UNITED STATES
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 ended:March 31, 2008
OR
[ ]TRANSITION REPORT PURSUANT SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from:to
Commission file number:000-09047
Strategic Gaming Investments, Inc.
-----------------------------------
(Exact name of small business issuer as
specified in its charter)
Delaware 20-3454263
---------- -----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2580 Anthem Village Dr., Henderson, NV 89052
---------------------------------------------
(Address of principal executive offices)
(702) 563-1600
----------------
(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YES[X]NO[ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
YES[X]NO[ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. YES[ ]NO[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
11,220,519 shares of common stock, $0.001 par value, as of May 14, 2008
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES[ ]NO[X]
FORM 10-QSB
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.................................................1
Balance Sheet (Unaudited)...............................................1
Statement of Operations (Unaudited).....................................2
Statement of Cash Flows (Unaudited).....................................3
Statement of Stockholder's Deficit (Unaudited)..........................4
Notes to Condensed Consolidated Financial Statements
(Unaudited)......................................................5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.................................... 7
ITEM 3. CONTROLS AND PROCEDURES..............................................9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS...................................................10
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS...........................10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.....................................10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS................................................................10
ITEM 5. OTHER INFORMATION...................................................11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K....................................11
SIGNATURE...........................................................................12
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
STRATEGIC GAMING INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED Audited
As of As of
March 31, 2008 December 31, 2007
ASSETS ---------------- ----------------
Current assets
Cash $ - $ -
---------------- ----------------
Total current assets - -
Other current assets
Bank receivable 4,089 3,693
Advances to related party - 500,100
---------------- ----------------
Total other current assets 4,089 503,793
Total assets $ 4,089 $ 503,793
================ ================
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable 402,188 $ 208,623
Bank overdraft 4,366 7,116
Accrued interest - 65,030
Accounts payable - related parties - 179,533
Advances from related parties 147,479 97,401
Lawsuit settlement payable 18,000 -
Accrued payroll for related party 108,304 577,235
---------------- ----------------
Total current liabilities 680,337 1,134,938
Convertible notes payable to related
party, less current maturity of $0,
net of unamortized discount of $901,316 184,629
Stockholders' (deficit)
Preferred Stock (25,000,000 shares
authorized and zero issued and outstanding) - -
Common stock; $.001 par value; 100,000,000 authorized;
9,447,137 and 8,047,137 shares issued and outstanding as
of December 31, 2007 and December 31, 2006, respectively 11,095 9,447
Additional paid-in capital 13,218,156 12,541,764
Receivable of shares issued -
Accumulated (deficit) (13,905,499) (13,366,985)
--------------- ----------------
Total stockholders' (deficit) (676,248) (815,774)
--------------- ----------------
Total liabilities and stockholders' (deficit) $ 4,089 $ 503,793
=============== ================
See Accompanying Notes to Financial Statements
1
STRATEGIC GAMING INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited Unaudited
3 months ended 3 months ended
March 31, 2008 March 31, 2007
---------------- -----------------
Revenue $ - $
Operating expenses
Consulting expense 529,313 -
General and administrative 9,203 141,757
--------------- ----------------
Total operating expenses 538,516 141,757
--------------- ----------------
Loss from operations (538,516) (141,757)
Other income (expenses):
Amortization of discount on convertible notes payable - (3,783)
Loss from rescinded Merger - (2,555,811)
Interest expense on warrant with convertible notes payable - (12,260)
