Rotate Black (ROBK) 10-Q/A 2010 Q4 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q /A

(Mark One)

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

For the quarterly period ended March 31, 2010

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission File Number 333-44315

Rotate Black, Inc.

(Exact name of registrant as specified in its charter)  

Nevada	75-3225181
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

932 Spring Street, Petoskey, Michigan  49770

(Address of principal executive offices)

(231) 347-0777

(Registrant’s telephone number, including area code)  

Indicate by checkmark 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  þ   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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o (Do not check if a smaller reporting company)	Smaller reporting company þ

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 126.2 of the Exchange Act).    Yes      No  þ

The number of shares of common stock outstanding as of May 17, 2010 was 82,944,889

ROTATE BLACK, INC. AND SUBSIDIARY

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements	1
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	17
ITEM 4T.	Controls and Procedures	17
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	18
ITEM 1A.	Risk Factors	18
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
ITEM 3.	Defaults upon Senior Securities	18
ITEM 4.	Submission of Matters to a Vote of Security Holders	18
ITEM 5.	Other Information	19
ITEM 6.	Exhibits	19
SIGNATURES		20

PART 1. ITEM 1 FINANCIAL STATEMENTS

ROTATE BLACK, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED BALANCE SHEET

	March 31, 2010 (Unaudited)				June 30, 2010
ASSETS
Current Assets
Cash		$	3,022		$	15,453
Prepaid expenses			19,770			88,902
Total current assets			22,792			104,355
Unbilled development advances			2,249,680			2,069,499
Fixed assets - net			36,665			49,179
Contract rights			6,323,884			6,323,884
Intangible assets			374,265			374,265
Investment in joint venture			-			139,781
Land purchase deposit			7,920,674			7,049,142
Deferred development cost			397,980			-
Deferred financing fee			10,000			-
Security deposit			3,600			3,600
TOTAL ASSETS		$	17,339,540		$	16,113,705
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses		$	2,176,688		$	1,761,367
Note payable			125,000			268,000
Note payable - truck - current portion			3,835			5,213
Total current liabilities			2,305,523			2,034,580
Note payable - truck			10,042			12,628
Loan payable - stockholder			462,402			1,675,932
Deferred revenues			49,821			47,078
Shares to be issued						3,995,467
TOTAL LIABILITIES			2,827,788			7,765,685
STOCKHOLDERS'  EQUITY
Common stock, $0.01 par value, 100,000,000
shares authorized; 78,015,389 and 67,321,858
shares issued and outstanding as of
March 31, 2010 and June 30, 2009,
respectively			780,154			673,219
Additional paid-in capital			16,726,719			8,334,185
Subscription receivable			(801,039	)		-
Accumulated deficit			(3,314,013	)		(1,789,498	)
TOTAL ROTATE BLACK, INC. STOCKHOLDERS' EQUITY			13,391,821			7,217,906
NONCONTROLLING INTEREST			1,119,931			1,130,114
TOTAL STOCKHOLDERS' EQUITY			14,511,752			8,348,020
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	17,339,540		$	16,113,705

See notes to financial statements

1

ROTATE BLACK, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
													August 2, 2006
	Three Months Ended						Nine Months Ended						(Inception)
	March 31,						March 31,						Through
	2010			2009			2010			2009			March 31, 2010
Operating expenses
Salary expense	$	48,399		$	108,143		$	184,946		$	227,669		$	297,184
Stock based compensation		112,500			-			287,500			741,570			1,054,070
General and administrative expenses		562,382			147,727			852,113			369,036			1,558,200
Write-off investment in joint venture		-			-			139,782			-			139,782
Write-off deferred expenses		-			-			-			-			233,960
Forgiveness of accounts payable and accrued expenses		-			-			49,145						49,145
Interest expense		2,803			13,299			21,212			26,172			60,756
Total expenses		726,084			269,169			1,534,698			(1,364,447	)		3,393,097
Net Loss		(726,084	)		(269,169	)		(1,534,698	)		(1,364,447	)		(3,393,097	)
Less:  Net loss attributable to noncontrolling interest		1,521			17,669			10,183			31,607			79,084
Net loss attributable to Rotate Black, Inc.	$	(724,563	)	$	(251,500	)	$	(1,524,515	)	$	(1,332,840	)	$	(3,314,013	)
Basic and diluted net loss per common share attributed to Rotate Black, Inc.	$	(0.01	)		*		$	(0.02	)	$	(0.03	)
Basic and diluted average common shares outstanding		77,051,647			63,718,757			72,647,315			45,284,304
* Less than $0.01, per share

See notes to financial statements

2

ROTATE BLACK, INC. AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

	Common Stock				Additional		Stock
	Number of				Paid-in		Subscription			Accumulated						Noncontrolling
	Shares		Amount		Capital		Receivable			Deficit			Total			Interest
August 2, 2006 - Stock subscription receivable		100	$	1	$	99	$	(100	)	$	-		$	-			-
Net loss - June 30, 2007		-		-		-		-			(3,433	)		(3,433	)		-
Balance - June 30, 2007		100		1		99		(100	)		(3,433	)		(3,433	)		-
Net loss - June 30, 2008		-		-		-		-			(2,755	)		(2,755	)		-
Balance - June 30, 2008		100		1		99		(100	)		(6,188	)		(6,188	)		-
August 15, 2008 - Common stock issued in connection with the acquisition of BevSystems		1,000,000		10,000		47,009		-			-			57,009			-
August 15, 2008 - Common stock issued in payment of due to stockholder		8,999,900		89,999		422,980		100			-			513,079			-
August 21, 2008 - Common stock issued in connection with employment agreements		8,300,000		83,000		390,100		-			-			473,100			-
August 27, 2008 - Common stock issued in connection with services rendered		4,610,000		46,100		216,670		-			-			262,770			-
October 3, 2008 - Purchase of Rotate Black Gaming, Inc.		26,560,000		265,600		3,331,444		-			-			3,597,044			1,199,015

