10-Q 1 f10q0613_empireglobal.htm QUARTERLY REPORT f10q0613_empireglobal.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Quarter ended June 30, 2013

Commission File Number: 333-169531

EMPIRE GLOBAL GAMING, INC.
 (Exact name of registrant as specified in its charter)

Nevada
  
27-2529852
(State or jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification Number)
     
555 Woodside Avenue
Bellport, New York 11713
  
 
11713
(Address of principal executive offices)
  
(Zip code)

(877) 643-3200
(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  T   No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 T No £.

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
£
Accelerated Filer
£
Non-Accelerated Filer
£
Smaller Reporting Company
T

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

There were 57,301,000 shares of common stock outstanding as of August 14, 2013.
 
 
 
 

TABLE OF CONTENTS

 
 
2
 
 
 
ITEM 1. FINANCIAL STATEMENTS

EMPIRE GLOBAL GAMING, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
 
   
June 30,
    
December 31,
  
   
2013
    
2012
  
   
(Unaudited)
    
(Audited)
  
ASSETS
  
             
CURRENT ASSETS:
            
    Cash
   $ 12,208     $ 16,953  
    Prepaid expenses
     200,000       -  
    Inventory
     18,639       21,970  
       Total current assets
     230,847       38,923  
                 
OTHER ASSETS
                
    Equipment
     4,000       4,000  
    Less: Accumulated depreciation
     (1,200 )     (800 )
      2,800       3,200  
                 
       Total assets
   $ 233,647     $ 42,123  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
  
                 
CURRENT LIABILITIES:
                
    Accounts payable and accrued expenses
   $ 7,512     $ 4,270  
       Total current liabilities
     7,512       4,270  
                 
LONG TERM LIABILITIES:
                
    Note payable - Stockholder
     21,720       2,120  
                 
TOTAL LIABILITIES
     29,232       6,390  
                 
STOCKHOLDERS' EQUITY
                
    Common stock: $0.001 par value; 980,000,000 authorized, 57,301,000 and 50,801,000 shares issued and outstandingas of June 30, 2013 and December 31, 2012, respectively.
     57,301       50,801  
    Additional paid-in capital
     664,099       345,599  
    Deficit accumulated during development stage
     (516,985 )     (360,667 )
       Total stockholders' equity
     204,415       35,733  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
   $ 233,647     $ 42,123  

The accompanying notes are an integral part of these interim financial statements.
 
 
3
 
 
EMPIRE GLOBAL GAMING, INC.
 (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)

   
For the three months ended,
    
For the six months ended,
    
From inception
  
   
June 30,
    
June 30,
    
June 30,
    
June 30,
    
(May 11, 2010) to
  
   
2013
    
2012
    
2013
    
2012
    
June 30, 2013
  
                               
REVENUES
   $ 1,111     $ 62     $ 10,518     $ 2,347     $ 22,843  
                                         
COST OF GOODS SOLD
     560       -       3,331       2,173       10,035  
                                         
GROSS PROFIT
     551       62       7,187       174       12,808  
                                         
GENERAL & ADMINISTRATIVE EXPENSES:
     111,928       24,381       163,505       59,652       529,793  
                                         
NET LOSS
   $ (111,377 )   $ (24,319 )   $ (156,318 )   $ (59,478 )   $ (516,985 )
                                         
Net loss per common share - basic and diluted
   $ (0.002 )   $ (0.001 )   $ (0.003 )   $ (0.001 )        
                                         
Weighted average of common shares outstanding
     57,290,560       50,801,000       54,063,707       50,801,000          
 
The accompanying notes are an integral part of these interim financial statements.
 
 
4
 
 
EMPIRE GLOBAL GAMING, INC.
 (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)

               
From inception
  
   
For the six months ended,
    
(May 11, 2010) to
  
   
June 30, 2013
    
June 30, 2012
    
June 30, 2013
  
Cash Flows from Operating Activities:
                  
    Net loss
   $ (156,318 )   $ (59,478 )   $ (516,985 )
    Adjustments to reconcile net loss to net cash from operating activities:
                        
       Inventory contributed by  stockholder
     3,331       (16,395 )     (18,639 )
       Prepaid expenses paid by the  issuance of common stock
     (200,000 )     -       (200,000 )
       Common stock issued for services
     325,000       -       374,000  
       Depreciation
     400       -       1,200  
       Changes in assets and liabilities                        
       Accounts receivable
     -       2,793       -  
       Prepaid legal fees
     -       3,624       -  
       Accounts payable
     3,242       7,970       7,512  
    Net cash used in operating activities
     (24,345 )     (61,486 )     (352,912 )
                         
Cash Flows From Investing Activities
                        
    Acquisition of equipment
     -       -       (4,000 )
    Net cash used in investing activities
     -       -       (4,000 )
                         
Cash Flows From Financing Activities:
                        
    Proceeds from note payable - Stockholder
     19,600       -       21,720  
    Proceeds from issuance of common stock
     -       -       347,400  
    Net cash provided by financing activities
     19,600       -       369,120  
                         
NET INCREASE (DECREASE) IN CASH
     (4,745 )     (61,486 )     12,208  
                         
CASH AT BEGINNING OF THE PERIOD
     16,953       111,207       -  
CASH AT THE END OF THE PERIOD
   $ 12,208     $ 49,721     $ 12,208  
                         
Non-Cash Transactions:
                        
    Contributed inventory
   $ -     $ -     $ 22,150  
    Common stock issued for services
   $ 325,000     $ -     $ 374,000  

The accompanying notes are an integral part of these interim financial statements.
 