Interest expense - (4,165)
--------------- ----------------
Total other income (expenses) - (2,576,019)
--------------- ----------------
(Loss) before provision for income taxes &
other comprehensive income / (loss) (538,516) (2,717,776)
Provision for income taxes - -
Net (loss) $ (538,516) $ (2,717,776)
--------------- ----------------
Basic and diluted (loss) per common share $ (0.06) $ (0.31)
=============== ================
Basic and diluted weighted average
common shares outstanding 9,721,867 8,753,804
=============== ================
See Accompanying Notes to Financial Statements
2
STRATEGIC GAMING INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Unaudited
3 months ended 3 months ended
March 31, 2008 March 31, 2007
--------------- -----------------
Cash flows from operating activities:
Net loss $ (538,516) $ (2,717,776)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in operating assets and liabilities:
Accounts receivable (397) -
Interest expense on warrant with convertible notes payable - 12,260
Amortization of discount on convertible notes payable - 3,783
Loss associated with rescinded merger - 2,465,000
Stock options issued 476,418 -
Depreciation and amortization - 942
(Increase) / decrease in prepaid expenses - 999
(Increase) / decrease in loans and bank receivables - 8,228
Increase / (decrease) in accounts payable 193,565 637
Increase / (decrease) in accounts payable - related party (179,533) -
Increase / (decrease) in accrued interest - 4,155
Increase / (decrease) in accrued payroll (16,865) 33,753
Lawsuit settlement payable 18,000 -
--------------- ----------------
Net cash used by operating activities (47,328) (188,019)
Cash flows from investing activities:
Purchase of property and equipment - -
--------------- ----------------
Net cash used by investing activities - -
Cash flows from financing activities:
Advance to (from) related party 50,078 2,500
Increase in bank overdraft 4,366
Proceeds from issuance of convertible notes payable - 167,500
--------------- ----------------
Net cash provided by financing activities 54,444 170,000
--------------- ----------------
Net increase in cash 7,116 (18,019)
Cash, beginning of period (7,116) 25,215
--------------- ----------------
Cash, end of period - 7,196
=============== ================
See Accompanying Notes to Financial Statements
3
STRATEGIC GAMING INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Additional Stock Total
Paid-in Subscriptions Accumulated Stockholders'
Shares Amount Capital Receivable Deficit Deficit
---------- ---------- -------------- ----------- --------------- ------------
Balance, December 31, 2006 8,047,137 $ 8,047 $ 3,580,849 $ - $ (4,414,090) $ (825,194)
========== ========= ============== =========== =============== ============
Shares issued for merger with Neolink 800,000 800 2,479,200 (2,500) - 2,477,500
Issuance of convertible debt agreements - - 377,558 - - 377,558
Shares issued for settlement of merger rescission 600,000 600 - - - 600
Issuance of stock options for services - - 1,031,050 - - 1,031,050
Issuance of stock options of compensation - - 4,361,888 - - 4,361,888
Issuance of convertible debt agreements - - 602,524 - - 602,524
Write off of stock receivable 2,500 2,500
Issuance of convertible debt agreements - - 108,695 - - 108,695
Net loss - - - - (8,952,893) (8,952,893)
---------- --------- ----------- ----------- --------------- ------------
Balance, December 31, 2007 9,447,137 $ 9,447 $ 12,541,764 $ - $ (13,366,983) $ (815,772)
========== ========= ============== =========== =============== ============
Settlement of accrued payroll 441,963 441,963
Conversion of notes payable 1,648,382 1,648 (241,989) (240,341)
Issuance of stock options for services 476,418 476,418
Net loss (538,516) (538,516)
---------- -------- ---------- ----------- --------------- ------------
11,095,519 11,095 13,218,156 - (13,905,499) (676,248)
========== ======== ========== =========== =============== ============
See Accompanying Notes to Financial Statements
4
STRATEGIC GAMING INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - NATURE OF BUSINESS AND FINANCIAL STATEMENT PRESENTATION
Description of Business and History - Strategic Gaming Investments, Inc., a
Delaware corporation ("SGME" or the "Company"), formerly named Left Right
Marketing Technology, Inc., was incorporated in 1973. Prior to June 2003, the
Company was involved in various businesses, none of which were successful. On
June 30, 2003, the Company executed a binding letter of intent which resulted
in a merger with Left Right Marketing & Technology, Inc., a Nevada corporation
("LRMT"), in September 2003.
