-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QN3P7egKAlsPk8r3t4E3pxdr3Cg17lZGxtL/WDawq/4JesnO+ciDoyqGq4O4zMmx KDqUR95fd7scbTFuAwyiGA== 0001227528-07-000130.txt : 20070521 0001227528-07-000130.hdr.sgml : 20070521 20070521162955 ACCESSION NUMBER: 0001227528-07-000130 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070331 FILED AS OF DATE: 20070521 DATE AS OF CHANGE: 20070521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STRATEGIC GAMING INVESTMENTS, INC. CENTRAL INDEX KEY: 0000278165 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 020314487 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09047 FILM NUMBER: 07868211 BUSINESS ADDRESS: STREET 1: 845 SOUTH MAIN SUITE 1B CITY: BOUNTIFUL STATE: UT ZIP: 84010 BUSINESS PHONE: 8012444405 MAIL ADDRESS: STREET 1: 845 SOUTH MAIN SUITE 1B CITY: BOUNTIFUL STATE: UT ZIP: 84010 FORMER COMPANY: FORMER CONFORMED NAME: LEFT RIGHT MARKETING TECHNOLOGY INC DATE OF NAME CHANGE: 20031002 FORMER COMPANY: FORMER CONFORMED NAME: LEFT RIGHT MAKETING TECHNOLOGY INC DATE OF NAME CHANGE: 20030815 FORMER COMPANY: FORMER CONFORMED NAME: GLOBAL GAMING & TECHNOLOGY INC DATE OF NAME CHANGE: 19920703 10QSB 1 msgme10qsb033107.txt STRATEGIC GAMING INVESTMENTS, INC. FORM 10-QSB MARCH 31, 2007 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended:March 31, 2007 OR [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from:______to______ Commission file number:000-09047 Strategic Gaming Investments, Inc. --------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 20-3454263 ---------------------------- ---------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2580 Anthem Village Dr., Henderson, NV 89052 -------------------------------------------- (Address of principal executive offices) (702) 563-1600 --------------------------- (Issuer's telephone number) N/A ------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [ ] NO Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [X] YES [ ] NO APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. [ ] YES [ ] NO APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 8,847,137 shares of common stock, $0.001 par value, as of May 21, 2007 TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): [ ] YES [X] NO FORM 10-QSB TABLE OF CONTENTS PAGE PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS...........................................1 Balance Sheet (Unaudited).........................................1 Statement of Operations (Unaudited)...............................2 Statement of Cash Flows (Unaudited)...............................3 Statement of Stockholder's Equity (Unaudited).....................4 Notes to Condensed Consolidated Financial Statements (Unaudited).................................................5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............................. 8 ITEM 3. CONTROLS AND PROCEDURES.......................................10 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS.............................................12 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.....................12 ITEM 3. DEFAULTS UPON SENIOR SECURITIES...............................12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.12......................................................... ITEM 5. OTHER INFORMATION.............................................12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..............................12 SIGNATURE....................................................................13 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. STRATEGIC GAMING INVESTMENTS, INC. CONSOLIDATED BALANCE SHEETS
Unaudited Audited As of As Of March 31, December 31, 2007 2006 ============ ============ ASSETS Current assets Cash $ 7,196 $ 25,215 ------------ ------------ Total current assets 7,196 25,215 Other current assets Prepaid expense - 999 Loan receivable - 8,228 ------------ ------------ Total other current assets - 9,227 Intangible Assets, net of accumulated amortization 1,654 2,596 ============ ============ Total assets $ 8,850 $ 37,038 LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities Accounts payable $ 93,913 $ 93,276 Accounts payable - related parties 30,000 30,000 Advances from related parties 133,658 131,158 Accrued interest 4,155 - Deferred officers' compensation 59,587 25,834 Accrued payroll 461,963 461,963 ------------ ------------ Total current liabilities 783,276 742,231 Convertible notes payable, net of unamortized discount of $271,457 16,043 120,000 Commitments and contingencies - - Stockholders' (deficit) Preferred Stock (25,000,000 shares authorized and zero issued and outstanding) - - Common stock; $.001 par value; 100,000,000 authorized;8,847,137 and 8,047,137 shares issued and outstanding as of March 31, 2007 and December 31, 2006, respectively 8,847 8,047 Additional paid-in capital 6,347,549 3,580,849 Stock issued for receivable (15,000) - Accumulated (deficit) (7,131,865) (4,414,090) ------------ ------------ Total stockholders' (deficit) (790,469) (825,193) ============ ============ Total liabilities and stockholders' (deficit) $ 8,850 $ 37,038
