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EX-31.1 - EXHIBIT 31.1 - Digital Brand Media & Marketing Group, Inc.ex31-1.htm
EX-32.1 - EXHIBIT 32.1 - Digital Brand Media & Marketing Group, Inc.ex32-1.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended: May 31, 2011
 
[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
 
For the transition period from ________ to ________
 
Commission file number: 333-85072
 
RTG VENTURES, INC.
(Exact name of small business issuer as specified in its charter)
 
Florida
 
59-3666743
(State or other jurisdiction of
 
(IRS Employer
incorporation or organization)
 
  Identification No.)
 
c/o David E. Price
1915 Eye Street Northwest
Washington, DC 20006-2107
(Address of principal executive offices)
 
(917) 488-6473
(Issuer's telephone number, including area code)
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 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 large accelerated filer, and accelerated filer, or non-accelerated filer.

Large accelerated filer    [  ]       
Accelerated filer    [  ]
   
Non-accelerated filer      [  ]     
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).  Yes [  ]   No [X]
 
Indicate by check mark whether the registrant has filed all the documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes [X ]  No [  ]
 
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 175,294,757 shares of Common Stock, par value $.001 per share, as of July 16, 2011.
 
Transitional Small Business Disclosure Format (Check one):  Yes [  ]   No [X].

 
 

 
 
RTG VENTURES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2011
(Unaudited)
 
INDEX
 
 
Page No.
PART I. FINANCIAL INFORMATION
 
   
Item 1. Financial Statements
 
Consolidated Financial Statements (Unaudited)
3
Balance Sheets
3
Statements of Operations
4-5
Statement of Stockholders' Deficit
6
Statements of Cash Flows
7
Notes to Unaudited  Consolidated Financial Statements
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
18
Item 3. Quantitative and Qualitative Disclosures About Market Risk
20
Item 4T. Controls and Procedures
20
   
PART II. OTHER INFORMATION
 
   
Item 1. Legal Proceedings
21
Item 1A. Risk Factors
21
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
21
Item 3. Defaults Upon Senior Securities
21
Item 4. Submission of Matters to a Vote of Security Holders
21
Item 5. Other Information
21
Item 6. Exhibits
21
SIGNATURES
22

 
2

 
 
RTG VENTURES, INC.
CONSOLIDATED BALANCE SHEETS

   
May 31,
2011
   
August 31,
2010
 
   
(Unaudited)
   
(Audited)
 
                 
ASSETS
 
                 
CURRENT ASSETS
               
Cash
 
$
104,801
   
$
-
 
Accounts receivable
   
75,575
     
-
 
Prepaid expenses
   
6,558
     
-
 
                 
Total current assets
   
186,934
     
-
 
                 
Property and equipment, net
   
4,774
     
-
 
                 
Other assets:
               
Website development costs, net
   
19,018
     
-
 
Intangible asset, net
   
791,072
         
Assets from discontinued operations
   
221,934
     
-
 
                 
TOTAL ASSETS
 
$
1,223,731
   
$
-
 
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
                 
CURRENT LIABILITIES:
               
Accounts payable and accrued expenses
 
$
276,817
   
$
105,197
 
Due to related party
   
-
     
73,841
 
Accrued compensation
   
809,825
     
869,522
 
Convertible notes payable, net
   
54,781
     
125,000
 
Loans payable
   
666,653
     
275,000
 
                 
TOTAL CURRENT LIABILITIES
   
1,808,166
     
1,448,560
 
                 
Liabilities for discontinued operations
   
418,807
     
-
 
                 
STOCKHOLDERS' DEFICIT
               
Preferred stock, par value .001; authorized 2,000,000 shares, issued; 500,000 and nil shares issued and outstanding, respectively
   
500
     
-
 
Common stock, par value .001; authorized 200,000,000 shares; 175,294,757 and 151,452,219 shares issued and outstanding, respectively
   
175,296
     
151,453
 
Additional paid in capital
   
8,397,880
     
5,857,949
 
Other comprehensive income
   
(1,278)
     
-
 
Accumulated deficit
   
(9,575,640
)
   
(7,457,962
)
                 
TOTAL STOCKHOLDERS' DEFICIT
   
(1,003,242
   
(1,448,560
)
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
 
$
1,223,731
   
$
-
 
 
See notes to unaudited consolidated financial statements.

 
3

 
 
RTG VENTURES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
Three Months Ended
May 31,
 
   
2011
   
2010
 
             
SALES
 
$
249,683
   
$
-
 
                 
COST OF SALES
   
33,059
     
-
 
                 
GROSS PROFIT
   
216,624
     
-
 
                 
COSTS AND EXPENSES:
               
   General and administrative
   
141,196
     
223,505
 
   Payroll
   
405,843
     
-
 
   Legal and professional fees
   
31,726
     
-
 
   Amortization and depreciation
   
132,975
     
-
 
                 
TOTAL OPERATING EXPENSES
   
711,740
     
223,505 
 
                 
OPERATING LOSS
   
(495,116
)
   
(223,505
)
                 
OTHER INCOME (EXPENSE): 
               
      
               
Interest expense
   
-
     
51,000
 
Impairment of intangible asset
   
(660,657
)
     
-
Gain (loss) on foreign currency transactions
   
(875
   
-
 
TOTAL OTHER INCOME (EXPENSE) 
   
(661,532
   
(274,505 )
 
                 
LOSS FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS
   
(1,156,648
)
     
-
                 
DISCONTINUED OPERATIONS:
               
Loss from discontinued operations
   
(212,602
)
   
-
 
TOTAL LOSS FROM DISCONTINUED OPERATIONS
   
(212,602)
         
                 
NET LOSS
 
$
1,369,250
 
 
$
(274,505)
 
                 
OTHER COMPREHENSIVE INCOME
               
Foreign exchange translation
   
(6,088
   
-
 
COMPREHENSIVE LOSS
 
$
1,375,338
   
$
(274,505
)
                 
NET LOSS PER SHARE:
               
   Basic and Diluted – Continuing operations
 
$
(0.01)
   
$
(0.00)
 
   Basic and Diluted – Discontinued operations
 
$
(0.00)
   
$
(0.00)
 
WEIGHTED AVERAGE NUMBER OF SHARES:
               
   Basic and Diluted
   
175,294,757
     
131,589,051
 
 
See notes to unaudited consolidated financial statements.

