Left Behind Games (LFBG) 10-Q 2012 Q1 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period endedJune 30, 2011

OR

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

For the transition period from _____to_____

COMMISSION FILE NUMBER 000-50603

LEFT BEHIND GAMES INC.

 (Exact name of registrant as specified in its charter)

NEVADA	91-0745418
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

25060 HANCOCK AVENUE, SUITE 103 BOX 110, MURRIETA, CA 92562

(Address of principal executive offices) (Zip Code)

(951) 894-6597

(Registrant's telephone number, including area code)

With copies to:

Virginia K. Sourlis, Esq.

The Sourlis Law Firm

The Courts of Red Bank

130 Maple Avenue, Suite 9B2

Red Bank, New Jersey 07701

Virginia@SourlisLaw.com

Tel: (732) 530-9007

Fax: (732) 530-9008

www.SourlisLaw.com

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesx.   Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yeso.   Noo

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 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	x

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

As of August 22, 2011, the Registrant had 8,379,641,409 shares of common stock, par value $0.001 per share, issued and outstanding.

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PART I.	FINANCIAL INFORMATION
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3
	CONDENSED CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2011 AND MARCH 31, 2011	4
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE  MONTH PERIOD ENDED JUNE 30, 2011 \AND 2010	5
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010	6
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	7
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	13
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4.	CONTROLS AND PROCEDURES	20
PART II.	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	21
ITEM 1A.	RISK FACTORS	21
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21
ITEM 4.	[REMOVED AND RESERVED BY THE SECURITIES AND EXCHANGE COMMISSION]	21
ITEM 5.	OTHER INFORMATION	22
ITEM 6.	EXHIBITS	22

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PART I. FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LEFT BEHIND GAMES INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	30-Jun		31-Mar
	2011		2011
ASSETS
Current Assets
Cash	$	24,616	$	21,180
Restricted cash		100		30,000
Inventories, net		305,380		304,479
Prepaid royalties		27,538		27,538
Prepaid expenses and other current assets		61,105		62,551
Total current assets		418,739		445,748
Property and equipment, net		41,661		52,428
Intangible assets		9,899		9,899
Other assets		35,927		35,927
Total assets	$	506,226	$	544,002
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	1,667,253	$	1,597,350
Payroll liabilities payable		349,474		326,294
Notes payable, net		156,380		54,166
Deferred revenue		100,423		101,060
Total current liabilities		2,273,530		2,078,870
Commitments and Contingencies		-		-
Stockholders' Deficit
Undesignated preferred stock, $0.001 par value, 39,989,000 shares authorized, none issued and outstanding		-		-
Series A convertible preferred stock, $0.001 par value; 3,586,245 shares authorized; 3,586,245 shares issued and outstanding; liquidation preference of $188,500		3,586		3,586
Series B convertible preferred stock, $0.001 par value; 16,413,755 shares authorized; 7,890,529 and 7,890,529 shares issued and outstanding as of June 30, 2011 and March 31, 2011, respectively		7,891		7,891
Series C preferred stock, $0.001 par value: 10,000 shares authorized, issued and outstanding as of June 30, 2011 and March 31, 2011		10		10
Series D convertible preferred stock, $0.001 par value; 1,000 shares authorized, 9 shares issued and outstanding as of June 30, 2011 and March 31, 2011, respectively		-		-
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 7,795,992,203 and 5,366,945,531 shares issued and outstanding as of June 30, 2011 and March 31, 2011, respectively		7,795,992		5,366,946
Treasury Stock		29,800		24,500
Additional paid-in capital		62,415,611		63,932,368
Accumulated deficit		(72,020,194)		(70,870,169)
Stockholders' deficit		(1,767,304)		(1,534,868)
Total liabilities and stockholders' deficit	$	506,226	$	544,002

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

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LEFT BEHIND GAMES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		For the Three Months Ended June 30, 2011		For the Three Months Ended June 30, 2010
Net revenues	$	24,637	$	39,894
Cost and expenses:
Cost of sales – product costs		5,412		13,241
Cost of sales – intellectual property costs		92		1,393
Selling, general and administrative		111,371		1,181,337
Consulting and professional fees		451,284		1,218,552
Wages and salaries		437,863		307,832
Product development		163,571		215,894
Total costs and expenses		1,169,593		2,938,249
Operating loss		(1,144,956)		(2,898,355)
Other income (expense):
Interest expense, net		5,069		14,447
Total other expense		5,069		14,447
Net profit (loss)	$	(1,150,025)	$	(2,912,802)
		-
Basic and diluted profit (loss) per common share	$	(0.00)	$	(0.00)
Weighted average number of common shares outstanding		6,258,713,268		2,567,152,201