STRATEGIC GAMING INVESTMENTS, INC. CONSOLIDATED STATEMENTS OF INCOME
Unaudited Unaudited Three months Three months ended ended March 31, March 31, 2007 2006 =========== =========== Revenue $ - $ - Operating expenses General and administrative 141,757 19,847 --------- --------- Total operating expenses 141,757 19,847 Loss from operations (141,757) (19,847) Other income (expenses): Amortization of discount on convertible notes payable (3,783) - Loss from rescinded merger (2,555,811) - Interest expense on warrants with convertible notes payable (12,260) - Interest expense (4,165) (207) --------- --------- Total other income (expenses) (2,576,020) (207) --------- --------- (Loss) before provision for income tax and other comprehensive income / (loss) (2,717,776) (20,054) --------- --------- Provision for income tax - - (Loss) before other comprehensive income / (loss) (2,717,776) (20,054) --------- --------- Other comprehensive income / (loss) - - Net (loss) $(2,717,776) $ (20,054) ========= ========= Basic and diluted (loss) per common $ (0.31) $ (0.20) share ========= ========= Basic and diluted weighted average common shares outstanding 8,753,804 98,804 ========= =========
STRATEGIC GAMING INVESTMENTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW
Unaudited Unaudited Three months Three months ended ended March 31, March 31, 2007 2006 =========== =========== Cash flows from operating activities: Net loss $(2,717,776) $ (20,054) Adjustments to reconcile net loss to net cash used by operating activities: Changes in operating assets and liabilities: Interest expense on warrant with convertible notes payable 12,260 - Amortization of discount on convertible notes payable 3,783 - Loss associated with rescinded merger 2,465,000 - Depreciation and amortization 942 - (Increase) / decrease in prepaid expenses 999 - (Increase) / decrease in loans receivable 8,228 - Increase / (decrease) in accounts payable 637 9,195 Increase / (decrease) in accrued interest 4,155 - Increase / (decrease) in deferred payroll 33,753 - Increase / (decrease) in contingency payable - (12,500) ---------- ---------- Net cash used by operating activities (188,018) (23,360) Cash flows from investing activities: Net cash provided by investing activities - - Cash flows from financing activities: Advance from related party 2,500 23,360 Proceeds from issuance of convertible notes payable 167,500 - ---------- ---------- Net cash provided by financing activities 170,000 23,360 ---------- ---------- Net increase in cash (18,018) - Cash, beginning of period 25,215 - ---------- ---------- Cash, end of period 7,196 $ - ========== ========== Fair value of warrants issued with convertible notes payable 217,758 - Discount on convertible notes payable 69,742 - ========== ==========
STRATEGIC GAMING INVESTMENTS, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - FINANCIAL STATEMENT PRESENTATION The financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006 as filed with the Securities and Exchange Commission on April 18, 2007. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. The Company adopted Statement of Financial Accounting Standard No. 130, "Reporting Comprehensive Income", (SFAS No. 130). SFAS No. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes the disclosure of the information that historically has not been recognized in the calculation of net income. For the period ended March 31, 2007, this amount did not vary from net loss from operations. Going Concern As discussed in the Form 10-KSB for the year ended December 31, 2006, the Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a "going concern", which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company is not a going concern and currently has no assets or continuing source of revenues and the liabilities record as basis of going concern do not reflect any adjustments due to the Companies inabilities to pay them. Management is currently discussing with creditors if, when and how they might those obligation might be paid. Management is looking at potential business opportunities and there is no guarantee any will come to fruition that action can be taken. NOTE 2 - BUSINESS COMBINATION