October 7, 2008 - Purchase of Dayton assets	5,480,900	54,809	164,345	-	-		219,154			-
October 7, 2008 - Purchase of interest in joint venture	8,400,000	84,000	52,121	-	-		136,121			-
November 16, 2008 - Common stock issued in connection with consulting agreement	100,000	1,000	4,700	-	-		5,700			-
November and December, 2008 - Common stock sold for cash	114,000	1,140	55,860	-	-		57,000			-
December 23, 2008 - Common stock issued in payment of due to stockholder	48,283	483	2,269	-	-		2,752			-
January, February and March, 2009 - Common stock sold for cash	285,000	2,850	282,150	-	-		285,000			-
January 2, 2009 - Common stock issued in connection with consulting agreement	50,000	500	24,500	-	-		25,000			-
May 11, 2009 - Common stock issued in    connection with land purchase	3,153,675	31,537	3,122,138	-	-		3,153,675			-
April, May and June, 2009 - Common     stock sold for cash
Net loss - June 30, 2009	-	-	-	-	(1,783,310	)	(1,783,310	)	$	(68,901	)
Balance at June 30, 2009	67,321,858	673,219	8,334,185	-	(1,789,498	)	7,217,906			1,130,114
September 15, 2009 - Common stock issued in connection with consulting agreement	75,000	750	74,250	-	-		75,000			-
July, August and September, 2009 - Common stock sold for cash	300,000	3,000	297,000	-	-		300,000			-

October 21, 2009 - Common stock issued for Shawanga land contract	3,895,467		38,954		3,856,513		-			-			3,895,467			-
November 9, 2009 - Common stock issud for Shawanga land purchase anti-dilution rights	350,000		3,500		346,500		-			-			350,000			-
November 9, 2009 - Common stock issued in connection for services	100,000		1,000		99,000		-			-			100,000			-
November 9, 2009 - Common stock issued for settlement of note payable	660,000		6,600		323,400		-			-			330,000			-
November 9, 2009 - Common stock issued for payment on due to stockholder	1,500,000		15,000		1,485,000		-			-			1,500,000			-
November 10, 2009 - Stock subscription receivable	-		-		-		(1,000,000	)		-			(1,000,000	)		-
October, November and December, 2009 - Common stock sold for cash	2,545,000		25,450		1,289,520		-			-			1,314,970			-
December, 2009 - Collections of stock     subscriptions	-		-		-		125,961			-			125,961			-
January 19, 2010 - Common stock issued for payment on shareholder loan	125,000		1,250		61,250		-			-			62,500
January, 2010 - Collections of stock    subscriptions
March 15, 2010 - Common stock issued for payment on shareholder loan	100,000		1,000		49,000		-			-			50,000
March 16, 2009 - Common stock issud for     Shawanga land purchase anti-dilution     rights	1,043,064		10,431		511,101		-			-			521,532
Net loss - March 31, 2010	-		-		-		-			(1,524,515	)		(1,524,515	)		(10,183	)
Balance at March 31, 2010 (Unaudited)	78,015,389	$	780,154	$	16,726,719	$	(801,039	)	$	(3,314,013	)	$	13,391,821		$	1,119,931

See notes to financial statements

4

ROTATE BLACK, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
							August 2, 2006
	Nine Months Ended						(Inception)
	March 31,						Through
	2010			2009			March 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,524,515	)	$	(1,332,840	)	$	(3,314,013	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock-based compensation		287,500			741,570			1,054,070
Write-off of investment in joint venture		139,782			-			139,782
Loss on settlement of note payable		473			-			473
Write-off of deferred expenses		-			-			233,960
Depreciation and amortization		16,381			11,421			32,877
Forgiveness of accounts payable and accrued expenses		(49,145	)		-			(49,145	)
Cancellation of shares to be issued		(32,138	)		-			(32,138	)
Noncontrolling interest		(10,183	)		(31,607	)		(79,084	)
Changes in assets and liabilities:
Prepaid expenses		1,270			(29,249	)		16,360
Unbilled development advances		(180,181	)		(485,618	)		(838,169	)
Accounts payable and accrued expenses		550,992			376,354			1,082,789
Deferred revenues		2,743			10,150			16,004
Net cash used in operating activities		(797,021	)		(739,819	)		(1,736,234	)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in BevSystems and increase in
deferred acquisition costs (net of
the issuance of common stock of $57,009		-			(228,151	)		(317,256	)
Purchases of fixed assets (net of note payable		(3,867	)
of $20,800 in 2008)		-			(43,098	)		(48,742	)
Security deposit		-			(3,600	)		(3,600	)
Investment in joint venture		-			-			(3,660	)
Increase in deferred expenses		(407,980	)		(13,022	)		(422,786	)
Net cash used in investing activities		(311,842	)		(287,871	)		(796,044	)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loan payable - stockholder		411,470			749,295			1,181,292
Proceeds from sales of  common stock		813,931			342,000			1,375,931
Payment of note payable		(25,000	)		-			(25,000	)
Payments of note payable - truck		(3,964	)		(1,088	)		(6,923	)
Net cash provided by investing activities		1,096,437			1,090,207			2,535,300
Net increase (decrease) in cash		(12,431	)		62,517			3,022
Cash, beginning of period		15,453			-			-
Cash, end of period	$	3,022		$	62,517		$	3,022
Noncash Transaction
Issuance of common stock in payment of due to stockholder	$	1,500,000		$	513,079
Issuance of common stock in payment of note payable	$	330,000

See notes to financial statements

5

Rotate Black, Inc. and Subsidiary

Notes to Consolidated Financial Statements

1.  ORGANIZATION AND OPERATIONS

            Rotate Black, Inc. (Company) was incorporated in Nevada on August 2, 2006 to be the successor by merger of BevSystems International, Inc. and BevSystems International Ltd. (BevSystems) under a plan of reorganization (Plan), effective August 15, 2008, as approved by the United States Bankruptcy Court in Tampa, Florida. Under the terms of the Plan, BevSystems merged into the Company with the Company as the survivor.