On November 4, 2005, the Company entered into an agreement and plan of
reorganization, or the Merger Agreement, with Strategic Gaming Investments,
Inc., a Nevada corporation, or SGI. The transaction between the Company and SGI
has been accounted for as a recapitalization. Since SGI was the only operating
company in the exchange and the stockholders of SGI received a substantial
majority of the voting securities of the combined companies, the transaction
exchange has been accounted for as a "reverse acquisition" and, effectively, as
a recapitalization, in which SGI has been treated as the accounting acquirer
(and the legal acquiree), and the Company has been treated as the accounting
acquiree (and the legal acquirer).
The financial statements have been prepared in accordance with Securities and
Exchange Commission requirements for interim financial statements. Therefore,
they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. These financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 2007 as filed with the
Securities and Exchange Commission on March 31, 2008.
The results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for the full year. In the
opinion of management, the information contained herein reflects all
adjustments necessary to make the results of operations for the interim periods
a fair statement of such operations. All such adjustments are of a normal
recurring nature.
The Company adopted Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income", (SFAS No. 130). SFAS No. 130 requires the
reporting of comprehensive income in addition to net income from operations.
Comprehensive income is a more inclusive financial reporting methodology that
includes the disclosure of the information that historically has not been
recognized in the calculation of net income. For the period ended March 31,
2008, this amount did not vary from net loss from operations.
Going Concern - The Company has an accumulated deficit of $13,905,499 as of
March 31, 2008, and currently has no source of revenue or business operations,
raising substantial doubt about the Company's ability to continue as a going
concern. The Company may seek additional sources of capital through the
issuance of debt or equity financing, but there can be no assurance the Company
will be successful in accomplishing its objectives. The ability of the Company
to continue as a going concern is dependent on additional sources of capital
and the success of the Company's future business operations, which are
presently not established. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
Principles of Consolidation - The consolidated financial statements include the
combined accounts of Strategic Gaming Investments, Inc., a Delaware
corporation; Strategic Gaming Investments, Inc., a Nevada Corporation; and The
Ultimate Poker League, Inc., a Nevada corporation. All material intercompany
transactions and accounts have been eliminated in consolidation.
NOTE 2 - STOCKHOLDERS' EQUITY
As of March 31, 2008, there were 11,095,519 shares of common stock outstanding.
On March 16, 2008, all outstanding convertible notes ("Notes"), in the
collective original principal amount of $1,095,945, plus accrued interest in
the collective amount of $65,600, were converted into 1,648,382 shares of
common stock at a conversion price of $0.40 per share. The balance of the
notes were settled by giving the 2,500,000 shares of Power Play Development
Corporation to the note holders.
Additionally, during the three months ended March 31, 2008, the Company issued
warrants to purchase 800,000 shares of common stock, exercisable for a period
of ten (10) years at $0.35 per share, to third party consultants. Such warrants
were valued at $476,418 using the Black-Scholes valuation methodology, and all
of such amount has been expensed on the financial statements of the Company.
NOTE 3 - NOTES PAYABLE
As of March 31, 2008, there are no outstanding convertible notes.
NOTE 4 - RELATED PARTY TRANSACTIONS
As of March 31, 2008, Larry Schroeder, the Company's President, Chief Executive
Officer and a Director, has loaned the Company the sum of $78,137. This loan is
non-interest bearing and has no due date assigned to it.
As of March 31, 2008, Anthony Marsiglia, President of The Ultimate Poker
League, Inc., a wholly owned subsidiary of the Company, has loaned the Company
the sum of $7,830. This loan is non- interest bearing and has no due date
assigned to it.
As of March 31, 2008, the Company had $108,304 in accrued payroll payable to
the Company's current and former officers.
NOTE 5 - LITIGATION
On March 7, 2006, Mark Newburg and Arnoldo Galassi jointly filed a complaint in
District Court, Clark County, Nevada, against Left Right Marketing Technology,
Inc. (the former name of Strategic Gaming Investments, Inc.) alleging, among
other things, breach of contract relating to promissory notes and employment
contracts purportedly outstanding in favor of Messrs. Newburg and Galassi. The
Company filed a responsive pleading and denied each of the allegations made by
Messrs. Newburg and Galassi.