On January 11, 2007, SGME and Neolink Wireless Content, Inc., a Nevada corporation ("Neolink"), closed a merger transaction ("Merger") whereby Neolink became a wholly-owned subsidiary of SGME. The Merger is evidenced by a Merger and Share Exchange Agreement ("Merger Agreement"). Pursuant to the terms of the Agreement, SGME issued the stockholders of Neolink, on a pro-rated basis, a total of One Million (1,000,000) shares of common stock, $0.001 par value, in consideration for 100% of the issued and outstanding capital stock of Neolink. Of those 1,000,000 issued the 500,000 shares of common stock to Donald Beck and 100,000 shares of common stock to John Padon. Mr. Beck is an officer of The Ultimate Poker League, Inc. and Mr. Padon is a director of The Ultimate Poker League, Inc. Both individuals are shareholders of the Company through its acquisition of The Ultimate Poker League on April 18, 2006. After the Merger, Mr. Beck and Mr. Padon each have 600,000 and 125,000 shares of common stock, respectively. In addition, SGME has provided approximately $90,000 of additional financing to Neolink. The Funding was utilized necessary in connection with Neolink's business, operations and affairs. On April 16, 2007, SGME and Beck entered into a Settlement Agreement and Mutual Release of Claims ("Settlement Agreement") relating to the Merger. The parties mutually decided it was in their respective best interests to terminate the Merger and did so on the following terms: (i) Beck to pay SGME the sum of Fifteen Thousand ($15,000) Dollars for 100% of the issued and outstanding capital stock of Neolink; (ii) Beck and another Neolink stockholder will relinquish a total of Two Hundred Thousand (200,000) shares of SGME common stock issued to them in the Merger; (iii) the employment agreement of Beck will be terminated and the Shares will not be issued; (iv) SGME will assume the real property lease of Neolink as well as the contract for T-1 Internet services; and (v) SGME and Beck have forever released and discharged the other, as well as their spouses, heirs, beneficiaries, shareholders, members, directors, officers, managers, employees, contractors, partners, joint venturers, attorneys, agents, representatives, successors and assigns, as applicable, from any and all contracts and other obligations relating to the Merger. As a result of the termination of the merger, SGME issued 800,000 shares of its common stocks at market price of $3.10 per share and received $15,000 in exchange. SGME recorded a loss of $2,555,000 from rescinded merger in the 1st quarter of 2007. NOTE 3 - STOCKHOLDERS' EQUITY As of March 31, 2007, there were 8,847,137 shares of common stock outstanding. On January 11, 2006, in conjunction with the Merger discussed in Note 2, the Company issued 1,000,000 shares of common stock, with 200,000 in transit to be cancelled per the terms of the Rescission. NOTE 4 - NOTES PAYABLE On January 10, 2007, SGME entered into a note and warrant purchase agreement ("Financing Agreement") with several third parties (collectively, the "Purchasers"), each of whom are accredited investors as such term is defined under the Act. The Financing Agreement consists of the following terms: (i) an initial investment of $120,000 and subsequent investment(s) of up to $980,000, for a total investment of up to $1,100,000; (ii) the investments shall be evidenced by convertible promissory notes ("Notes") on the following terms: (a) a term of three (3) years, (b) bearing simple interest at the rate of eight percent (8%) per annum, (c) convertible at $0.40 per share, and (d) secured by a first priority security interest in all of the assets of SGME; and (iii) the Purchasers shall be issued warrants to purchase 10,000 shares of common stock for every $10,000 of Notes purchased ("Warrants"), exercisable at $0.40 per share for a period of ten (10) years. The financing was made in reliance upon the exemptions from securities registration provided by Section 4(2) of the Act and Rule 506 promulgated thereunder. At March 31, 2007, the Company had approximately $287,500 of convertible notes payable to an unrelated company, principal and interest at 8%, payable three years from the date of issuance, secured by 718,750 shares of common stock and 287,500 warrants. Principal is convertible into common stock at a conversion price of $0.40 per share of common stock. At the due date the Company has the option to repay the debt or issue common stock. In connection with this transaction, the Company recorded a discount of $287,500, for the fair value of the warrants and beneficial conversion feature; as of March 31, 2007, the debt is stated