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EX-31.2 - CERTIFICATION - Game Plan Holdings, Inc.gameplan_10q-ex3102.htm
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EX-32.1 - CERTIFICATION - Game Plan Holdings, Inc.gameplan_10q-ex3201.htm
EX-32.2 - CERTIFICATION - Game Plan Holdings, Inc.gameplan_10q-ex3202.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2012

 

OR

 

 

£

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

 

For the transition period from _______________ to ______________.

  

GAME PLAN HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

  

Nevada 333-160730 20-0209899
(State or other jurisdiction of incorporation) (Commission File No.) (IRS Employer Identification No.)

 

1712 Ravanusa Drive, Henderson, NV 89052

 (Address of principal executive offices, including Zip Code)

 

Registrant's telephone number, including area code: (702) 951-1385

 

           N/A             

 (Former name or former address if changed since last report)

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days.  Yes S   No £

 

Indicate by check mark whether the Registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

  

  Large accelerated filer £   Accelerated filer £  
         
  Non-accelerated filer £
(Do not check if a smaller reporting company)
  Smaller reporting company S  

  

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).  Yes £   No S

  

Class of Stock No. Shares Outstanding Date
Common Stock 15,050,000 August 14, 2012

 

 

 

TABLE OF CONTENTS

 

      PAGE
PART I. FINANCIAL INFORMATION    
       
Item 1. Financial Statements   1
 
  Balance Sheets as of June 30, 2012 and December 31, 2011 (unaudited)   1
 
  Statements of Operations for the three month period ending June 30, 2012 and 2011 and the period from inception (March 25, 1999) through June 30, 2012 (unaudited)   2
 
  Statements of Cash Flows for the three month periods ending June 30, 2012 and 2011 and the period from inception (March 25, 1999) through June 30, 2012 (unaudited)   3
 
  Notes to Financial Statements (unaudited)   4
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   13
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk   15
       
Item 4. Controls and Procedures   16
       
PART II. OTHER INFORMATION   18
       
Item 1. Legal Proceedings   18
       
Item 1A. Risk Factors   18
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   18
       
Item 3. Defaults Upon Senior Securities   18
       
Item 4. Mine Safety Disclosures – Not Applicable   18
       
Item 5. Other Information   18
       
Item 6. Exhibits   18

  

i
 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

Certain statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements.  These factors include, but are not limited to, our ability to implement our business plan, our ability to raise sufficient capital as needed, our ability to successfully transact business, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition and other factors.  Most of these factors are difficult to predict accurately and are generally beyond our control.  You should consider the areas of risk described in connection with any forward-looking statements that may be made herein.  Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this 10-Q report in its entirety, including all other filings made by the Company with the SEC.  Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.  These forward-looking statements speak only as of the date of this 10-Q report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

 

Unless otherwise noted, references to “Game Plan,” “GPH,” the “Company,” “GP,” “we,” “our” or “us” means Game Plan Holdings, Inc., a Nevada corporation.

 

ii
 

  

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Information.

 

Game Plan Holdings, Inc.

(A Development Stage Company)

 

BALANCE SHEETS

(Unaudited)

 

   June 30,   December 31, 
   2012   2011 
         
ASSETS        
         
Current assets          
Cash  $11,693   $43,521 
Marketable securities   3,747    3,732 
Prepaid expenses   28,916    103,646 
Total current assets   44,356    150,899 
           
           
Property and equipment, net   5,109    6,163 
           
Intangible assets          
Website, net   157,878    230,172 
Other assets          
Security deposit   2,300    2,300 
           
Total assets  $209,643   $389,534 
           
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Liabilities          
Due to related party  $52,211   $62 
Accounts payable and accrued liabilities   23,952    8,751 
Total current liabilities   76,163    8,813 
           
Stockholders' equity          
           
Common stock, authorized 100,000,000 shares, par value $0.001, 15,050,000 and  15,050,000  issued and outstanding at June 30, 2012  and December 31, 2011, respectively.   15,050    15,050 
Additional paid-in capital   1,931,744    1,562,093 
Accumulated other comprehensive loss   (23,905)   (23,920)
Common stock payable   7,500     
Deficit accumulated during the development stage   (1,796,909)   (1,172,502)
           
Total stockholders' equity   133,480    380,721 
           
Total liabilities and stockholders' equity  $209,643   $389,534 

  

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

 

1
 

 

Game Plan Holdings, Inc.