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

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LEFT BEHIND GAMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Three Months Ended June 30,
	2011		2010
Cash flows from operating activities:
Net loss	$	(1,150,025)	$	(2,912,802)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		10,767		11,021
Amortization of note discount		264		-
Common shares issued to third parties for services		254,100		306,790
Common shares issued for anti-dilution price protection		59,614		103,742
Shares issued under warrant exercises		418,913		-
Interest paid in common stock		-		4,065
Convertible debt issued for services		-		2,227,000
Changes in operating assets and liabilities:
Accounts receivable		-		6,915
Inventory		(901)		2,557
Prepaid expenses and other current assets		1,446		47,614
Intangibles and other assets		-		6,228
Accounts payable		93,183		(238,809)
Deferred income		(637)		643
Accrued expenses		-		-
Net cash used in operating activities		(313,276)		(435,036)
Cash flows from investing activities:
Change in restricted cash		29,900		-
Purchases of property and equipment		-		(14,447)
Net cash used in investing activities		29,900		(14,447)
Cash flows from financing activities:
Proceeds from issuance of notes payable		147,000		25,000
Payments under notes payable		(20,000)		-
Common shares issued for cash		159,812		384,588
Net cash provided by financing activities		286,812		409,588
Net increase (decrease) in cash		3,436		(39,895)
Cash at beginning of period		21,180		56,677
Cash at end of period	$	24,616	$	16,782
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-
Non-cash investing and financing activities:
Common shares issued for conversion of debt	$	25,150	$	-
Common shares for settlement of debt and accounts payable		-		109,200
Common shares issued for warrant conversion		1,159,115		-
Discount from beneficial conversion feature on debt		-		25,000

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

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LEFT BEHIND GAMES INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

Left Behind Games, Inc., a Nevada corporation, conducts all of its operations through its wholly owned subsidiary, Left Behind Games, Inc. d/b/a Inspired Media Entertainment (herein referred to as the “Company,” “LFBG,” “we,” “us,” “our” or similar terms). LFBG was founded on December 31, 2001 and incorporated in the state of Delaware on August 22, 2002 for the purpose of engaging in the business of producing, distributing and selling video games and associated products. We completed the development of our first video game, which was based upon the popular LEFT BEHIND series of novels published by Tyndale House Publishers (“Tyndale”), and as of November 2006, we began commercially selling the video game to retail outlets nationwide.

We hold an exclusive worldwide license (the “License”) from Tyndale to develop, manufacture and distribute video games and related products based on the LEFT BEHIND series of novels published by Tyndale.  Additionally, we have acquired ownership of the Charlie Church Mouse brand from Lifeline Studios and all assets of Cloud9Games, creators of our PRAISE CHAMPION and KING SOLOMON branded games.

BASIS OF PRESENTATION

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Such rules and regulations allow us to condense and omit certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States of America. We believe these unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of our consolidated financial position and consolidated results of operations for the periods presented. The information included in this Form 10-Q should be read in conjunction with the condensed consolidated financial statements and notes thereto included in our Form 10-K for the year ended March 31, 2011. The interim unaudited consolidated financial information contained in this filing is not necessarily indicative of the results to be expected for any other interim period or for the full year ending March 31, 2012.

RECLASSIFICATIONS

Certain prior period amounts have been reclassified to conform to the current period presentation.

RESTRICTED CASH

Restricted cash at March 31, 2011 was comprised of $30,000 that we had deposited into an escrow account with a law firm.  We agreed to hold these funds in escrow as support for future compensation as a condition to hiring a key game developer.  We used those funds to pay that key game developer in the three months ended June 30, 2011 and the restricted cash balance at June 30, 2011 was $100.

NOTE 2 - GOING CONCERN

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of LBG as a going concern. We have started generating revenue but have incurred net losses of $1,150,025 during the three months ending June 30, 2011 and had an accumulated deficit of $72,020,194 at June 30, 2011. In addition, we used cash in our operations of $313,276 during the three months ending June 30, 2011.

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We plan to continue to control and reduce costs where necessary while focusing on the expansion of our product line on more consumer platforms to expand our business. Management plans to continue to raise additional capital in fiscal 2012 to fund ongoing business operations and potential business combinations.

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 our obligations and to repay the liabilities arising from normal business operations when they come due. We plan to continue to provide for our capital requirements by issuing additional equity securities. No assurance can be given that additional capital will be available when required or on terms acceptable to us. We also cannot give assurance that we will achieve significant revenues in the future. The outcome of these matters cannot be predicted at this time and there are no assurances that if achieved, we will have sufficient funds to execute our business plan or generate positive operating results.

These matters, among others, raise substantial doubt about the ability of LBG to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

We had a working capital deficit at June 30, 2011 of $1,854,791.

NOTE 3 - INVENTORIES

Inventories consisted of the following:

	June 30, 2011		March 31, 2010
Raw Materials	$	19,678	$	21,237
Finished Goods		336,345		333,885
Subtotal		356,023		355,122
Less: reserve for obsolescence		(50,643)		(50,643)
Total Inventories, net of reserve	$	305,380	$	304,479

NOTE 4 - STOCKHOLDERS’ EQUITY

Common Stock

We are authorized to issue 10,000,000,000 shares of common stock, $0.001 par value per share. The holders of our common stock are entitled to one vote per share of common stock held and have equal rights to receive dividends when, and if, declared by our Board of Directors, out of funds legally available therefore, subject to the preference of any holders of preferred stock. In the event of liquidation, holders of common stock are entitled to share ratably in the net assets available for distribution to stockholders, subject to the rights, if any, of holders of any preferred stock then outstanding. Shares of common stock are not redeemable and have no preemptive or similar rights.