In March 2008, the Company settled the lawsuit with Mark Newburg and Arnold
Galassi. The Company agreed to pay $20,000 in legal fees to the plaintiffs and
issued the sum of 250,000 shares of restricted common stock. A shareholder of
the Company has agreed to relinquish all legal right and title to 250,000
shares of common stock to the Company. As a result, the issuance of the 250,000
shares of common stock to Messrs. Newburg and Galassi, pursuant to the terms of
the settlement, will not result in dilution to the current shareholders of the
Company. In addition, the settlement will result in the Company's balance
sheet reflecting a reduction of $461,963 in current liabilities.
5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with our financial
statements and notes to our financial statements, included elsewhere in this
report. This discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of various
factors discussed elsewhere in this report.
Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, such
as statements relating to our anticipated revenues, gross margin and
operating results, future performance and operations, plans for future
expansion, capital spending, sources of liquidity and financing sources. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future, and
accordingly, such results may differ from those expressed in any forward-
looking statements made herein. These risks and uncertainties principally
include, but are not limited to, those relating to our lack of an operating
business, and lack of operating capital. A complete discussion of these risks
and uncertainties are contained in our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2007, as filed with the Securities and Exchange
Commission on March 31, 2008.
SUMMARY
Strategic Gaming Investments, Inc., a Delaware corporation formerly known as
Left Right Marketing Technology, Inc., was incorporated in the state of
Delaware in 1973. In this Quarterly Report on Form 10-QSB, references to
"Company," "we," "our," and "us," refer to Left Right Marketing Technology,
Inc., a Delaware corporation, prior to April 18, 2006, and Strategic Gaming
Investments, Inc., a Delaware corporation, from April 18, 2006 forward.
On April 18, 2006, we consummated a merger and share exchange with Strategic
Gaming Investments, Inc., a Nevada corporation, including its wholly-owned
subsidiary, The Ultimate Poker League, Inc., a Nevada corporation. In
conjunction with the merger and share exchange, we (a) exchanged 7,650,000
shares of our common stock for 100% of the issued and outstanding common stock
of Strategic Gaming Investments, Inc. and The Ultimate Poker League, Inc., (ii)
amended our articles of incorporation to change our name to Strategic Gaming
Investments, Inc., and (iii) effected a change of our trading symbol from
"LRMT" to "SGME".
On January 11, 2007, SGME and Neolink Wireless Content, Inc., a Nevada
corporation ("Neolink"), closed a merger transaction ("Merger") whereby
Neolink became a wholly-owned subsidiary of SGME. The Merger is evidenced by a
Merger and Share Exchange Agreement ("Neolink Merger Agreement").
Pursuant to the terms of the Neolink Merger Agreement, SGME issued the
stockholders of Neolink, on a pro-rated basis, a total of One Million
(1,000,000) shares of common stock, $0.001 par value, in consideration for
100% of the issued and outstanding capital stock of Neolink. Of the
1,000,000 shares issued, 500,000 shares of common stock were issued to Donald
Beck ("Beck") and 100,000 shares of common stock to John Padon. Mr. Beck is an
officer of The Ultimate Poker League, Inc. and Mr. Padon is a director of The
Ultimate Poker League, Inc. Both individuals are shareholders of the
Company through its acquisition of The Ultimate Poker League on April 18,
2006. After the Merger, Mr. Beck and Mr. Padon each have 600,000 and 125,000
shares of common stock, respectively. In addition, SGME has provided
approximately $90,000 of additional financing to Neolink. The funding was
utilized in connection with Neolink's business, operations and affairs.
