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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

 

EXCHANGE ACT OF 1934

 

 

For the fiscal year ended December 31, 2012

 

OR

 

[  ]

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

 

EXCHANGE ACT OF 1934

 

 

For the transition period from _______ to _______


Commission file number: 001-34359


GAME PLAN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)


Nevada

20-0209899

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)


1712 Ravanusa Drive, Henderson, NV 89052
(Address of principal executive offices)

(702) 951-1385
(Issuer’s telephone number)


Securities registered under Section 12(b) of the Exchange Act:


Title of Class

 

Name of exchange on which registered

Common Stock

 

None


Securities registered under Section 12(g) of the Exchange Act: None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  [ ] Yes   [X] No


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  [ ] Yes   [X] No





Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.  Yes [X]   No [ ]


Indicate by checkmark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K or any amendment to this Form 10-K.   [X]


Indicate by checkmark if registrant is a large accelerated filer, an accelerated filer, a non-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.


 

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]


As of March 25, 2013, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $4,157,000 based upon the closing sales price of the registrant’s common stock as reported on the OTCQB Market.


As of March 25, 2013, 32,050,000 shares of common stock were issued and outstanding.


DOCUMENTS INCORPORATED BY REFERENCE


If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933 ("Securities Act"). Not applicable.








GAME PLAN HOLDINGS, INC.

INDEX TO ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2012

  

 

 

PAGE

PART I.

Part I.

 

 

 

 

Item 1.

Business

2

 

 

 

Item 1A.

Risk Factors

10

 

 

 

Item 2.

Properties

14

 

 

 

Item 3.

Legal Proceedings

14

 

 

 

Item 4.

Mine Safety Disclosures

14

 

 

 

PART II.

Part II

 

 

 

 

Item 4.

Market for Registrant’s Common Equity Related Stockholder Matters

15

 

 

 

Item 5.

Selected Financial Data

16

 

 

 

Item 6.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

 

 

 

Item 6A.

Quantitative and Qualitative Disclosures About Market Risk

19

 

 

 

Item 7.

Financial Statements and Supplementary Data

19

 

 

 

Item 8.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

19

 

 

 

Item 8A.

Controls and Procedures

19

 

 

 

Item 8B.

Other Information

21

 

 

 

PART III.

Part III

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

22

 

 

 

Item 11.

Executive Compensation

24

 

 

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

28

 

 

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

29

 

 

 

Item 14.

Principal Accounting Fees and Services

29

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

30

 

 


 





CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

 

Certain statements in this annual 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-K report in its entirety, including the risks described in "Risk Factors." 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-K 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.















1




PART I


Item 1. Business


In General


Game Plan Holdings, Inc., a Nevada corporation, (the “Company”), owns and operates three social networking websites, www.hazzsports.com, www.totalscout.com, and www.checkinsave.com.


The Company maintains approximately 1000 square feet at 1712 Ravanusa Drive in Henderson, Nevada as our executive office space. The office space is located in a residential home, which is owned by Fauscom Investment Ltd., a shareholder of the Company. Concepcion Mabanta, the mother of Christina Hazzard, is the sole shareholder of Fauscom Investment, Ltd. On April 1, 2011, the Company entered into a new lease with Fauscom Investment Ltd, which began on April 1, 2011 and will terminated on March 31, 2012, under which the Company leased the same executive office space for $2,000 per month on the same terms and conditions as the previous lease. As of April 1, 2012, the Company entered into a new lease with Fauscom Investment Ltd. for a term of one year to lease the same executive office space for $2,000 per month on the same terms and conditions as the previous lease. This lease will expire on March 31, 2013.


The Company’s 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 free area on the web for athletes, sports fans, coaches, and friends to network socially and professionally with each other. In addition, the Company owns Totalscout.com, which is also a social networking website which provides college baseball coaches with a way to create scouting reports and request scouting reports on opposing teams. Finally, the Company owns and operates CheckinSave.com, an online and mobile social networking site where users can “check in” at restaurants, bars, and other venues and accrue points for their check-ins, as well as those of their friends, to be used toward discounts and special offers.

 

The Company has a limited operating history, thus there is little information upon which to base an evaluation of its business and prospects. The Company lacks any meaningful financial history against which a potential investor can judge our performance or that, if known, would be of assistance in evaluating our business prospects or the merits of investing in the Company. The Company competes against several competitors, many of which are larger, have greater financial resources and better access to capital markets than the Company.

 

The Company’s plan of operations is to attract advertisers and thus grow its websites, Hazzsports.com, Totalscout.com, and Checkinave.com, which will allow us to diversify the websites to include additional services and products.


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.




2




As of February 7, 2013, the Company entered into an intellectual property purchase agreement (the “IP Agreement”) with Sportingblood Nutrition, LLC, a Delaware limited liability company (“Sportingblood”) for the acquisition of all rights, title and interests in the Sporting Blood trademark and certain product formulations (the “Intellectual Property”). Pursuant to the IP Agreement, the Company issued 11,000,000 shares of common stock to Sportingblood.


Sporting Blood is a vitamin and nutritional supplements company. Sporting Blood’s mission is to provide safe, reliable products that have been tested for integrity and quality. Sporting Blood has partnered with NSF International to undergo their stringent NSF Certified for Sport Certification Program. This certification is designed to minimize the risk that a dietary supplement contains banned substances or contaminants. The Company believes this industry is growing and that it is better suited to the strengths of company management. The Company intends to focus exclusively on the Sporting Blood supplement business proceeding forward and to minimize or eliminate its social networking business going forward. The Company plans to utilize a subscription-based replenishment model where customers sign up and receive an ongoing subscription for the products for which they register with automatic renewals being charged monthly to their credit card until cancellation. The Company will use social media as a primary means of marketing the supplements.

 

Business Development


During the fourth quarter of 2007, Game Plan Canada provided the Company with $329,970 to assist with our website development and other expenses. The Company executed the Reorganization Agreement with Game Plan Canada and its shareholders on December 31, 2007 (the “Reorganization Agreement”) and Amendment One to the Reorganization Agreement on July 11, 2008 (the “Amendment”).


Pursuant to the Reorganization Agreement and Amendment, the final distribution was 8,000,000 shares of common stock in the name of Christina Hazzard, 2,148,000 shares of common stock in the name of Charles Hazzard, 332,000 shares in the names of the various Shareholders of the Company, and 3,070,000 shares in the names of the Game Plan Canada Shareholders.


Mr. Charles Hazzard received a total of 2,148,000 shares; however, he gifted 103,000 shares and has transferred 45,000 of his shares to individuals for services rendered to the Company.


Prior to the Reorganization Agreement and Amendment, Concepcion Mabanta, mother to Christina Hazzard, was the sole officer and director of Game Plan Canada. Ms. Hazzard was a majority shareholder of the Company; however, she did not act as an officer or director of Game Plan Canada at any time. In addition, Mr. Hazzard was not an officer, director or a shareholder of Game Plan Canada at any time.


On September 13, 2011, the Company 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, the Company acquired the website www.checkinsave.com (“CheckinSave”), a social networking website where 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. The points can be redeemed for discount coupons and deals at various registered venues. The site launched on September 15, 2011.




3




For the years of 2008 through 2012, the Company focused upon the development and improvement of its websites: Hazzsports.com, TotalScout.com, and CheckinSave.com. These efforts include expanded website functionality, improved ease of use, increased traffic and search engine positioning, and advanced website metrics to provide improved measurement of website performance. The Company has been unable to generate revenue through its websites. Thus, as of February 2013, the Company has begun to pursue its new venture in the nutritional supplements industry and expects to devote all or most of its efforts and financial backing to the creating, branding, marketing and distributing the Sportingblood supplements.


Industry Background

 

Online Social Networking

 

Online social networking continues to grow and evolve to include a broad spectrum of websites and online services. From a category that attracted a relatively small number of users a few years ago, social networking websites now attract millions of users worldwide. The popularity of such social networking websites is because people have an innate desire to connect with others, be part of a community, express themselves, and maintain personal relationships. Generally, relationships are based on similar affiliations, which are related to shared experiences such as family, school, hobbies, or the workplace. People seek to nurture these relationships as well as other affiliations, such as those based on common interests, hobbies, and trends.


Many social networking websites face challenges in attracting, retaining, and monetizing online audiences. While there is a wide range of online social networking websites available today, only a limited number have demonstrated an ability to build large-scale and sustainable audiences. Scale in a social network is required to create a "network effect," where members of the network benefit from the presence of other members, potentially accelerating growth in user activity and website visits. In addition, only a limited number of social networking websites has demonstrated that users are willing to pay for online social networking services.


Nutritional Supplements


Dietary and nutritional supplements are typically categorized as nutraceuticals, which are products that are derived from food sources that provide extra health benefits in addition to the basic nutritional value in foods.


The nutraceutical industry is a multi-billion dollar industry and is expected to continue to grow rapidly over the next several years. As health awareness raises concerns about what people put into their bodies, more and more people turn to nutritional and vitamin supplements for natural immunity boosts, athletic performance enhancers and other health benefits as an alternative to pharmaceutical products. The use of nutraceuticals is thought to accomplish desirable therapeutic outcomes with reduced side effects, as compared to other therapeutic agents. Nearly two-thirds of Americans take at least one type of nutraceutical health product.