(A Development Stage Company)

 

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

 

   Three Months Ended   Three Months Ended   Six Months Ended   Six Months Ended   From inception
(March 25, 1999) through
 
   June 30,   June 30,   June 30,   June 30,   June 30, 
   2012   2011   2012   2011   2012 
                          
Revenue  $   $   $   $   $6,608 
                          
Operating expenses:                         
General and administrative   30,363    12,878    62,149    27,706    536,149 
Computer and website expenses   1,867    7,046    3,616    14,187    106,082 
Impairment of website   34,985        34,985        34,985 
Professional fees   69,231    26,912    130,084    46,733    325,295 
Officers wages   16,500    9,000    393,500    19,000    881,940 
                          
Total operating expenses   152,946    55,836    624,334    107,626    1,884,451 
                          
Other income (expenses):                         
Other income               540    703 
Gain on sale of marketable securities                   61,718 
Loss on impairment of marketable securities                   (8,924)
Interest income       48    4    127    27,693 
Foreign currency transaction loss                   (5)
Interest expense   (77)       (77)       (251)
                          
Total other income (expenses)   (77)   48    (73)   667    80,934 
                          
Net loss  $(153,023)  $(55,788)  $(624,407)  $(106,959)  $(1,796,909)
Other comprehensive income (loss), net of tax:                         
Foreign currency translation adjustments                   1,558 
Unrealized gain (loss) on marketable securities   (1,333)   3,376    15    3,315    (25,463)
                         
Other comprehensive income (loss)   (1,333)   3,376    15    3,315    (23,905)
                         
Comprehensive loss  $(154,356)  $(52,412)  $(624,392)  $(103,644)  $(1,820,814)
                          
                          
Basic loss per common share  $(0.01)  $(0.00)  $(0.04)  $(0.01)     
                          
Weighted average number of common shares outstanding   15,050,000    14,100,000    15,050,000    14,100,000      

  

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

 

2
 

  

Game Plan Holdings, Inc.

(A Development Stage Company)

 

STATEMENTS OF CASH FLOWS

(Unaudited)

 

           From inception on 
   Six Months   Six Months   (March 25, 1999) 
   Ended   Ended   through 
   June 30,   June 30,   June 30, 
   2012   2011   2012 
Operating Activities               
                
Net loss  $(624,407)  $(106,959)  $(1,796,909)
Adjustments to reconcile net loss to net cash used in operating activities:               
Depreciation and amortization   38,363    1,871    81,661 
Gain on sale of marketable securities           (61,718)
Loss on impairment of marketable securities           8,924 
Impairment of website   34,985        34,985 
Stock-based compensation   420,178        809,119 
Changes in operating assets and liabilities:            
Decrease in prepaid expenses   31,703        31,703 
Decrease in related party receivable       4,255    2,450 
Increase in other receivable           (5,800)
Increase in accounts payable and accrued liabilities   15,201    39,585    59,835 
                
Net cash used in operating activities   (83,977)   (61,248)   (835,750)
                
Investing activities               
Change in other investments           (2,450)
Purchases of marketable securities       1    (197,140)
Sales of marketable securities           221,874 
Purchase of intangible assets       (6,800)   (34,500)
Purchase of fixed assets       (1,836)   (16,633)
                
Net cash used in investing activities       (8,635)   (28,849)
                
Financing activities               
Advances from related party   52,211    283    52,273 
Payments on related party advances   (62)       (62)
Proceeds from sale of common stock           823,673 
                
Cash provided by financing activities   52,149    283    875,884 
                
Effect of foreign currency translation adjustment           408 
Net (decrease) increase in cash   (31,828)   (69,600)   11,285 
                
                
Cash, beginning of period   43,521    199,430     
                
                
Cash, end of period  $11,693   $129,830   $11,285 
                
                
Supplemental disclosure of cash flow information:               
Interest paid  $77   $   $216 
Income taxes paid  $   $   $ 
                
Non-cash investing and financing activities:               
Shares issued for settlement of accounts payable  $   $   $35,883 
Shares issued for prepaid legal fees  $   $   $7,824 
Shares issued for prepaid consulting fees  $   $   $92,322 
Shares issued for intangible asset  $   $   $228,500 

 

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

 

3
 

  

Game Plan Holdings, Inc

(A Development Stage Company)

 

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1. ORGANIZATION AND BUSINESS OF COMPANY

 

HJS Technology, Inc. (A Development Stage Company) was incorporated on March 25, 1999 under the laws of the State of Nevada. The Company developed a business plan around a concept entitled www.close2here.com.  This concept failed to get off the ground and the business plan was shut down in 2005.  On May 31, 2007, HJS Technology, Inc. changed its name to Game Plan Holdings, Inc. (the “Company”). Game Plan Holdings owns and operates a social networking website, www.Hazzsports.com (“Hazzsports.com”). Hazzsports.com is an online social networking website that offers an interactive resource for sports enthusiasts. In accordance with Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) No. 915 the Company is considered to be in the development stage.