On March 31, 2004, BevSystems filed under Chapter 7 of the Bankruptcy Code and, on April 15, 2006, filed a plan of  reorganization under Chapter 11 of the Bankruptcy Code. The Plan provided for the Company to: (1) purchase the intangible assets of

BevSystems for $175,000, (2) pay creditors opting out of the common stock settlement an aggregate of $10,000, (3) pay all legal and other cost of the Plan of $189,265 and (4) issue 1,000,000 shares of common stock of the Company (10%) to the balance of the

creditors. The shares issued to the creditors were valued at $.057, per share, the value of the shares acquired by the 90% stockholder, for an aggregate purchase price of $513,079. All costs of the bankruptcy were paid by the 90% stockholder, Rotate Black, LLC (RBL), an entity substantially owned by an officer of the Company and family members. The Company was also required to provide an escrow fund for future operations of $200,000. All outstanding equity shares of BevSystems were cancelled. All requirements under the Plan have been met.

            The Company recorded the purchase of BevSystems under the purchase method of accounting and allocated the entire purchase price to intangible assets.

            On August 15, 2008, the Company commenced operations and all activity prior thereto has been charged to operations. The Company is in the development stage.

Acquisitions

In October 2008, the Company acquired: (1) 75% of the outstanding common stock of Rotate Black-Gaming, Inc. (Gaming), (2) all of the assets of a casino development in Dayton, Nevada (Dayton) and (3) a 50% joint venture interest in Rotate Black India Pvt Ltd. (India) in exchange for 26,560,000, 5,480,900 and 8,400,000 shares of common stock of the Company, respectively, from RBL. The acquisitions have been recorded on the purchase method of accounting at the carrying amounts on RBL of the assets and liabilities acquired as of the date of acquisition as RBL is under common control with the Company.

Gaming

The purchase price of Gaming of $3,597,044 has been allocated as follows:

Development advances	$	1,411,511
Other current assets		3,992
Land		556,000
Contract rights (a)		5,767,884
Accounts payable and accrued expenses		(1,229,570	)
Loan payable – stockholder		(1,411,941	)
Note payable		(268,000	)
Deferred revenue		(33,817	)
		4,796,059
Less:  noncontrolling interest		(1,199,015	)
	$	3,597,044

Gaming is under contract to develop and manage a world-class destination casino resort in Sullivan County, New York. Gaming has acquired the property and completed all design layouts.

Dayton

The purchase price of Dayton of $219,154 was allocated to deferred expenses and included the predevelopment expenses as of the date acquired.

As of March 31, 2010, the Dayton casino development project is on hold and, as of June 30, 2009, the Company has written-off the deferred expenses of $233,960.

India

The purchase price of India of $136,121 was allocated to investment in joint venture and includes all the investment of RBL as of the date acquired. The Company had identified potential properties for acquisition, but does not anticipate an acquisition until new Indian gaming laws are solidified in India. (Note 8 )

6

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the rules and regulations set forth in Regulation S-X of the Securities and Exchange Commission for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statement presentation. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position, results of operations and cash flows for the interim periods have been included. These consolidated financ ial statements should be read in conjunction with the financial statements of Rotate Black, Inc. and Subsidiary together with Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the year ended June 30, 2009. Interim results are not necessarily indicative of the results for a full year.

Consolidated Financial Statements

The accompanying consolidated financial statements include all of the accounts of the Company and the subsidiary.

Investments in 50% or less owned entities are accounted for using the equity method.  Under the equity method, the Company includes the net income or loss from the equity entity.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Estimates

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

Reclassifications

Certain amounts for prior years have been reclassified to conform to 2009 financial statement presentation.

Financial Instruments

The Company considers the carrying amounts of financial instruments, including cash, accounts payable and accrued expenses to approximate their fair values because of their relatively short maturities.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method.

Maintenance and repairs are charged to operating expenses as they are incurred.  Improvements and betterments which extend the lives of the assets are capitalized.  The cost and accumulated depreciation of assets retired or otherwise disposed of are relieved from the appropriate accounts and any profit or loss on the sale or disposition of such assets is credited or charged to income.

Contract Rights and Intangible Assets

 Contract rights and intangible assets are valued at cost and will be amortized over their estimated useful lives as determined by management. The Company will evaluate the carrying value of the intangible assets for impairment at least annually or upon the occurrence of an event which may indicate that the carrying amount may be greater than its fair value. If impaired, the Company will write-down such impairment. In addition, the useful lives of the contract rights and intangible assets will be evaluated by management at least annually or upon the occurrence of an event which may indicate that the useful life may be definitive and the Company will commence amortization over such useful life.

 The Company will commence amortization of contract rights upon the effective date of the underlying contract. The intangible assets have an in definitive life.

Share-Based Compensation

 The Company recognizes compensation expense for all share-based payment awards made to employees, directors and others. The Company determines the fair value of the share-based compensation awards granted as either the fair value of the consideration received or the fair value of the shares issued, whichever is more reliably measureable. If the fair value of the equity instruments issued is used, it is measured using the stock price of recent sales of common stock by the Company (as their shares are thinly traded) as of the earlier of either the date at which a commitment for performance to earn the equity instrument is reached or the date the performance is complete.

All shares of common stock issued for legal and consulting services have been charged to operations and included in stock based compensation.

7

Noncontrolling Interest

The Company records adjustments to noncontrolling interest for the allocable portion of income or loss that the noncontrolling interest holders are entitled based upon their portion of certain of the subsidiaries that they own.  Distributions to holders of noncontrolling interests are adjusted to the respective noncontrolling interest holders' balance.

The Company suspends allocation of losses to noncontrolling interest holders when the noncontrolling interest balance for a particular noncontrolling interest holder is reduced to zero.  Any excess loss above the noncontrolling interest holders' balance is not charged to noncontrolling interest as the noncontrolling interest holders have no obligation to fund such losses.

Loss per Common Share

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each period.

Income Taxes

Deferred income taxes have been provided for temporary differences between financial statement and income tax reporting under the liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected to reverse.  A valuation allowance is provided when realization is not considered more likely than not.

The Company’s policy is to classify income tax assessments, if any, for interest in interest expense and for penalties in general and administrative expenses.

Consideration of Subsequent Events

The Company evaluated all events and transactions occurring after March 31, 2010 through May 17, 2010, the date these financial statements were issued, to identify subsequent events which may need to be recognized or non-recognizable events which would need disclosure.  No recognizable events were identified. See Note 18 for non-recognizable events identified for disclosure.