 
4

 
 
RTG VENTURES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
   
Nine Months Ended
May 31,
 
   
2011
   
2010
 
             
SALES
 
$
651,844
   
$
-
 
                 
COST OF SALES
   
112,012
     
-
 
                 
GROSS PROFIT
   
539,832
     
-
 
                 
COSTS AND EXPENSES:
               
   General and administrative
   
222,107
     
784,612
 
   Payroll
   
864,788
     
-
 
   Legal and professional fees
   
131,803
     
-
 
   Amortization and depreciation
   
353,157
     
-
 
                 
TOTAL OPERATING EXPENSES
   
1,571,856
     
784,612
 
                 
OPERATING LOSS
   
(1,032,024
)
   
(784,612
)
                 
OTHER INCOME (EXPENSE): 
               
      
               
Interest expense
   
(30,877
   
165,000
 
Gain on derivative liability
   
53,000
     
-
 
Loss on settlement of debt
   
(22,710
)
   
-
 
Impairment of intangible asset
   
(660,657
)
   
-
 
Gain on foreign currency transactions
   
328
     
-
 
TOTAL OTHER INCOME (EXPENSE)  
   
  (766,916
   
165,000 
 
                 
LOSS FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS
   
(1,798,940
)
   
(949,612
)
                 
DISCONTINUED OPERATIONS:
               
Loss from discontinued operations
   
(318,737
)
   
-
 
TOTAL LOSS FROM DISCONTINUED OPERATIONS
   
(318,737
)
   
-
 
                 
NET LOSS
 
$
(2,117,677
 
$
(949,612
                 
OTHER COMPREHENSIVE INCOME
               
Foreign exchange translation
   
(1,278)
     
-
 
COMPREHENSIVE LOSS
 
$
 (2,118,955
 
$
(949,612
)
                 
NET LOSS PER SHARE:
               
   Basic and Diluted
 
$
(0.01)
   
$
(0.00)
 
   Basic and Diluted
 
$
(0.00)
   
$
(0.00)
 
WEIGHTED AVERAGE NUMBER OF SHARES:
               
   Basic and Diluted
   
160,928,145
     
131,589,051
 

See notes to unaudited consolidated financial statements.

 
5

 
 
RTG VENTURES INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
 
   
Preferred Stock
   
Common
Stock
   
Additional
Paid
   
Accumulated
   
Other Comprehensive
   
Total
Stockholders'
Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
   
in Capital
   
Deficit
   
Income (Loss)
   
(Deficit)
 
                                                 
Balance, August 31, 2010
   
-
   
$
-
     
151,452,219
   
$
151,453
   
$
5,857,949
   
$
(7,457,962
)
 
$
-
   
$
(1,448,560
)
Shares issued in connection with conversion of debentures @ $0.01 per share
                   
10,000,000
     
10,000
     
90,000
     
-
             
100,000
 
Shares issued in connection with employment term agreements
                   
1,250,000
     
1,250
     
14,750
     
-
             
16,000
 
Shares issued for services
                   
1,500,000
     
1,500
     
18,650
     
-
             
20,150
 
Shares issued for payment of loan payable
                   
11,092,538
     
11,093
     
151,617
     
-
             
162,710
 
Capital contribution
                                   
215,000
                     
215,000
 
Beneficial conversion feature in connection with convertible notes payable
                                   
163,414
                     
163,414
 
Shares issued in connection with purchase of subsidiaries
   
500,000
     
 500
                     
1,886,500
                     
1,887,000
 
Comprehensive income:
                                                               
Net loss
                   
-
     
-
     
-
     
(2,117,677
)
           
(2,028,099
)
Other comprehensive income(loss)
                                                   
(1,278)
     
(1,278
Subtotal
                   
-
     
-
     
-
     
-
             
(2,118,955
)
                                                                 
Balance, May 31, 2011
   
500,000
   
$
500
     
175,294,757
   
$
175,296
   
$
8,397,880
   
$
(9,575,640
)
 
$
(1,278
 
$
(1,003,242
 
 
See notes to unaudited consolidated financial statements.

