DKG Capital Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - EXHIBIT 32.1 - DKG Capital Inc.	ex32_1.htm
EX-31.1 - EXHIBIT 31.1 - DKG Capital Inc.	ex31_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED June 30, 2015

	OR

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

Commission file number 000-1592411

RERAISE GAMING CORPORATION

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

7785 S. Dean Martin Dr. #100

Las Vegas, NV 89118

(Address of principal executive offices, including zip code.)

(702) 514-7111

(telephone number, including area code)

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

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x NO o

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 17,376,000 shares of common stock as of July 28, 2015.

RERAISE GAMING CORPORATION

FINANCIAL STATEMENTS

June 30, 2015

TABLE OF CONTENTS

PART I. - FINANCIAL INFORMATION
		Page

ITEM 1	FINANCIAL STATEMENTS

	Unaudited Condensed Balance Sheets as of June 30 2015 and December 31, 2014	3

	Unaudited Condensed Statements of Operations for the three and six month periods ended June 30, 2015 and 2014	4

	Unaudited Condensed Statements of Cash Flows for the six month periods ended June 30, 2015 and 2014	5

	Notes to Interim Condensed Financial Statements (unaudited)	6

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	12

ITEM 4	Controls and Procedures	13

PART II	OTHER INFORMATION	13

ITEM 1A	Risk Factors	13

ITEM 6	Exhibits	13

INDEX TO EXHIBITS		13

SIGNATURES		14

Reraise Gaming Corporation
Condensed Balance Sheets

	June 30,			December 31,
	2015			2014
	(unaudited)
ASSETS

Current assets
Cash	$	41,387		$	21,113
Total current assets		41,387			21,113

Intangible asset, less accumulated amortization of $2,126 and $1,592 respectively		4,274			5,341
Total assets	$	45,661		$	26,454

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable and accrued liabilities	$	1,250		$	2,477
Loan payable - related party		30,000			30,000
Note payable		25,000			25,000
Note payable - related party		26,500			1,500
Total current liabilities		82,750			58,977

Stockholders' deficit
Common stock, 100,000,000 shares authorized, at
$0.001 par value, 17,376,000 and 17,271,000 shares
outstanding, respectively		17,376			17,272
Additional paid in capital		2,682,624			2,630,228
Accumulated deficit		(2,737,089	)		(2,680,023	)
Total stockholders' deficit		(37,089	)		(32,523	)

Total liabilities and stockholders' deficit	$	45,661		$	26,454

The accompanying notes are an integral part of these unaudited condensed financial statements

Reraise Gaming Corporation

Condensed Statements of Operations

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014

Revenue	$	-		$	-		$	-		$	-

Operating expenses
General and administrative		17,765			273,267			56,543			2,418,355
Professional fees		-			2,803			-			4,653
Total operating expenses		17,765			276,070			56,543			2,423,008

Loss from operations		(17,765	)		(276,070	)		(56,543	)		(2,423,008	)

Other expenses
Interest expense		831			-			523			-
Total other expenses		831			-			523			-

Loss before provision for income taxes		(18,596	)		(276,070	)		(57,066	)		(2,423,008	)

Net loss	$	(18,596	)	$	(276,070	)	$	(57,066	)	$	(2,423,008	)

Basic and diluted loss per share	$	(0.00	)	$	(0.02	)	$	(0.00	)	$	(0.15	)

Weighted average shares outstanding
Basic and diluted		17,334,333			14,713,000			17,328,597			15,811,884

The accompanying notes are an integral part of these unaudited condensed financial statements

Reraise Gaming Corporation
Condensed Statements of Cash Flow
(Unaudited)

	For the six months ended
	June 30,
	2015			2014
Cash flows from operating activities
Net (loss)	$	(57,066	)	$	(2,423,008	)
Adjustments to reconcile net loss to cash
used in operating activities
Stock based compensation		27,500			2,393,750
Amortization		1,067			465
Change in assets and liabilities-
Decrease in accounts payable and accruals		(1,227	)		-
Net cash used in operating activities		(29,726	)		(28,793	)

Cash flows from investing activities
Acquisition of interactive web site		-			(5,600	)
Net cash used in investing activities		-			(5,600	)

Cash flows from financing activities
Loan from related party		25,000			-
Proceeds from note payable		-			25,096
Common stock issued for cash		25,000			5,000
Net cash provided by financing activities		50,000			30,096

Increase (Decrease) in Cash		20,274			(4,297	)
Cash, beginning		21,113			33,655
Cash, ending	$	41,387		$	29,358
Supplementary information
Cash paid:
Interest	$	-		$	-
Income taxes	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed financial statements

