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: September 30, 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
AMERIGO ENERGY, 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 [X]
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:
10,742,528 shares of common stock, $0.001 par value, as of November 14, 2008
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES[ ] NO [X]
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet (Unaudited) 2
Statement of Operations (Unaudited) 3
Statement of Cash Flows (Unaudited) 4
Noted to Condensed Financial Statements (Unaudited) 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 7
CONDITION AND RESULTS OF OPERATIONS
ITEM 3. CONTROLS AND PROCEDURES 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS 13
SIGNATURE
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMERIGO ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
2008 2007
------------ -----------
ASSETS
Current assets
Cash $ - $ -
------------ -----------
Total current assets - -
Other current assets
Accounts receivable - 3,693
Advances to related party - 500,100
Total other current assets - 503,793
------------ -----------
Total assets $ - $ 503,793
============ ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities
Accounts payable $ 451,458 208,623
Bank overdraft - 7,116
Accrued interest - 65,030
Accounts payable - related parties - 179,533
Advances from related parties 167,541 97,401
Lawsuit settlement payable 3,000
Accrued payroll for related party 108,304 577,235
------------ -----------
Total current liabilities 730,303 1,134,939
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;
560,498 and 9,447,137 shares issued and outstanding
as of September 30, 2008 and December 31, 2007,
respectively 11,096 9,447
Additional paid-in capital 12,189,184 12,541,764
Receivable of shares issued -
Accumulated (deficit) (12,930,583) (13,366,985)
------------ -----------
Total stockholders' (deficit) (730,304) (815,774)
------------ -----------
Total liabilities and stockholders' (deficit) $ - $ 503,794
============ ===========
See Accompanying Notes to Financial Statements
2
AMERIGO ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited Unaudited
UNADITED CONSOLIDATED UNAUDITED CONSOLIDATED
9 months ended 9 months ended 3 months ended 3 months ended
September 30, September 30, September 30, September 30,
2008 2007 2008 2007
-------------- -------------- -------------- --------------
Revenue $ - $ - $ - $ -
Operating expenses
Compensation expense - 4,361,888.00 - -
Consulting expense 641,455 1,031,050.00 50,293 -
General and administrative 10,828 549,460.19 (4,402) 195,560.19
-------------- -------------- -------------- --------------
Total operating expenses 652,284 5,942,398.19 45,891 195,560.19
-------------- -------------- -------------- --------------
Loss from operations (652,284) (5,942,398.19) (45,891) (195,560.19)
Other income (expenses):
Amortization of discount on
convertible notes payable - (17,178.00) - (6,799.00)
Loss from rescinded Merger - (2,576,786.00) - (20,975.00)
Interest expense on warrant
with convertible notes payable - (32,733.00) - -
Interest expense - (48,427.67) - (37,574.67)
-------------- -------------- -------------- --------------
Total other income (expenses) - (2,675,124.67) - (65,348.67)
-------------- -------------- -------------- --------------
(Loss) before provision for income taxes &
other comprehensive income / (loss) (652,284) (8,617,522.86) (45,891) (260,908.86)
Provision for income taxes - -
(Loss) before othe
comprehensive income / (loss) (652,284) (8,617,522.86) (45,891) (260,908.86)
Other comprehensive income / (loss) - -
Net (loss) $ (652,284) (8,617,522.86) $ (45,891) (260,908.86)
-------------- -------------- -------------- --------------
Basic and diluted (loss) per common share $ (1.16) $ (0.95) $ (0.08) $ (0.03)
============== ============== ============== ==============
Basic and diluted weighted average
common shares outstanding 560,498 9,091,581 560,498 9,447,137
============== ============== ============== ==============
See Accompanying Notes to Financial Statements
3
AMERIGO ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Unaudited
9 months ended 9 months ended
September 30, September 30,
2008 2007
-------------- --------------
Cash flows from operating activities:
Net loss $ (652,284) $ (8,617,523)
Adjustments to reconcile net loss to
net cash used by operating activities:
Changes in operating assets and liabilities:
Accounts receivable $ 3,693 $ -
Stocks and options issued for services / to settle debt (2,169) 5,392,938
Increase / (decrease) in stock subscription - 2,500
Interest expense on warrant with convertible notes payable - 86,176
Amortization of discount on convertible notes payable - 10,379
Forgiveness of related party payable 61,881 -
Cost associated with rescinded merger - 600
Loss associated with rescinded merger - 2,467,808
Stock options issued 476,418 -
Depreciation and amortization - 2,597