net of the unamortized discount of $16,043. Beneficial Conversion Feature of Debt In accordance with Emerging Issues Task Force No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, the Company recognizes the value of conversion rights attached to convertible debt. These rights give the debt holder the ability to convert his debt into common stock at a price per share that is less than the trading price to the public on the day the loan is made to the Company. The beneficial value is calculated based on the market price of the stock at the commitment date in excess of the conversion rate of the debt and related accruing interest and is recorded as a discount to the related debt and an addition to additional paid in capital. The discount is amortized as interest expense over the remaining outstanding period of related debt. For the period ended March 31, 2007, debt discount of approximately $65,959 was recorded and $3,782 was amortized to interest expense. Warrants issued in connection with notes payable In connection with the issuance of the promissory notes payable (discussed in Note 5), the warrants grant the holders the right to purchase in aggregate 287,500 shares of common stock at an exercise price of $0.40 per share from the Company. The Company, in accordance with APB Opinion No. 14, recorded these debts and related warrants as separate securities. The warrants have a term of approximately ten years and became exercisable upon issue. The Company allocated the investment proceeds to the debt and warrants based on their relative fair values. The relative fair value of the warrants was determined to be $217,758, which was charged to additional paid-in capital with a corresponding discount on the notes payable, a reduction of the carrying amount of the debt. The discount is being amortized to interest expense over the term of the debt. The fair value of the warrants was based on the Black-Scholes model. The Black-Scholes calculation incorporated the following assumptions: 0% dividend yield, 74% - 89% average volatility, 4.65% average risk-free interest rate, a ten-year life and an underlying common stock value of $2.40 - $3.75 per share. For the period ended March 31, 2007, debt discount of approximately $12,260 was amortized to interest expense. Weighted Number of Average Shares Exercise Price ------------ -------------- Balance, December 31, 2006 -- -- Warrants granted and assumed 287,500 .40 Warrants expired -- -- Warrants canceled -- -- Warrants exercised -- -- ------------ -------------- Balance, March 31, 2007 $ 287,500 $ .40 As of March 31, 2007, all warrants outstanding are exercisable. NOTE 5 - RELATED PARTY TRANSACTIONS As of March 31, 2007, Larry Schroeder, the Company's President, Chief Executive Officer and a Director, has loaned the Company the sum of $64,177. This loan is non-interest bearing and has no due date assigned to it. This amount is in addition to $28,337 in accrued payroll, which is discussed in Note 4. As of March 31, 2007, Matthew Schultz, the Company's Vice-President and Chairman, has loaned the Company the sum of $48,889. This loan is non-interest bearing and has no due date assigned to it. As of March 31, 2007, Jason Griffith, the Company's Chief Financial Officer and a Director, has loaned the Company the sum of $42,662. Of this amount, $30,000 is in the form of accounts payable for accounting services rendered. This loan is non-interest bearing and has no due date assigned to it. This amount is in addition to $31,250 in accrued payroll, which is discussed in Note 4. As of March 31, 2007, Anthony Marsiglia, the President of The Ultimate Poker League, Inc., a wholly owned subsidiary of the Company, has loaned the Company the sum of $7,830. This loan is non- interest bearing and has no due date assigned to it. As of March 31, 2007, the Company had $59,587 in accrued payroll, payable to the Company's officers. On January 11, 2007, the Company closed a merger transaction with Neolink Wireless Content, Inc. Pursuant to the terms of the Agreement, SGME issued the 500,000 shares of common stock to Donald Beck and 100,000 shares of common stock to John Padon. Mr. Beck is an officer of The Ultimate Poker League, Inc. and Mr. Padon is a director of The Ultimate Poker League, Inc. Both individuals are shareholders of the Company through its acquisition of The Ultimate Poker League on April 18, 2006. After the Merger, Mr. Beck and Mr. Padon each have 600,000 and 125,000 shares of common stock, respectively. NOTE 6 - INTANGIBLE ASSETS The Company has adopted SFAS No. 142, "Goodwill and Other Intangible Assets", which requires that goodwill and other intangible