Reraise Gaming Corporation

Notes to Unaudited Condensed Financial Statements

June 30, 2015

NOTE 1 - ORGANIZATION AND OPERATIONS

Reraise Gaming Corporation (Reraise) located in Las Vegas, Nevada, was incorporated on October 2, 2013, in the State of Nevada. As of June 30, 2015 the Company has acquired a variety of poker games, some with patents and some with patents pending, in addition to those we are developing. Each of the games has been acquired or is being developed for different segments of the poker market, namely video poker, brick and mortar, as well as online poker. Several of the games are available on line, at no charge, to test their viability.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of Reraise Gaming Corporation have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2014 contained in the Company’s Form S 1/A amendment 5 originally filed with the Securities and Exchange Commission on March 24, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less which are not securing any corporate obligations. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Stock-Based Compensation

The Company records stock-based compensation at fair value as of the date of grant and recognizes the corresponding expense over the requisite service period (usually the vesting period), utilizing the Black-Scholes option-pricing model. The volatility component of the calculation is based on the historic volatility of the Company’s stock or the expected future volatility. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company incurred accumulated net losses from inception (October 2, 2013) through the period ended June 30, 2015 of $2,737,089. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s development activities since inception have been financially sustained through the sale of capital stock and capital contributions from a note holder.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock or through debt financing and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 4- COMMITMENT

On May 21, 2014 the Company entered into an agreement with Chris Moneymaker, an individual, to use his name and likeness alongside a brief positive quote on the Company’s website, paraphernalia or literature. In exchange, the Company paid a signing bonus of $10,000, to Chris Moneymaker and committed to pay $1,000 per month for 24 months after it has raised $1,000,000 from the time the contract was initiated plus an additional $500 per month for 24 months for every $1,000,000 thereafter that is raised. The above consulting terms are concurrent, meaning, the 2nd contract will be added to the first contract and every other contract thereafter.

NOTE 5 – NOTE PAYABLE

On June 2, 2014 the Company borrowed $25,000 from a lender with compound interest of 5% repayable in one payment of $26,250, on June 1, 2015. The lender has not made demand for payment nor for the common stock, to be issued. The amount remains outstanding as of June 30, 2015 and is past due. In the event of default, the note is secured by not less than 2,000,000 shares of the Company’s common stock.

NOTE 6 - STOCKHOLDERS’ EQUITY

On January 7, 2015 the Company issued 55,000 restricted common shares to two consultants, for allowing the Company to utilize the consultants’ name, image and endorsement, on Company material, electronic and other wise. The shares have a fair value of $27,500 which was recognized as stock based compensation for the six months ended June 30, 2015.

On June 15, 2015 the issued 50,000 restricted common shares, to an investor, at $0.50 per share or a total of $25,000 cash.

NOTE 7 – RELATED PARTY TRANSACTIONS

Between December 3, 2013 and January 29, 2014 a related party made cash advances totaling $30,000, to an individual, to acquire, several patents and patents pending. The loan is non-interest bearing, unsecured and has no repayment terms or maturity date.

On June 8, 2015 the Company borrowed $25,000, from a related party, on an unsecured note payable, repayable on July 8, 2015, including interest of 2% per annum. The Company also borrowed an additional $1,500 which are non-interest bearing and payable in demand.

NOTE 8 – SUBSEQUENT EVENTS

The related party note of $25,000 was not repaid on July 8, 2015 and has been extended, on the same terms and conditions, for one year, until July 8, 2016

Item 2: - Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q includes statements about:

our marketing plan;

our plans to hire industry experts and expand our management team;

our beliefs regarding the future of our competitors;

our anticipated development schedule;

the anticipated benefits of our product;

our expectation that the demand for our products will eventually increase; and

our expectation that we will be able to raise capital when we need it.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

general economic and business conditions;

we may have product liability claims;

we may not be successful in commercialization of our products;

regulatory changes may hurt the market for our products;

we may not be able to protect our intellectual property rights;

our auditors have issued a going concern opinion regarding our company;

competition for, among other things, capital, products and skilled personnel; and

other factors discussed under the section entitled “Risk Factors”,

any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this report, the terms “we”, “us” and “our” mean 808 Renewable Energy Corporation, a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements and related notes appearing elsewhere in this Quarterly Report.

History and Overview

Reraise Gaming Corporation was incorporated on October 2, 2013 under the laws of the State of Nevada.

Plan of Operations

We are in the business of developing poker games, some with patents and some without patents, for different segments of the poker market, namely video poker, brick and mortar, as well as online poker The Company has, also, acquired, for cash and common stock, a variety of poker games, some with patents and some with patents pending. Several of the games are available on line, at no charge, to test their viability.

Results of Operations

The following is an analysis of our revenues and analysis of components of expenses, and variances comparing the six and three months ended June 30, 2015 to the six and three months ended June 30, 2014.