 

On December 31, 2007, a Reorganization Agreement was entered into by and between Game Plan Holdings Canada, a corporation formed under the laws of the country of Canada (“Game Plan Canada”), and Game Plan Holdings, Inc. (“Game Plan USA). The agreement reorganized the capital structure of Game Plan Canada and Game Plan USA by exchanging all of Game Plan Canada Shares totaling 11,070,000 shares on a one-for-one basis with Game Plan USA shares held by existing shareholders of the Company. Consequently, there were no new shares issued related to the 11,070,000 shares exchanged by Game Plan USA to Game Plan Canada rather, certain shareholders of Game Plan USA exchange their previously issued shares to Game Plan Canada. Under the Reorganization Agreement, Game Plan USA also agreed to the cancelation of 8,032,000 and 418,000 shares (total of 8,450,000 shares) of its common stock, as well as, transfer 2,148,000 shares of common stock of Game Plan USA held by certain shareholders to the Company’s President, Charles Hazzard. Upon completion of the Game Plan USA Reorganization and the exchange of the shares, all of the shares of Game Plan Canada were canceled and all the assets held by Game Plan Canada were assigned to Game Plan USA. Prior to the Reorganization Agreement, Game Plan USA developed the social networking website. www.Hazzsports.com which was principally funded by Game Plan Canada through capital it had raised. Since both Game Plan USA and Game Plan Canada were co-dependent upon each other both financially and intellectually prior to the Reorganization Agreement, the Company has accounted for this transaction as a recapitalization of both companies under a pooling of interest whereby the history of both companies have been integrated.

 

NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The interim unaudited financial statements should be read in conjunction with the financial statements included in the Form 10-K for the year ended December 31, 2011. In the opinion of management, all adjustments considered necessary for the fair presentation consisting solely of normal recurring adjustments, have been made. Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.

 

4
 

 

Cash and Cash Equivalents

 

For the purpose of the statement of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less.

 

Earnings (Loss) per Share

 

The basic earnings (loss) per common share is calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

 

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.

 

Fair Value Accounting for Financial Instruments

 

As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC (“ASC 820-10”), fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The three levels of the fair value hierarchy are described below:

 

  Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
  Level 2 Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
  Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

Pursuant to ASC 825, the fair value of cash and marketable securities is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of cash, marketable securities, receivables, accounts payable and accrued liabilities, and other payables approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

 

5
 

 

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of June 30, 2012 and December 31, 2011as follows:

 

   Fair Value Measurements as of June 30, 2012 Using: 
   Total Carrying Value as of   Quoted Market Prices in Active Markets   Significant Other Observable Inputs   Significant Unobservable Inputs 
   06/30/12   (Level 1)   (Level 2)   (Level 3) 
Assets:                    
Equity securities  $3,747   $3,747   $0   $0 
Total  $3,747   $3,747   $0   $0 

 

 

   Fair Value Measurements as of December 31, 2011 Using: 
   Total Carrying Value as of   Quoted Market Prices in Active Markets   Significant Other Observable Inputs   Significant Unobservable Inputs 
   12/31/10   (Level 1)   (Level 2)   (Level 3) 
Assets:                    
Equity securities  $3,732   $3,732   $0   $0 
Total  $3,732   $3,732   $0   $0 

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, principally on a straight-line basis. Estimated service lives of property and equipment are as follows:

 

    Estimated
Description   Life
Computers   5 yr
Software   3 yr
Office Furniture   7 yr

 

Concentrations of Credit Risk

 

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counter parties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below.

 

6
 

 

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents, and marketable debt securities. The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer or sector. To manage the risk exposure, the Company maintains its portfolio of cash and cash equivalents and short-term and long-term investments.