4




An aging population has been a major factor contributing to this growth of the nutraceuticals market. By the year 2020, the number of individuals who are aged 60 years and above is expected to surpass 1.0 billion, with 70% of this populace dwelling in the developing nations. The nutraceuticals industry is geared to meet the rising demand for health foods and products as companies with sufficient capital for scientific research enter the nutraceuticals space. The trend towards personalized health nutrition is expected to provide solutions to successfully prevent, manage, and treat chronic medical illnesses. Also, the availability and accessibility of healthy foods in the developing nations, evolving understanding of the concepts that promote healthy living, and the launch of targeted foods and products scientifically formulated to address disease conditions are expected to support the growth of the nutraceuticals market in the near future.


Competition


Social Media Competition


The market for the Company’s websites is highly competitive, and the Company expects competition to significantly increase in the future. The Company maintains three separate websites, which focus upon three very different market segments.


Hazzsports.com is an online social networking website offering an interactive resource for sports enthusiasts. This online community provides a free area on the web for athletes, sports fans, coaches, and friends to network socially and professionally with each other.  It further provides a location on the internet for college coaches and high school athletes to connect and interact.  Competitors of the Hazzsports.com website include websites focused upon young athletes and team sports, such as www.berecruited.com and www.sportsvite.com.


Totalscout.com caters to a very different marketplace relative to Hazzsports.com. Totalscout.com is an online tool utilized exclusively by collegiate coaching staffs to standardize and electronically organize the process of generating scouting reports and then sharing them with other teams. The Company initially launched the website only among college baseball teams, but anticipates expanding the website to collegiate softball teams in the near future. If successful, the Company will continue to examine opportunities in other sports. The Company has been unable to identify a company providing services identical to Totalscout.com; however, companies such as www.perfectgame.org and www.rivals.com compete with certain aspects of Totalscout.com’s business plan.


The Company’s newest addition, CheckinSave.com, is a website that fuses users’ desire to network socially online with their interest in receiving coupons and daily deals to their favorite hangouts. CheckinSave.com allows its users to accrue points by “checking in” at registered venues and when their friends “check in” to the same venues. Accrued points can then be redeemed for coupons or deals on food, retail, and entertainment in any of the website’s supported cities. There are many websites offering discounts and daily deals, but the biggest competition comes from www.foursquare.com.





5




Nutritional & Dietary Supplements Competition


The global nutritional and dietary supplements industry is highly competitive. Growing demand by consumers to lead healthier lifestyles and avoid dependency on synthetic drugs has spurred many companies, large and small, to break into the market. Major trends influencing the market include growing competition leading to industry consolidation, maturing markets in the developed regions, higher disposable incomes leading to greater personal care in the developing markets, growing affixation with beauty, and the launch of supplements enhancing beauty. Vitamin and mineral supplements are projected to generate relatively moderate growth in nutraceutical applications, resulting from intense pricing competition, overall lack of proprietary compounds, and mature product applications.


The industry continues to see large players from the food and pharmaceutical industries acquiring small companies to mark an entry into the market. Competition within the nutraceuticals market is driven by several factors, including price, safety and efficacy issues, packaging, brand loyalty and others. Key players in the field currently include Archer Daniels Midland Company, GlaxoSmithKline, Groupe Danone, Ocean Nutrition Canada, Pfizer Nutrition and Perrigo Company.


With growing similarity among products and formulations, maintaining brand loyalty is emerging as a critical, but complex, issue. On the other hand, factors restraining growth in the nutraceutical segment include the time taken between concept and product launch, the impact of false product claims which have impacted consumer confidence and lack of significant marketing promotion dollars that reach and educate the consumer.


Our Strategy


The Company’s overall objective is to minimize or eliminate its pursuit in the social networking sphere and to place its efforts in the nutritional supplements industry.


The Company intends to pursue market share in the nutritional supplements industry by:

 

Branding the Sportingblood products in the nutritional supplements industry as a safe, effective product, particularly for athletes.

Marketing the Sportingblood supplements nationwide as supplements that have undergone the stringent NSF Certified for Sport Certification Program.

Working with distributors to begin distributing the Sportingblood products as early as Spring 2013.


The Company intends to increase both subscription and advertising revenues by enhancing the value of its services to members as well as to advertisers.

 

The Company believes its strategy of enhancing member experience and engagement on its websites will increase the frequency of visits and the time spent on our websites. The Company intends to capitalize on this opportunity and increase its advertising revenues by working with brand advertisers seeking to reach relevant online consumers.

The Company intends in the future to develop additional sophisticated methods for designing advertising campaigns for its members that are specifically tailored to an individual's personal interests, purchasing behavior, and demographic profile.




6




Our Products and Services

 

Social Media Websites


The Company’s two social media websites, Hazzsports.com and CheckinSave.com, are still operational. Since the Company does not have any current revenues for these websites, the Company is intending to focus primarily on the nutritional supplements industry and expects to minimize or completely eliminate its efforts in social media during 2013. The Company’s third website, Totalscout.com, is no longer operational.

 

Hazzsports.com visitors are invited to join as members and complete a brief membership form. The member must have a valid email address, provide a password and create a username. There will be no additional fees for a full membership. Members can then elect to build their profile and provide information about their personal interests, post photos and videos, and post blogs.


Members have free access to the following features:


 

Members can use our search feature to locate individuals who are also members in our member database.

 

Members can post information about themselves, including personal profiles, biography information, and photos.

 

Members can view other members' posted information, including personal profiles, biography information, and photo albums.

 

Members have access to, and can read messages posted on our message boards.

 

Members can communicate using the Instant Message and Chat Room features.

 

Members can get up-to-the-minute sports news, scores, and player statistics.

 

Members can schedule events and tournaments on their own personal calendar.

 

Members can play over 400 free arcade games.

 

Totalscout.com was launched in February of 2010 and currently has 145 NCAA Division 1 Universities signed up. A number of these schools are among the most successful college programs in the county, including: the University of Arizona, Pepperdine University, Cal State Fullerton, Tulane, Auburn, Mississippi State, Cal Berkeley, and TCU. During the 2010 season we provided coaches with access free of charge to demonstrate the benefits of utilizing our system. To date, the Company has not generated any revenue through Totalscout.com. Totalscout.com is no longer operational.


On CheckinSave.com, users can check in to registered venues and the check-in will automatically be blasted out to users’ friends through various social media sites when users link accounts such as Facebook, Twitter, and Foursquare. Users receive 10 points each time they check in at a registered venue and 20 points each time a friend checks in to that location through the user’s social media referral. Users can then redeem accrued points for various discounts and deals offered by any of venue registered with CheckinSave.com.





7




Nutritional Supplements


The Company intends to focus on the nutritional supplements industry in 2013. With the acquisition of the intellectual property for Sportingblood, the Company plans to create, brand, market and distribute nutritional supplements that undergo stringent certification to ensure they are safe and effective for athletes and do not contain banned substances. The Company expects to engage distributors and other third party vendors to assist it with its national distribution of the Sportingblood products once these products are ready to go to market.


Marketing


The Company’s primary marketing efforts have been focused on attracting new members to its websites via a word of mouth campaign. Thus far, the Company’s marketing efforts for its websites has not generated enough traffic to allow the Company to generate revenue from its websites. The Company intends to continue to evaluate its marketing and to determine whether it will continue to pursue any efforts to keep these websites live.


In the nutritional supplements space, the Company intends to focus its efforts on branding and marketing the Sportingblood supplements. The Company believes the unique feature of offering NSF Certified for Sport supplements will provide the opportunity for the Company to create and gain market share in the growing but competitive supplements industry. Additionally, because the Company’s background has been and continues to be in the area of amateur and professional sports, the Company believes it has the necessary contacts and relationships to grow into the nutritional supplements industry, particularly for athletes.


Government Regulations


Social Media Regulation


The Company is subject to state, federal, and international laws and regulations applicable to online commerce, including user privacy policies, product pricing policies, website content, and general consumer protection laws. Laws and regulations have been adopted, and may be adopted in the future, that address Internet-related issues, including online content, privacy, online marketing, unsolicited commercial email, taxation, pricing, and quality of products and services. Some of these laws and regulations, particularly those that relate specifically to the Internet, were adopted relatively recently and their scope and application may still be subject to uncertainties. Interpretations of these laws, as well as any new or revised law or regulation, could decrease demand for our services, increase our cost of doing business, result in liabilities for us, restrict our operations or otherwise cause our business to suffer. The Company’s failure, or the failure of its business partners, to accurately anticipate the application of these laws and regulations, or to comply with such laws and regulations, could create liability for the Company, result in adverse publicity and negatively affect our businesses.





8




Nutritional Supplements Regulation


Unlike pharmaceutical drugs, within the United States, nutraceutical products are widely available and monitored with the same level of scrutiny as "dietary supplements". Within the oversight of the Federal Food & Drug Administration, unlike many other countries such as Canada, the use of broad-based definitions creates inconsistent credibility distinguishing the standards, function, and effectiveness between "nutraceuticals" and "dietary supplements". Within this loose regulatory oversight, legitimate companies producing nutraceuticals provide credible scientific research to substantiate their manufacturing standards, products, and consumer benefits and differentiate their products from "dietary supplements".


