The accompanying notes are an integral part of these unaudited financial statements
Reraise Gaming Corporation
Notes to Financial Statements
For the Three Months Ended March 31, 2016 and 2015
NOTE 1 - ORGANIZATION AND OPERATIONS
Reraise Gaming Corporation (Reraise) located in Las Vegas, Nevada, was incorporated on October 2, 2013, in the State of Nevada. As of March 31, 2016 the Company has acquired a variety of poker games, some with patents and some with patents pending, in addition to those we are developing. Each of the games has been acquired or is being developed for different segments of the poker market, namely video poker, brick and mortar, as well as online poker. Several of the games are available on line, at no charge, to test their viability.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements of Reraise Gaming Corporation have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the years ended December 31, 2015 and 2014, contained in the Company's Form 10K, originally filed with the Securities and Exchange Commission on March 30, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year.
NOTE 3 - GOING CONCERN
The accompanying interim financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been engaged substantially in financing activities and developing its business plan and marketing. As a result, the Company incurred accumulated net losses from inception (October 2, 2013) through the period ended March 31, 2016 of $2,780,820. As of March 31, 2016, the Company has a working capital deficit. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The Company's development activities since inception have been financially sustained through the sale of capital stock and capital contributions from a note holder.
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock or through debt financing and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 4 - COMMITMENT
On May 21, 2014 the Company entered into an agreement with Chris Moneymaker, an individual to use his name and likeness alongside a brief positive quote on the Company's website, paraphernalia or literature. In exchange, the Company will compensate Chris Moneymaker the following:
Reraise Gaming Corporation
Notes to Financial Statements
For the Three Months Ended March 31, 2016 and 2015
NOTE 4 – COMMITMENT (Continued)
| ☐ | | $10,000 signing bonus |
| ☐ | | $1,000 per month – 24 months consulting contract after we have raised $1,000,000 from the time this contract is initiated. |
| ☐ | | Additional $500 per month – 24 month consulting contract for every $1,000,000 thereafter that is raised. The above consulting terms are concurrent, meaning, the 2nd contract will be added to the first contract and every other contract thereafter. |
NOTE 5 – INTANGIBLE ASSETS
During the year ended December 31, 2014, and as part of its marketing strategy to acquaint users with its product, the Company has undertaken to build its own interactive website. The Company capitalized website development costs of $6,400 for the period from January 1, 2014 through website launch on September 1, 2014. The Company's capitalized website amortization is included in general and administrative expenses in the Company's statements of operations, and totaled $533 and $533 for the three months ended March 31, 2016 and 2015, respectively. Intangible assets consist of the unamortized portion of capitalized website development costs.
NOTE 6 – RELATED PARTY LOANS AND NOTES PAYABLE
During the year, December 31, 2013, the Company accrued expenses for $30,000 for the payment of services provided by an entity controlled by the Company's sole officer and director. The loan is non- interest bearing, unsecured and has no specific repayment terms or maturity date. As of March 31, 2016, the entire $30,000 is outstanding.
On June 2, 2014 the Company borrowed $25,000 from a related party with interest of 5% repayable in one payment of $26,250, on June 1, 2015. In the event of default, the note is secured by not less than 2,000,000 shares of the Company's common stock. On August 14, 2015 the note was extended, with an additional interest charge of 5% or $1,322, the entire balance of $26,322, repayable on June 1, 2016.
On June 8, 2015 the Company borrowed $25,000 from a related party with interest of 2% repayable in one payment of $25,042, on July 8, 2015. On August 14, 2015 the note was extended, under the same terms and conditions, until July 8, 2016, the entire balance of $25,682 payable in one lump sum. In the event of default, unless such default is cured within 10 days, holder has the option of charging the Company an additional 10% of the note amount.
NOTE 7 – RELATED PARTY TRANSACTIONS
As of March 31, 2016, the Company has an outstanding advance to the Company's President, in the amount of $1,351. The advance was for working capital purposes. The advance has no specific repayments terms or maturity and is non-interest bearing and unsecured.
The Company has been provided office space by its chief executive officer at no cost. Management has determined that such cost is nominal and has not recognized any rent expense in its financial statements.
Item 2: - Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q includes statements about:
| · | our plans to hire industry experts and expand our management team; |
| · | our beliefs regarding the future of our competitors; |
| · | our anticipated development schedule; |
| · | the anticipated benefits of our product; |
| · | our expectation that the demand for our products will eventually increase; and |
| · | our expectation that we will be able to raise capital when we need it. |
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:
| · | general economic and business conditions; |
| · | we may have product liability claims; |
| · | we may not be successful in commercialization of our products; |
| · | regulatory changes may hurt the market for our products; |
| · | we may not be able to protect our intellectual property rights; |
| · | our auditors have issued a going concern opinion regarding our company; |
| · | competition for, among other things, capital, products and skilled personnel; and |
| · | other factors discussed under the section entitled "Risk Factors", |
any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
As used in this report, the terms "we", "us" and "our" mean Reraise Gaming Corporation, a Nevada corporation. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.
The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our unaudited interim financial statements and related notes appearing elsewhere in this Quarterly Report.