On April 16, 2007, SGME and Beck entered into a Settlement Agreement and Mutual
Release of Claims ("Settlement Agreement") relating to the Merger. The parties
mutually decided it was in their respective best interests to terminate the
Merger and did so on the following terms: (i) Beck paid SGME the sum of
Fifteen Thousand ($15,000) Dollars for 100% of the issued and outstanding
capital stock of Neolink; (ii) Beck and another Neolink stockholder
relinquished a total of Two Hundred Thousand (200,000) shares of SGME
common stock issued to them in the Merger; (iii) the employment agreement of
Beck was terminated; (iv) SGME assumed the real property lease of
Neolink as well as the contract for T-1 Internet services; and (v) SGME and
Beck forever released and discharged the other, as well as their spouses,
heirs, beneficiaries, shareholders, members, directors, officers,
managers, employees, contractors, partners, joint venturers, attorneys,
agents, representatives, successors and assigns, as applicable, from any
and all contracts and other obligations relating to the Merger.
As a result of the termination of the merger with Neolink, SGME issued 800,000
shares of its common stock at a market price of $3.10 per share and received
$15,000 in exchange. SGME recorded a loss of $2,555,000 from the rescinded
merger in the three months ended March 31, 2007.
On July 24, 2007, SGME entered into an Agreement and Plan of Merger ("PPDC
Merger Agreement") with Power Play Development Corporation ("PPDC"). On October
11, 2007, the PPDC Merger Agreement was terminated. Pursuant to the termination
of the PPDC Merger Agreement, the Company was entitled to receive Two Million
Five Hundred Thousand (2,500,000) shares of common stock of PPDC if PPDC
received $4,000,000 in financing on or before December 22, 2007 from third
parties. This financing did not occur. In addition, in the event that the
Company is (i) negotiating a third party transaction that requires a non-
exclusive license of technology owned by PPDC, or (ii) has concluded a
transaction that requires a non-exclusive license to the PPDC's technology,
then, in either event, PPDC shall use its best efforts to provide a non-
exclusive license to the Company relating to its technology on reasonably
favorable terms and conditions; provided, however, that the foregoing
obligations of PPDC shall expire on October 22, 2010.
DESCRIPTION OF REVENUES
At this time we are not generating revenues. There can be no assurance that we
will generate revenues in the future. Accordingly, our long-term viability is
subject to substantial doubt.
REVENUE RECOGNITION
Sales revenue relating to any future product or service offerings, if
applicable, will be recognized upon receipt.
DESCRIPTION OF EXPENSES
Our current expenses consist primarily of general and administrative matters,
including legal and accounting fees. At this time, our sole officer is paid
sporadically.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2008 AND 2007
REVENUES
We did not realize revenues for the three months ended March 31, 2008 and
March 31, 2007.
OPERATING EXPENSES
General and Administrative - General and administrative expenses were $9,203
for the three months ended March 31, 2008, compared to $141,757 for the three
months ended March 31, 2007, representing a decrease of $132,554, or 93.1%. The
significant decrease in general and administrative expense reflects the lack of
an operating business.
OTHER EXPENSES
During the three months ended March 31, 2008, other expense was $529,313,
compared to $2,576,019 during the three months ended March 31, 2007,
representing a decrease of $2,046,706, or 79.5%. The significant decrease
relates to a decrease of $2,555,811 in loss from rescinded merger, offset, in
part, by an increase in warrant expense in the amount of $476,418 and
consulting and contract labor of $59,761.
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
We realized a net loss of $538,516 for the three months ended March 31, 2008,
compared to a net loss of $2,717,776 for the three months ended March 31, 2007,
a decrease of $2,179,260, or 80.2%. The decrease in net loss is attributable to
a decrease of $3,783 in amortization of discount on convertible notes payable,
a decrease of $2,555,811 of loss from rescinded merger, a decrease of $12,260
in interest expense on warrant with convertible notes payable, a decrease of
$4,165 in interest expense, offset, in part, by an increase of $467,418 of
warrant expense.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2008, we had a cash deficit of $4,366, and a working capital
deficit of $680,337, as compared to a cash deficit of $7,116 and a working
capital deficit of $631,145. In addition, our stockholders' deficit was
$676,248 at September 30, 2007, compared to stockholders' deficit of $815,774
at December 31, 2007.