Despite the international movement within the industry, professional organizations, academia, and health regulatory agencies to add specific legal and scientific criterion to the definition and standards for nutraceuticals, within the United States the term is not regulated by the FDA. The FDA still uses a blanket term of "dietary supplement" for all substances without distinguishing their efficacy, manufacturing process, supporting scientific research, and increased health benefits.


In 1994 Congress passed legislation known as the Dietary Supplement Health and Education Act (DSHEA). The law restricted the Food and Drug Administration (FDA) in the regulations it could enforce limiting label claims on dietary supplements. Specifically, DSHEA allows dietary supplement labels to carry statements dealing with structure/function claims such as "supports the immune system." Section 6 of DSHEA states that structure/function statements are "statements of nutritional support . . . that describe the role of a nutrient or dietary ingredient intended to affect the structure or function in humans."


The intent of DSHEA was to provide consumers access to more health-related information about dietary supplements. However, sifting through the complicated language contained in the legislation is a formidable task. The fine line in semantics with respect to a supplement "supporting" a normal body function as opposed to "treating a disease" remains as controversial an area as the current debate over how the FDA actually defines "diseases." Members of the nutraceutical industry, including manufacturers, distributors, and sales associates, are becoming increasingly aware, however, of the importance of understanding and adhering to these oftentimes confusing guidelines in marketing nutraceuticals.


In 2005, the National Academies Institute of Medicine and National Research Council created a blue-ribbon committee to create an improved framework for the Federal Food & Drug Administration to evaluate dietary supplements, though the improved framework fails to distinguish between "nutraceuticals" and "dietary supplements". With the continued use of a broad definition and lacking greater distinction, a cost-effective and scientifically based framework was needed to evaluate the safety of "dietary supplements" including those consumer products recognized internationally as "nutraceuticals".


Employees


As of 2013, the Company employs one person, Chuck Hazzard. The Company conducts its business largely through agreements with consultants and other independent third parties. The Company intends to enter several employment agreements in 2013 in order to expand the Company and proceed with its plans to enter the nutritional supplements industry.

 



9




Although Ms. Christina Hazzard, who serves as the Company’s Chief Financial Officer, is not an employee of the Company, she devotes 25% of her time per week to the business of the Company in her capacity as the Company’s Chief Financial Officer.


Subsidiaries


The Company does not currently have any subsidiaries.


Patents


The Company does not own, either legally or beneficially, any patent.


Trademarks


The Company owns five trademarks, which are registered with the United States Patent and Trademark Office: Trademark Registration No. 3,609,416 for the Hazzsports.com logo, Trademark Registration No. 3,521,870 for Hazzsports.com, Trademark Registration No. 3,620,491 for the slogan, “It’s better to be a Hazz been than a never was,” Trademark Registration No. 4,215,313 for the CheckinSave logo, and Trademark Registration No. 4,215,312 for CheckinSave. The Company has two pending trademarks: Trademark Serial No. 85857176 for “Sporting Blood” and Trademark Serial No. 85835704 for “Sportingblood.” These pending trademark applications are registered under Andrew Bachman and will be assigned to the Company pursuant to the IP Agreement.

 

Licenses and Royalties


The Company does not have any license or royalty agreements in place.

 

Item 1A. Risk Factors


You should consider each of the following risk factors and any other information set forth herein and in our reports filed with the SEC, including our financial statements and related notes, in evaluating our business and prospects. The risks and uncertainties described below are not the only ones that impact on our operations and business. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, may also impair our business or operations. If any of the following risks actually occur, our business and financial results or prospects could be harmed. In that case, the value of the common stock could decline.


Risks Related to the Company


The Company has a limited operating history.


The operation of the Company, social networking, constitutes a relatively new venture. As a result, the Company has limited financial information on which you can evaluate the prior performance of the Company. The Company is subject to all of the business risks and uncertainties associated with any new business, including the risk the Company will not achieve its business objectives.  


The Company has just begun the initial stages of its business plan. As a result, the Company has no way to evaluate the likelihood it will be able to operate the business successfully. The Company has earned minimal revenues, and thus faces a high risk of business failure.




10




There is no assurance of planned growth and the inability to grow could adversely affect operating results.


The Company believes that its future operating results will depend largely on its ability to increase its penetration in existing and future markets. Additional personnel and assets may be required to execute those actions. There can be no assurance that the Company will successfully expand and operate profitably. Its expansion plans have and may continue to result in increased operating expenses in the future. Results of operations may therefore be adversely affected during this expansion. There can be no assurance that the Company will anticipate and respond effectively to all of the changing demands that its expanding operations will have on the Company’s management, information and operating systems. The failure to adapt its systems could have a material adverse effect on the Company’s results of operations and financial condition. There is no assurance that the Company will successfully achieve its planned expansion or, if achieved, that the expansion will result in profitable operations.


The Company’s President and affiliated individuals will collectively own a majority of the shares of common stock of the Company. Thus, investors may find that the corporate decisions influenced by them may be inconsistent with the best interests of other stockholders.


After the closing of the Sporting Blood Acquisition, the Company’s President, Andrew Bachman, and affiliated individuals, including other owners of Sporting Blood, will collectively own a majority of the shares of Common Stock of the Company. Because Mr. Bachman and other Sporting Blood owners will own a majority of the shares of common stock of the Company, they will have significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control.


The consideration being paid to management has not been determined based on arm’s length negotiation.


The stock and cash consideration being paid by the Company to management has not been determined based on arm’s length negotiation. While management believes that the consideration is fair for the work being performed, there is no assurance that the consideration to management reflects the true market value of its services.


Risks Related to the Sporting Blood Acquisition


The Company expects to face increasing competition that could result in an inability to gain market share and an inability to generate revenues.


The nutritional and dietary supplements industry is highly competitive and is expected to continue to see higher levels of competition. Many of the large food and pharmaceutical companies have entered the industry, allowing for larger marketing campaigns and brand recognition to gain greater market share. Additionally, companies have been involved in the nutritional and dietary supplements industry for many years, allowing them to gain consumer loyalty. If the Company cannot generate consumer following in order to gain a market share, it may not be able to generate revenues, and the Company’s financial condition could be adversely affected.




11




The Company may be adversely affected if it is unable to protect its intellectual property, including from infringement by third parties.


The Company is in the process of acquiring the intellectual property from Sporting Blood, including trademark registration of Sporting Blood and certain product formulations. The Company cannot assure any future trademark registrations will be issued for pending or future applications or that any registered trademarks or service marks will be enforceable or provide adequate protection of its proprietary rights. Additionally, the Company cannot guarantee that it can adequately protect its intellectual property from infringement by third parties. Failure to adequately protect its trademark or product formulations may result in an inability to create or maintain brand recognition or loyalty, which may adversely affect the Company’s operations or financial condition.


Our products and manufacturing activities are subject to extensive government regulations and could be subject to additional laws and regulations.

 

The formulation, manufacturing, packaging, labeling, advertising, distribution and sales of each of our major product groups are subject to regulation by numerous governmental agencies and authorities, such as the FDA, the FTC, the USDA and state regulatory agencies. These markets have varied regulations which may require us to reformulate products for specific markets, conform product labeling to market regulations and register or qualify products or obtain necessary approvals with the applicable governmental authorities in order to market our products in these markets. Failure to comply with the regulatory requirements of these various governmental agencies and authorities could result in enforcement actions including: cease and desist orders, injunctions, limits on advertising, consumer redress, divestitures of assets, rescission of contracts, or such other relief as may be deemed necessary. Violation of these orders could result in substantial financial or other penalties. Any action against us could materially affect our ability to successfully market our products.

 

In the future, we may be subject to additional laws or regulations administered by the FDA or other federal, state or local regulatory authorities, the repeal or amendment of laws or regulations which we consider favorable and/or more stringent interpretations of current laws or regulations. We can neither predict the nature of such future laws, regulations, interpretations or applications, nor what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business. They could, however, require reformulation of certain products to meet new standards, recall or discontinuance of certain products not able to be reformulated, imposition of additional record-keeping requirements, expanded documentation of the properties of certain products, expanded or altered labeling and/or scientific substantiation. Any or all such requirements could have a material negative impact on our financial position, results of operations or cash flows.


Availability and integrity of raw materials could become compromised.

 

We depend on outside suppliers for raw materials. We acquire all of our raw materials for the manufacture of our products from third-party suppliers. We have many agreements for the supply of materials used in the manufacture of our products in order to hedge against shortages or potential spikes in material costs. We also contract with third-party manufacturers and suppliers for the production of some of our products. In the event we were to lose any significant suppliers and experience any difficulties in finding or transitioning to alternative suppliers, it could result in product shortages or product back orders, which could harm our business. There can be no assurance that suppliers will be able to provide us with the raw materials in the quantities and at the appropriate level of quality that we request or at a price that we are willing to pay. We are also subject to the delays caused by any interruption in the production of these materials including weather, crop conditions, climate change, transportation interruptions and natural disasters or other catastrophic events.



12




Our suppliers may experience production difficulties with respect to our products, including the delivery of materials or products that do not meet our quality control standards. These quality problems may result in stock outages or shortages of our products, and could harm our sales and create inventory write-offs for unusable product.


Product liability claims could harm our business.

 

As a manufacturer and distributor of products that are ingested, we face an inherent risk of exposure to product liability claims in the event that, among other things, the use of our products results in alleged injury to consumers due to tampering by unauthorized third parties or product contamination and/or other causes. Defending against such potential claims and in the event of a finding of liability, the Company could be subject to severe monetary and other penalties, which would have a material negative impact on our business prospects, financial position, results of operations or cash flows.