(Increase) / decrease in prepaid expenses - 999
(Increase) / decrease in loans and bank receivables - 8,228
Increase / (decrease) in accounts payable 242,835 131,191
Increase / (decrease) in accounts payable - related party (179,533) 44,804
Increase / (decrease) in accrued interest - 17,531
Increase / (decrease) in accrued payroll (16,865) 93,760
Lawsuit settlement payable 3,000 -
-------------- --------------
Net cash used by operating activities $ (63,024) $ (358,012)
Cash flows from investing activities: $ -
Net cash used by investing activities $ - $ -
-------------- --------------
Cash flows from financing activities:
Increase in bank overdraft $ - $ 1,840
Advance to (from) related party 70,140 (538,818)
Proceeds from stock receivable - 12,500
Proceeds from issuance of convertible notes payable - 857,275
-------------- --------------
Net cash provided by financing activities $ 70,140 $ 332,797
-------------- --------------
Net increase in cash $ 7,116 $ (25,215)
Cash, beginning of period $ (7,116) $ 25,215
-------------- --------------
Cash, end of period $ 0 $ 0
============== ==============
Supplementary cash flow information:
Interest paid $ 10
Receivable of shares issued $ 15,000
Fair value of warrants issued with convertible notes payable $ 282,989
Discount on convertible notes payable $ 91,761
============== ==============
See Accompanying Notes to Financial Statements
4
AMERIGO ENERGY, 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).
In August of 2008, our Board of Directors voted to get approval from the
shareholders of the Company for a name change from Strategic Gaming
Investments, Inc. to Amerigo Energy, Inc. The company received the approval
from a majority of its stockholders and filed the amendment to its Articles of
Incorporation with the State of Delaware. The name change became effective by
the State of Delaware on August 26, 2008. The Company also requested a new
stock symbol as a result of the name change. Our new trading symbol is "AGOE".
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/A for the year ended December 31, 2007 as filed with the
Securities and Exchange Commission on August 21, 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 September 30,
2008, this amount did not vary from net loss from operations.
Going Concern - The Company has an accumulated deficit of $12,930,583 as of
September 30, 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 for financial statements as
of September 30, 2007 and December 31, 2007. All material intercompany
transactions and accounts have been eliminated in consolidation.
5
NOTE 2 - STOCKHOLDERS' EQUITY
As of September 30, 2008, there were 560,226 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 1,653,832 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.
On August 18, 2008, our Board of Directors authorized a reverse stock split of
the outstanding common stock on the basis of one share for every twenty shares
currently issued and outstanding, effective September 5, 2008 (the "Effective
Date"). Each twenty shares of common stock of the Company outstanding on the
Effective Date were converted automatically into a single share of common
stock. There will not be a change in the par value of the common stock of
Strategic Gaming. To avoid the existence of fractional shares of common stock,
if a stockholder would otherwise be entitled to receive a fractional share, the
number of shares to be received was rounded up to the next whole share.
NOTE 3 - NOTES PAYABLE
As of September 30, 2008, there are no outstanding convertible notes.
NOTE 4 - RELATED PARTY TRANSACTIONS
As of September 30, 2008, Larry Schroeder, the Company's President, Chief
Executive Officer and a Director, has loaned the Company the sum of $79,707.
This loan is non-interest bearing and has no due date assigned to it.
As of September 30, 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.
As of September 30, 2008 the Company owes $3,000 of the $20,000 owed as a part
of the settlement.
NOTE 6 - SUBSEQUENT EVENTS
On October 31, 2008 the Company entered into a Reorganization pursuant to a
Reorganization Agreement dated as of October 31, 2008. The Reorganization,
Granite Energy, Inc. transferred to Amerigo Energy substantially all of its
assets and operations, including its subsidiary, Amerigo, Inc. and its
controlling interest in GreenStart, Inc. in exchange for 10,000,000 restricted
shares of Common Stock of the Company. The Company filed a form 8-K on November
11, 2008 to disclose the transaction. For more information, please refer to
that filing.
6
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".
7
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.
8
On August 19, 2008, The Ultimate Poker League, Inc. filed dissolution papers
with the Secretary of State of Nevada to dissolve the corporation. As a result,
UPL is no longer included in our financials on a consolidated basis and our
investment in UPL was removed from our books.