During the three months ending June 30, 2011, we issued the following:

(1)  292,788,248 shares of common stock to independent third parties for services provided, valued at $254,100.

(2)  471,814,805 shares of common stock to accredited investors for cash proceeds of $159,812.

(3)  100,000 shares of common stock to convert outstanding debt and settle accounts payable with a total value of $150.

(4)  400,000,000 shares of common stock were issued under conversions of $25,000 of convertible notes originally issued for services with during fiscal 2011.

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(5)  1,159,115,152 shares of common stock under warrant exercises at an average strike price of $0.0000509.  The warrants were issued in exchange for contributions to our treasury stock of 5,300,000 shares by the warrant holders.

Of the 1,159,115,152 warrants issued during the June 2011 period, 890,000 warrants were accounted for as compensatory issuances and carried compensation expense of $413,163.  The remaining 269,115,152 warrants were accounted for as a component of stock purchases and carried no compensation expense.

Anti-dilution Rights to Common Stock

In 2004, we entered into an agreement with Charter Financial Holdings, LLC in connection with consulting services. The compensation section of the agreement requires that we issue shares of our common stock to Charter sufficient to ensure that its ownership in us does not fall below one percent (1%) of our outstanding common stock. The result is that for each time we issue or sell stock, we must issue shares equal to one percent of such issuance to Charter Financial Holdings, LLC to maintain their ownership percentage. Charter Financial Holdings, LLC is not required to pay additional consideration for those shares. During the 3 months ended June 30, 2011, we issued Charter Financial Holdings, LLC 35,228,467 shares at a fair market value of $17,614 for legal services.

In addition, during the three months ended June 30, 2011, we issued 70,000,000 shares with a fair value of $42,000 to an investor for no additional consideration.  The entire fair value was recorded to expense during the three months ended June 30, 2011.

NOTE 5 - WARRANTS

A summary of warrant activity during the three months ended June 30, 2011 is presented below:

	Amount		Range of Exercise Price		Weighted Average Exercise Price
Warrants outstanding at March 31, 2011		--	$	--	$	--
Exercised		(1,159,115,152)	$	0.0000509	$	0.0000509
Issued		1,159,115,152	$	0.0000509	$	0.0000509
Cancelled/Expired		--	$
Warrants outstanding at June 30, 2011		--	$		$	--
Warrants exercisable at June 30, 2011		--	$		$	--

The following outlines the significant weighted average assumptions used to estimate the fair value information presented, with respect to warrants utilizing the Black Scholes option pricing models at, and during the three months ended June 30, 2011:

Risk free interest rate	0.18% - 0.19%
Average expected life	1 year
Expected volatility	195% - 203%
Expected dividends	None

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NOTE 6 - NOTES PAYABLE

Notes payable consisted of the following at June 30, 2011:

	Face Amount of				Notes Payable
	Notes Payable		Note Discounts		Net of Discounts
Individual loans	$	147,000	$	-	$	147,000
Convertible debt from services		9,163		-		9,163
2 year convertible notes		24,850		(24,633)		217
Total notes payable	$	181,013	$	(24,633)	$	156,380

In the three months ended June 30, 2011, we repaid one individual loan in the amount of $20,000 and borrowed an additional $147,000 in loans from individuals.  Those loans bear interest at five percent, are unsecured and are due six months from the date of the advance.  

During the three months ended June 30, 2011, the holder of the two year convertible note converted $150 in principal into shares of 100,000 shares of common stock.  Additionally, we issued 400,000,000 shares for conversion of $25,000 of convertible debt originally issued for services during fiscal 2011.

At June 30, 2011, we had accrued interest of $9,947.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Guarantees and Indemnities

We have made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party in relation to certain actions or transactions. We indemnify our directors, officers, employees and agents, as permitted under the laws of the State of Delaware. We have also indemnified our consultants, investment bankers, sublicensor and distributors against any liability arising from the performance of their services or license commitment, pursuant to their agreements. In connection with our facility leases, we have indemnified our lessors for certain claims arising from the use of the facility. The duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

Antidilution Rights for Common Stock

In 2004, we entered into an agreement with Charter Financial Holdings, LLC in connection with consulting services. The compensation section of the agreement requires that we issue shares of our common stock to Charter sufficient to ensure that its ownership in LBG does not fall below one percent (1%) of our outstanding common stock. The result is that for each time we issue or sell stock, we must issue that amount of stock to Charter Financial Holdings, LLC to maintain their ownership percentage. Charter Financial Holdings, LLC is not required to pay additional consideration for those shares. We record the fair value of the additional shares of common stock issued under this provision as consulting expense in the period they are earned.  During fiscal 2011, we issued 35,063,042 shares of common stock with a fair value of $69,998 under this provision.  During fiscal 2011, we issued 16,901,207 shares of common stock with a fair value of $294,879 under this provision.

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Employment Agreements

We have entered into employment agreements with of our chief executive officer. This contract provides for minimum annual salaries and is renewable annually. In the event of termination of this employment agreement by LBG without cause, we would be required to pay continuing salary payments for specified periods in accordance with the employment contract. Effective October 2009, our CEO, Troy Lyndon, had chosen not to receive a salary. However, the Board of Directors agreed on February 13, 2011 to provide him a base salary of $5,000 per month on a going-forward basis.