Risks Related to the Company’s Social Media Business


The Company expects to face increasing competition that could result in a loss of users and reduced revenues or decreased profits.


The market for the Company’s websites is competitive, and competition is expected to significantly increase in the future. The Company maintains three separate websites, which focus upon three very different market segments.


The Company will compete for advertising revenues with social networking Websites, online direct marketing businesses, content providers, large Web publishers, Web search engine companies, content aggregation companies, major Internet service providers, and various other companies that facilitate Internet advertising. The Company will also compete with traditional offline advertising media, such as radio, television and print advertising, because most companies currently spend only a small portion of their advertising budgets on Internet-based advertising. Internet advertising techniques are evolving, and if the Company’s technology does not keep up with the needs of advertisers, the Company will not be able to compete effectively. If the Company fails to persuade companies to advertise on our Website, the Company’s revenues will be adversely affected.


If the Company’s social networking members do not interact on the Company’s websites, the Company’s business and financial results will suffer.


The Company’s success is dependent upon its social networking members interacting on its social networking websites. Currently, the network effect on Hazzsports.com is limited, and the vast majority of the member activity is within the high school community, family and friends. Only a limited number of the social networking members post information about themselves, view other members' profiles or participate in the other features on Hazzsports.com. Furthermore, the Company has only recently launched CheckinSave.com and has not seen a large increase in member activity on the website. If the Company is unable to encourage its members to interact more frequently and to provide user generated content, the ability of the Company to attract new users and advertisers will be adversely affected. As a result, the business and financial results of the Company will suffer, and the Company will not be able to grow its business as planned.




13




The Company may be unable to obtain, generate, increase or maintain advertising revenues, which could reduce the Company’s profits.


While there is no assurance, the Company intends to pursue advertising revenues from the sale of display advertisements on its websites. The ability of the Company to attract or maintain advertising revenue from each of these potential sources is largely dependent upon the number of members actively using the services of the Company and the traffic generated on its websites. The Company may have to increase user engagement with its services in order to increase our advertising revenues. In addition, advertising revenue may fluctuate, and may fluctuate in the future, due to changes in the online advertising market, including extreme fluctuations in online advertising spending patterns and advertising rates.


The business will be adversely affected if the Company is unable to protect intellectual property rights from unauthorized use or infringement by third parties.


The Company has pursued the registration of our trademarks and service marks in the United States. The Company owns 5 trademarks, which are registered with the United States Patent and Trademark Office. The Company has two pending trademarks which are the subject of the IP Agreement entered into with Sportingblood Nutrition, LLC. If the Company is unable to secure the “Sporting Blood” and “Sportingblood” trademarks, its branding and marketing of the Sportingblood products will be adversely affected, which will have a material impact on the Company’s business and results of operation.


The steps the Company has taken to limit access to, and disclosure of, its proprietary information may not prevent unauthorized use of the technology of the Company. Moreover, others may independently develop technologies that are competitive with or infringe on the intellectual property of the Company. The Company cannot be certain that the steps we have taken will prevent unauthorized use of our intellectual property rights. Legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in Internet-related industries are uncertain and still evolving.


Item 2. Properties


The Company maintains approximately 1,000 square feet at 1712 Ravanusa Drive in Henderson, Nevada as our executive office space. The office space is located in a residential home owned by Fauscom Investment Ltd., a shareholder of the Company. As of April 1, 2012, the Company entered into a new lease with Fauscom Investment Ltd. for a term of one year to lease the same executive office space for $2,000 per month on the same terms and conditions as the previous lease. This lease terminates on March 31, 2013.


Concepcion Mabanta, the mother of Christina Hazard, is the sole shareholder of Fauscom Investment, Ltd. The Company’s website servers and software development activities are conducted by third party vendors off-site.


Item 3. Legal Proceedings


The Company is not currently a party to any legal proceedings. The Company is not aware of any pending legal proceeding to which any of the Company’s officers, directors, or any beneficial holders of 5% or more of its voting securities are adverse to the Company or have a material interest adverse to the Company.


Item 4. Mine Safety Disclosures


Not applicable.

 

14


PART II


 

Item 4. Market for Common Equity and Related Stockholder Matters


Market Information


Since inception, there has been no established public trading market for the Company’s common stock. The Company’s common stock is quoted on OTC Market’s OTCQB quotation system under the symbol GPLH. The quotations reflect inter-dealer prices, without retail markup, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Quarter

High 2011

Low 2011

High 2012

Low 2012

First Quarter

N/A1

N/A1

$0.32

$0.23

Second Quarter

$0.51

$0.35

$0.37

$0.26

Third Quarter

$0.55

$0.36

$0.35

$0.12

Fourth Quarter

$0.40

$0.20

$0.20

$0.16

1 Quotations commenced on OTCQB on April 26, 2011.


Since inception, the Company has not paid any dividends on its common stock, and the Company does not anticipate that it will pay dividends in the foreseeable future.


Holders of Our Common Stock


Currently, the Company has 75 holders of record of its common stock.


Recent Sales of Unregistered Securities


On July 26, 2011, the Company issued 200,000 shares of restricted common stock for services valued at $90,000 ($0.45 per share). The shares were valued at fair market value on July 26, 2011, the agreement date.


On October 15, 2011, the Company issued 200,000 shares of restricted common stock in satisfaction of a subscription payable for services valued at $74,000 ($0.37 per share). The shares were valued at fair market value on September 22, 2011, the agreement date.


On October 21, 2011 the Company issued 500,000 shares of restricted common stock for the purchase of www.checkinsave.com valued at $210,000 ($0.42 per share). The shares were valued at fair market value on September 13, 2011, the agreement date.


On November 28, 2011 the Company issued 50,000 shares of restricted common stock as payment of a referral fee in connection with purchase of CheckinSave valued at $19,450 ($0.39 per share). The shares were valued at fair market value on November 28, 2011, the agreement date.


On February 24, 2012, the Company issued 4,000,000 options to purchase common stock to Andrew Bachman as compensation for services to be rendered pursuant to an Executive Employment Agreement. The options consist of the option to purchase 1,000,000 newly issued shares of restricted common stock of the Company and the options to purchase 3,000,000 shares of restricted common stock from designated Company shareholders. All 4,000,000 options are exercisable at $0.30 per share.



15




Item 5. Selected Financial Data


Pursuant to Item 301(c) of Regulation S-K, as a smaller reporting company, the Company is not required to provide the information required by this item.


Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following discussion and analysis should be read in conjunction with our consolidated 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 includes 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” section of this annual report.


Organizational History


On March 25, 1999, Game Plan Holdings, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in the state of Nevada. 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 each 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 the business plan was shut down in 2005. This offering was exempt from registration under Rule 504 of the Securities Act of 1933 as it involved the sale of founder’s shares, with a value of substantially less than $1 million.

 

On December 19, 2007, we increased its 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, we and our shareholders 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 was 8,000,000 shares of common stock in the name of Christina Hazzard, 2,148,000 shares of common stock in the name of Charles Hazzard, 332,000 shares in the names of the various Shareholders of the Company and 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 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.




16




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, the Company acquired 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 issued stock in connection with the Asset Purchase Agreement on October 21, 2011, which is when the acquisition closed.


On April 1, 2012, our president, Chuck Hazzard, formally resigned as President. 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. Mr. Hazzard continued to act as the CEO for the Company until his resignation on March 1, 2013. Mr. Hazzard was subsequently appointed as Executive Vice President of the Company. Mr. Bachman accepted appointment as Chief Executive Officer and Chairman of the Board of Directors of the Company on March 1, 2013. Additionally, on March 1, 2013, Christina Hazzard and Ronald Smith resigned from the Board of Directors of the Company, and James Dingman accepted appointment to the Board of Directors.


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.


Totalscout.com 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.


Proceeding forward, we intend to minimize or eliminate our efforts in the social media website spaces and focus on our entry into the nutritional supplements industry with the Sportingblood line of nutritional supplements, which are specially formulated to be NSF Certified to ensure they do not include banned substances for athletes.




17



Plan of Operations


In the next twelve months, we intend to hire several employees to assist in our development, marketing and distribution of the Sportingblood supplements. We expect that we will be purchasing equipment to assist in the production and distribution of our products. We may also enter into agreements with third party vendors to assist with the production and distribution of our products. We intend to minimize and possibly eliminate our efforts with our three websites during 2013.

 

Off Balance Sheet Arrangements

 

From December 31, 2008 through the fiscal year ending December 31, 2012, there were no off balance sheet arrangements.

 

Results of Operations for the Fiscal Year Ended December 31, 2012


Our revenues from December 31, 2008, through the year ending December 31, 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 of $779,081 for the fiscal year ended December 31, 2012, as compared to $290,942 in the fiscal year ended December 31, 2011 (an increase of $488,139 or 168%).


These operating expenses consisted of general and administrative expenses in the amount of $124,058 (2011: $62,502), professional fees in the amount of $204,678 (2011: $165,216), computer and website expenses in the amount of $6,932 (2011: $26,224), stock-based compensation in the amount of $389,873 (2011: $0), impairment of the Company’s website in the amount of $17,540 (2011: $0), and officer wages in the amount of $36,000 (2011: $37,000). We anticipate our operating expenses will increase as we undertake our plan of operations.  