On August 20, 2008, Strategic Gaming Investments, Inc. (the "Company"), a
Delaware Corporation, announced that the Company would be issuing a dividend to
its shareholders of its ownership interest in Strategic Gaming Investments,
Inc., a Nevada Corporation to shareholders. The dividend was in the form of a
dividend certificate representing restricted common stock, which was
distributed to the Company's beneficial stockholders of record as of the record
date, September 3, 2008. The stock dividend was be distributed to owners of the
Company's common stock as of the record date in a ratio of one share of
dividend stock in, for every 5 shares of common stock held by Strategic Gaming
Investments, Inc. shareholders. As a result of the dividend, Strategic Gaming
Investments, Inc., a Nevada Corporation, is no longer held by the Company and
therefore not consolidated into its financials.
On August 18, 2008, our Board of Directors authorized a reverse stock split of
the outstanding common stock on the basis of one share for every twenty shares
currently issued and outstanding, effective September 5, 2008 (the "Effective
Date"). Each twenty shares of common stock of the Company outstanding on the
Effective Date were converted automatically into a single share of common
stock. There will not be a change in the par value of the common stock of
Strategic Gaming. To avoid the existence of fractional shares of common stock,
if a stockholder would otherwise be entitled to receive a fractional share, the
number of shares to be received was rounded up to the next whole share.
In August of 2008, our Board of Directors voted to get approval from the
shareholders of the Company for a name change from Strategic Gaming
Investments, Inc. to Amerigo Energy, Inc. The company received the approval
from a majority of its stockholders and filed the amendment to its Articles of
Incorporation with the State of Delaware. The name change became effective by
the State of Delaware on August 26, 2008. The Company also requested a new
stock symbol as a result of the name change. Our new trading symbol is AGOE.
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 not
being compensated.
9
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
REVENUES
We did not realize revenues for the three months ended September 30, 2008 and
September 30, 2007.
OPERATING EXPENSES
General and Administrative - General and administrative expenses were $10,828
for the nine months ended September 30, 2008, compared to $549,460 for the nine
months ended September 30, 2007, representing a decrease of $538,632, or 98%.
The significant decrease in general and administrative expense reflects the
lack of operations.
OTHER EXPENSES
During the nine months ended September 30, 2008, other expense was $0, compared
to $2,675,125 during the nine months September 30, 2008, representing a
decrease of $2,675,125 or 100%. The significant decrease relates to a decrease
of $2,576,786 in loss from rescinded merger in 2007.
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
We realized a net loss of $652,284 for the nine months ended September 30,
2008, compared to a net loss of $8,617,523 for the nine months ended September
30, 2007, a decrease of $7,965,239, or 92.4%.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2008, we had cash of $0, and a working capital deficit of
$730,303, as compared to a cash deficit of $7,116 and a working capital deficit
of $631,145 at December 31, 2007. In addition, our stockholders' deficit was
$730,304 at September 30, 2008, compared to stockholders' deficit of $815,774
at December 31, 2007.
Our accumulated deficit decreased from $13,366,985 at December 31, 2007 to
$12,930,583 at September 30, 2008. This was related to the removal of both THE
Ultimate Poker League, Inc. and Strategic Gaming Investments, Inc (a Nevada
Corporation) from our financial statements on a consolidation basis.
Our operations used net cash of $63,024 during the nine months ended September
30, 2008, compared to $358,012 during the nine months ended September 30, 2007,
a decrease of $294,988.
Our investing activities provided zero in net cash for both the three months
ended September 30, 2008 and 2007.
Our financing activities provided net cash of $70,140 during the nine months
ended Septmber 30, 2008, compared to net cash of $332,797 during the nine
months ended September 30, 2007.
Given the absence of revenue generating operations and a cash deficit, our
viability is in serious doubt.
10
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
We evaluated the effectiveness of our disclosure controls and procedures and
internal control over financial reporting as of September30, 2008, the end of
the period covered by this Quarterly Report on Form 10-Q. 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 as of
September 30, 2008.
We reviewed and evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) as of the end of the fiscal quarter
covered by this report 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. We have also concluded that there
has not been any change in the our internal control over financial reporting
that occurred during the most recent fiscal that has materially affected, or is
reasonably likely to materially affect, the our internal control over financial
reporting.
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 September
30, 2008, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On March 7, 2006, Mark Newburg and Arnoldo Galassi 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.
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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
removed $461,963 of liabilities from the balance sheet.
As of September 30, 2008 the Company owes $3,000 of the $20,000 that was to be
paid as part of the settlement.
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 1,653,832 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.
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ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS
(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)
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on it s behalf by the undersigned, thereunto duly
authorized.
AMERIGO ENERGY, INC.
(REGISTRANT)
Date: November 18, 2008 By: /s/ Bruce Lybbert
-------------------------
Bruce Lybbert
Its: Chief Executive Officer
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