assets be valued and recorded when acquired and amortized over their estimated useful life unless that that life is determined to be indefinite. Intangible assets are required to be tested for impairment and impairment losses, if any, shall be recorded. As of March 31, 2007, the Company had $7,775 in intangible assets and management has determined those assets to have finite useful lives. The intangible assets that make up that amount include trademark rights of $275 (15-year estimated useful life) and website development cost of $7,500 (2-year estimated useful life). Both are amortized using the straight-line method. The amortized value at March 31, 2007, was $1,654. NOTE 7 - LITIGATION On March 7, 2006, Mark Newburg and Arnoldo Galassi jointly filed a complaint in District Court, Clark County, Nevada, against Left Right Marketing Technology, Inc. (the former name of Strategic Gaming Investments, Inc.) alleging, among other things, breach of contract relating to promissory notes and employment contracts purportedly outstanding in favor of Messrs. Newburg and Galassi. The Company has filed a responsive pleading and has denied each of the allegations made by Messrs. Newburg and Galassi. Management for the Company believes that the claims relating to the alleged promissory notes and employment contracts are without merit in that the ultimate resolution will not have a material effect on the Company.. NOTE 8 - DEFERRED INCOME TAX Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of March 31, 2007 are as follows: Deferred tax assets: Net operating loss carry forwards $ 2,078,735 Stock issued for services 866,250 ----------- 2,944,985 Deferred tax assets: Depreciation and amortization (1,319) ----------- (1,319) Net deferred tax asset 2,943,666 Less valuation allowance (2,943,666) ----------- $ - =========== At March 31, 2007, the Company had federal net operating loss ("NOL") carryforwards of approximately $2,078,735. Federal NOLs could, if unused, begin to expire in 2021. The valuation allowance for deferred tax assets as of March 31, 2007 was $2,943,666. NOTE 9 - SUBSEQUENT EVENTS On April 16, 2007, SGME and Beck entered into a Settlement Agreement and Mutual Release of Claims ("Settlement Agreement") relating to the Merger. Please refer to Note 2 for further details. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with our financial statements and notes to our financial statements, included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors discussed elsewhere in this report. Certain information included herein contains statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, such as statements relating to our anticipated revenues, gross margin and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to our liquidity requirements, the continued growth of the lodging industry, the success of our product-development, marketing and sales activities, vigorous competition in the lodging industry, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global economic conditions, the inherent uncertainty and costs of prolonged arbitration or litigation, and changes in federal or state tax laws or the administration of such laws. A complete discussion of these risks and uncertainties are contained in our Annual Report on Form 10-KSB, as filed with the Securities and Exchange Commission on April 18, 2007. SUMMARY Strategic Gaming Investments, Inc., a Delaware corporation formerly known as Left Right Marketing Technology, Inc., was incorporated in the state of Delaware in 1973. In this Quarterly Report on Form 10-QSB, references to "Company," "we," "our," and "us," refer to Left Right Marketing Technology, Inc., a Delaware corporation, prior to April 18, 2006, and Strategic Gaming Investments, Inc., a Delaware corporation, from April 18, 2006 forward. On April 18, 2006, we consummated a merger and share exchange with Strategic Gaming Investments, Inc., a Nevada corporation, including its wholly- owned subsidiary, The Ultimate Poker League, Inc., a Nevada corporation. In conjunction with the merger and share exchange, we (a) exchanged 7,650,000 shares of our common stock for 100% of the issued and outstanding common stock of Strategic Gaming Investments, Inc. and The Ultimate Poker League, Inc., (ii) amended our articles of incorporation to change our name to Strategic Gaming Investments, Inc., and (iii) effected a change of its trading symbol from "LRMT" to "SGME". We continue to develop the poker league, or the Poker League. We have been negotiating with several third parties to serve as our partner and to sponsor the contest, but we have reached a definitive agreement. SGI intends to