Our net loss for the fiscal year ended December 31, 2012 was approximately $807,063 compared to our net loss of $290,241 for the fiscal year ended December 31, 2011. During the fiscal year ended December 31, 2012 we generated $0 in revenue as compared to our revenue of $0 for the fiscal year ended December 31, 2011.


The basic weighted average number of shares outstanding was 15,050,000 and 14,343,151 at December 31, 2012 and December 31, 2011 respectively.


Liquidity and Capital Resources


As of December 31, 2012 we had cash of $3,453 (2011: $43,521) and working capital (deficit) of ($103,406) (2011: $142,086).


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 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.



18




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 and that a similar amount of increased public company expenditures will be incurred for calendar year 2013.


Item 6A. Quantitative and Qualitative Disclosures About Market Risk


Pursuant to Item 305(e) of Regulation S-K, as a smaller reporting company, we are not required to provide the information required by this Item.


Item 7. Financial Statements and Supplementary Data


The Financial statements of the Company are contained in footnotes F-2 through F-32, which appear at the end of this Form 10-K Report.


Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


During the Company’s two most recent fiscal years, and all subsequent periods, the Company has not had any disagreements with our accountants.


Item 8A. Controls and Procedures


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 December 31, 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.


In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure that our financial statements were prepared in accordance with generally accepted accounting principles. 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.




19




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.


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 not effective due to the material weaknesses described below.


Remediation of Material Weaknesses Found in our Quarterly Report on Form 10-Q for the Quarter ended September 30, 2012 and Material Weaknesses found in our Annual Report on Form 10-K for 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 September 30, 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.



20




 

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 year ended December 31, 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.


Attestation Report of the Independent Registered Public Accounting Firm


This annual report does not include an attestation report by the Company’s registered public accounting firm regarding internal control over financial reporting, because Management’s report in the annual report was not subject to attestation by the Company’s independent registered public accounting firm, pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.


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.


Item 8B. Other Information


Not applicable.


 

21



PART III


Item 10. Directors, Executive Officers and Corporate Governance


Below is a list of the Company’s executive officers and directors and their respective ages as of December 31, 2012:


Name

Age

Position(s) and Office(s) Held

Charles Hazzard

37

Chief Executive Officer, Director

Christina Hazzard

28

Secretary & CFO, Director

Ronald Smith

62

Director

Andrew Bachman

29

President

 

As of March 1, 2013, Charles Hazzard is no longer Chief Executive Officer, but was appointed as Executive Vice President. Andrew Bachman accepted appointment as Chief Executive Officer and Chairman of the Board of Directors, Ronald Smith and Christina Hazzard resigned from the Board of Directors, and James Dingman, age 39, accepted appointment to the Board of Directors.


Set forth below is a brief description of the background and business experience of each of our current executive officers and directors:


Andrew Bachman


Andrew Bachman is an accomplished entrepreneur and investor who has built and sold two successful companies in the span of his career, and is currently working on developing his newest venture, Sportingblood Nutrition LLC (“Sportingblood”). Bachman co-founded Tatto Media, a company that employed innovative strategies focused on online advertising and supervised annual revenues that exceeded $100 million. Tatto Media was later sold to Ozura World, a prominent international media group. Andrew Bachman has focused on online technique and implemented a cache of methods that catered to both advertisers and publishers. Mr. Bachman then employed his skills in professional leadership and new media as the founder of Scambook.com, a site that receives and groups reports from users seeking to recover damages accrued from faulty warrantees, social media schemes, false advertisements, bait and switches, and unauthorized credit card charges.


Charles Hazzard


Mr. Hazzard is the President and Chief Executive Officer of the Company. Mr. Hazzard earned his Bachelor of Science degree from the University of Florida in 1999. He received a baseball athletic scholarship to the University of Florida where he played baseball for four years. After college, Mr. Hazzard signed a minor league contract with the Tampa Yankees. After playing for the Tampa Yankees, he entered the private sector and accepted a position as a database administrator for MetaSolv Software, a telecommunications software company. At MetaSolv, Mr. Hazzard developed internal software upgrading error and data management processes and was also involved in the customer support and data base management processes. In 2003, he accepted a position as an assistant baseball coach at the University of Nevada, Las Vegas. While a coach, the team won the Mountain West Conference Title and went to the NCAA Regional. In 2005, Mr. Hazzard left UNLV to accept a similar position at Pepperdine University. In his two years at Pepperdine, he helped the Waves to win a West Coast Conference Title and two berths into the NCAA Regional. In 2006, while at Pepperdine University, Mr. Hazzard was accepted into the Master’s program where he studied Educational Technology. Mr. Hazzard graduated with a Masters of Arts in Educational Technology in 2007. Mr. Hazzard married Ms. Hazzard in June of 2009.

 



22




Christina Hazzard


Ms. Hazzard is the Secretary and Chief Financial Officer of the Company. Ms. Hazzard received a Bachelor of Science degree in Hotel Management and a Minor in Business Administration from the University of Nevada, Las Vegas. While attending UNLV, Ms. Hazzard played college golf on scholarship for all four years. After college, Ms. Hazzard used her degree and worked for Harrah’s Entertainment in the Leisure Sales Department. At Harrah’s Ms. Hazzard was involved in sales coordination for large group projects. During college, she also worked for Wynn Las Vegas Golf Club and Southern Highlands Golf Club. As a competitive golfer, she won the 2002 British Columbia Amateur Championship. She was a member of the B.C. Junior Provincial Team for five years and was a member of the Canadian Junior World Cup Team where she traveled to play at St. Andrew’s Golf Course in Scotland. Ms. Hazzard was awarded UNLV’s All-Scholar Academic Athletic Award. Ms. Hazzard married Mr. Hazzard in June of 2009.


James Dingman


Mr. Dingman is a successful entrepreneur who is Managing Director at Shipston Group Limited, a private equity fund that has been focus on emerging markets since the early 1990s. Prior to joining Shipston Group, Mr. Dingman served as founding partner and co-president of National Timber Company. Additionally, he owned and served as president of Fitapaldi-Dingman Racing. Mr. Dingman has lived and worked in emerging markets for over 20 years. Mr. Dingman attended Boston College. Mr. Dingman is closely tied to the Dingman Center for Entrepreneurship, which is part of the Robert H. Smith School of Business at the University of Maryland.


Involvement in Certain Legal Proceedings


Since our inception, the Company believes that none of our directors or executive officers have been involved in any legal proceeding concerning: (i) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction permanently or temporarily enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity; or (iv) being found by a court, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law (and the judgment has not been reversed, suspended or vacated).


Family Relationships


Other than Charles Hazzard and Christina Hazzard, who are married, there are no family relationships among the Company’s officers and directors.

 

Directors


Our bylaws authorize no less than one director. We currently have three Directors: Mr. Andrew Bachman, Mr. Charles Hazzard, and Mr. James Dingman.




23




Term of Office


Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.


Significant Employees


Mr. Charles Hazzard is our only employee. He was employed with the Company as the Chief Executive Officer as of December 31, 2012, but as of March 1, 2013, he is employed as Executive Vice President.


We conduct our business through agreements with consultants and arms-length third parties. Current arrangements in place include the following:


1.

Verbal agreements with our accountants to perform accounting services.

 

 

2.

Written agreements with auditors to perform audit functions at their respective normal and customary rates.

 

 

3.

Written agreements with consultants and arms-length third parties to perform certain tasks at their respective normal and customary rates.


Code of Ethics

 

Due to a lack of resources, the Company has not adopted a written code of ethics applying to our executive officers.


Section 16(a) Beneficial Ownership Reporting Compliance


Charles Hazzard, Christina Hazzard, and Ronald Smith have all filed their initial reports on Form 3, but did not do so on a timely basis. They filed their Form 3 as of September 14, 2011.


Item 11. Executive Compensation


Compensation Discussion and Analysis


The Company presently does not have an employment agreement with Andrew Bachman, Charles Hazzard or Christina Hazzard and it has not established a system of executive compensation or any fixed policies regarding compensation of executive officers.  


Mr. Bachman, Mr. Hazzard and Ms. Hazzard hold substantial ownership in the Company and are motivated by a strong entrepreneurial interest in developing our operations and potential revenue base to the best of their ability.  As our business and operations expand and mature, we may develop a formal system of compensation designed to attract, retain, and motivate talented executives.


Summary Compensation Table


The table below summarizes all compensation awarded to, earned by, or paid to each named executive officer for our last completed fiscal year for all services rendered to us.

 



24




December 31, 2012 Summary Compensation Table


 

Name and

Principal

Position

Year

Salary

($)

Bonus

($)

Stock Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan Compensation

Nonqualified

Deferred Compensation Earnings ($)

All Other

Compensation

($)

Total ($)

Charles Hazzard,

CEO

2012

$36,000

$0

$0

$0

$0

$0

$0

$36,000

Christina Hazzard

CFO & Secretary

2012

$0

$0

$22,500

$0

$0

$0

$0

$22,500

 

 

 

 

 

 

 

 

 

 

Andrew Bachman,

President

2012

$0

$0

$0

$368,000

$0

$0

$0

$368,000


December 31, 2011 Summary Compensation Table


 

Name and

Principal

Position

Year

Salary

($)

Bonus

($)

Stock Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan Compensation

Nonqualified

Deferred Compensation Earnings ($)

All Other

Compensation

($)

Total ($)

Charles Hazzard,

CEO and President

2011

$37,000

$0

$0

$0

$0

$0

$0

$37,000

Christina Hazzard

CFO & Secretary

2011

$0

$0

$0

$0

$0

$0

$0

$0


Outstanding Equity Awards At Fiscal Year-End Table


The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer outstanding as of the end our fiscal year ended 2011 and 2012.