We are in our infancy stage and have not generated any revenue from our core business model. Our total expenses during the three months ended June 30, 2015 were general and administrative expenses of $17,765 compared to $273,267, which included $257,500 of stock based compensation, and $533 depreciation expense compared to $465 for the three months ended June 30, 2015 and 2014, respectively. General and administrative expenses for the six months ended June 30, 2015 was $56,543 compared to $2,418,355, including stock based compensation of $2,393,750 for the same period in 2014. Depreciation expense for the six months ended June 30, 2015 was $1,067 compared to $465 for the six months ended June 30, 2014. Interest expense was $523 for the six months ended June 30, 2015 compared to nil for the same period in 2014.

For the six months ended June 30, 2015, our total operating expenses were $ 56,543 as compared to $2,423,008 for the six months ended June 30, 2014. The change in operating expenses is primarily due to the inclusion of $2,393,750 of stock based compensation paid to key management personnel and several consultants for the use of their images in promoting the Company’s products.

Professional Fees

We incurred a total of $0 in professional and filing fees for the six months ended June 30, 2015 as compared to $4,653 during the six months ended June 30, 2014. Professional fees include legal and other fees consisting mostly of cost related to the preparation of SEC filings. Our audit and legal fees are expected to vary.

Liquidity and Capital Resources

During the six months ended June 30, 2015, we utilized cash in the amount of $29,726 to pay for operating activities compared to $28,793 for the six months ended June 30, 2014. Cash used in operating activities during the six months ended June 30, 2015 included a net loss of $57,066 compared to a net loss of $2,423,008 for the six months ended June 30. 2014. The net loss for the six months ended June 30, 2015 included non-cash stock based compensation expense of $27,500 compared to a similar charge in the same 2014 period of $2,393,750. Accounts payable decreased and utilized cash of $1,227 for the six months ended June 30, 2015 compared to no change for the six months ended June 30, 2014.

Investing Activities

We did not use any cash resources for investing activities during the six months ended June 30, 2015 compared to the acquisition cost, of a web site, of $5,600 for the six months ended June 30, 2014.

Financing Activities

During the six months ended June 30, 2015 the Company generated $25,000 from a related party loan and $25,000 from the sale of common stock, compared to the six months ended June 30, 2014, when we received proceeds from notes payable in the amount of $25,096 and $5,000 from the sale of common stock.

Working Capital Needs:

As of June 30, 2015, we had a working capital deficit of ($41,363). Over the next 12 months, we will require approximately $75,000 to sustain our working capital needs as a public reporting company and to further develop our web and bricks and mortar products.

Sources of Capital:

We expect to obtain financing through the sale of restricted common shares, shareholder loans, and a potential line of credit. The sale of common shares will be priced based on current market activity. Shareholder loans, depending on circumstances, may be without stated terms of repayment or interest. Because a line of credit is not currently being investigated, its terms will depend on the lender at the time of commitment. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.

Plan of Operations:

We are in the infancy stage of developing our products. The Company was incorporated in the State of Nevada on October 2, 2013, to engage in the development and distribution of poker games. We have generated no revenues from business operations. Our independent registered public accounting firm has issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business unless we obtain additional capital to pay our ongoing operational costs. Accordingly, we must locate sources of capital to pay our operational costs.

We are in the start-up stage of our business plan. We are currently working with potential sponsors of our card games and the U.S. Patent office before we start promoting our games. In the next 12 months we anticipate developing and or purchasing additional games for our game portfolio. Every game will require a novel approach to add it to our portfolio including the issuance of our stock to acquire them. We anticipate when we have reached our goal of several new games in our portfolio we will have a strong portfolio to make available to the general public and begin to charge a fee for downloads of our games via ITunes and our web page Reraisegaming.com.

Our detailed plan of operation consists of identifying the game, applying for patents and trademarks, apply for international patents and trademarks, obtain mathematical analysis to determine the value of the game and market the game to the gaming industry. Each game will need a different degree of development and financing as no two games are alike. On average each game will take between 12 and 18 months to reach its final stage. We will need traditional funding and anticipate hiring a brokerage firm registered with FINRA to assist us in meeting our funding needs. We have currently not discussed our plan with any brokerage firms.

Material Commitments

We do not have any material commitments for capital expenditures.

Seasonal Aspects

Management is not currently aware of any seasonal aspects which would affect the results of our operations during any particular time of year.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

Summary of Significant Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 2 of our unaudited interim 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. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our unaudited interim financial statements:

Recent accounting pronouncements issued by FASB (including the Emerging Issues Task Force), the AICPA and the SEC, did not or are not believed by the Company management, to have a material impact on the Company’s present or future financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective during the six month period ended June 30, 2015.

There were no changes in our internal control over financial reporting during the three month period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

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

ITEM 6. EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 14th day of August, 2015.

	RERAISE GAMING CORPORATION






	BY: /s/	RON CAMACHO RON CAMACHO
		Principal Executive Officer Principal Financial Officer and Principal Accounting Officer

DKG Capital Inc. - FORM 10-Q - August 14, 2015

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DKG Capital Inc. Reports