combine the rapidly growing popularity of poker, or Poker, with corporate team building exercises. The Poker League will initially consist of an intra-departmental playoff designed to promote participation as well as the "team" concept within large corporations. Once the teams are established, the inter-departmental play begins. Teams participate using the Ultimate Poker League's format, including the use of substitutions on the level change. At the finals, the four person teams will compete to be the team with the final player remaining in the contest, or the final player with poker chips in the contest. The final player remaining will win the grand prize on behalf of their respective team and department. Over time, we anticipate expanding the Poker League beyond corporations and to the general public. Throughout the initial contest, we anticipate that camera crews will compile video footage for the purpose of creating a DVD surrounding the events of the Poker League's contest. This DVD would be edited for use as a sales aid to present this concept to other corporate human resource departments across the country as well as expand into charitable events. While SGI is presently negotiating with a third party to produce this DVD, it has not yet reached a definitive agreement. In addition to the foregoing, we are currently discussing several gaming centric products that will compliment our proposed Poker League to provide additional branding awareness and media related visibility. At this time, there can be no assurance that we will be successful in reaching a definitive agreement regarding any of the proposed opportunities. On January 11, 2007, SGME and Neolink Wireless Content, Inc., a Nevada corporation ("Neolink"), closed a merger transaction ("Merger") whereby Neolink became a wholly-owned subsidiary of SGME. The Merger is evidenced by a Merger and Share Exchange Agreement ("Merger Agreement"). Pursuant to the terms of the Agreement, SGME issued the stockholders of Neolink, on a pro-rated basis, a total of One Million (1,000,000) shares of common stock, $0.001 par value, in consideration for 100% of the issued and outstanding capital stock of Neolink. Of those 1,000,000 issued the 500,000 shares of common stock to Donald Beck and 100,000 shares of common stock to John Padon. Mr. Beck is an officer of The Ultimate Poker League, Inc. and Mr. Padon is a director of The Ultimate Poker League, Inc. Both individuals are shareholders of the Company through its acquisition of The Ultimate Poker League on April 18, 2006. After the Merger, Mr. Beck and Mr. Padon each have 600,000 and 125,000 shares of common stock, respectively. In addition, SGME has provided approximately $90,000 of additional financing to Neolink. The Funding was utilized necessary in connection with Neolink's business, operations and affairs. On April 16, 2007, SGME and Beck entered into a Settlement Agreement and Mutual Release of Claims ("Settlement Agreement") relating to the Merger. The parties mutually decided it was in their respective best interests to terminate the Merger and did so on the following terms: (i) Beck to pay SGME the sum of Fifteen Thousand ($15,000) Dollars for 100% of the issued and outstanding capital stock of Neolink; (ii) Beck and another Neolink stockholder will relinquish a total of Two Hundred Thousand (200,000) shares of SGME common stock issued to them in the Merger; (iii) the employment agreement of Beck will be terminated and the Shares will not be issued; (iv) SGME will assume the real property lease of Neolink as well as the contract for T-1 Internet services; and (v) SGME and Beck have forever released and discharged the other, as well as their spouses, heirs, beneficiaries, shareholders, members, directors, officers, managers, employees, contractors, partners, joint venturers, attorneys, agents, representatives, successors and assigns, as applicable, from any and all contracts and other obligations relating to the Merger. As a result of the termination of the merger, SGME issued 800,000 shares of its common stocks at market price of $3.10 per share and received $15,000 in exchange. SGME recorded a loss of $2,555,000 from rescinded merger in the 1st quarter of 2007. DESCRIPTION OF REVENUES At this time we are not generating revenues. We anticipate that upon the commencement of the Poker League and possibly other gaming centric products that we are presently contemplating, we will generate revenues in the nine months ending September 30, 2007. Until we commence the Poker League, our long-term viability is subject to substantial doubt. REVENUE RECOGNITION Sales revenue from the Poker League