 
5
 
 
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

Note 1. Basis of Presentation and Organization and Significant Accounting Policies

Basis of Presentation and Organization

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 Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.  In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included,  Operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.  For further information, refer to the financial statements and footnotes thereto for the year ending December 31, 2012.

As used in these Notes to the Financial Statements, the terms the "Company", "we", "us", "our" and similar terms refer to Empire Global Gaming, Inc.

The Company was incorporated in the State of Nevada on May 11, 2010 in order to acquire certain U.S Patent license agreements pertaining to roulette and actively engage in the gaming business worldwide and commenced operations in June, 2010.  The Company was founded to develop, manufacture and sell Class II and Class III Casino electronic and table games for the general public and casinos worldwide. The Company owns exclusive rights through license agreements to four U.S. Patents consisting of 14 roulette games patents. These patents are certified by Gaming Laboratories International to minimize any unfairness in the multi-number bets in roulette (American double 0 and European single 0) to both players and casinos. One of the patents controlled by the Company is for a “new number pattern and board layout” that will insure, the various gaming control boards and commissions in the United States and eventually worldwide, that the highest standards of security and integrity are met. We hold licenses for eight patented Class II and III Casino Grade Mechanical and Electronic Games.  The games include (i) proprietary 20 sided dice game, (ii) combination game of poker and blackjack, side bet blackjack, and (iii) five patents covering roulette.  We also created a new proprietary variation on the standard deck of playing cards (patent pending).   EGGI also sells a complete line of public and casino grade gaming products for roulette, blackjack, craps, baccarat, mini baccarat, pinwheels, Sic Bo, slot machines, poker tables and bingo games. We are working on developing some of our patented games into video and slot machine terminals as well as computer and mobile devices.  We also are attempting to develop a pick 3 lotto evaluation and analysis program.   We have taken certain steps to become fully “e-commerce” operational while awaiting Gaming Board approvals.  We operate a website where we sell certain equipment and proprietary games.   Our website is located at:  www.empireglobalgaminginc.com.  

The Company has net losses consisting of pre-operating and start-up expenses, of $516,985 from May 10, 2010 to June 30, 2013.

We are controlled by two individuals (our President and Chief Financial Officer) who devote approximately 25 hours a week each of their time to the business of the Company.

The Company currently has limited operations in accordance with Financial Accounting Standard Board Codification (“FASB ASC”) Development Stage Entities topic. The Company has been in the development stage since its formation.  The accompanying financial statements have been prepared in accordance with authoritative guidance for development stage entities.  A development stage entity is one in which planned principal operations has not commenced or if its operations have commenced, there has been no significant revenues there from.
 
 
6
 

NOTE 2.  GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  To date, the Company has generated minimal revenues, is considered a development stage Company, has experienced recurring net operating losses, had a net loss of $111,377 for the six months ending June 30, 2013 and $516,985 for the period from inception (May 11, 2010) to June 30, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  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. We will need to raise funds or implement our business plan to continue operations.

In order to continue as a going concern, the Company may need, if revenues do not continue to grow, among other things, additional capital resources. Management’s plan is to obtain such resources, if needed, for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting.  The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

NOTE 4.

In March 2013, the Company issued 6,000,000 shares of its common stock to three consultants and one attorney in exchange for services to be rendered.  The shares were valued at the estimated value of the services to be received and are being amortized over the respective terms of the consulting agreements.  During the six months ended June 30, 2013, $100,000 was amortized and charged to operations

 
NOTE 5.  SUBSEQUENT EVENTS

Management evaluated all activity of the Company through the issue date of the Financial Statements and noted that no subsequent events that would have a material impact on the financial statements as of and for the period ended June 30, 2013.

NOTE 6. RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2013 and for the year ended December 31, 2012, the Company sold     $10,242 and $5,971, respectively of inventory to the shareholders of the Company.
 
 
7
 
 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto. This discussion and analysis may contain forward-looking statements based on assumptions about our future business.

In General
 
We presently sell our ancillary gaming products in the United States but contemplate selling and leasing our products worldwide.

Although the Company has obtained the license for the manufacturing, sale, marketing and licensing of the four roulette patents, and certain other patents, we have not yet applied to any State Gaming Commission(s) to seek approval to sell any of our products.  The Company has not, as of yet, arranged for any lines of credit, and we have no commitments, written or oral, from officers, directors or shareholders to provide the Company with advances, loans or other funding for our operations.

