Executive Officer and Chief Financial Officer

August 8, 2013

CITRINE GLOBAL, CORP. - FORM 10-Q - August 8, 2013

Attached files

CITRINE GLOBAL, CORP. Reports