 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2010 and 2011

OPTION AWARDS

 

STOCK AWARDS

Name

Number of

 Securities

 Underlying

 Unexercised

 Options

 (#) Exercisable

Number of

 Securities

 Underlying

 Unexercised

 Options

 (#) Unexercisable

Equity Incentive

 Plan Awards:

 Number of Securities

 Underlying

 Unexercised

 Unearned

 Options

 (#)

Option

 Exercise

 Price

 ($)

Option

 Expiration

 Date

 

Number

 of Shares

 or Shares

 of Stock

That

 Have

 Not

 Vested

 (#)

Market

 Value

 of Shares

 or Shares

 of Stock

 That

 Have

 Not

 Vested

 ($)

Equity

 Incentive

 Plan Awards:

 Number of

 Unearned Shares,

 Shares or

 Other

 Rights

 That Have

 Not

 Vested

 (#)

Equity

 Incentive

 Plan Awards:

 Market or

 Payout

 Value of

 Unearned

 Shares,

 Shares or

 Other Rights

 That Have

Not Vested

 (#)

Charles Hazzard

300,000

0

0

$150,000

N/A

 

300,000

0

0

0

Christina Hazzard

300,000

0

0

$150,000

N/A

 

300,000

0

0

0

Andrew Bachman

0

4,000,000

0

$1,200,000

2/24/13

 

0

0

0

0

 



27




Compensation of Directors Table


The table below summarizes all compensation paid to our directors for the fiscal years ended December 31, 2012 and 2011.

 

DIRECTOR COMPENSATION

Name

Fees

Earned

or Paid in

Cash

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)

Non-Equity

Incentive

Plan

Compensation

($)

Non-Qualified

Deferred

Compensation

Earnings

($)

 

All

Other

Compensation

($)

 

 

 

Total

($)

Charles Hazzard

$0

$0

$0

$0

$0

$0

$0

Christina Hazzard

$0

$0

$0

$0

$0

$0

$0

Ronald Smith

$0

$0

$0

$0

$0

$0

$0


Narrative Disclosure to the Director Compensation Table


Our directors do not currently receive any compensation from the Company for their services as members of the Board of Directors of the Company.


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


The following table sets forth, as of December 31, 2011, the beneficial ownership of our common stock by each executive officer and director, by each person known by us to beneficially own more than 5% of the our common stock, and by the executive officers and directors as a group. Except as otherwise indicated, all shares are owned directly and the percentage shown is based on 15,050,000 shares of common stock issued and outstanding on December 31, 2011.

 

Name and Address of

Owner

Title of Class

Number of Shares

Owned

Percentage of Class

Charles Hazzard

Common Stock

2,000,000

13%

Christina Hazzard

Common Stock

8,000,000

53%(1)

(1)

As of February 21, 2013, Ms. Hazzard only has 2,500,000 shares of the Company’s common stock.


As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.


The persons named above have full voting and investment power with respect to the shares indicated. The persons named above were married as of June 2009. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.



28




Item 13. Certain Relationships and Related Transactions and Director Independence


The Company rents approximately 1,000 square feet of executive office space on Ravanusa Drive in Henderson, Nevada. The office space is located in a residential home, which is owned by Fauscom Investment, Ltd., a shareholder of the Company. Concepcion Mabanta, the mother of Christina Hazzard, is the sole shareholder of Fauscom Investment, Ltd.  On April 1, 2012, the Company entered into a new lease with Fauscom Investment Ltd, which began on April 1, 2012, under which the Company leased space for $2,000 per month for a term of one year. The lease included the office space, water, electricity, heat, appliances, window coverings, and parking. The terms of the lease for the executive office space are no more or less favorable than could be obtained with an unaffiliated third party.


Except as noted above, none of the following parties has had, since our date of incorporation, any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:


·

Any of our directors or officers;

·

Any person proposed as a nominee for election as a director;

·

Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock;

·

Any of our promoters;

·

Any relative or spouse of any of the foregoing persons who has the same house address as such person.


Item 14. Principal Accounting Fees and Services


De Joya Griffith, LLC served as our independent registered public accounting firm for fiscal 2012. We paid De Joya Griffith, LLC a total of $12,750 in 2012 for the audit and other services provided by that firm. We paid De Joya Griffith, LLC a total of $9,750 in 2011 for the audit and other services provided by that firm.

 

Audit Fees: This category includes the audit of our annual financial statements, review of financial statements included in our Form S-1 Registration Statement and services that are normally provided by the independent auditors. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. The aggregate fees billed by the independent registered accountants for the period ended December 31, 2012 for professional services for the audit of our financial statements as at December 31, 2012 and for the periods then ended and services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements were $10,750 and $11,750 for 2011 and 2012, respectively.

 

Audit-Related Fees: This category consists of assurance and related services by the independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees." The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC and other accounting consulting. De Joya Griffith, LLC did not perform any audit-related services during 2008.


All Other Fees: This category consists of fees for other miscellaneous items. We did not pay De Joya Griffith, LLC any other fees during 2011 and 2012.

 



29




Item 15. Exhibits, Financial Statement Schedules


The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated.


EXHIBIT NO.

 

DESCRIPTION

2.1

 

Reorganization Agreement dated December 31, 2007 (1)

2.2

 

Amendment One to Reorganization Agreement dated July 11, 2008 (1)

2.3

 

Tenancy Agreement dated March 1, 2008 (1)

3.1

 

Articles of Incorporation and Amendments thereto (1)

3.2

 

Bylaws (1)

10.1

 

Executive Employment Agreement with Andrew Bachman (2)

31.1

 

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

 

Certification of Principal Financial and Accounting 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.


(1)

Incorporated by reference to the Company’s post-effective amendment to the Registration Statement on form S-1 filed on February 14, 2011.

(2)

Incorporated by reference to the Company’s form 8-K filed on April 24, 2012.












30




SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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: April 1, 2013

By:

/s/ Andrew Bachman

 

 

Name:

Titles:

 Andrew Bachman

 President, CEO and Chairman of the Board

 


SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Date: April 1, 2013

By:

/s/ Christina Hazzard

 

 

Name:

Titles:

 Christina Hazzard

 CFO, Principal Financial &

 Accounting Officer and Director.

 

 

 

 

 

Date: April 1, 2013

By:

/s/ Andrew Bachman

 

 

Name:

Titles:

 Andrew Bachman

 President, CEO and Director.

 
















31







GAME PLAN HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS



Table of Contents

 

Report of Independent Registered Public Accounting Firm

F-2

 

 

Balance Sheets as of December 31, 2012 and 2011 (Audited)

F-3

 

 

Statements of Operations and Comprehensive Loss (Audited)

F-4

 

 

Statements of Stockholders’ Equity from March 25, 1999 through December 31, 2012 (Audited)

F-6 ~ F-11

 

 

Statements of Cash Flows (Audited)

F-12 ~ F-13

 

 

Notes to Financial Statements (Audited)

F-14 ~ F-26
















 




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders

Game Plan Holdings, Inc.


We have audited the accompanying balance sheets of Game Plan Holdings, Inc. (A Development Stage Company) (the “Company”) as of December 31, 2012 and 2011 and the related statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2012 and for the period from inception (March 25, 1999) through December 31, 2012. Game Plan Holdings, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Game Plan Holdings, Inc. (A Development Stage Company) as of December 31, 2012 and 2011 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2012 and for the period from inception (March 25, 1999) through December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ De Joya Griffith, LLC

Henderson, Nevada

March 25, 2013





F-1




GAME PLAN HOLDINGS, INC.

(A Development Stage Company)


BALANCE SHEETS

(Audited)


 

 

December 31,

 

December 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

   Cash

 

$

3,453

 

$

43,521

 

   Marketable securities

 

 

1,315

 

 

3,732

 

   Prepaid expenses

 

 

-

 

 

103,646

 

 

 

 

 

 

 

 

 

   Total current assets

 

 

4,768

 

 

150,899

 

Property and equipment, net

 

 

3,141

 

 

6,163

 

Intangible assets

 

 

 

 

 

 

 

   Websites, net

 

 

137,480

 

 

230,172

 

Other assets

 

 

 

 

 

 

 

   Security deposit

 

 

2,300

 

 

2,300

 

 

 

 

 

 

 

 

 

Total assets

 

$

147,689

 

$

389,534

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

   Due to related party

 

$

72,267

 

$

62

 

   Accounts payable and accrued liabilities

 

 

35,907

 

 

8,751

 

 

 

 

 

 

 

 

 

   Total current liabilities

 

 

108,174

 

 

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 December 31,

   2012 and December 31, 2011, respectively.