 
6

 
 
RTG VENTURES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Nine Months Ended May 31,
 
   
2011
   
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
  Net loss
 
$
(2,117,677
)
 
$
(949,612
)
                 
  Adjustments to reconcile net loss to net cash used in operating activities:
               
        Net loss from discontinued operations
   
318,737
         
       Fair value of shares issued for compensation
   
16,000
     
284,000
 
       Fair value of shares issued for services
   
20,150
     
-
 
       Depreciation
   
1,347
     
-
 
       Amortization of intangible
   
139,601
     
 -
 
       Amortization of debt discount
   
93,285
     
-
 
       Beneficial conversion feature on notes payable
   
-
     
165,000
 
       Amortization of website development costs
   
 2,377
     
-
 
        Gain on write-off of derivative liability
   
(53,000
)
       
        Loss on settlement of debt
   
22,710
         
        Impairment of intangible asset
   
660,657
         
  Changes in assets and liabilities:
               
     Prepaid expenses
   
(6,558
   
-
 
      Inventory
   
-
     
-
 
      Accounts receivable
   
4,462
     
-
 
      Due to related party
   
(73,841
)    
-
 
      Accounts payable and accrued expenses
   
489,446
     
335,612
 
NET CASH USED IN OPERATING ACTIVITIES – CONTINUING OPERATIONS
   
(482,305
   
(165,000
)
                 
NET CASH USED IN OPERATING ACTIVITIES – DISCONTINUED OPERATIONS
   
85,483
 
   
 
     
(396,822
)    
(165,000
)
CASH FLOWS FROM INVESTING ACTIVITIES
               
Cash acquired in connection with acquisition of subsidiaries
   
80,765
         
Capitalized website development costs
   
(21,395
)        
Purchases of fixed assets
   
(6,121
)    
-
 
NET CASH PROVIDED BY INVESTING ACTIVITIES
   
53,249
     
-
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
  Payment of debt
   
(53,000
)
   
-
 
  Proceeds from loan payable
   
81,653
     
-
 
  Proceeds from convertible notes payable
   
206,000
     
165,000
 
  Capital contribution
   
215,000
     
-
 
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
449,653
     
165,000
 
                 
NET INCREASE (DECREASE) IN CASH
   
106,080
     
-
 
                 
EFFECT OF VARIATION OF EXCHANGE RATE ON CASH HELD IN FOREIGN CURRENCY
   
(1,278
)    
-
 
                 
CASH – BEGINNING OF PERIOD
   
 -
     
-
 
                 
CASH – END OF PERIOD
 
$
104,801
   
$
-
 
                 
CASH PAID FOR :
               
     Interest
 
$
-
   
$
-
 
     Taxes
 
$
-
   
$
-
 
Supplemental Cash Flow Information:
               
Non-Cash Investing and Financing Activities
               
Issuance of convertible note payable to satisfy liabilities – related party
 
$
450,000
   
$
-
 
Conversion of convertible notes payable into common stock
 
$
100,000 
   
$
-
 
Conversion of loans payable into common stock
 
$
162,710
   
$
-
 
Fair value of preferred shares issued for acquisition
 
$
1,887,000
   
$
 -
 
Stock issued to acquire subsidiaries
 
$
1,707,914
   
$
 -
 
Proceeds from exercise of option and warrants offset in payment of accounts payable
 
$
-
   
$
125,000
 

See notes to unaudited consolidated financial statements.

 
7

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The interim consolidated financial statements of RTG Ventures Inc. (“we,” “us,” “our,” “RTG” or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, availability of capital resources, the timing of acquisitions, and the sensitivity of our business to economic conditions. You should read these interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in the RTG Ventures, Inc.  Annual Report on Form 10-K for the year ended August 31, 2010. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Description of Business
 
RTG Ventures, Inc. is an OTC:QB listed company offering a turnkey media monetization solution to rights owners of music video content.  RTGV's total product offering is a Monetization Platform which allows rights owners to define and tag media content in detail, set and enforce rights management and distribution rules, receive payment on distribution and obtain detailed analytics in real time.

RTG Ventures is organized as three divisions: Media Systems, Payment Systems and Solutions, each of which contains both wholly-owned companies and joint ventures with independent business plans, strategies and management. In addition to servicing their discrete markets, these companies all contribute to RTG Ventures' total product offering for media rights owners.

NOTE 2 - DEVELOPMENT STAGE

For all periods prior to August 31, 2010, the Company considered itself a development stage enterprise. During the nine months ended May 31, 2011, the Company has generated approximately $1,150,000 in revenue and made significant progress toward achieving its intended business plan in becoming a full-service digital media and monetization company with an integrated value proposition unique in the industry. As a result of the generation of historically significant revenue as well as a result of the Company development we no longer consider ourselves a development stage enterprise.

NOTE 3 - LIQUIDITY

As of May 31, 2011, we had a working capital deficit of $1,621,232 at May 31, 2011 our cash used in operating activities amounted to $373,328.  Our results of operations for the nine months ended May 31, 2011 resulted in net loss of $2,117,677.  During the nine months ended May 31, 2011 the Company received $502,653 in the form of notes and capital contributions (Note 7 and Note 12). We will need to raise equity or borrow additional capital to finance our operating deficit and our continued participation in planned activities. If additional financing is not available, we may be compelled to reduce the scope of our business activities.  If we are unable to fund our operating cash flow needs and planned capital investments, it may be necessary to sell a portion of our interests.

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of cash in banks. The Company considers cash equivalents to include all highly liquid investments with original maturities of three months or less to be cash equivalents.
 
Accounts Receivable

The Company has a policy of reserving for uncollectible accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for recovery is considered remote. At May 31, 2011 and August 31, 2010, management has determined that an allowance is not necessary.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation.  Depreciation is provided using the straight-line method over the estimated useful lives of the related assets (primarily three to five years).

 
8

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES (continued)
 
Inventory

Inventory is stated at the lower of cost or market and consists of finished goods.  Cost is determined using the FIFO method.  To ensure inventories are carried at the lower of cost or market, the Company periodically evaluates the carrying value of its inventories.  The Company also periodically performs an evaluation of inventory for excess and obsolete items.  Such evaluations are based on management’s judgment and use of estimates.  Such estimates incorporate inventory quantities on-hand, aging of the inventory, sales forecasts for particular product groupings, planned dispositions of product lines and overall industry trends.