 

Stock-based Compensation

 

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

 

Impairment of Long-lived Assets

 

We test intangibles and long-lived asset groups for recoverability when changes in circumstances indicate the carrying value may not be recoverable, for example, when there are material adverse changes in projected revenues or expenses, significant underperformance relative to historical or projected operating results, and significant negative industry or economic trends. We also perform a test for recoverability when management has committed to a plan to sell or otherwise dispose of an asset group and the plan is expected to be completed within a year. We evaluate recoverability of an asset group by comparing its carrying value to the future net undiscounted cash flows that we expect will be generated by the asset group. If the comparison indicates that the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the estimated fair value. When an impairment loss is recognized for assets to be held and used, we depreciate the adjusted carrying amount of those assets over their remaining useful life.

 

Reclassifications

 

Professional fees of $7,752 were reclassified from general and administrative to professional fees in the statement of operations to conform to the current year presentation. The reclassification had no effect on previously reported total operating expenses, results of operations, or retained earnings.

 

Other Comprehensive Income (Loss)

 

Marketable securities held by Canaccord and MorganStanley SmithBarney (the holding companies) are held for an indefinite period of time and thus are classified as available-for-sale securities. Realized investment gains and losses are included in the statement of operations, as are provisions for other than temporary declines in the market value of available for-sale-securities. Unrealized gains and unrealized losses deemed to be temporary are excluded from earnings (losses), net of applicable taxes, as a component of other comprehensive income (loss). Factors considered in judging whether an impairment is other than temporary include the financial condition, business prospects and creditworthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of decline, and the Company’s ability and intent to hold the investment until the fair value recovers.

 

7
 

  

Recent Accounting Pronouncements

 

The Company has evaluated recent accounting pronouncements through ASU 2012-02 and believes the item listed below may impact the Company’s financial statements.

 

In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2012-02-Intangibles-Goodwill and Other (Topic 350). The amendments in this Update will allow an entity to first assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. Under these amendments, an entity would not be required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on qualitative assessment, that it is not more likely than not, the indefinite-lived intangible asset is impaired. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment.

 

The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012. The adoption of this update will not have a material effect on the Company’s financial position, results of operations or cash flows.

 

NOTE 3. GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in the notes to the financial statements the Company has no established source of revenue and has experienced recurring net operating losses. This raises substantial doubt about the Company’s ability to continue as a going concern. As shown on the accompanying financial statements, the Company has incurred a net loss of $1,796,909 for the period from inception (March 25, 1999) to June 30, 2012. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s activities to date have been supported by equity financing. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4. MARKETABLE SECURITIES AND INVESTMENTS

 

Marketable securities held by Canaccord and MorganStanley SmithBarney (the holding companies) are held for an indefinite period of time and thus are classified as available-for-sale securities. Realized investment gains and losses are included in the statement of operations, as are provisions for other than temporary declines in the market value of available-for-sale securities. Unrealized gains and unrealized losses deemed to be temporary are excluded from earnings (losses), net of applicable taxes, as a component of other comprehensive income (loss). Factors considered in judging whether an impairment is other than temporary include the financial condition, business prospects and creditworthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of decline, and the Company’s ability and intent to hold the investment until the fair value recovers. During 2010, the Company recorded an impairment charge of $8,924 regarding its investment in marketable securities because, based on management’s evaluation of the circumstances, management believed that the decline in fair value below the cost of certain of the Company’s marketable securities was not temporary.

 

Included in “Gain on sale of marketable securities” on the statements of operations are $0 and $0 realized gains for the six months ended June 30, 2012 and 2011, respectively. The Company did not sell any marketable securities during the six months ended June 30, 2012. The Company recorded $15 and $3,315 of other comprehensive income (loss) associated with unrealized gains (losses), net of tax effect, on these investments during the six months ended June, 2012 and 2011, respectively.

 

8
 

 

The following is a summary of available-for-sale marketable securities as of June 30, 2012 and December 31, 2011:

 

   June 30, 2012 
Description  Cost  

Unrealized

Gain

  

Unrealized

(Losses)

  

Market or

Fair Value

 
Equity securities  $29,210   $0   $-25,453   $3,747 
Total  $29,210   $0   $-25,463   $3,747 

 

   December  31, 2011 
Description  Cost  

Unrealized

Gain

  

Unrealized

(Losses)

  

Market or

Fair Value

 
Equity securities  $29,210   $0   $-25,478   $3,732 
Total  $29,210   $0   $-25,478   $3,732 

 

The following is a summary of unrealized gains and losses as presented in Other Comprehensive Income (loss) for the six months ended June 30, 2012 and 2011:

 