Leases

We operate in a 4,355 square foot sales and distribution facility in Temecula, California under a sublease agreement through October 2011. Its cost is $2,919 per month. Our lease ends each October and is renewable each year for 2 years at a similar lease rate.

Previously, our corporate offices consisted of a 3,500 square foot facility on 29995 Technology Drive in Murrieta, California under a lease agreement through May 2010. Its cost is $7,545 per month, with annual increases of four percent (4%). We abandoned that facility in March 2008 and in a legal settlement, our former landlord applied our $45,270 deposit to resolve the amount owed.

Left Behind License

On October 11, 2002, the publisher of theLeft Behind book series granted us an exclusive worldwide license to use the copyrights and trademarks relating to the storyline and content of the books in theLeft Behind series of novels for the manufacture and distribution of video game products for personal computers, CD-ROM, DVD, game consoles, and the Internet.

The license requires us to pay royalties based on the gross receipts on all non-electronic products and for electronic products produced for use on personal computer systems, and a smaller percentage of the gross receipts on other console game platform systems. According to the license agreement, within 30 days from the end of each month, the Company shall provide royalties to licensor based upon its agreement for the preceding month. Additionally, the license term of 3 years automatically renews to additional terms in perpetuity.

Charlie Church Mouse License

In July 2007, we obtained an exclusive license to sell three (3) PC games featuring Charlie Church Mouse (“CCM”) to the CBA market from the publisher of the CCM games. The CCM games are educational software programs utilizing Bible stories designed for pre-school, kindergarten and early elementary age children. Under the license, we pay the author a royalty of twenty percent of gross margin collected from our customers. On May 12, 2010, we acquired the entire Charlie Church Mouse brand.

Keys of the Kingdom License

On May 20, 2008, we acquired the publishing and distribution rights to the PC game, Keys of the Kingdom. This new game features brain-teasing dynamics and inspirational scriptures. We agreed to pay the author a royalty of fifteen percent of gross margin collected from our customers.

Integrity Music License

We have a licensing agreement for songs distributed through Integrity Music. According to the license agreement, the term it has acquired is for the life of the product (Praise Champion) and beyond the initial 5,000 unit advance, we shall pay a 10% royalty for all music in each game title which uses the licensed music.

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Payroll Taxes

As of June 30, 2011 and March 31, 2011, we owed accrued payroll taxes of $349,474 and $326,294, respectively, to various governmental authorities. This is a significant offense with the US government to which we may face significant penalties and operations could be harmed should the US government wish to enforce its rights to collect the payroll taxes and that our officers and directors, both past and present, are potentially liable for penalties.

Rule 144

We had arrangements with two consultants (see Note 13) which were terminated with an effective date of September 30, 2010. We are evaluating the structure of these consulting agreements to determine whether or not the consulting arrangement complied with the SEC rules & regulations. Accordingly, we have hired legal counsel to evaluate the agreement and request an interpretation from the SEC to ensure that there was no violation of the SEC rules or regulations.

Litigation

We are subject to litigation from time to time in the ordinary course of our business.

We are currently not involved in any other litigation or any pending legal proceedings that we believe could have a material adverse effect on our financial position or results of operations.

NOTE 8 – SUBSEQUENT EVENTS  

In July 2011, we issued 35,000,000 share of common stock valued at $14,000 at the closing price to an investor as antidilution protection.

In July 2011, we issued 42,500,000 shares of common stock to accredited investors in exchange for aggregate cash investments of $20,000.  Those investors also exchanged 200,000 shares of common stock in exchange for warrants to purchase 147,142,857 share of common stock at a purchase price of $0.00000125 per share.

 In July 2011, we issued 2,777,778 shares of common stock to an independent third party for services provided, valued at $2,500.

On August 5, 2011, we issued to certain of our legal advisors warrants to purchase 500,000,000 shares of common stock at a purchase price of $0.0002 per share. On August 12, 2011, one of these legal advisors converted 75,000,000 warrants, via a cashless exercise, into 53,571,428 shares.

On August 9, 2011, we filed an S-8 registration statement to issue 1,000,000,000 shares as part of the Company’s 2011 Stock Incentive Plan and subsequently issued those shares.

On August 22, 2011, we terminated 550,000,000 shares previously issued in the quarter ending June 30, 2011.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by the unaudited condensed consolidated financial statements and notes thereto, included in Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.

FORWARD LOOKING STATEMENTS

This document contains statements that are considered forward-looking statements. Forward-looking statements give our current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward -looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on our current plans and are subject to risks and uncertainties, and as such our actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this quarterly report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:

·  continued development of our technology;

·  consumer acceptance of our current and future products

·  dependence on key personnel;

·  competitive factors;

·  the operation of our business; and

·  general economic conditions.

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this quarterly report.