Revenue Recognition

The Company follows the guidance of ASC Topic 605, formerly, SAB 104 for revenue recognition. In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Revenues from services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collectability is probable.
 
Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions are eliminated.

Use of Estimates

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

Computation of Net Loss Per Share

The Company utilizes the guidance per FASB Codification “ASC 260 "Earnings Per Share". Basic earnings per share is calculated on the weighted effect of all common shares issued and outstanding, and is calculated by dividing net income available to common stockholders by the weighted average shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted-average number of common share equivalents during the period. Common stock equivalents arise from the issuance of stock options and warrants. Dilutive earnings per share is not shown as the effect is anti-dilutive. There were no common stock equivalents at May 31, 2011.
 
 Stock Based Compensation

We account for the grant of stock options and restricted stock awards in accordance with ASC 718, “Compensation-Stock Compensation.”   ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation.

Foreign Currency Translation

Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using both the exchange rate in effect at the balance sheet date or historical rate, as applicable. Results of operations are translated using the average exchange rates prevailing throughout the year. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive loss), while gains and losses resulting from foreign currency transactions are included in operations.

 
9

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments
 
Effective January 1, 2008, the Company adopted FASB ASC 820-Fair Value Measurements and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.
 
 ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
 
Level 1:
Observable inputs such as quoted market prices in active markets for identical assets or liabilities
 
Level 2:
Observable market-based inputs or unobservable inputs that are corroborated by market data
 
Level 3:
Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
 
The Company did not have any Level 2 or Level 3 assets or liabilities as of February 28, 2011, with the exception of its convertible notes payable and derivative liability.  The carrying amounts of these liabilities at February 28, 2011 approximate their respective fair value based on the Company’s incremental borrowing rate.
 
Cash is considered to be highly liquid and easily tradable as of February 28, 2011 and therefore classified as Level 1 within our fair value hierarchy.
 
In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Recently Issued Accounting Pronouncements
 
A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date.  We regularly  review all new pronouncements that have been issued since the filing of our Form 10K for the year ended August 31, 2010 to determine their impact, if any, on our financial statements. The Company does not expect the adoption of any of these standards to have a material impact once adopted.

 
NOTE 5 – DISCONTINUED OPERATIONS

Since the share exchange agreement with RTG Ventures (Europe) Limited (f/k/a Cloud Channel Ltd.), which brought Bitemark MC Limited (“BMC”) into the Company, was completed, RTG Ventures' (“RTG”) business model has been further developed. BMC was originally acquired to provide manufacturing and logistics capabilities to the group to offer merchandising solutions to the Company's core client base in the music industry. With specific expertise in producing high quality electronic products, in low volumes and at value prices, BMC offered the Company the opportunity to earn incremental revenues from its customers.

As RTG has commenced launching its technology products, it has partnered with other companies, like Aderra, who are able to offer exactly the same kind of services, but with an existing track record, customer base and product portfolio. It became apparent to the Company's Board of Directors that, strategically, it would be better to partner with companies to deliver non-core services in order to enable greater focus being applied to RTG's unique selling point, its technology.

While BMC was producing revenues but, as its traditional market declined and it evolved out of its previous business as intended, revenues were dwindling, losses were mounting and BMC would have needed significant re-investment to continue operations. With existing partners able to bring new revenue sources to the company for its core products and provide a complementary set of products too, it became clear that BMC no longer had a role to play within RTG Ventures and BMC reorganized accordingly.
 
 
10

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 5 – DISCONTINUED OPERATIONS (continued)

Summarized operating results for discontinued operations of BMC is as follows:
 
   
September 8, 2010
 
   
through May 31, 2011
 
       
Revenue
  $ 581,488  
Operating Expenses
    900,225  
Operating Income (Loss)
    (318,737 )
         
Loss from operations
    (318,737 )
         
Gain (loss) to be recognized from discontinued operations,
  $ (318,737 )
 
Summary of assets and liabilities of discontinued operations of BMC is as follows:
 
   
May 31, 2011
 
       
Accounts receivable
  $ 147,737  
Other Assets
    74,196  
         
Total assets from discontinued operations
  $ 221,934  
         
Accrued liabilities and other current liabilities
  $ 418,807  
         
Total liabilities associated with discontinued operations
  $ 418,807  

 
NOTE 6 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

     
February 28,
 
 
Estimated life
 
2011
 
Computer and office equipment
3 to 5 years
 
$
6,121
 
Less: Accumulated depreciation
     
(1,347
)
     
$
4,774
 

Depreciation expense amounted to $505 during the nine-month period ended May 31, 2011.

 
11

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

At May 31, 2011 and August 31, 2010 accounts payable and accrued expenses consisted of the following:

   
May 31,
   
August 31,
 
   
2011
   
2010
 
Trade Payables
 
$
166,660
   
$
39,642
 
Professional Fees
   
110,157
     
65,555
 
Total 
 
$
276,817
   
$
105,197
 
 

NOTE 8 – NOTES PAYABLE

At May 31, 2011 and August 31, 2010 convertible debentures and loans payable consisted of the following:

   
May 31,
   
August 31,
 
   
2011
   
2010
 
Convertible notes payable
 
$
178,000
   
$
125,000
 
Unamortized debt discount
   
(123,129
)
   
-
 
Total 
 
$
54,871
   
$
125,000
 

   
May 31,
   
August 31,
 
   
2011
   
2010
 
Loans payable
 
$
666,653
   
$
275,000
 
Total 
 
$
666,653
   
$
275,000
 

Notes payable
In March, 2010, the Company issued a convertible debenture in the amount of $25,000 at 0% interest. The note matures in September 2010 and is convertible into shares of the Company’s common stock at $.01 per share at that date.