   June 30, 2012 
       Unrealized   Unrealized   Other 
   Unrealized   (Losses)   (Losses)   Comprehensive 
Description  Gains   Short Term   Long Term   Income (Loss) 
Equity Securities  $320   $0   $-305   $15 
Total  $320   $0   $-305   $15 

  

   June 30, 2011  
       Unrealized   Unrealized   Other 
   Unrealized   (Losses)   (Losses)   Comprehensive 
Description  Gains   Short Term   Long Term   Income (Loss) 
Equity Securities  $4,762   $0   $-1,447   $3,315 
Total  $4,762   $0   $-1,447   $3,315 

 

The Company classifies securities that have a readily determinable fair value and are not bought and not held principally for the purpose of selling them in the near term as securities available-for-sale, pursuant to FASB ASC 320-10, Investments-Debt & Equity Securities. Under FASB ASC 320-10, unrealized holding gains and losses for available-for-sale securities are excluded from earnings and reported in other comprehensive income until realized.

 

9
 

 

NOTE 5. PROPERTY AND EQUIPMENT

 

   June 30, 2012   December 31, 2011 
Computers  $12,713   $12,713 
Furniture & fixtures   3,472    3,472 
Software   449    449 
Accumulated depreciation   (11,525)   (10,021)
           
Property and equipment, net  $5,109   $6,613 

  

Depreciation expense was $1,055 and $1,871 for the six months ended June 30, 2012 and 2011, respectively.

 

NOTE 6. INTANGIBLE ASSETS

 

During the quarter ended June 30, 2012, the Company evaluated the revenue potential of its websites (HazzSports.com and TotalScout.com). Based upon this evaluation, the Company determined that the future revenue outlook for these two websites was zero. Accordingly, the Company performed an impairment assessment on these two assets. The preliminary assessment, based upon undiscounted cash flows, indicated that these assets were impaired. The Company recorded a $34,985 impairment charge during the quarter ended June 30, 2012.

 

The following is a summary of intangible assets as of June 30, 2102 and 2011:

 

  June 30, 2012   June 30, 2011 
Intangible assets          
Website (CheckinSave.com)  $157,878   $176,815 
Website other (HazzSports.com and TotalScout.com)       34,985 
Website, net  $157,878   $211,800 

 

NOTE 7. RELATED PARTY TRANSACTIONS

 

At June 30, 2012, the Company owed a shareholder/director $52,259 for advances made to the Company by a shareholder/director.

 

On April 1, 2012, the Company entered into a consulting agreement with Mrs. Mabanta- Hazzard. Mrs. Mabanta- Hazzard will assume the role of Vice President and CFO of the Company. Compensation for her services will be $2,500/ month, payable in the Company’s common stock. The number shares issued will be determined using the weighted average closing price of the stock for the five trading days preceding the first of each month. Mrs. Mabanata-Hazzard compensation was recorded as common stock payable totaling $7,500 as of June 30, 2012.

 

At December 31, 2011, the Company owed a shareholder/director $62 for reimbursement of company expenses paid for by the shareholder/director on behalf of the Company.

 

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

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NOTE 8. STOCKHOLDERS’ EQUITY

 

The stockholders’ equity of the Company comprises the following classes of capital stock as of June 30, 2012 and December 31, 2011:

 

Common stock, par value of $0.001 per share; 100,000,000 shares authorized; 15,050,000 shares issued and outstanding at June 30, 2012 and December 31, 2011.

  

NOTE 9. STOCK OPTION PLAN

 

On December 22, 2008, the Board of Directors of the Company ratified, approved, and adopted a Stock Option Plan for the Company allowing for the grant of up to 1,400,000 options to acquire common shares with terms of up to 5 years. In the event an optionee ceases to be employed by or to provide services to the Company for reasons other than cause, any Stock Option that is vested and held by such optionee may be exercisable within up to thirty days after the effective date that his position ceases. No Stock Option granted under the Stock Option Plan is transferable. Any Stock Option held by an optionee at the time of his death may be exercised by his estate within one year of his death or such longer period as the Board of Directors may determine.

 

As approved by the Board of Directors, on December 22, 2008, the Company granted 600,000 fully vested stock options to certain officers of the Company at $0.50 per share for terms of two years. The two year terms commence on the start date when the common stock of the Company begins trading on the Over the Counter Bulletin Board. The total fair value of these options at the date of grant was estimated to be $305,940 and was determined using the Black-Scholes option pricing model with an expected life of 4 years, a risk free interest rate of 1.40%, a dividend yield of 0% and expected volatility of 82.29% and was recorded as a stock based compensation expense in 2008.