 

 

15,050

 

 

15,050

 

   Additional paid-in capital

 

 

1,929,972

 

 

1,562,093

 

   Common stock payable

 

 

72,500

 

 

-

 

   Accumulated other comprehensive loss

 

 

1,558

 

 

(23,920)

 

   Deficit accumulated during the development stage

 

 

(1,979,565)

 

 

(1,172,502)

 

 

 

 

 

 

 

 

 

   Total stockholders' equity

 

 

39,515

 

 

380,721

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

147,689

 

$

389,534

 


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



F-2




GAME PLAN HOLDINGS, INC.

(A Development Stage Company)


STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Audited)


 

 

 

 

 

 

From inception

 

 

Year

 

Year

 

(March 25, 1999)

 

 

Ended

 

Ended

 

through

 

 

December 31,

 

December 31,

 

December 31,

 

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

Revenue

 

$

-

 

$

-

 

$

6,608

Operating expenses:

 

 

 

 

 

 

 

 

 

   General and administrative

 

 

124,058

 

 

62,502

 

 

598,058

   Computer and website expenses

 

 

6,932

 

 

26,224

 

 

109,398

   Impairment of website

 

 

17,540

 

 

-

 

 

17,540

   Stock-based compensation

 

 

390,379

 

 

-

 

 

390,379

   Professional fees

 

 

204,172

 

 

165,216

 

 

399,383

   Officers wages

 

 

36,000

 

 

37,000

 

 

524,440

   Total operating expenses

 

 

779,081

 

 

290,942

 

 

2,039,198

Other income (expenses):

 

 

 

 

 

 

 

 

 

Other income

 

 

-

 

 

552

 

 

703

   Gain on sale of marketable securities

 

 

-

 

 

-

 

 

61,718

   Loss on impairment of marketable securities

 

 

(27,896)

 

 

-

 

 

(36,820)

   Interest income

 

 

4

 

 

149

 

 

27,693

   Foreign currency transaction loss

 

 

-

 

 

-

 

 

(5)

   Interest expense

 

 

(90)

 

 

-

 

 

(264)

 

 

 

 

 

 

 

 

 

 

   Total other income (expenses)

 

 

(27,982)

 

 

701

 

 

53,025

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(807,063)

 

$

(290,241)

 

$

(1,979,565)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

   Foreign currency translation adjustments

 

 

-

 

 

-

 

 

1,558

   Unrealized gain (loss) on marketable securities

 

 

-

 

 

338

 

 

-

Other comprehensive income (loss)

 

 

-

 

 

338

 

 

1,558

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

$

(807,063)

 

$

(289,903)

 

$

(2,627,877)

 

 

 

 

 

 

 

 

 

 

   Basic loss per common share

 

$

(0.05)

 

$

(0.02)

 

 

 

   Weighted average

 

 

 

 

 

 

 

 

 

     number of shares outstanding

 

 

15,050,000

 

 

14,343,151

 

 

 



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




F-3



GAME PLAN HOLDINGS, INC.

(A Development Stage Company)


STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD FROM INCEPTION (MARCH 25, 1999) THROUGH DECEMBER 31, 2012

(AUDITED)


 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common Stock

 

Paid-in

 

Subscriptions

 

Common Stock

 

Comprehensive

 

Accumulated

 

 

 

 

Shares

 

Amount

 

Capital

 

Receivable

 

Payable

 

Income (Loss)

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 25, 1999

 

-

 

$  -

 

$  -

 

$  -

 

$  -

 

$  -

 

$  -

 

$  -

Balance, December 31, 1999

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2000

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2001

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Common stock issued to founders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  December 2, 2002

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2002

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2003

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2004

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2005

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Balance, December 31, 2006

 

10,930,000

 

10,930

 

(10,930)

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares issued for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  cash in private placement in Game Plan Holdings, Canada

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  on January 23, 2007

 

8,000,000

 

8,000

 

(7,200)

 

-

 

-

 

-

 

-

 

800

  on January 26, 2007

 

1,200,000

 

1,200

 

-

 

-

 

-

 

-

 

-

 

1,200

  on January 29, 2007

 

500,000

 

500

 

500

 

-

 

-

 

-

 

-

 

1,000

  on February 02, 2007

 

150,000

 

150

 

29,850

 

-

 

-

 

-

 

-

 

30,000

  on February 06, 2007

 

50,000

 

50

 

12,450

 

-

 

-

 

-

 

-

 

12,500

  on February 06, 2007

 

50,000

 

50

 

14,950

 

-

 

-

 

-

 

-

 

15,000

  on February 09, 2007

 

140,000

 

140

 

41,860

 

-

 

-

 

-

 

-

 

42,000

  on February 09, 2007 (canadian)

 

70,000

 

70

 

23,103

 

-

 

-

 

-

 

-

 

23,173

  on February 12, 2007

 

35,000

 

35

 

10,465

 

-

 

-

 

-

 

-

 

10,500

  on March 15, 2007

 

150,000

 

150

 

44,850

 

-

 

-

 

-

 

-

 

45,000

  on March 29, 2007

 

20,000

 

20

 

6,980

 

-

 

-

 

-

 

-

 

7,000

  on April 15, 2007

 

30,000

 

30

 

10,470

 

-

 

-

 

-

 

-

 

10,500

  on April 20, 2007

 

60,000

 

60

 

20,940

 

-

 

-

 

-

 

-

 

21,000

  on April 22, 2007

 

25,000

 

25

 

8,725

 

-

 

-

 

-

 

-

 

8,750

  on May 20, 2007

 

265,000

 

265

 

92,485

 

-

 

-

 

-

 

-

 

92,750

  on June 15, 2007

 

50,000

 

50

 

17,450

 

-

 

-

 

-

 

-

 

17,500

  on July 1, 2007

 

150,000

 

150

 

52,350

 

-

 

-

 

-

 

-

 

52,500

  on November 1, 2007

 

75,000

 

75

 

29,925

 

(30,000)

 

-

 

-

 

-

 

-

  on December 15, 2007

 

50,000

 

50

 

14,950

 

-

 

-

 

-

 

-

 

15,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of 8,450,000 shares related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to reorganization on December 31, 2007

 

(8,450,000)

 

(8,450)

 

8,450

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

(22,505)

 

-

 

(22,505)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Currency Translation

 

-

 

-

 

-

 

-

 

-

 

2,147

 

-

 

2,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

(76,334)

 

(76,334)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2007

 

13,550,000

 

13,550

 

422,623

 

(30,000)

 

-

 

(20,358)

 

(76,334)

 

309,481

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issued for cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  on January 03, 2008

 

-

 

-

 

-

 

30,000

 

-

 

-

 

-

 

30,000

  on February 22, 2008

 

100,000

 

100

 

49,900

 

-

 

-

 

-

 

-

 

50,000

  on March 12, 2008

 

450,000

 

450

 

337,050

 

-

 

-

 

-

 

-

 

337,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

305,940

 

-

 

-

 

-

 

-

 

305,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

-

 

-

 

-

 

-

 

-

 

(5,220)

 

-

 

(5,220)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

(13,595)

 

-

 

(13,595)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

(468,571)

 

(468,571)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2008 (restated)

 

14,100,000

 

14,100

 

1,115,513

 

-

 

-

 

(39,173)

 

(544,905)

 

545,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

-

 

-

 

-

 

-

 

-

 

3,637

 

-

 

3,637

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

108,451

 

-

 

108,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

(162,743)

 

(162,743)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2009

 

14,100,000

 

14,100

 

1,115,513

 

-

 

-

 

72,915

 

(707,648)

 

494,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

-

 

-

 

-

 

-

 

-

 

994

 

-

 

994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

(98,167)

 

-

 

(98,167)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss)

 

-

 

-

 

-

 

-

 

-

 

-

 

(174,613)

 

(174,613)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2010

 

14,100,000

 

14,100

 

1,115,513

 

-

 

-

 

(24,258)

 

(882,261)

 

223,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restrictive shares issued for services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   on July 26, 2011

 

200,000

 

200

 

89,800

 

-

 

-

 

-

 

-

 

90,000

   on October 21, 2011

 

200,000

 

200

 

126,960

 

-

 

-

 

-

 

-

 

127,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restrictive shares issued for asset purchase:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   on October 21, 2011

 

500,000

 

500

 

209,500

 

-

 

-

 

-

 

-

 

210,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued as a referral fee:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on November 28, 2011

 

50,000

 

50

 

18,450

 

-

 

-

 

-

 

-

 

18,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

-

 

-

 

1,870

 

-

 

-

 

-

 

-

 

1,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

338

 

-

 

338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

(290,241)

 

(290,241)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2011

 

15,050,000

 

$15,050

 

$1,562,093

 

$  -

 

$  -

 

$(23,920)

 

$(1,172,502)

 

$380,721

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

-

 

-

 

367,879

 

-

 

-

 

-

 

-

 

367,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in Unrealized Gain/Loss on Securities

 

-

 

-

 

-

 

-

 

-

 

25,478

 

-

 

25,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash received for common stock in private placement

 

-

 

-

 

-

 

-

 

50,000

 

-

 

-

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock Payable for services rendered

 

-

 

-

 

-

 

-

 

22,500

 

-

 

-

 

22,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

-

 

-

 

-

 

-

 

-

 

-

 

(807,063)

 

(807,063)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2012

 

15,050,000

 

$15,050

 

$1,929,972

 

-

 

$72,500

 

$1,558

 

$(1,979,565)

 

$39,515


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



F-4




GAME PLAN HOLDINGS, INC.