In September, 2010 the Company converted a convertible debenture for $25,000 at $0.01 and issued 2,500,000 shares.

In September 2010, the Company agreed with a third party non-affiliate to an 8% interest bearing convertible debenture for $53,000 due in nine months. The balance can be paid in full or can be converted into shares on or after March 26, 2011 at an average share price computed on the 30 days prior to conversion. This convertible note contains round down provisions relative to the conversion price of the note.  Effective September 1, 2010 the Company adopted (FASB ASC 815-40-15-5) ("ASC 815") "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock" which outlines new guidance for being indexed to an entity's own stock and the resulting liability or equity classification based on that conclusion.  The adoption of ASC 815 affects the accounting for convertible instruments and warrants with provisions that protect holders from declines in the stock price ("down - round" provisions).  The Company recorded an initial valuation of the derivative liability equal to the amount of the estimated fair value of the embedded conversion features amounting to $53,000. In March 2011, the Company repaid in full this convertible debenture.  In connection with this debenture, the Company recorded a $53,000 discount on debt, related to the beneficial conversion feature of the note, to be amortized over the life of the note or until the note was converted or repaid.
 
 
12

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 8 – NOTES PAYABLE (continued)
 
In March, April and May 2011, the Company agreed with a third party non-affiliate to three 8% interest bearing convertible debentures for $153,000 due in nine months. The balance can be paid in full or can be converted into shares on or after December 8, 2011, January 4, 2012 and February 16, 2012 respectively at an average share price computed on the 30 days prior to conversion.  In connection with this debenture, the Company recorded a $110,414 discount on debt, related to the beneficial conversion feature of the note, to be amortized over the life of the note or until the note was converted or repaid.
 
During the nine month period ended May 31, 2011, the Company amortized $95,285 of of debt discount associated with convertible debentures.
 
In October, 2010 the Company converted a convertible debenture for $25,000 at $0.01 and issued 2,500,000 shares.

In October 2010, a note holder received 4,000,000 shares for $52,000 valued at $0.013 per share in connection with the conversion of a portion of a loan payable.

In November 2010, an officer of the Company assigned $150,000 of debt to a shareholder, a non-affiliated third party. The debt is due on demand and bears no interest, can be paid in full or converted into shares at the market price on the date of issuance.

In January, 2011 the Company converted a convertible debenture for $50,000 at $0.01 and issued 5,000,000 shares.

In December 2010, a note holder received 4,000,000 shares for $73,600 valued at $0.0184 per share in connection with the conversion of a portion of a loan payable.

In January, 2011, a note holder received 3,092,538 shares for $37,110 valued at $0.012 per share in connection with the conversion of a portion of a loan payable.

Loans payable
In November 2010, an officer of the Company assigned $150,000 of debt to a shareholder, a non-affiliated third party. The debt is due on demand and bears no interest, can be paid in full or converted into shares at the market price on the date of issuance.

In December 2010, an officer of the Company assigned $150,000 of debt to a shareholder, a non-affiliated third party. The debt is due on demand and bears no interest, can be paid in full or converted into shares at the market price on the date of issuance.
 
In March 2011, an officer of the Company assigned $150,000 of debt to a shareholder, a non-affiliated third party. The debt is due on demand and bears no interest, can be paid in full or converted into shares at the market price on the date of issuance.

In March 2011, the Company received $81,653 from a non-affiliated third party in the form of a non interest bearing loan.

 
13

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 9 – ACCRUED SALARIES

As of May 31, 2011 the Company owes $809,825 to its officers and employees. The amounts are non-interest bearing


NOTE 10 - COMMON STOCK AND PREFERRED STOCK

As of May 31, 2011 we had authorized 2,000,000 shares of $.001 par value preferred stock, of which 500,000 were outstanding.

As of May 31, 2011 we had authorized 300,000,000 shares of $.001 par value common stock, of which 175,294,757 were outstanding.

 Our shareholders have approved an increase in our share capital allowing for an increase in the number of authorized common shares from 200,000,000 to 300,000,000 with an effective date of August 31, 2010. The amended articles of incorporation were filed with the state of Florida on December 15, 2010.

In September, 2010 the Company converted a convertible debenture for $25,000 at $0.01 and issued 2,500,000 shares.

On October 11, 2010, the Company entered into a three month consulting agreement. For the term of this agreement, the consultant shall receive an up-front retainer fee of 500,000 shares of restricted stock for $6,350. In addition the consultant shall receive an additional 1,000,000 shares of restricted stock on November 11, 2010 for $13,800 and another 1,000,000 shares of restricted stock on December 11, 2010. The contract was terminated prior to the last equity payment.

In October, 2010 the Company converted a convertible debenture for $25,000 at $0.01 and issued 2,500,000 shares.

In October 2010, a note holder received 4,000,000 shares of common stock for $52,000 in connection with the conversion of a portion of a loan payable.
 
In November, 2010, 500,000 shares of common stock were issued for $7,000 to a consultant as a sign-on bonus under the terms of the agreement for services.
 
In December 2010, a note holder received 4,000,000 shares for $73,600 valued at $0.0184 per share in connection with the conversion of a portion of a loan payable.

In January, 2011 the Company converted a convertible debenture for $50,000 at $0.01 and issued 5,000,000 shares.