Recent Accounting Pronouncements

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

3.  GOING CONCERN

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of $3,314,013 and negative working capital of $2,282, 731 as of March 31, 2010 and further losses are anticipated. These factors raise doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be nece ssary in the event the Company cannot continue.

4.  PROPERTY AND EQUIPMENT

As of March 31, 2010, property and equipment consisted of the following:

Truck	$	39,761
Furniture and fixtures		8,490
Office equipment		21,291
		69,542
Less accumulated depreciation		(32,877	)
	$	36,655

For the  nine months ended March 31, 2010 and 2009, depreciation expense was $16,381 and $11,421, respectively.

5.  INTANGIBLE ASSETS

The intangible assets acquired under the Plan consisted of a license of patents, pending patents, trade secrets, know-how and other intangibles of Life O2 Oxygenated Water (Life O2) which were assigned to the Company under the Plan. The license grants the Company the exclusive worldwide (as defined), irrevocable, perpetual, royalty-free right to all the intangible assets for use in the production, marketing, distribution, sublicensing and sale of Life O2, subject to certain previously granted licenses, and only for human consumption. The Company has the right to assign the rights under the license to any corporate successor by way of merger, etc. The Company is entitled to sublicense, exclusively or not, or to subcontract the manufacture of products under the license.

8

The Company is currently evaluating a sublicense and bottling arrangements or sale of the license.

As of the March 31, 2010, management has determined no impairment of the intangible assets has occurred.

6.  CONTRACT RIGHTS

As of March 31, 2010, Contract rights consisted of the various rights acquired under the Development and Management Agreements acquired from RBL, at RBL’s costs and the additional costs of the Company.

Development Agreement

On June 22, 2007, Gaming entered into a Development Agreement with the Seneca Nation of Indians (Nation), a Federally recognized Indian tribal government, to act as the Developer to provide managerial expertise and financial resources to assist the Nation in acquiring land and developing and constructing a gaming facility (Facility). The purpose of the Facility for the Nation is to provide employment and improve the social, economic, education, and health needs of its members; to increase its revenues and to enhance the Nation’s economic self-sufficiency.

The Development Agreement commenced upon execution and continues through the date the Facility is open to the public and operational, until all obligations of the parties have expired, as defined, or until all obligations owed to the Company by the Nation have been satisfied, whichever is later; provided the agreement is not terminated by mutual agreement.

Under the terms of the Development Agreement, the Company is responsible for arranging a limited recourse loan or other arrangements to finance the Facility in an aggregate principal amount of up to $350,000,000. The proceeds of the loan are to be used exclusively for the development, design, construction, furnishing and equipping of the Facility, for start-up and working capital and reimbursing the Company for development advances.  Development advances are the funds advanced by the Company for necessary costs in advance of the facility loan which include expenses for legal, engineering and architectural fees.  A development fee of 2.5% of total development costs will be paid to the Company for services rendered pursuant to the Development Agreement and are in addition to the amounts advanced to cover the development costs.

The Company is committed under an agreement between a financial advisor and the Nation under which the advisor will assist in certain financings, etc. Upon closing of any such financings, the Company shall issue warrants to purchase common stock of the Company to the advisor equal to 7% of the Company's fully diluted shares outstanding.

As of December 31, 2009, unbilled Development Advances were $ 2,249,680 , including $205,998 of interest and $49,071 of developer fees, which have been deferred. The unbilled Development Advances will be billed upon the closing of the financing and the deferred development fees will be recognized.

In October, 2007, as amended, Gaming acquired land in exchange for $556,000, payable $288,000 in cash and the issuance of a note in the amount of $268,000, payable on August 15, 2009, as extended, with interest payable at 18%, per annum. In August 2009, the Company made a payment of $25,000 against the note.

On November 1, 2009, the Company issued 660,000 shares of common stock in full repayment of the note payable of $243,000 and accrued interest thereon of $87,000, $0.50, per share. The number of shares and price per share are subject to adjustment for stock splits, dividends, exchanges and consideration received by stockholders in the event of an acquisition of the Company by another entity, and dependent on the performance of the stock prices, as defined. In addition, for one year and under certain conditions, the Company is could be liable for certain market loss on these shares, as defined.

On December 23, 2008, under the terms of the Development Agreement, the land was transferred to the Nation, without compensation, and the cost of the land has been included in Contract Rights.

Management Agreement

On June 14, 2008, Gaming entered into a Management Agreement with the Nation for an exclusive right and obligation to manage, operate and maintain the gaming facility to be developed in Sullivan County, New York, commencing on the effective date, as defined, and continuing for a period of seven years after the date on which gaming commences in the facility.  The term will be automatically extended for a period of seven years unless terminated under the provisions of the agreement.

Under the Management Agreement, the Nation will pay the Company a fee based on a percent of gaming revenues, as defined.  As manager, the Company will conduct and direct all business and affairs in connection with the operation, management and maintenance of the Facility, including all commercial gaming business, sale of food, beverages, tobacco and gifts, hotels, parking, resorts, amusement or accommodation operations.

Land Purchase

On May 26, 2009, the Company entered into an agreement to acquire additional real property in Sullivan County, New York. The purchase price for the property was 7,049,142 shares of common stock of the Company, $1,750,000 in cash on escrow and $1,750,000 in cash upon closing. On May 11, 2009, the Company issued 3,153,675 shares of common stock and RBL transferred, on behalf of the Company, 3,895,467 shares of the Company’s common stock to the seller, both being held in escrow, as a deposit under the agreement. The shares were valued at $7,049,142, $1.00, per share.

In October 2009, the Company issued 3,895,467 shares of common stock to RBL.

On November 9, 2009, the Company issued 350,000 shares of common stock in satisfaction of anti-dilution rights of the land purchase agreement.

On March 16, 2010, the Company issued 1,043,064 shares of common stock in satisfaction of all anti-dilution rights of the land purchase agreement, which the Company has valued at $521,532 ($.50, per share).

As the agreement is cancellable, the time requirements under the agreement have been delayed until certain matters have been resolved.