 

On September 13, 2011, the Company granted a total of 200,000 stock options to consultants of the Company at $0.50 per option for a term of 2 years. Upon each anniversary of the agreement, a total of 100,000 options will become vested and available for purchase by the Consultants. The total fair value of these options at the date of grant was estimated at $12,820 and determined using the Black-Scholes option pricing model with the following assumptions; a term of 2 years, a risk free interest rate of 0.25%, a dividend yield of 0%, and an expected volatility of 66.59%. The estimated incremental fair value of these options of $1,651 and $1,870 was recorded as a stock based compensation expense for March 31, 2012 and December 31, 2011, respectively.

 

On February 24, 2012, the Company granted a total of 4,000,000 stock options as part of an executive compensation agreement with the Company’s new president at $0.30 per option for a term of one year. The one year term commenced on the date the option agreement was executed. The total fair value of these options at the grant date was estimated to be $368,000 and was determined using the Black- Scholes option pricing model with an expected life of one year, a risk free interest rate of 0.33%, a dividend yield of 0%, and expected volatility of 67.05% and was recorded as stock based compensation for the period ended March 31, 2012.

 

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The Company’s stock option activity for the periods ended June 30, 2012 and December 31, 2011 is summarized as follows:

 

   Number of Options   Weighted average exercise
Price per share
   Weighted average remaining
contractual life (in years)
 
Balance, December 31, 2009   600,000   $0.50    3.00 
Granted            
Exercised            
Expired / cancelled            
Balance, December 31, 2010   600,000   $0.50    2.00 
Granted   200,000    0.50    2.00 
Exercised            
Expired / cancelled            
Balance, December 31, 2011   800,000   $0.50    2.00 
Granted   4,000,000    0.30    1.00 
Exercised            
Expired / cancelled            
Balance, June 30, 2012   4,800,000   $0.33    1.17 

 

NOTE 10. OPERATING LEASES

 

The company has a lease for its office rent. The payment is $2,300 per month through March 30, 2011. On April 1, 2011 a new lease began, which ended on March 31, 2012. This lease has been extended an additional six months ending September 30, 2012. The payment continues to be $2,000 per month for the new lease term. Rent expense for the six months ending June 30, 2012 and 2011 was $12,000 and $12,900 respectively.

 

NOTE 11. RISK CONCENTRATION

 

The Company has its cash and Certificates of Deposits only in FDIC insured accounts. The FDIC insures interest bearing deposit accounts up to $250,000. The Company does not have any cash balances that are not covered by the FDIC deposit insurance.

 

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Item 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operations.

   

The following discussion and analysis should be read in conjunction with our financial statements and related notes. Some of the information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this report, include forward-looking statements based on our current management’s expectations. There can be no assurance that actual results, outcomes or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, among others, our limited operating history, unpredictability of future program dispositions and operating results, competitive pressures and the other potential risks and uncertainties discussed in the “Risk Factors” as discussed in the “Risk Factor” section in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2011.

 

Organizational History

 

We were incorporated on March 25, 1999. On December 2, 2002, we issued 200,000 shares of common stock to Lawrence Horwitz and Eric Schmidt, the two “Initial Founders” of the Company.  Each of the two Initial Founders received 100,000 shares of common stock in consideration of their initial capital.   We developed a business plan around a concept entitled www.close2here.com.  This concept failed to get off the ground, and thus the business plan was shut down in 2005. The initial issuance of our common stock was exempt from registration under Rule 504 of the Securities Act of 1933, as it involved the sale of founders shares, with a value of substantially less than $1 million.

 

On December 19, 2007, we increased our number of authorized common stock to 100,000,000 shares of common stock, $.001 par value.  We also authorized and implemented a one hundred and ten for one forward split of its common stock.

 

On December 31, 2007, together with our shareholders, we entered into a Reorganization Agreement with Game Plan Holdings, a Canadian corporation (“Game Plan Canada”) and its shareholders (the “Game Plan Canada Shareholders”).  Pursuant to the Reorganization Agreement, the final distribution of our common stock was as follows: (a) 8,000,000 shares of common stock to Christina Mabanta-Hazzard; (b) 2,148,000 shares of common stock to Charles Hazzard; (c) 332,000 shares in the names of the various shareholders; and (d) 3,070,000 shares in the names of the Game Plan Canada Shareholders.