In January, 2011, a note holder received 3,092,538 shares for $37,110 valued at $0.012 per share in connection with the conversion of a portion of a loan payable.

In December 2010, 250,000 shares of common stock for $3,000 were issued to a company executive as a sign on bonus under terms of an employment contract.

In December 2010, 500,000 shares of common stock for $6,000 were issued to a company executive as a sign on bonus under terms of an employment contract.


NOTE 11 - LITIGATION

The Company is not currently involved in any litigation.


NOTE 12 - EMPLOYMENT AND CONSULTING AGREEMENTS

In April, 2010 term sheets were agreed with Company officers for annual remuneration of £100,000 ($155,000) for the Chairman and Director of the Company and £100,000 ($155,000) for the President, CEO and Director of the Company. The contracts are for three years. Both may receive bonuses totaling 50-75% of their base salaries after certain Company performance objectives are achieved. The Chairman and Director received 3.0 million restricted shares as a sign-on bonus and the President, CEO and Director received 1.5 million restricted shares as a sign-on bonus.

 
14

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 12 - EMPLOYMENT AND CONSULTING AGREEMENTS (continued)

On October 11, 2010, the Company entered into a three month consulting agreement for the purpose of consulting for equity and bond placements as well as financial relations, public relations and research services. For the term of this agreement, the consultant shall receive an up-front retainer fee of 500,000 shares of restricted stock. In addition the consultant shall receive an additional 1,000,000 shares of restricted stock on November 11, 2010 and another 1,000,000 shares of restricted stock on December 11, 2010. The contract was terminated prior to the last equity payment.

In November, 2010, the Company entered into a one year agreement with a consultant in the media systems division. 500,000 shares of common stock were issued to the consultant as a sign-on bonus under the terms of the agreement for services. 

In December, 2010, the Company entered into a one year agreement with a consultant in the payment systems division. 500,000 shares of common stock were issued to the consultant under the terms of the agreement for services.

 
NOTE 13 – CAPITAL CONTRIBUTION

In July 2010 an officer of the Company made contributions of $85,000 to assist with various professional fees. These contributed funds are considered as paid in capital.

In November 2010 an officer of the Company made contributions of $95,000 to assist with various professional fees. These contributed funds are considered paid in capital.
 
In February, 2011 an officer of the Company made contributions of $95,000 to assist with various professional fees. These contributed funds are considered paid in capital.

In May, 2011 an officer of the Company made contributions of $25,000 to assist with various professional fees. These contributed funds are considered paid in capital.


NOTE 14 – INTANGIBLE ASSET
 
Intangible assets consisted of the following:

     
May 31,
 
 
Estimated life
 
2011
 
Non Contractual Customer Relationships – Stylar Limited
5 years
 
$
930,671
 
Less: Accumulated amortization
     
(139,601
)
     
$
791,070
 

When the Company originally acquired BMC, $777,243 of identified intangible assets were recognized.  However, when RTG Ventures, Inc. reported BMC as a “discontinued operation” (Note 5) previously identified intangible assets of BMC were reported as impaired.

Amortization expense amounted to $256,185 during the nine-month period ended May 31, 2011. This amount includes the accumulated amortization of $116,584 for BMC.

The non contractual customer relationships are amortized on a straight line basis over 5 years (2011-2015) at $186,134 per year.

 
15

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
NOTE 14 – ACQUISITIONS
 
RTGV acquired 100% of the shares of RTG Ventures Europe, 10,000 (Ten Thousand) ordinary shares at £ .0001 per share par value. RTG shall issue and transfer 500,000 from an aggregate amount of 1,273,059 preferred shares which convert into its common stock, .001 par value per share (the “RTG Common Stock”). The conversion rate is calculated in each individual contract and agreed by RTG.  It is acknowledged and approved by both Boards that the majority of these shares are to be consideration for acquisitions and asset purchases to be completed by RTG Ventures (Europe) Ltd. All shares held in escrow will be voted by management.

On March 31, 2010, the same date as the above Stock Exchange Agreement, RTG Ventures Europe entered into share purchase agreements with Stylar Limited, a private limited company, registered in England and Wales, company number 07009951, whereby RTGV acquired 100% of its shares and with Bitemark MC Limited a private limited company, registered in England and Wales, company number 4258735, whereby RTGV acquired 100% of its shares.
 
Bitemark MC Ltd

On September 3, 2010, the Company acquired 100% of the common stock of Bitemark MC Ltd (“Bitemark”), under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 3, 2010 and the transaction was accounted for under the purchase method in accordance with ASC 805.

The resultant Intangible Asset from the acquisition of Bitemark totalled $777,243 and was deemed Non Contractual Customer Relationships that was being amortized over the estimated life of the asset of five years. However, when RTG Ventures, Inc. reported BMC as a “discontinued operation” (Note 5) previously identified intangible assets of BMC were reported as impaired (Note 13).

Stylar Limited

On September 3, 2010, the Company acquired 100% of the common stock of Stylar Limited. (“Stylar”), under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 3, 2010 and the transaction was accounted for under the purchase method in accordance with ASC 805.

 
16

 
 
RTG VENTURES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 14 – ACQUISITIONS (continued)
 
The resultant Intangible Asset from the acquisition of Stylar totaling $930,671 has been deemed Non Contractual Customer Relationships that is being amortized over the estimated life of the asset of five years.