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Gaming Vessel

In February 2010, the Company entered into an agreement to purchase with a Chapter 11 Trustee a gaming vessel for $3,000,000, payable: (a) $125,000 in cash, (b) a note in the amount of $125,000, as a deposit, and (c) the balance at closing. The closing shall be no later than March 15, 2010, subject to a single extension of no more than 30 days, at the election of the Company upon a payment to the Trustee of an additional cash deposit of $50,000.  The deposit shall be forfeited in the event that the Company defaults, breaches the terms of the offer, or breaches the terms of any sale. In February 2010, the Chapter 11 Trustee approved the sale.  

The Note was March 15, 2010, with interest at 22%, per annum, and is guaranteed by the Company’s chief executive officer.

In, January 2010, a newly formed subsidiary of the Company, organized to acquire the gaming vessel, sold 20% of its initial capitalization for $250,000.

In April 2010, the Company entered into an agreement with the Trustee to extend the closing date to on or before June 1, 2010 for an additional cash payment of $275,000.  In consideration of the extension, the Company has paid and additional $225,000 to date.

7.       CASINO PROPERTIES

On August 15, 2009, the Company entered into an agreement to acquire the purchase opportunities (Purchase Opportunities) of certain other casino properties in exchange for 5,000,000 shares of common stock of the Company, issuable 2,500,000 upon transfer of the first purchase opportunity and the balance of 2,500,000 shares to be held in escrow until agreements to manage casino property are completed.  The Purchase Opportunities include contact information, work product and due diligence to date on these certain casino properties.

8.  INVESTMENT IN JOINT VENTURE

 Investment in joint venture consisted of a 50% interest in India.  The financial statements of India are as follows:

 As of March 31, 2010, the balance sheet of India was as follows:

Total Assets	NONE
Capital Contribution	$	272,242
Deficit		(272,242	)
Total assets and liabilities	NONE

 For the period October 7, 2008 through March 31, 2010, the investment in India was inactive.

 As of December 31, 2009 , the Company determined that the recovery of the carrying value of the investment in India  was uncertain and wrote-off the investment in the joint venture of $136,121.

 As of March 31, 2010, the India casino development project is on hold.

9.  LEASE

On August 8, 2008, the Company entered into a lease for office space, commencing on September 1, 2008 through August 31, 2011.  Rent is payable in advance, in annual installments. The initial year’s rent is $46,200, increasing as defined. The Company has an option to extend the lease for an additional three year period.

As of March 31, 2010, $30,543 of the second year’s rent was included in accrued expenses.

10.       LOAN PAYABLE – STOCKHOLDER

As of March 31, 2010, loan payable - stockholder primarily consisted of Development Advances incurred by RBL on behalf of the Company and is payable on demand, with interest at 12%, per annum.

On November 9, 2009, the Company issued 1,500,000 shares of common stock to RBL as repayment of loan payable – stockholder of $1,500,000, $1.00, per share.

On January 19, 2010, the Company issued 125,000 shares of common stock to RBL as repayment of loan payable –stockholder of $67,500, $0.50, per share.

On March 15, 2010 the Company issued 100,000 shares of common stock to RBL as repayment of loan payable –stockholder of $50,00, $0.50, per share..

11.  NOTE PAYABLE -TRUCK

On September 10, 2008, the Company originally borrowed $20,800 to purchase a truck. The note is payable in equal installments of $520, including interest at 9.19%, per annum, through September 10, 2012.

As of March 31, 2010, minimum annual payments under the loan are:

2010	$	3,835
2011		5,541
2012		4,501
	$	13,877

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12.  COMMON STOCK

On August 2, 2006, the Company issued 100 shares of common stock under a stock subscription receivable for $100 which was paid in August 2008.

On August 2, 2006, the Company authorized 100,000,000, $0.01, par value, shares of common stock.

On August 15, 2008, the Company issued 8,999,900 shares of common stock to RBL in payment of due to stockholder of $513,079.

 On August 21, 2008, the Company issued an aggregate of 8,300,000 shares common stock to four officers and an employee of the Company as a one-time incentive in connection with their employment agreements. The shares were valued at $473,100 ($0.057, per share), the value of the shares issued on August 15, 2008, and were charged to operations.

On August 27, 2008, the Company issued an aggregate of 4,610,000 shares of common stock to three individuals for services. The shares were valued at $262,770 ($0.057, per share), the value of the shares issued August 15, 2008, and were charged to operations.

On November 16, 2008 the Company entered into an agreement with a capital markets consultant in exchange for a finder’s fee equal to 10% of the capital the consultant may raise for the Company, payable 5% in cash and 5% in equity. In addition, in March 2009, the Company issued 100,000 shares of common stock as a commencement bonus, valued at $5,700.

On December 23, 2008, the Company issued 48,283 shares of common stock to RBL in payment of due to stockholder, valued at $2,752.

In November and December 2008, the Company sold an aggregate of 114,000 shares of common stock for an aggregate of $57,000, $0.50, per share.

On January 2, 2009, the Company issued 50,000 shares of common stock for legal services, valued at $25,000, $0.50, per share.

In January, February and March 2009, the Company sold an aggregate of 285,000 shares of common stock for $285,000, $1.00, per share.

In April, May and June, 2009, the Company sold an aggregate of 220,000 shares of common stock for $220,000, $1.00, per share.

On September 15, 2009, the Company issued 75,000 shares of common stock for services rendered, valued at $75,000.

In July, August and September, 2009, the Company sold an aggregate of 300,000 shares of common stock to investors for $300,000, $1.00, per share.

In November 2009, the Company issued 100,000 shares of common stock for professional services valued at $100,000, $1.00, per share.

In November 2009, the Company sold 85,000 shares of common stock for $85,000, $1.00, per share.

In December 2009, the Company sold 460,000 shares of common stock for $229,970, $0.50, per share.

Subscription Receivable

           On November 10, 2009, the Company entered into a subscription agreement (Subscription), to sell 2,000,000 shares of its common stock, at a purchase price of $.50, per share, for an aggregate purchase price of $1,000,000.

As of  March 31, 2010 , the Company has collected $ 198,961  under the Subscription. 

13.  NONCONTROLLING INTEREST

As of March 31, 2010, the noncontrolling interest of Gaming was 25%.

14.  INCOME TAXES

 As of March 31, 2010, management has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements.