 

During 2008 we raised $387,500 from four accredited investors, all domiciled in the United States. This offering was exempt from registration under Rule 506 of the Securities Act of 1933 as it was exclusively to accredited investors.  In addition, Game Plan Canada raised $121,462 in 2007 exclusively from investors domiciled in Canada. This financial raise was exempt from the registration under Regulation S of the Securities Act of 1933, as it involved an issuer formed under the laws of Canada, an issuer operating exclusively in the country of Canada and making offers and sales exclusively to individuals residing in Canada. This offering would also comply with Rule 504 of the Securities Act of 1933 as it was for less than $1 million and involved less than 35 non-accredited investors.

 

On September 13, 2011, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Vantage Assets Holdings, Inc. which closed on October 21, 2011. Pursuant to the Asset Purchase Agreement, we will acquire the website www.checkinsave.com (“CheckinSave”), a social networking website whereby users check in to locations via a mobile application or using the website and accrue points for their check-ins as well as check-ins of their connections through the site that can be redeemed for coupons for discounts and deals at various registered venues. In connection with the acquisition of CheckinSave, we entered into consulting agreements with CheckinSave founders Jordan Brill and Matthew Housser to assist with the continued development, launch and marketing of the CheckinSave website and concept. The site launched on September 15, 2011. We did not issue the stock in connection with the Asset Purchase Agreement until October 21, 2011, which is when the acquisition closed.

 

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On April 1, 2012, the Company’s president, Mr. Hazzard, formally resigned as President. Mr. Hazzard will continue to act as the CEO for the Company. Prior to his resignation, the Company entered into an executive agreement with Mr. Bachman, where Mr. Bachman will assume the role as President for the Company.

 

Operational History

 

We own and operate three internet web sites, Hazzsports.com, Totalscout.com and CheckinSave.com. Our website servers and software development activities are conducted by third party vendors off-site.  

 

Hazzsports.com is an online social networking website offering an interactive resource for sports enthusiasts.  This online community provides a site for athletes, sports fans, coaches and friends to network socially and professionally with each other.  

 

In addition, we own and operate Totalscout.com, which provides college baseball coaches an easier and more efficient way to create and request scouting reports on opposing teams.  We have developed an online standardized reporting tool that has proven to significantly reduce the time and effort spent on scouting reports. Presently most scouting reports are generated manually, with little standardization or electronic assistance.  The tool accessible at Totalscout.com has preloaded every college baseball player and every possible scouting attribute into an online database. This database then generates an online standard report, providing a readily recognizable and accessible scouting report.

 

Our most recent addition, CheckinSave.com, is a social networking website whereby users check in at locations such as restaurants, bars or theaters via our website and accrue points for their check-ins. In addition, when “friends” the users are connected to on the website check-in to locations, the user accrues points. These points are then redeemable for coupons and discounts at various registered venues. The site is currently available to users in Vancouver, British Columbia and Las Vegas, Nevada. We plan to expand to several other metropolitan cities in North America.

 

Plan of Operations

 

At this time, we do not have plans to purchase any significant equipment or change the number of our employees.  Our plan of operations for the next 12 months is for the Company to diversify our websites with several lines of corresponding products and services.   Our new website CheckinSave.com is part of the growth of our business in our efforts to offer our members new and updated services.

 

Off Balance Sheet Arrangements

 

As of June 30, 2012, there were no off balance sheet arrangements.

 

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Results of Operations for the Quarter Ended June 30, 2012

 

Our revenues from March 25, 1999 (year of inception) to June 30, 2012 were minimal.  We do not anticipate earning revenues until such time as we enter into the final development stages of our websites where we can attract advertisers via our implementation of our business plan.

 

We incurred operating expenses in the amount $624,334 for the six months ended June 30, 2012. We incurred operating expenses in the amount of $152,946 for the quarter ended June 30, 2012 as compared to $55,836 for the quarter ended June 30, 2011 (an increase of $97,110).  The increase can be attributed to an increase in the accrual of officer wages and professional fees, an increase in general and administrative expenses, and a loss on impairment website.

 

These operating expenses consisted of general and administrative expenses in the amount of $30,363 (2011: $12,878), computer and website expenses in the amount of $1,867 (2011: $7,046); Impairment of website in the amount of $34,985 (2011: $-0-); professional fees in the amount of $69,231 (2011: $26,912), and officer wages in the amount of $16,500 (2011: $9,000).  

 

Our net loss for the quarter ended June 30, 2012 was $153,023 as compared to our net loss of $55,788 for the quarter ended June 30, 2011.  During the quarters ended June 30, 2012 and 2011 we generated no revenue.