THE COMPANY

Left Behind Games Inc. d/b/a Inspired Media Entertainment (herein referred to as the “Company,” “LFBG,” “we,” “us,” “our” or similar terms), was founded on December 31, 2001 and incorporated in the state of Delaware on August 22, 2002 and reincorporated in the state of Nevada on January 17, 2011. The Company is the only publicly-traded exclusive publisher of Christian modern media. It is the world leader in the publication of Christian video games and a Christian social network provider. Trade names include Inspired Media Entertainment™, LB Games®, Cloud 9 Games® and MyPraize®. The Company and its subsidiaries produce quality interactive experiences including entertainment products that perpetuate positive values and appeal to faith-based and mainstream audiences.

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Our common stock is quoted on the OTC Markets’ OTCQB exchange under the ticker symbol “LFBG.”

We are an early stage company which is one of the first companies to develop, publish, and distribute products into the multi-billion dollar video game and inspirational markets. Our goal is to become a leading publisher in the new market of inspirational games.

Our products include games based upon the popularLeft Behind series of novels, theCharlie Church Mouse television programs and others. We have the exclusive world-wide rights to theLeft Behind book series and brand, for the purpose of making any form of electronic games, which includes video games.Left Behind novels and products are based upon fictional storylines focused on events at the end of the world, including the ultimate battles of good against evil, which are very action oriented and supremely suitable for an engaging series of electronic games. According to the book publisher, Tyndale House Publishers,Left Behind’s series of books has sold more than sixty three (63) million copies. According to a Barna Research study,Left Behind has also become a recognized brand name by more than one-third (1/3) of Americans. Our management believes thatLeft Behind products have experienced financial success, including the novels, children's books, graphic novels (comic books), movies, and music. Our interest in theLeft Behind brand is limited to our license to make video games. We have no interest in, nor do we profit from any otherLeft Behind branded products.

To date, we have financed our operations primarily through the sale of shares of our common stock. During the three months ended June 30, 2011, we raised net proceeds of $201,812 from the sale of 541,814,805 shares of our common stock. We continue to generate operating losses.

Furthermore, the report by our Independent Registered Public Accounting Firm on our financial statements includes a paragraph describing substantial doubt about our ability to continue as a “going concern.”

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and must file reports, proxy statements and other information with the SEC. The reports, information statements and other information we file with the Commission can be inspected and copied at the Commission Public Reference Room, 450 Fifth Street, N.W. Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. The Commission also maintains a Web site http://www.sec.gov) that contains reports, proxy, and information statements and other information regarding registrants, like us, which file electronically with the Commission. Our mailing address is 25060 Hancock Avenue, Suite 103 Box 110, Murrieta, CA 92562. Our phone number is (951) 894-6597. Our website ishttp://www.leftbehindgames.com.

RESULTS OF OPERATIONS

Assets

At June 30, 2011, our total assets were $506,226, compared to $544,002 at March 31, 2011.  This $37,776 decrease was primarily due to a decrease in restricted cash from $30,000 at March 31, 2011 to $100 at June 30, 2011, which was the result of a drawdown on that restricted cash to pay salaries to a game developer in the June 2011 period, and a $10,767 reduction in our net fixed assets due to depreciation of our fixed assets during that period.

Liabilities

At June 30, 2011, our total liabilities were $2,273,530, compared to $2,078,870 at March 31, 2011.  This $194,660 increase was primarily due to a $102,214 increase in notes payable used to finance our operations and a $69,903 increase in accounts payable.

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Three Months Ended June 30, 2011 and 2010

Revenues

We recorded net revenues of $24,637 for the three months ended June 30, 2011 compared to $39,894 for the three months ended June 30, 2010. This represented a decrease in our revenues of $15,257, or 38%. During the three month period ended June 30, 2011, approximately 41% of our sales arose from cash receipts from a new customer which focuses on distribution to non-profit organizations.  The remainder of our revenue came from our master distributor, from cash receipts from the Christian bookstore or church markets or from on-line sales.

For the three months ended June 30, 2010, approximately $14,000, or 35% of our revenue, related to a television broadcast agreement of Charlie Church Mouse shows.  Our primary distributor accounted for 27% of our revenues.  

Cost of Sales - Product Costs

We recorded cost of sales - product costs of $5,412 for the three months ended June 30, 2011 compared to $13,241 in the three months ended June 30, 2010. This represented a decrease in our cost of sales – product costs of $7,829, or 59%. The decrease in cost of sales – product costs was due to the decrease in revenues noted above. Cost of sales - product costs consists of product costs and inventory-related operational expenses.

Cost of Sales – Intellectual Property Licenses

We recorded cost of sales – intellectual property licenses of $92 for the three months ended June 30, 2011 compared to $1,393 in the three months ended June 30, 2010. The decrease in cost of sales – intellectual property licenses was due to the decrease in revenues noted above coupled with our acquisition of the Charlie Church Mouse brand, which obviates our need to pay royalties for sales of games with that brand name.

General and Administrative Expenses

General and administrative expenses were $111,371 for the three months ended June 30, 2011, compared to $1,181,337 for the three months ended June 30, 2010, a decrease of $1,069,966. The decrease was primarily due to the reduction of certain stock-based compensation arrangements.