15.  FINANCING ARRANGEMENT

 On October 26, 2009, the Company entered into an agreement with a placement agent (Agent) for a proposed offering (Offering) up to $12,500,000 of debt obligations or other financings, on a best-efforts basis.

 The Company will pay fees to the Agent, as follows:

-   nonrefundable retainer of $25,000, payable $10,000 upon execution and $15,000 upon completion of a term sheet, credited  against expenses due of the Offering;

-   6% of the maximum amount of any debt securities, including the face value of any committed line of credit, payable at closing;

-    a warrant to purchase common shares of the Company equal to 3% of(10 the number of shares issued in an equity financing  and (2) any maximum credit available in any debt obligation divided by the closing price of the Company's stock price on the day of closing, as defined. The warrant will be exercisable at the minimum exercise price of any warrants received by investors in the financing or, in the absence of any warrant issuance, the closing price for the common stock of the Company on the day of the closing for five years.

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16. COMMITMENTS AND CONTINGENCIES

 On March 25, 2009, the Company entered into an agreement for architectural services to construct a temporary casino in Sullivan County, New York, for $25,000, plus reimbursable expenses, payable monthly based upon the percentage of work completed.

17.  ADOPTION OF ACCOUNTING POLICIES

During the nine months ended March 31, 2010, the Company adopted the following accounting pronouncements without a material impact on the financial statements.

In September 2009, the Financial Accounting Standards Board (FASB) issued ASU No. 2009-08, "Earnings Per Share - Amendments to Section 260-10-S99".  This Codification Update represents technical corrections to Topic 260-10-S99, "Earnings Per Share", based on EITF Topic D-53, "Computation of Earnings Per Share for a Period that Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock" and EITF Topic D-42, "The Effect of the Calculation of Earnings Per Share For the Redemption or Induced Conversion of Preferred Stock". The Codification Update provides guidance regarding the definition of redemptions and conversions of equity-classified preferred stock instruments in relation to the calculation of earnings per share.

In August 2009, the FASB issued ASU No. 2009-05, "Measuring Liabilities at Fair Value".  This ASU amends the "Fair Value Measurements and Disclosures" Topic of the Codification to provide further guidance on how to measure the fair value of a liability.  ASU No. 2009-05 is effective for the first reporting period beginning after issuance.

In June 2009, the FASB issued Statement No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”).  FAS 168 establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied to rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws as authoritative GAAP for SEC registrants.

 In April 2009, the FASB issued Staff Position No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”), FSP FAS 107-1 and APB 28-1 amends SFAS 107, “Disclosures about Fair Value of Financial Instruments”, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements.  This FSP also amends APB Opinion No. 28, “Interim Financial Reporting”, to require those disclosures in summarized financial information at interim reporting periods.  FSP FAS 107-1 and APB 28-1 is effective for interim reporting periods ending after June 15, 2009 and does not require disclo sures for earlier periods presented for comparative purposes at initial adoption.  In periods after initial adoption, the FSP requires comparative disclosures only for periods ending after initial adoption.

Statement of Financial Accounting Standards No. 141(R), “Business Combinations” (“SFAS 141”), which replaced SFAS No. 141, “Business Combinations”, establishes principles and requirements for determining how an enterprise recognizes and measures the fair value of certain assets and liabilities acquired in a business combination, including non-controlling interests, contingent consideration and certain acquired contingencies.  SFAS 141(R) also requires acquisition-related transaction expenses and restructuring costs be expensed as incurred rather than capitalized as a component of the business combination.

Financial Staff Position (“FSP”) 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”, amended and clarified SFAS 141R to address application issues associated with initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination.

In April, 2008, the FASB issued Statement of Financial Accounting Standards Staff Position 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB No. 142, “Goodwill and Other Intangible Assets”. FSP SFAS 142-3 is effective for financial statements issued for fiscal years beginning after December 31, 2008 and must be applied prospectively to intangible assets acquired after the effective date.

FASB No. 160. “Non-controlling Interest in Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS 160”), establishes accounting and reporting standards for the non-controlling interest in a subsidiary (previously referred to as minority interests).  SFAS 160 also requires that a retained non-controlling interest upon the deconsolidation of a subsidiary be initially measured at its fair value.  SFAS 160 also requires reporting any non-controlling interests as a separate component of stockholders’ equity and presenting any net income allocable to non-controlling interests and net income attributable to stockholders of the Company separately in its consolidated statements of income.

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18.  SUBSEQUENT EVENTS

Legal Fees

On April 26, 2010, in connections with the proposed secured and equity financing arrangements the Company entered into an agreement for legal services for $5,000 in cash and the issuance of 150,000 shares of common stock payable, payable upon signing and an additional $55,000 in cash from the proceeds, of the secured financing arrangement and  $35,000 from the proceeds of the equity financing arrangement

Common Stock

On April 1, 2010 the Company issued 200,000 shares of common stock in payment of accounts payable and future consulting services of $34,000, $0.17 per share.

On April 26, 2010, the Company issued 29,500 shares of common stock to RBL as repayment of loan payable –stockholder of $14,750, $0.17, per share..

On May 12, 2010, the Company issued 1,000,000 shares of common stock in satisfaction of all anti-dilution rights of the land purchase agreement valued at $170,000, $0.17, per share.

On May 12, 2010, the Company issued an aggregate of 1,500,000 shares of common stock for professional services valued at $255,000, $0.17, per share.

Subscriptions Receivable

On April 26, 2009, the Company entered into a subscription agreement (Subscription), to sell 1,600,000 shares of its common stock, at a purchase price of $.17, per share, for an aggregate purchase price of $272,000.  As of April 30, 2010, the Company has collected $202,500 under the Subscription. 

On April 27, 2009, the Company entered into a subscription agreement (Subscription), to sell 600,000 shares of its common stock, at a purchase price of $.17, per share, for an aggregate purchase price of $102,000.  As of April 30, 2010, the Company has collected $93,500 under the Subscription. 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Unaudited Financial Statements and the Notes thereto included in this report. This discussion contains certain forward-looking statements that involve substantial risks and uncertainties. When used in this report, the words "anticipate," "believe," "estimate," "expect” and similar expressions as they relate to our management or us are intended to identify such forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. Historical operating results are not necessarily indicative of the trends in operating results for any future period.