 

The weighted average number of shares outstanding was 15,050,000 and 14,100,000 at June 30, 2012 and June 30, 2011 respectively.

 

Liquidity and Capital Resources

 

As of June 30, 2012, we had cash of $11,693, as compared to $43,521 as of December 31, 2011.  As of June 30, 2012, we had working capital of ($31,807), as compared to $142,086 as of December 31, 2011.

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue activities beyond those planned for the current fiscal year.  For these reasons, our auditors stated in their report for the year ended December 31, 2011 that they have substantial doubt we will be able to continue as a going concern. We do believe that our present operating capital position is sufficient to finance our operations for at least the next 12 months. We base this conclusion about our historical cash needs and while we anticipate that our cash needs may increase slightly in the next 12 months, we believe that our present operating capital will be sufficient to finance our operations. In the event we are unable to generate revenues sufficient to finance our operations then we will eventually be required to seek additional outside capital. In the event we are unable to secure such financing, our company may cease operations and eventually be forced to disband our business operations.

 

We anticipate that as our website development and associated marketing plans increase, our development expenditures will increase per calendar quarter. We further anticipate that the increased audit and legal expenses arising from our becoming a public company will be an additional expense for the calendar year 2012 and that a similar amount of increased public company expenditures will be incurred for the calendar year 2012.

 

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

 

Not applicable. 

 

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Item 4. Internal Control Over Financial Reporting.

 

Disclosure Controls and Procedures

 

Our management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that as of June 30, 2012, the Company’s disclosure controls and procedures were not effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely discussions regarding required disclosure; due to the material weaknesses described below.

 

Our financial statements were prepared in accordance with generally accepted accounting principles (“GAAP”). Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations, changes in stockholders’ equity and cash flows for the periods presented.

 

 Management Report on Internal Control Over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

 

  1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 

  2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

 

  3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

 

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5) or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. 

 

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Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our internal control over financial reporting was effective.

 

Remediation of Material Weaknesses found in our Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2012 and Material Weaknesses found in our Annual Report on Form 10-K for the Year Ended December 31, 2011

 

To remediate the material weaknesses identified in our Annual Report filed on Form 10-K for the year ended December 31, 2011 and our Quarterly Report for the quarter ended March 31, 2012, we have taken the following additional steps:

 

  1. In connection with the ineffective assessment of the Company’s internal control over financial reporting, management implemented additional controls to improve the effectiveness of the Company’s disclosure controls and procedures.

 

  2. In connection with the reported inadequate review and approval of certain aspects of the accounting process, management has reiterated the Company’s current review and approval processes, to insure that all accounting reconciliations, journal entries and complex transactions are reviewed and approved on a timely basis.

   

In connection with the assessment of the Company’s internal control over financial reporting for the quarter ended June 30, 2012, the Company looked more closely at the financial reporting to insure greater accuracy regarding the timing of transactions. While the Company has taken steps to address these weaknesses, the weaknesses remain and will not be considered effectively remediated until additional improvements to the operating of our internal control over financial reporting are in place for a sufficient period of time and tested.

 

Inherent Limitations on the Effectiveness of Controls

 

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

 

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

Changes in Internal Control over Financial Reporting

 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not currently a party to any legal proceedings. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1a. Risk Factors.

 

As a smaller reporting company, we are not required to provide the information required by this Item.

  

Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds.

 

There were no unregistered sales of equity securities during the period from April 1, 2012 through June 30, 2012.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

  

Number Exhibit
   
31.1 Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS XBRL Instance Document*
101.SCH XBRL Taxonomy Extension Schema*
101.CAL XBRL Taxonomy Extension Calculation Linkbase*
101.DEF XBRL Taxonomy Extension Definition Linkbase*
101.LAB XBRL Taxonomy Extension Label Linkbase*
101.PRE XBRL Taxonomy Extension Presentation Linkbase*

 

*Pursuant to Rule 405(a)(2) of Regulation S-T, the Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this Form 10-Q within the permitted 30-day grace period granted for the first quarterly period in which detailed footnote tagging is required.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

  GAME PLAN HOLDINGS, INC.  
       
Date: August 14, 2012 By: /s/ Chuck Hazzard  
    Chuck Hazzard, Chief Executive Officer  
       

Date: August 14, 2012

By:

/s/ Christina Mabanta-Hazzard

 
    Christina Mabanta-Hazzard, Chief Financial and Accounting Officer   

 

 

 

 

 

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