Critical Accounting Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America required 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. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results could differ from those estimates.

Liquidity and Capital Resources
 
We believe that the Company currently does not have the necessary working capital to support existing operations through 2013.  Our primary capital source will be cash flow from operations cash on hand and loans from Stockholders We anticipate reaching profitability in 2014.    We are seeking to develop and market the patented technologies, manufacture and sell gaming equipment that will generate cash from operations.
 
For the remainder of the fiscal year ending December 31, 2013, we anticipate incurring a loss as a result of continued expenses associated with compliance with the reporting requirements of the Exchange Act.
 
Plan of Operations
 
During the remainder of the fiscal year ending December 31, 2013, we plan to continue with efforts to develop and market the patented technologies, a pick 3 lotto evaluation and analysis program, manufacture and sell gaming equipment that will generate cash from operations. We also plan to file all required periodic reports and to maintain our status as a fully-reporting company under the Exchange Act.

Based upon our current cash reserves, although we feel it will be adequate, we may not have adequate resources to meet our short term or long-term cash requirements. No specific commitments to provide additional funds have been made by management, the principal stockholders or other stockholders, and we have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities. Accordingly, there can be no assurance that any additional funds will be available to us to allow us to cover our expenses.
 
 
8
 

Six Months Ended June 30, 2013 Compared to June 30, 2012
 
The following table summarizes the results of our operations during the six months ended June 30, 2013 and 2012, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current six month period to the prior six month period:
 
   
6/30/13

    
6/30/12

              
 
  
(unaudited)
    
(unaudited)
    
Variance
    
Percentage
  
Revenues
     10,518       2,347       8,171       348.15 %
Cost of Goods Sold
     3,331       2,173       1,158       53.29 %
Operating expenses
     163,505       59,652       103,853       174.10 %
Net loss
     (156,318 )     (59,478 )     96,840       61.42 %
Loss per share of common stock
   $ (0.003 )   $ (0.001 )   $ (0.002 )        

We recorded a net loss of $156,318 for the six months ended June 30, 2013 as compared with a net loss of $59,478 for the three months ended June 30, 2012. The increase in net loss was primarily attributable to an increase in legal and professional fees.

Three Months Ended June 30, 2013 Compared to June 30, 2012
 
The following table summarizes the results of our operations during the three months ended June 30, 2013 and 2012, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current three month period to the prior three month period:
 
   
6/30/13

    
6/30/12

              
 
  
(unaudited)
    
(unaudited)
    
Variance
    
Percentage
  
Revenues
    1,111       62       1,049       1691.94 %
Cost of Goods Sold
     560       -       560       0.00 %
Operating expenses
     111,928       24,381       87,547       359.08 %
Net loss
     (111,377 )     (24,319 )     (87,058 )     357.98 %
Loss per share of common stock
   $ (0.002 )   $ (0.001 )   $ (0.001 )        

We recorded a net loss of $111,377 for the three months ended June 30, 2013 as compared with a net loss of $24,319 for the three months ended June 30, 2012. The increase in net loss was primarily attributable to an increase in legal and professional fees.

Commitment and Contingencies

None.

Off-Balance Sheet Arrangements
 
At June 30, 2013, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements.
 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.


Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company are detected.
 
 
9
 
 
Changes in Internal Control over Financial Reporting

There has been no change since December 31, 2012 in our internal control over financial reporting identified in connection with the evaluation of disclosure controls and procedures discussed above that occurred during the three months ended June 30, 2013, or subsequent to that date, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.


As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item


During the period covered by this Report, we have not sold any of our securities that were not registered under the Securities Act.


None.


Not applicable.


None.
 

Exhibit No.
  
Description
     
31.1
  
Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
  
Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
  
Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
  
Certification of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  101*
The following financial information from the Company’s Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets at June 30, 2013 and December 31, 2012; (ii) Unaudited Condensed Consolidated Statement of Operations for the three months ended June 30, 2013 and June 30, 2012 and from inception (May 11, 2010) to June 30, 2013; (iii) Unaudited Condensed Statement of Cash Flows for the three months ended June 30, 2013 and June 30, 2012 and from inception May 11, 2010 to June 30, 2013; and (v) Notes to Unaudited Condensed Financial Statements, tagged as blocks of text.

* Users of this data are advised that pursuant to Rule 406T of Regulation S-T, this XBRL information is being furnished and not filed herewith for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and Sections 11 or 12 of the Securities Act of 1933, as amended, and is not to be incorporated by reference into any filing, or part of any registration statement or prospectus, of Empire Global Gaming, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.
 
 
10
 

 
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 
EMPIRE GLOBAL GAMING, INC.
Dated: August 14, 2013
    
 
By
/s/ Nicholas Sorge, Sr.
   
Nicholas Sorge, Sr.
   
Chief Executive Officer and President and Director

Dated: August 14, 2013    
 
By
/s/ Dolores Marsh
   
Dolores Marsh
   
Chief Financial Officer, Controller,
   
Secretary/Treasurer and Director

 
 11