OVERVIEW

Rotate Black, Inc. (Company) was incorporated in Nevada on August 2, 2006 to be the successor by merger of BevSystems International, Inc. and BevSystems International Ltd. (BevSystems) under a plan of reorganization (Plan), effective August 15, 2008, as approved by the United States Bankruptcy Court in Tampa, Florida. Under the terms of the Plan, BevSystems merged into the Company with the Company as the survivor.

On March 31, 2004, BevSystems filed under Chapter 7 of the Bankruptcy Code and, on April 15, 2006, filed a plan of reorganization under Chapter 11 of the Bankruptcy Code. The Plan provided for the Company to: (1) purchase the intangible assets of BevSystems for $175,000, (2) pay creditors opting out of the common stock settlement an aggregate of $10,000, (3) pay all legal and other cost of the Plan of $189,265 and (4) issue 1,000,000 shares of common stock of the Company (10%) to the balance of the creditors. The shares issued to the creditors were valued at $.057, per share, the value of the shares acquired by the 90% stockholder, for an aggregate purchase price of $513,079. All costs of the bankruptcy were paid by the 90% stockholder, Rotate Black, LLC (RBL), an entity substantially owned by an officer of the Company and family memb ers. The Company was also required to provide an escrow fund for future operations of $200,000. All outstanding equity shares of BevSystems were cancelled. All requirements under the Plan have been met. The Company recorded the purchase of BevSystems under the purchase method of accounting and allocated the entire purchase price to intangible assets.

 On August 15, 2008, the Company commenced operations and all activity prior thereto has been charged to operations. Rotate Black is a development stage company focused on building its business of developing and managing casino properties worldwide.

Gaming

On October 7, 2008, the Company entered into certain agreements with Rotate Black, LLC (“RBL”) a Michigan Limited Liability Company for the acquisition its gaming operations.  Under the terms of the agreements, we acquired land, receivables and contract rights for an aggregate of 40,440,900 shares of its common stock.

Pursuant to the RBL agreement we acquired a seventy five percent (75%) ownership in RBL’s wholly owned subsidiary Rotate Black Gaming, Inc. (Gaming), a Nevada corporation. In accordance with a December 2009 Executive Order issued by the President of the Seneca Nation of Indians (Nation), Gaming is the Presidential Representative to pursue the development of a Class III world-class casino resort tentatively scheduled to be named “the Seneca Catskills Resort and Casino” consistent with the terms of Development and Management Agreements previously entered into with the Nation.  To date, Gaming has completed the overall plans for the three phased development, acquired property and transferred the property to the Nation.

On December 4, 2009, Gaming received a written temporary determination from the Nation’s gaming regulatory body, the Seneca Gaming Authority (SGA). The temporary determinations found our gaming subsidiary and four of our officers unsuitable to be issued a Class III Gaming License by the SGA.

On December 23, 2009, the Nation issued an Executive Order providing that it was "in the Nation's best interests" that Gaming "continue to pursue a Catskills Class III gaming facility on behalf of the Nation" during the SGA appeal process and designated Gaming “a Presidential Representative" to pursue such Catskills project " consistent with terms of the Development and Management Agreements previously entered into with the Nation".  The Executive Order provides Gaming with the Presidential imprimatur to continue to exclusively develop this project pending the SGA’s appeal process. At the successful conclusion of the SGA’s appeals process, we intend to seek any and all formal extensions

On January 19, 2010, each of Gaming and the four officers filed appellant petitions with the SGA to review their initial determinations of suitability.  We believe the appellant petitions provided meritorious factual and legal positions for the SGA to reverse its initial determinations. Gaming continues to work with the SGA for a final satisfactory resolution of this matter.

On February 10, 2010, the SGA notified Gaming that it had determined that it was not necessary to continue the licensing process for Gaming and its four named officers and that it was prepared to rescind its temporary findings of unsuitability and withdraw such findings without prejudice.

On February 25, 2010, the Seneca Gaming Authority, or SGA, notified our attorneys that the Seneca Nation of Indians Tribal Council informed them that the SGA “has the authority to and is hereby directed to continue to review the merits of the appeal” filed by Rotate Black Gaming, Inc and the four named individuals in January 2010.   The Company expects to conclude this process in early July.

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Big Easy Gaming Vessel

On February 2, 2010, Rotate Black, Inc entered into a purchase agreement with the Chapter 11 Trustee of Cruise Holding II, LLC to purchase the gaming vessel “The Big Easy” for $3,000,000. Pursuant to the Purchase Agreement, the Company paid a cash deposit of $125,000 and issued a note in the amount of $125,000, which was personally guaranteed by the Company’s Chief Executive Officer, John Paulsen. The Purchase Agreement provides for a closing no later than March 15, 2010, subject to a single extension of no more than 30 days, at the election of the Company upon a payment to the Trustee of an additional cash deposit of $50,000. The Purchase Agreement also provides that the $250,000 deposit shall be forfeited as liquidated damages in the event that the Company defaults, breaches the terms of the offer, or breaches the terms of any sale order that may be entered by the U.S. Bankruptcy Court for the Southern District of Florida.

 On February 8, 2010, the US Bankruptcy Court for the Southern District of Florida approved the Private Sale of the M/V Big Easy free and clear of liens, claims and encumbrances to us. The Court ordered that any party in interest objecting to the sale order may file a motion for reconsideration within ten calendar days, so long as the objecting party enters into a binding Asset Purchase Agreement with the Trustee at a cost higher than $3,525,000 and tenders a cash deposit in the amount of $525,000. Then if the Court agrees to vacate the Company’s sale order, Rotate Black would be entitled to receive a break up fee of $250,000 and a refund of its cash deposit along with the cancellation of the promissory note and personal guaranty.  At the time of this filing no one had objected to the Court’s approved sale o rder.

On April 20, 2010 the Company entered into an agreement with the Trustee to extend the closing date to on or before June 1, 2010 for an additional cash payment of $275,000.   In consideration of the extension, Rotate Black remitted a total of One Hundred Seventy-Five Thousand Dollars ($175,000) as of April 21, 2010. Additional payments on May 1, 2010 of Fifty Thousand Dollars ($50,000) and May 14, 2010 of Fifty Thousand Dollars ($50,000) are required.  A portion of these payments will be used as a down payment on the vessel and a portion will be used to retire the note.