The following table summarizes the estimated fair values of the assets and liabilities assumed at the date of acquisition:

   
Stylar
Limited
 
ASSETS
 
(UNAUDITED)
 
       
Current assets
 
$
137,307
 
Intangible assets
   
930,671
 
Tangible assets
   
-
 
         
LIABILITIES
       
         
Current liabilities
   
72,478
 
         
Net purchase price
 
$
995,500
 
 
 The following unaudited pro forma consolidated  results of operations have been prepared as if the acquisition of Stylar Limited had occurred as of the following period:

   
For the nine
months ended
May 31,
2010
 
   
(UNAUDITED)
 
       
Net revenues
 
$
181,107
 
         
Net profit (loss) from continuing operations
 
$
55,954
 
         
Net profit (loss) per share from continuing operations
 
$
(0.00
)
         
Weighted average number of shares -  Basic and diluted
   
  276,732,897
 

 
17

 
 
Item 2. Management's Discussion and Analysis or Plan of Operations
 
Cautionary Factors That May Affect Future Results
 
This Current Report on Form 10-Q and other written reports and oral statements made from time to time by the Company may contain predictive statements, all of which are subject to risks and uncertainties. One can identify these predictive statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects" and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's predictive statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No predictive statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any predictive statement. One should carefully evaluate such statements in light of factors described in the Company's filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. In various filings the Company has identified important factors that could cause actual results to differ from expected or historic results. One should understand that it is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete list of all potential risks or uncertainties.
 
Company Overview
 
The following Results of Operation should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Report.

The Company is operating with a Business Plan in place. In 2006, the Company identified a business in digital and broadband internet media and online global payment systems in the UK which lent itself to both organic growth and growth by acquisition. From that time, we have been evolving the Business Plan to maximize the opportunities and minimize the risks inherent in a challenging economic environment. All of these efforts were conducted under the contractual requirements of a Share Exchange Agreement. On March 20, 2007, we entered into a Share Exchange Agreement (the "Agreement") with Atlantic Network Holdings Limited, New Media Television (Europe) Limited ("NMTV"), and Certain Outside Stockholders Listed on Exhibit A thereto to acquire all of the outstanding shares of NMTV. Atlantic Network Holdings Limited is a Guernsey company limited by shares and NMTV is a United Kingdom private company limited by shares. The transaction was subject to the fulfillment of certain conditions, including the filing by the Company of all reports required to be filed by it under the Exchange Act and the satisfactory completion of the audit of NMTV's financial statements for each of its past three fiscal years.  The conditions of closing were not met by ANHL and the agreement was rescinded on March 30, 2010. A new agreement with Cloud Channel Limited renamed RTG Ventures (Europe) Limited was consummated on March 31, 2010. The consolidated financials were filed as an 8-K on September 3, 2010 which is also the closing date for the transaction.

In August, 2009, RTGV signed a Letter of Intent with International Financial Systems Ltd. (IFS) a private company, to include iPayu/Paylogy, another dimension in the payment systems division of our Business Plan as described on our website. www.rtgventures.com. The Letter of Intent became a joint venture with RTG Ventures (Europe) Ltd in April, 2010.

Pursuant to the Exchange Agreement, the Company acquired 100% of the outstanding capital stock of RTG Ventures (Europe) Ltd from its stockholders for consideration consisting of Convertible Preferred Shares of RTG Ventures, Inc. according to the valuation methodologies outlined in the Share Exchange Agreements of Bitemark MC Limited and Stylar Limited. RTG Ventures (Europe) Ltd has been valued 12 months forward using forecasts submitted by them and agreed by the Company. Based on the results after 12 months, shareholders will be able to convert the preferred shares into common stock using the average share price of the 30 days preceding the conversion. At conversion the valuations will be adjusted up to a maximum of 25% in either direction using performance against forecast. All preferred stock will be held by RTGV's transfer agent for the 12 month period.
 
RTG Ventures, Inc. is an OTC:QB listed company offering a turnkey media monetization solution to rights owners of music video content.  RTGV's total product offering is a Monetization Platform which allows rights owners to define and tag media content in detail, set and enforce rights management and distribution rules, receive payment on distribution and obtain detailed analytics in real time.

RTG Ventures is organized as three divisions: Media Systems, Payment Systems and Solutions, each of which contains both wholly-owned companies and joint ventures with independent business plans, strategies and management. In addition to servicing their discrete markets, these companies all contribute to RTG Ventures' total product offering for media rights owners.

 
18

 
 
Results of Operations

For the Three Months Ended May 31, 2011 Compared to the Three Months Ended May 31, 2010

Revenues for the three months ended May 31, 2011 were $249,683, compared to $nil for the three months ended May 31, 2010.  Cost of sales was $33,059 for the three months ended May 31, 2011, compared to $nil for the comparable period of 2010.  Changes are the result of the acquisition of the operating entities as described herein that took place in September 2010. The Company did not have any operations in 2009 and most of 2010.

Total operating expenses for the quarter ended February were $495,116 compared to $223,505 for the comparable period of 2010.  The increased operating expenses in 2010 resulted primarily from the acquisitions of operating entities as well as the professional fees associated with the closing of the transactions and ongoing operations.

We recognized a comprehensive net loss of $1,370,528 for the three months ended May 31, 2011 compared to a loss of $274,505 for the three months ended May 31, 2010.  Net losses in prior periods were attributable to general and administrative expenses whereas losses incurred during the current period result from losses incurred in the operation of our subsidiaries.

For the Nine Months Ended May 31, 2011 Compared to the Nine Months Ended May 31, 2010

Revenues for the nine months ended May 31, 2011 were $651,844, compared to $nil for the nine months ended May 31, 2010.  Cost of sales was $112,012 for the nine months ended May 31, 2010, compared to $nil for the comparable period of 2009.  Changes are the result of the acquisition of the operating entities as described herein that took place in September 2010. The Company did not have any operations in 2009 and most of 2010.