and merchandise sales, once applicable, will be recognized upon receipt. Description of Expenses Our current expenses consist primarily of general and administrative matters, including legal and accounting fees. At this time, our officers are not being paid regularly. Over time, general and administrative expenses will increase should our Poker League operations commence. RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED MARCH 31, 2007 AND 2006 REVENUES We did not realize revenues in the three months ended March 31, 2007 or the three months ended March 31, 2006. OPERATING EXPENSES General and Administrative - General and administrative expenses were $141,757 for the three months ended March 31, 2007, compared to $19,847 for the three months ended March 31, 2006, representing an increase of $121,910, or 614.2%. Given the limited nature of our operations, the results for the three months ended March 31, 2007 are not necessarily indicative of future fiscal periods. To this end, we expect that our general and administrative expenses, as well as our selling expenses, will increase as our Poker League operations commence. For the three months ended March 31, 2007, beneficial conversion discount was $3,783, the loss from the rescinded merger was $2,555,811 and interest expense was $16,426. Interest expense was $207 for the three months ended March 31, 2006. NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS We realized a net loss of $2,717,776 for the three months ended March 31, 2007, compared to a net loss of $20,054 for the three months ended March 31, 2006. The difference of $2,697,722 is principally due to the rescinded merger with Neolink. While we anticipate experiencing additional losses in future quarters, we do not expect that such future losses will be as significant as the first quarter of 2007. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2007, we had $7,196 of cash and cash equivalents, and a working capital deficit of $988,680, as compared to $25,215 of cash and cash equivalents and a working capital deficit of $853,004 at December 31, 2006. In addition, our stockholders' deficit was $790,469 at March 31, 2006, compared to a stockholders' deficit of $825,193 at December 31, 2006. Our accumulated deficit increased from $4,414,090 at December 31, 2006 to $7,131,865 at March 31, 2007. Our accumulated deficit will likely increase in the future until such time as we are able to realize profitable operations from the Poker League and other prospective gaming centric initiatives. Our operations used net cash of $188,019 during the three months ended March 31, 2007, compared to using $23,360 during the three months ended March 31, 2006, an increase of $164,659 in net cash used. Financing activities for the three months ended March 31, 2007 provided $170,000 of net cash, compared to $23,360 of net cash provided for the three months ended March 31, 2006. We will require additional capital in the future to become a viable entity and to achieve our long-term business objectives. There can be no assurance that such financing will be made available, or if it is made available, on acceptable terms. If such future financing is procured in the form of equity, the shareholdings of the current stockholders of the Company will be diluted. ITEM 3. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS We evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2007, the end of the period covered by this Quarterly Report on Form 10-QSB. This evaluation was done with the participation of our chief executive officer and president, Lawrence S. Schroeder, as well as our chief financial officer, Jason F. Griffith. Mr. Schroeder serves as our principal executive officer, while Mr. Griffith serves as our principal accounting and financial officer. We reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the fiscal quarter covered by this report, as required by Securities Exchange Act Rule 13a-15, and concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management on a timely basis, including our principal executive officer and principal financial and accounting officer. LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS Our management does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of a control. The design of a control system is also based upon certain assumptions about the likelihood of future events, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Although unlikely, due to the inherent limitations in a cost- effective control system, misstatements due to error or fraud may occur and may not be detected. Further, management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the