Consulting

Consulting expense to consultants was $451,284 for the three months ended June 30, 2011 compared to $1,218,552 for the three months ended June 30, 2010, a decrease of $767,268. The decrease was the result of a $795,801 decrease in largely stock-based payments to marketing consultants, which was partially offset by increases in other professional fees, 

Wages and Salaries

We had wages and salaries expense to employees and directors of $437,863 for the three months ended June 30, 2011 as compared to $307,832 for the three months ended June 30, 2010.  The $130,031 increase is due to an $111,614 increase in wages due to headcount increases and a $21,744 increase in stock-based compensation to employees.

Product Development Expenses

Product development expenses were $163,571 for the three months ended June 30, 2011, compared to $215,894 for the three months ended June 30, 2010, a decrease of $52,323.  The decrease was primarily due to a reduction in new game development expenses.

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Interest Expense

We recorded interest expense of $5,069 for the three months ended June 30, 2011, compared to 14,447 in the three months ended June 30, 2010, a decrease of $9,378.  Interest expense in the June 2011 period consists of the contractual coupons on our notes payable and $264 in amortization of debt discount on our two year convertible note.

Net Loss

As a result of the above factors, we reported a net loss of $1,150,025 for the three months ended June 30, 2011, compared to a net loss of $2,956,932 for the three months ended June 30, 2010. In addition, our accumulated deficit at June 30, 2011 totaled $72,020,194.

CASH REQUIREMENTS, LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2011, we had $24,616 of cash compared to $21,180 of cash at March 31, 2011, an increase of $3,436.  At June 30, 2011, we had a working capital deficit of $1,854,791 compared to a working capital deficit of $1,633,122 at March 31, 2011.

Operating Activities

For the three month periods ended June 30, 2011 and 2010, net cash used in operating activities was $313,276 and $435,036, respectively. The net losses for the three month periods ended June 30, 2011 and 2010 were $1,150,025 and $2,912,802, respectively, a decrease of $1,762,777.

Investing Activities

We did not invest in fixed assets during the three month period ended June 30, 2011 compared to an investment of $14,447 in the 2010 period.

Financing Activities

For the three month periods ended June 30, 2011 and 2010, net cash provided by financing activities was $286,812 and $409,588, respectively. The primary elements of cash provided by financing activities in both periods were the sale of common stock and borrowings under notes payable.

Future Financing Needs

Since our inception in August 2002 through June 30, 2011, we have raised approximately $14million through funds provided by private placement offerings and convertible notes. This was sufficient to enable us to develop our first product and expand our product line to include 11 games. Although we expect this trend of financing our business through private placement offerings to continue, we can make no guarantee that we will be adequately financed going forward. We do not currently have enough capital to sustain our operations for the next 12 months.  We will need to continue raising capital through privately placed offerings in order to continue our operations over the next 12 months. It is also anticipated that in the event we are able to continue raising funds at a pace that exceeds our minimum capital requirements, we may elect to spend cash to expand operations or take advantage of business and marketing opportunities for our long-term benefit. Additionally, we intend to continue to use equity whenever possible to finance marketing, public relations and development services that we may not otherwise be able to obtain without cash.

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To date, we have financed our operations primarily through the sale of shares of our common stock and through the issuance of debt instruments. During the three months ended June 30, 2011, we raised $159,812 of cash through the sale of common stock to certain accredited investors. We continue to generate operating losses.  We are currently authorized to issue up to 10 billion shares of common stock.  To date, 8,483,677,147 shares of common stock are issued and outstanding.  In addition, we have reserved 1 billion shares of common stock for issuance under our 2011 Stock Incentive Plan and are obligated to issue an aggregate of 425,000,000 shares of common stock pursuant to securities exercisable or convertible into shares of common stock.  In order to raise additional capital through the issuance of shares of common stock or securities exercisable or convertible into shares of common stock, we will have increase our authorized common stock which requires us to file an Information Statement with the Securities and Exchange Commission and an Amendment to our Articles of Incorporation with the Secretary of State of the State of Nevada.  

Furthermore, the report by our Independent Registered Public Accounting Firm on our financial statements includes a paragraph describing substantial doubt about our ability to continue as a “going concern” as of and for the year ended March 31, 2011.

Going Concern

The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. Since our inception, we have an accumulated deficit of $72,020,194. We have suffered continuing losses from operations and have negative working capital of $1,854,791, which, among other matters, raises substantial doubt about our ability to continue as a going concern. A significant amount of additional capital will be necessary to advance the development and distribution of our products to the point at which they may generate sufficient gross profits to cover our operating expenses. We intend to fund operations through debt and/or equity financing arrangements, which management believes may be insufficient to fund our capital expenditures, working capital and other cash requirements (consisting of accounts payable, accrued liabilities, amounts due to related parties and amounts due under various notes payable) for the fiscal year ending March 31, 2012. Therefore, we will be required to seek additional funds to finance our long-term operations.

We are currently addressing our liquidity issue by continually seeking investment capital through the public markets, specifically, through private placements of common stock and debt. However, no assurance can be given that we will receive any funds in addition to the funds we have received to date.

The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results.

The consolidated financial statements do not include any adjustments related to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

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Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, however, in the past the estimates and assumptions have been materially accurate and have not required any significant changes. Specific sensitivity of each of the estimates and assumptions to change based on other outcomes that are reasonably likely to occur and would have a material effect is identified individually in each of the discussions of the critical accounting policies described below. Should we experience significant changes in the estimates or assumptions which would cause a material change to the amounts used in the preparation of our financial statements, material quantitative information will be made available to investors as soon as it is reasonably available.