Total operating expenses for the nine months ended May 31, 2011 were $1,571,856 compared to $784,612 for the comparable period of 2010.  The increased operating expenses in 2010 resulted primarily from the acquisitions of operating entities as well as the professional fees associated with the closing of the transactions and ongoing operations.

We recognized a comprehensive net loss of $2,118,955 for the nine months ended May 31, 2011 compared to a loss of $946,612 for the nine months ended May 31, 2010.  Net losses in prior periods were attributable to general and administrative expenses whereas losses incurred during the current period result from losses incurred in the operation of our subsidiaries.

Liquidity and Capital Resources

As of May 31, 2011, we had $104,801 in cash and total liabilities of $1,808,166.  Our current liabilities exceed our current assets as of May 31, 2011, and we have recorded negative cash flows from operations in this and prior fiscal years.  To date, the Company has not generated sufficient revenue to support the operating costs of the business, and no assurance can be made that the Company will generate revenues sufficient to support operating costs in the foreseeable future.  As a result, as of May 31, 2011, management could not be assured that the Company’s current finances would enable us to implement our plans and satisfy our estimated financial needs over the next 12 months.

Cash Used in Operations

Net cash used in operations for the periods ended May 31, 2011 and 2010 amounted to $373,328 and $165,000 respectively.  The changes in net cash used in operating activities are attributable to our net income adjusted for non-cash charges as presented in the consolidated statements of cash flows and changes in working capital as discussed above.

Cash Used in Investing Activities

Net cash provided by investing activities for the periods ended May 31, 2011 and 2010 amounted to $29,753 and nil respectively.  The changes in net cash provided by investing activities are attributable to the acquisitions made in September 2010 as well as the purchase of fixed assets.

Cash Provided by Financing Activities

Net cash provided by financing activities for the periods ended May 31, 2011 and 2010 amounted to $449,653 and $165,000 respectively.  The changes in net cash provided by financing activities are attributable to the proceeds received from the issuance of a convertible notes payable and the capital contribution made by an officer of the Company.

 
19

 

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

Critical Accounting Policies and Estimates

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses.  These estimates and assumptions are affected by management’s application of accounting policies.  Our critical accounting policies are discussed in our annual report on Form 10-K for the fiscal year ended August 31, 2010.  Certain prior period amounts have been reclassified in the condensed consolidated financial statements to conform to the current period presentation.

We have financed our activities to date from sales of debentures and loans from shareholders, officers and third parties. As at May 31, 2011 we had an accumulated deficit of $9,575,640. The report of our independent registered public accounting firm, Sherb & Co., LLP, on our audited financial statements contains a qualification regarding our ability to continue as a going concern.

Recently Issued Accounting Pronouncements
 
A variety of accounting standards have been issued or proposed by FASB that do not require adoption until a future date.  We regularly  review all new pronouncements that have been issued since the filing of our Form 10K for the year ended August 31, 2010 to determine their impact, if any, on our financial statements. The Company does not expect the adoption of any of these standards to have a material impact once adopted.

Significant Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, the amount of unbilled vendors payable for services performed during the reporting period. Actual results may differ from these estimates and assumptions.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
As a “smaller reporting company”, as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.
 
Item 4T. CONTROLS AND PROCEDURES
 
CEO Certification
 
As of the end of the period covered by this quarterly report, our company carried out under the supervision and with the participation of our management, including our Chief Executive Officer ("the Certifying Officer"), an evaluation of the effectiveness of our "disclosure controls and procedures". The certification of the CEO required by Rules 13a-14(a) and 15d-14(c) of the Securities Exchange Act of 1934, as amended (the "Certifications") are filed as exhibits to this report. This section of this report contains information concerning the evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) ("Disclosure Controls") and changes to internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) ("Internal Controls") referred to in the Certifications and should be read in conjunction with the Certifications for a more complete understanding of the topics presented.

 
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Evaluation of Disclosure Controls
 
We maintain controls and procedures designed to ensure that we are able to collect the information that is required to be disclosed in the reports we file with the Securities and Exchange Commission (the "SEC") and to process, summarize and disclose this information within the time period specified in the rules of the SEC. Our Chief Executive Officer is responsible for establishing, maintaining and enhancing these procedures. He is also responsible, as required by the rules established by the SEC, for the evaluation of the effectiveness of these procedures.

Internal Controls
 
We maintain a system of internal controls designed to provide reasonable assurance that transactions are executed in accordance with management's general or specific authorization; transactions are recorded as necessary to permit preparation of financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") and maintain accountability for assets. Access to assets is permitted only in accordance with management's general or specific authorization.
 
PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors
 
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.
 
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
 
During the nine month period ended May 31, 2011 the Company did not sell any stock nor repurchase any of its equity securities.
 
Item 3. Defaults Upon Senior Securities
 
None.
 
Item 4. Submission of Matters to a Vote of Security Holders
 
None.
 
Item 5. Other Information
 
None.
 
Item 6. Exhibits
 
31.1   
Chief Executive Officer - Rule 13a-14(a) Certification
 
32.1   
Chief Executive Officer - Sarbanes-Oxley Act Section 906 Certification

 
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SIGNATURES
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
RTG VENTURES, INC. 
 
   
Date: July 18, 2011 
 
By: /s/ Dominic Hawes - Fairley 
 
   
Dominic Hawes - Fairley
Chief Executive Officer
 
 
 
 
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