employees involved and the control procedures in place, the risks associated with such lack of segregation are insignificant and the potential benefits of adding employees to clearly segregate duties do not justify the expenses associated with such increases. Management will periodically reevaluate this situation. CONCLUSIONS Based on this evaluation, our chief executive officer and president concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file pursuant to the Exchange Act are recorded, processed, summarized, and reported in such reports within the time periods specified in the Securities and Exchange Commission's rules and forms. CHANGES IN INTERNAL CONTROLS There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter, i.e., the three months ended March 31, 2007, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. On March 7, 2006, Mark Newburg and Arnoldo Galassi, our former President and Chief Financial Officer, respectively, jointly filed a complaint in District Court, Clark County, Nevada, against Left Right Marketing Technology, Inc. (the former name of Strategic Gaming Investments, Inc.) alleging, among other things, breach of contract relating to promissory notes and employment contracts purportedly outstanding in favor of Messrs. Newburg and Galassi. The Company has filed a responsive pleading and has denied each of the allegations made by Messrs. Newburg and Galassi. The litigation is currently in the discovery phase. Management for the Company believes that the claims relating to the alleged promissory notes and employment contracts are without merit. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 5. OTHER INFORMATION. Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a)Exhibits. 31.1 Certification of our Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of our Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of our President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (b)Reports on Form 8-K. None. SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. STRATEGIC GAMING INVESTMENTS, INC. By: /s/ Lawrence S. Schroeder -------------------------- Lawrence S. Schroeder Dated: May 21, 2007 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME OFFICER DATE /s/ Lawrence S. Schroeder Chief Executive Officer, May 21, 2007 - ------------------------- President and a Director Lawrence S. Schroeder /s/ Jason F. Griffith Chief Financial Officer, May 21, 2007 - ------------------------- Secretary and a Director Jason F. Griffith EX-1 2 mex311.txt EXHIBIT 1 EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Lawrence S. Schroeder, President and Chief Executive Officer of Strategic Gaming Investments, Inc., a Delaware corporation formerly known as Left Right Marketing Technology, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-QSB for the fiscal quarter ended March 31, 2007 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 21, 2007 /s/ Lawrence S. Schroeder - --------------------------- Lawrence S. Schroeder, Chief Executive Officer and Principal Executive Officer EX-2 3 mex312.txt EXHIBIT 2 EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Jason F. Griffith, Chief Financial Officer and Secretary of Strategic Gaming Investments, Inc., a Delaware corporation formerly known as Left Right Marketing Technology, Inc., certify that: 1. I have reviewed this quarterly report on Form 10-QSB for the fiscal quarter ended March 31, 2007; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 21, 2007 /s/ Jason F. Griffith - -------------------------- Jason F. Griffith, Chief Financial Officer and Principal Financial and Accounting Officer EX-3 4 mex321.txt EXHIBIT 3 EXHIBIT 32.1 CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Strategic Gaming Investments, Inc., a Delaware corporation formerly known as Left Right Marketing Technology, Inc (the "Company") on Form 10-QSB for the fiscal quarter ended March 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Lawrence S. Schroeder, President and Chief Executive Officer of the Company, and Jason F. Griffith, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. By: /s/ Lawrence S. Schroeder Dated: May 21, 2007 --------------------------- Lawrence S. Schroeder Title: Chief Executive Officer and Principal Executive Officer of Strategic Gaming Investments, Inc. By: /s/ Jason F. Griffith Dated: May 21, 2007 --------------------------- Gregory L. Hrncir Title: Chief Financial Officer, Chief Financial and Accounting Strategic Gaming Investments, Inc. This certification is made solely for the purposes of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose. -----END PRIVACY-ENHANCED MESSAGE-----