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

Software Development Costs. Research and development costs, which consist of software development costs, are expensed as incurred. Software development costs primarily include payments made to independent software developers under development agreements. Accounting standards provide for the capitalization of certain software development costs incurred after technological feasibility of the software is established or for the development costs that have alternative future uses. We believe that the technological feasibility of the underlying software is not established until substantially all product development is complete, which generally includes the development of a working model. No software development costs have been capitalized to date.

Impairment of Long-Lived Assets.We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows expected to be generated by the assets. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the present value of estimated future cash flows. At June 30, 2011, our management believes there is no impairment of our long-lived assets other than the lease-hold improvements of its abandoned office space and certain trademark costs both of which have been written off in the fiscal year ended March 31, 2008. There can be no assurance however; that market conditions will not change or that there will be demand for our products, which could result in impairment of long-lived assets in the future.

Stock-Based Compensation. Effective April 1, 2006, on the first day of our fiscal year 2006, we adopted the fair value recognition provisions of the accounting standards applied at that time, using the modified-prospective transition method. Under this transition method, compensation cost recognized in the fiscal year ended March 31, 2007 includes: (a) compensation cost for all share-based payments granted and not yet vested prior to April 1, 2006, based on the grant date fair value estimated in accordance with the accounting standards, and (b) compensation cost for all share-based payments granted subsequent to March 31, 2006 based on the grant-date fair value estimated in accordance with the provisions of accounting standards. Accounting standards requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. As of March 31, 2008, we had no options outstanding and therefore believe the adoption of this accounting standard had an immaterial effect on the accompanying consolidated financial statements.

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Stock-based awards to non-employees are accounted for using the fair value method in accordance with accounting standards. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the third-party performance is complete or the date on which it is probable that performance will occur. We account for stock-based awards to non-employees by using the fair value method.

In accordance with accounting standards, an asset acquired in exchange for the issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor's balance sheet once the equity instrument is granted for accounting purposes. Accordingly, we have recorded the fair value of the common stock issued for certain future consulting services as prepaid expenses in its consolidated balance sheet.

Revenue Recognition.We evaluate the recognition of revenue based on the criteria set forth in accounting standards. We evaluate revenue recognition using the following basic criteria and recognize revenue when all four of the following criteria are met:

·Persuasive evidence of an arrangement exists: Evidence of an agreement with the customer that reflects the terms and conditions to deliver products must be present in order to recognize revenue.

·Delivery has occurred: Delivery is considered to occur when the products are shipped and risk of loss and reward have been transferred to the customer.

·The seller’s price to the buyer is fixed and determinable: If an arrangement includes rights of return or rights to refunds without return, revenue is recognized at the time the amount of future returns or refunds can be reasonably estimated or at the time when the return privilege has substantially expired in accordance with SFAS No. 48,Revenue Recognition When Right of Return Exists. If an arrangement requires us to rebate or credit a portion of our sales price if the customer subsequently reduces its sales price for our product to its customers, revenue is recognized at the time the amount of future price concessions can be reasonably estimated, or at the time of customer sell-through.

·Collectibility is reasonably assured: At the time of the transaction, we conduct a credit review of each customer involved in a significant transaction to determine the creditworthiness of the customer. Collection is deemed probable if we expect the customer to be able to pay amounts under the arrangement as those amounts become due. If we determine that collection is not probable, we recognize revenue when collection becomes probable (generally upon cash collection).

For sales to our large retail customers, we defer revenue recognition until the resale of the products to the end customers, or the “sell-through method.” Under sell-through revenue accounting, accounts receivable are recognized and inventory is relieved upon shipment to the channel partner or retail customer as title to the inventory is transferred upon shipment, at which point we have a legally enforceable right to collection under normal terms. The associated sales and cost of sales are deferred by recording “deferred income – product sales” (gross profit margin on these sales) as shown on the face of the consolidated balance sheet. When the related product is sold by our primary channel partner or our largest retail customer to their end customers, we recognize previously deferred income as sales and cost of sales. Our large retail customers provide us with sell-through information on a frequent basis regarding sales to end customers and in-channel inventories.

For sales to our on-line store customers, revenues are deferred until such time as the right of return privilege granted to the customers lapses, which is thirty (30) days from the date of sale for unopened games.

For sales to our Christian bookstore customers and all other customers that cannot provide us with sell-through information and for which we may accept product returns from time to time, revenues are recognized on a cash receipts basis.

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In the future, we intend to continue using the sell-through methodology from customers that supply us with sell through reports. We also plan to continue recognizing sales on our on-line store after a one month lag to allow for the right that we have given our on-line customers to return unopened games for thirty (30) days.

We continue to accumulate historical product return and price concession information related to our Christian bookstore customers and all other customers. In future periods, we may elect to return to the accrual methodology of recording revenue for those customers upon shipment with estimated reserves at which time we believe we can reasonably estimate returns and price concessions to these customers based upon our historical results.

Revenue from Sales of Consignment Inventory. We have placed consignment inventory with certain customers. We receive payment from those customers only when they sell our product to the end consumers. We recognize revenue from the sale of consignment inventory only when we receive payment from those customers.