Our accumulated deficit increased from $13,366,985 at December 31, 2007 to
$13,905,499 at March 31, 2008.
Our operations used net cash of $47,328 during the three months ended March 31,
2008, compared to $188,019 during the three months ended March 31, 2007, a
decrease of $140,691.
Our investing activities provided zero in net cash for both the three months
ended March 31, 2008 and 2007.
Our financing activities provided net cash of $50,078 during the three months
ended March 31, 2008, compared to net cash of $170,000 during the three months
ended March 31, 2007.
Given the absence of revenue generating operations and a cash deficit, our
viability is in serious doubt.
<page> 7
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
We evaluated the effectiveness of our disclosure controls and procedures as of
March 31, 2008, the end of the period covered by this Quarterly Report on Form
10-QSB. This evaluation was undertaken by our chief executive officer,
president, and chief financial officer, Lawrence S. Schroeder. Mr. Schroeder
serves as our principal executive officer as well as our principal accounting
and financial officer.
We reviewed and evaluated the effectiveness of the design and operation of our
disclosure controls and procedures, as of the end of the fiscal quarter covered
by this report, as required by Securities Exchange Act Rule 13a-15, and
concluded that our disclosure controls and procedures are effective to
ensure that information required to be disclosed in our reports filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, is accumulated and communicated to management on a timely
basis, including our principal executive officer and principal financial and
accounting officer.
CONCLUSIONS
Based on this evaluation, our principal executive officer and principal
financial and accounting officer concluded that our disclosure controls and
procedures are effective to ensure that the information we are required to
disclose in reports that we file pursuant to the Exchange Act are recorded,
processed, summarized, and reported in such reports within the time periods
specified in the Securities and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS
There were no changes in our internal controls over financial reporting that
occurred during the last fiscal quarter, i.e., the three months ended March 31,
2008, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.
9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On March 7, 2006, Mark Newburg and Arnoldo Galassi jointly filed a complaint in
District Court, Clark County, Nevada, against Left Right Marketing Technology,
Inc. (the former name of Strategic Gaming Investments, Inc.) alleging, among
other things, breach of contract relating to promissory notes and employment
contracts purportedly outstanding in favor of Messrs. Newburg and Galassi. The
Company filed a responsive pleading and denied each of the allegations made by
Messrs.
In March 2008, the Company settled the lawsuit with Mark Newburg and Arnold
Galassi. The Company agreed to pay $20,000 in legal fees to the plaintiff and
issue 250,000 shares of restricted common stock. A shareholder of the Company
has agreed to relinquish 250,000 shares of common stock to the Company, and
thus there will be no dilution to the other shareholders. This settlement will
remove $461,963 of liabilities from the balance sheet.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
During the three months ended March 31, 2008, the Company issued one
convertible note in the original principal amount of $10,000. The convertible
note provides for a term of three (3) years, simple interest at the rate of 8%
per annum, payable in arrears on the first, second and third anniversaries
thereof, and convertible at the rate of $0.40 per share. In connection with the
issuance of the convertible note, the Company issued the note holder a warrant
to purchase 10,000 shares of common stock, exercisable at $0.40 per share for a
period of ten (10) years.
On March 16, 2008, all outstanding convertible notes, in the collective
original principal amount of $1,095,945, plus accrued interest in the
collective amount of $65,600, were converted into 1,648,382 shares of common
stock at a conversion price of $0.40 per share. The balance of the notes were
settled by giving the 2,500,000 shares of Power Play Development Corporation to
the note holders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
10
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
31.1 Certification of our Principal Executive Officer and Principal
Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32.1 Certification of our President, Chief Executive Officer and
Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (18 U.S.C. Section 1350)
(b) Reports on Form 8-K.
None.
11
SIGNATURE
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.
STRATEGIC GAMING INVESTMENTS, INC.
(REGISTRANT)
Date: May 15, 2008 By: /s/ Lawrence S. Schroeder
-------------------------
Lawrence S. Schroeder
Its: Chief Executive Officer and President