The Company anticipates the closing to occur on or before May 27, 2010, at such time the company will be obligated to deliver the balance of the purchase price of Two Million Six Hundred Seventy-Five Thousand Dollars ($2,725,000) in immediately available funds.

Other Gaming Development

As of February 15, 2010, we have commenced the early development of other gaming properties and placed our India and Dayton gaming developments on hold.

Life O2

Management is currently evaluating sublicense and bottling arrangements or a sale of the license.

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Results of Operations

Revenue

 As of March 31, 2010, we have had no recognizable revenues. Revenues, consisting of development fees, will commence upon the closing of the financing related to the Development Agreement. As of March 31, 2010, we have unbilled development advances of $2,249,680.

Operating Expenses

 Operations for the nine months ended March 31, 2010 and 2009 are not comparable because, during 2009 , the Company was not operational inasmuch as management was pursuing contracts and approvals but not expending capital or incurring expenses while awaiting contracts and approvals.

 Our operating expenses consisted of salaries, stock based compensation and various general and administrative expenses. As of  December 31, 2009 , we wrote-off our investment in joint venture for our India casino development of $136,121. Our management has determined that the fair value was uncertain because the gaming laws in India may not stabilize for two to three years.

Also, during the nine months ended March 31, 2010, a vender agreed to forgive $49,145 for payment of the balance due.

Cash Used in Financing Activities

Net cash flows from financing activities for the nine months ended March 31, 2010 was $ 1,096,437 , consisted primarily of proceeds from sales of common stock of $813,931 and an increase in loan payable – stockholder (RBL) of $ 411,470 .

Net cash flows from financing activities for the nine months ended March 31, 2009 were $1,090,207, consisted primarily of proceeds from sales of common stock of $342,000 and an increase in loan payable – stockholder (RBL) of $749,295.

Liquidity and Capital Resources

As of March 31, 2010, we had negative working capital of $2,282,731 compared to negative working capital of $1,930,225 as of June 30, 2009, an accumulated deficit of $3,314,013 and further losses are anticipated.

We do not have sufficient funds to continue our operating activities. Future operating activities are expected to be funded by sales of common stock and to a limited extent, provided by loans from RBL, our major stockholder until such time that operations will generate sufficient funds.

These factors raise doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations arising from normal business operations when they come due. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the amounts of and classification of liabilities that might be necessary in the event we cannot continue.

 Upon the funding of the Facilities financing with CRT Capital, the deferred development cost will be invoiced and we will recognized our deferred revenue.

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On October 26, 2009, we entered into an agreement with CapStone Investments to act as placement agent (Agent) for a proposed offering by the Company of up to $12,500,000 of debt obligations or other financings, on a best-efforts basis.

We plan to utilize the proceeds of the CapStone financing to fund the acquisition of assets and operations of the casino properties under the Purchase Opportunities.

Contractual Obligations

 Not applicable as we are a smaller reporting company.

Off-balance Sheet Arrangements

 The Company has no off-balance sheet arrangements.

Impact of Inflation

We believe that inflation has not had a material impact on our results of operations for the nine months ended March 31, 2010. We cannot be assured that future inflation will not have an adverse impact on our operating results and financial condition.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable as we are a smaller reporting company.

Item 4(T).  Controls and Procedures

Evaluation of Disclosure Controls and Procedures  

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and the Chief Financial Officer, we have concluded that our disclosure controls and procedures were not effective as of  March 31, 2010 , based on their evaluation of these controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Exchange Act is accumulated and communicate d to management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 We have identified certain matters that constitute deficiency (as defined under the Public Company Accounting Oversight Board Auditing Standard No. 2) in our internal controls over financial reporting. The deficiencies that we have identified relate to the fact that that our overall financial reporting structure, internal accounting information systems and current staffing levels are not sufficient to support our financial reporting requirements. We are working to remedy our deficiency.

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Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ending March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

 None.

Item 1A. Risk Factors

 Not applicable as we are a smaller reporting company.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

 In October 2009, the Company issued 3,895,467 shares of common stock for the purchase of land of $3,895,467, $1.00, per share.

On November 1, 2009, the Company issued 660,000 shares of common stock in full repayment of the note payable of $243,000 and accrued interest thereon of $87,000, $0.50, per share

On November 9, 2009, the Company issued 1,500,000 shares of common stock to RBL as repayment of loan payable – stockholder of $1,500,000, $1.00, per share.

On November 9, 2009, the Company issued 350,000 shares of common stock in accordance with the anti-dilution rights clause of the land purchase agreement.

In November 2009, the Company issued 100,000 shares of common stock for professional services valued at $100,000, $1.00, per share.

In November 2009, the Company sold 85,000 shares of common stock to an investor for $85,000, $1.00, per share.

In December 2009, the Company sold 460,000 shares of common stock to an investor for $229,970, $0.50, per share.

On January 19, 2010 the Company issued 125,000 shares of common stock for shareholder loan valued at $67,500, $0.50 per share.

On March 15, 2010 the Company issued 100,000 shares of common stock for shareholder loan valued at $50,000, $0.50 per share.

Subscription Receivable

           On November 23, 2009, the Company entered into a Subscription Agreement with one accredited investor, an individual previously known to the Company and a stockholder, pursuant to which the Company sold 2,000,000 shares of its common stock, at a purchase price of $.50, per share in a private placement for an aggregate purchase price of $1,000,000.  As of  March 31, 2010 , the Company has collected $ 198,961 under the Subscription.

Item 3.               Defaults Upon Senior Securities

 None.

Item 4.               Submission of Matters to a Vote of Security Holders

 None.

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Item 5.                      Other Information

 None.

Item 6.                      Exhibits

Exhibit No.:	Exhibit
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-15(a) and Rule 15d-15(a), promulgated under the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ROTATE BLACK, INC. (Registrant)
May 18 , 2010	By:	/s/ John Paulsen
		John Paulsen
		Chief Executive Officer (Authorized Officer, Principal Executive Officer and Principal Financial Officer)

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