Shipping and Handling: In accordance with accounting standards, we recognize amounts billed to customers for shipping and handling as revenue. Additionally, shipping and handling costs incurred by us are included in cost of goods sold.

Historically, we promoted our products with advertising, consumer incentive and trade promotions. Such programs include, but are not limited to, cooperative advertising, promotional discounts, coupons, rebates, in-store display incentives, volume based incentives and product introductory payments (i.e. slotting fees). In accordance with accounting standards, certain payments made to customers by us, including promotional sales allowances, cooperative advertising and product introductory expenditures have been deducted from revenue.  During the three months ended June 30, 2011, we had no such types of arrangements.

Off-Balance Sheet Arrangements

We presently do not have any off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The disclosure required under this item is not required to be reported by small reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Controls and Procedures.

In accordance with Securities Exchange Act Rules 13a-15 and 15d-15, our management is required to perform an evaluation under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period.

Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2011, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in this Report was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and instructions for Form 10-Q.

Our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures had the following deficiency:

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We were unable to maintain any segregation of duties within our business operations due to our reliance on a single individual fulfilling the role of both our Principal Executive Officer and Principal Financial Officer. While this control deficiency did not result in any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties. Accordingly we have determined that this control deficiency constitutes a material weakness.

Until such time as we retain the services of a Principal Financial Officer, the above-described deficiency will exist. We intend to hire a Principal Financial Officer in the future as our Company grows and we have sufficient capital to pay such individual.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are currently not involved in any other litigation or any pending legal proceedings that we believe could have a material adverse effect on our financial position or results of operations.

ITEM 1A. RISK FACTORS.

The disclosure required under this item is not required to be reported by small reporting companies; as such term is defined by Item 503(e) of Regulation S-K.

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

During the three months ended June 30, 2011, we issued the following:

(1)

292,788,248 shares of common stock to independent third parties for services provided, valued at $254,100.

(2)

471,814,805 shares of common stock to accredited investors for cash proceeds of $159,812.

(3)

100,000 shares of common stock to convert outstanding debt and settle accounts payable with a total value of $150.

(4)

400,000,000 shares of common stock were issued under conversions of $25,000 of convertible notes originally issued for services with during fiscal 2011.

(5)

1,159,115,152 shares of common stock under warrant exercises at an average strike price of $0.0000509.  The warrants were issued in exchange for contributions to our treasury stock of 5,300,000 shares by the warrant holders.

The Company issued the shares of common stock listed in (1) to (5) above pursuant to the registration exemption afforded the Company under Section 4(2) of the Securities Act of 1933, as amended, due to the fact that the issuances were isolated and did not involve a public offering of securities. 

The Company issued the warrants listed in (5) above pursuant to the registration exemption afforded the Company under Section 3(a)(9) of the Securities Act of 1933, as amended, due to the fact that warrant recipients were existing security holders of the Company, no consideration was given and no commission or other remuneration was paid directly or indirectly for soliciting such exchange.

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The Company issued the foregoing securities pursuant to the registration exemption afforded the Company under Section 4(2) of the Securities Act of 1933, as amended, due to the fact that the issuances were isolated and did not involve a public offering of securities.  

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. [REMOVED AND RESERVED BY THE SECURITIES AND EXCHANGE COMMISSION]

ITEM 5. OTHER INFORMATION.

SUBSEQUENT EVENTS

In July 2011, we issued 35,000,000 share of common stock valued at $14,000 at the closing price to an investor as antidilution protection.

In July 2011, we issued 42,500,000 shares of common stock to accredited investors in exchange for aggregate cash investments of $20,000.  Those investors also exchanged 200,000 shares of common stock in exchange for warrants to purchase 147,142,857 share of common stock at a purchase price of $0.00000125 per share.

 In July 2011, we issued 2,777,778 shares of common stock to an independent third party for services provided, valued at $2,500.

On August 5, 2011, we issued to certain of our legal advisors warrants to purchase 500,000,000 shares of common stock at a purchase price of $0.0002 per share. On August 12, 2011, one of these legal advisors converted 75,000,000 warrants, via a cashless exercise, into 53,571,428 shares.

On August 9, 2011, we filed an S-8 registration statement to issue 1,000,000,000 shares as part of the Company’s 2011 Stock Incentive Plan and subsequently issued those shares.

On August 22, 2011, we terminated 550,000,000 shares previously issued in the quarter ending June 30, 2011.

ITEM 6. EXHIBITS.

(a)  Exhibits. The following documents are filed as part of this report:

Exhibit No.:	Description:
31.1	Certification by Troy A. Lyndon, Principal Executive Officer and Principal  Financial and Accounting Officer, of Left Behind Games, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification by Troy A. Lyndon, Principal Executive Officer and Principal Financial and Accounting Officer, of Left Behind Games, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
101	Interactive Data Files *

* To be filed by amendment.

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SIGNATURES

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

	LEFT BEHIND GAMES, INC.
August 22, 2011	By:	/S/ TROY A. LYNDON
		TROY A. LYNDON CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER (Principal Executive Officer) (Principal Financial and Accounting Officer)

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