History and Overview
Reraise Gaming Corporation was incorporated on October 2, 2013 under the laws of the State of Nevada.
Plan of Operations
We are in the business of developing poker games, some with patents and some without patents, for different segments of the poker market, namely video poker, brick and mortar, as well as online poker The Company has, also, acquired, for cash and common stock, a variety of poker games, some with patents and some with patents pending. Several of the games are available on line, at no charge, to test their viability.
Results of Operations
The following is an analysis of our revenues, and analysis of components of expenses, and variances comparing the three months ended March 31, 2016 to the three months ended March 31, 2015.
We are in our infancy stage and have not generated any revenue from our core business model. Our total operating expenses during those periods were general and administrative expense of $7,373 for the three months ended March 31, 2016 compared to $38,778, which included $27,500 of product endorsement costs, paid for through the issuance of restricted common stock. Interest expense for the three months ended March 31, 2016 was $500 compared to $308 for the three months ended March 31, 2015. General and administrative expense for the three months ended March 31, 2016 was $7,373 compared to $11,278 for the same period in 2015.
The decrease in operating expenses, for the three months ended March 31, 2016, compared to the three months ended March 31, 2015, excluding the stock based compensation paid in 2015, is due, primarily, to reduced professional fees.
Liquidity and Capital Resources
During the three months ended March 31, 2016, we utilized cash in the amount of $6,840 to pay for operating activities compared to $12,496 for the three months ended March 31, 2015. Cash used in operating activities during the three months ended March 31, 2016 included a net loss of $7,873 compared to a net loss of $39,086 for the three months ended March 31, 2015. The net loss for the three months ended March 31, 2016 included amortization of intangible asset in the amount of $533, compared to amortization of $533 and a non-cash stock based compensation expense of $27,500, for the same three months in 2015. Accounts payable increased and provided cash of $500 for the three months ended March 31, 2016 compared to cash utilized of $1,443 for the three months ended March 31, 2015.
Investing Activities
We did not use any cash resources for investing activities during the three month periods ended March 31, 2016 and 2015
Financing Activities
We did not generate any funds from financing activities during the three month periods ended March 31, 2016 and 2015.
Working Capital Needs:
As of March 31, 2016, we had a working capital deficit of $83,496. Over the next 12 months, we will require approximately $75,000 to sustain our working capital needs as a public reporting company and to further develop our web and bricks and mortar products.
Sources of Capital:
We expect to obtain financing through the sale of restricted common shares, shareholder loans, and a potential line of credit. The sale of common shares will be priced based on current market activity. Shareholder loans, depending on circumstances, may be without stated terms of repayment or interest. Because a line of credit is not currently being investigated, its terms will depend on the lender at the time of commitment. We have no formal agreement that ensures that we will receive such loans. We may exhaust this source of funding at any time.
Plan of Operations:
We are in the infancy stage of developing our products. The Company was incorporated in the State of Nevada on October 2, 2013, to engage in the development and distribution of poker games. We have generated no revenues from business operations. Our independent registered public accounting firm has issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business unless we obtain additional capital to pay our ongoing operational costs. Accordingly, we must locate sources of capital to pay our operational costs.
We are in the start-up stage of our business plan. We are currently working with potential sponsors of our card games and the U.S. Patent office before we start promoting our games. In the next 12 months we anticipate developing and or purchasing additional games for our game portfolio. Every game will require a novel approach to add it to our portfolio including the issuance of our stock to acquire them. We anticipate when we have reached our goal of several new games in our portfolio we will have a strong portfolio to make available to the general public and begin to charge a fee for downloads of our games via ITunes and our web page Reraisegaming.com.
Our detailed plan of operation consists of identifying the game, applying for patents and trademarks, apply for international patents and trademarks, obtain mathematical analysis to determine the value of the game and market the game to the gaming industry. Each game will need a different degree of development and financing as no two games are alike. On average each game will take between 12 and 18 months to reach its final stage. We will need traditional funding and anticipate hiring a brokerage firm registered with FINRA to assist us in meeting our funding needs. We have currently not discussed our plan with any brokerage firms.
Material Commitments
We do not have any material commitments for capital expenditures. Seasonal Aspects.
Management is not currently aware of any seasonal aspects which would affect the results of our operations during any particular time of year.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
Going Concern
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective during the three month period ended March 31, 2016.
There were no changes in our internal control over financial reporting during the three month period ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 6. EXHIBITS.
The following documents are included herein:
| EXHIBIT | | |
| NUMBER | | DOCUMENT DESCRIPTION |
| | | |
| 31.1 | | Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 32.1 | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 101.INS | | XBRL Instance Document* |
| | | |
| 101.SCH | | XBRL Taxonomy Extension Schema Document* |
| | | |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document* |
| | | |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document* |
| | | |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document* |
| | | |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document* |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this May 5, 2016.
| | RERAISE GAMING CORPORATION |
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| | BY: | RON CAMACHO |
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| | /s/ | RON CAMACHO |
| | | Principal Executive Officer |
| | | Principal Financial Officer and |
| | | Principal Accounting Officer |