(A Development Stage Company)


STATEMENTS OF CASH FLOWS

(Audited)


 

 

 

 

 

 

From inception on

 

 

Year

 

Year

 

(March 25, 1999)

 

 

Ended

 

Ended

 

through

 

 

December 31,

 

December 31,

 

December 31,

 

 

2012

 

2011

 

2012

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

   Net loss

 

$

(807,063)

 

$

(290,241)

 

$

(1,979,565)

   Adjustments to reconcile net loss to net cash used

 

 

 

 

 

 

 

 

 

   in operating activities:

 

 

 

 

 

 

 

 

 

      Depreciation and amortization

 

 

78,174

 

 

18,786

 

 

121,472

      Gain on sale of marketable securities

 

 

-

 

 

-

 

 

(61,718)

      Impairment of marketable securities

 

 

27,895

 

 

-

 

 

36,819

      Impairment of website

 

 

17,540

 

 

-

 

 

17,540

      Stock-based compensation

 

 

390,379

 

 

118,884

 

 

779,320

   Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

      Decrease in prepaid expenses

 

 

103,646

 

 

-

 

 

103,646

      Decrease in related party receivable

 

 

-

 

 

4,255

 

 

2,450

      Increase in other receivable

 

 

-

 

 

(3,500)

 

 

(5,800)

      Decrease in accounts payable and accrued liabilities

 

 

27,156

 

 

5,159

 

 

71,790

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(162,273)

 

 

(146,657)

 

 

(914,046)

 

 

 

 

 

 

 

 

 

 

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

 

 

-

 

 

(6,315)

 

 

(34,500)

   Purchase of fixed assets

 

 

-

 

 

(1,836)

 

 

(16,633)

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

(8,150)

 

 

(28,849)

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

   Advances from related party

 

 

90,705

 

 

(1,102)

 

 

90,767

   Payments on related party advances

 

 

(18,500)

 

 

-

 

 

(18,500)

   Proceeds from sale of common stock

 

 

50,000

 

 

-

 

 

873,673

 

 

 

 

 

 

 

 

 

 

Cash provided by financing activities

 

 

122,205

 

 

(1,102)

 

 

945,940

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash

 

 

(40,068)

 

 

(155,909)

 

 

3,045

   Effect of foreign currency translation adjustment

 

 

-

 

 

-

 

 

408

Cash, beginning of period

 

 

43,521

 

 

199,430

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash, end of period

 

$

3,453

 

$

43,521

 

$

3,453

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

   Interest paid

 

$

-

 

$

-

 

$

139

   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

 

$

7,824

   Shares issued for prepaid consulting fees

 

$

-

 

$

92,322

 

$

92,322

   Shares issued for intangible asset

 

$

-

 

$

228,500

 

$

228,500


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



F-5




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.


On September 13, 2011, the Company 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, the Company acquired the website www.checkinsave.com (“CheckinSave”), a social networking website where 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. The points can be redeemed for discount coupons and deals at various registered venues. The site launched on September 15, 2011.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES


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.



F-6




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.


Income Taxes


The Company accounts for its income taxes in accordance with ASC No. 740, "Income Taxes". Under Statement 740, a liability method is used whereby deferred tax assets and liabilities are determined based on temporary differences between basis used for financial reporting and income tax reporting purposes. Income taxes are provided based on tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not, that the Company will not realize the tax assets through future operations. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward.


Revenue and Cost Recognition


The Company recognizes revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the related fee is reasonably assured.


Advertising


The Company expenses advertising as incurred. In 2012 and 2011, respectively, advertising expenses were $1,096 and $1,872.


Website


The Company officially launched its website on February 5, 2008 and capitalized the costs associated with its development until placed in service. The Company’s capitalized website costs in 2009 and 2008 were $17,445. The website is amortized over an estimated useful life of 3 years. Amortization expense was $0 and $485 for the years ended 2012 and 2011, respectively.





F-7




The company is developing a new website design. The costs incurred for 2012 and 2011, respectively is $0 and $6,800. These development costs have been capitalized and will be amortized over an estimated useful life of 3 years when the website is placed in service. During the year ended December 31, 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 outlook for these two websites was zero. Accordingly, the Company performed and impairment assessment on these two assets. The preliminary assessment, based upon undiscounted cash flows, indicated that these assets were impaired. The Company recorded a $17,540 impairment charge during the year ended December 31, 2012.


On October 21, 2011 the Company purchased and launched the website www.checkinsave.com. The Company purchased the website for 500,000 shares of restricted stock valued at $210,000 ($0.42 per share) and issued 50,000 shares of common stock valued at $18,500 ($0.37 per share) as a referral fee. The website is amortized over an estimated useful life of 3 years. Amortization expense was $76,167 and $15,868 for the years ended 2012 and 2011, respectively.


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.


Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of December 31, 2011 and 2010 as follows:

 



F-8




 

 

Fair Value Measurements as of December 31, 2012 Using:

 

 

Total Carrying

Value as of

 

 

Quoted Market

Prices in Active

Markets

 

 

Significant Other

Observable Inputs

 

 

Significant

Unobservable Inputs

 

 

12/31/12

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Equity securities

$

1,315

 

$

1,315

 

$

0

 

$

0

Total

$

1,315

 

$

1,315

 

$

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

 

 

12/31/11

 

 

(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 years

Software

 

3 years

Office Furniture

 

7 years


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.


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.




F-9




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 presentation. The reclassification had no effect on previously reported total operating expenses, results of operations, or retained earnings.


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.


ASC 505, "Compensation-Stock Compensation", establishes standards for the accounting for transactions in which an entity exchanges its equity instruments to non-employees for goods or services. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 505.


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.





F-10




Recent Accounting Pronouncements


The Company has evaluated recent accounting pronouncements through ASU 2013-05 and believes those listed below may impact the Company’s financial statements.


In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update 2011-04 (ASU 2010-04), Fair Value Measurement (Topic 820), which amends the fair value measurement guidance and includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements based on unobservable inputs. The standard is effective for the fiscal years beginning after December 15, 2011. The adoption of this update will not have a material effect on the Company’s financial position, results of operations or cash flows.


In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220), which eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. Instead, an entity will be required to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. The standard is effective for fiscal years beginning after December 15, 2011. The adoption of this update will not have a material effect on the Company’s financial position, results of operations or cash flows.


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 the 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 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 test 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.


In February 2013, the FASB issued authoritative guidance on the reporting of reclassifications out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012, with early adoption permitted. The adoption of this guidance did not have a material effect on the Company’s financial condition, 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 $1,979,565 for the period from inception (March 25, 1999) to December 31, 2012. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.



F-11




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.  During the year ended December 31, 2012, the Company recorded an impairment charge of $27,896 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 “Loss on impairment of marketable securities” in the statements of operations are $27,896 and $0 impairments for the years ended December 31, 2012 and 2011, respectively. The Company did not sell any marketable securities during the year ended December 31, 2012. The Company recorded $0 and $338 of other comprehensive income (loss) associated with unrealized gains (losses), net of tax effect, on these investments during the years ended December 31, 2012 and 2011, respectively.


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

 

 

December 31, 2012

 

 

Cost

 

 

Unrealized

Gain

 

 

Unrealized

(Losses)

 

 

Market or

Fair Value

Equity securities

$

29,210

 

$

0

 

$

(27,895)

 

$

1,315

Total

$

29,210

 

$

0

 

$

(27,895)

 

$

1,315

 

 

 

 

 

December 31, 2011

 

 

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




F-12




The following is a summary of unrealized gains and losses as presented in Other Comprehensive Income as of December 31, 2012 and 2011:

 

 

December 31, 2012

 

 

 

 

 

Unrealized

 

 

Unrealized

 

 

Other

 

 

Unrealized

 

 

(Losses)

 

 

(Losses)

 

 

Comprehensive

Description

 

Gains

 

 

Short Term

 

 

Long Term

 

 

Income (Loss)

Equity Securities

$

0

 

$

0

 

$

0

 

$

0

Total

$

0

 

$

0

 

$

0

 

$

0

 

 

 

 

 

December 31, 2011

 

 

 

 

 

Unrealized

 

 

Unrealized

 

 

Other

 

 

Unrealized

 

 

(Losses)

 

 

(Losses)

 

 

Comprehensive

Description

 

Gains

 

 

Short Term

 

 

Long Term

 

 

Income (Loss)

Equity Securities

$

1,882

 

$

0

 

$

(1,544)

 

$

338

Total

$

1,882

 

$

0

 

$

(1,544)

 

$

338


The following is a summary of the loss from impairment of marketable securities and the gains or losses reclassified from Other Comprehensive Income (OCI) as of December 31, 2012:

 

 

December 31, 2012

 

 

Proceeds

 

 

Gross

 

 

Gross

 

 

Gain or (Loss)

 

 

From

 

 

Realized

 

 

Impairment

 

 

Reclassified

Description

 

Sales

 

 

Gains

 

 

(Losses)

 

 

From O.C.I.

Equity Securities

$

0

 

$

0

 

$

(27,895)

 

$

(27,895)

Total

$

0

 

$

0

 

$

(27,895)

 

$

(27,895)


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.



NOTE 5 - PROPERTY AND EQUIPMENT


 

December 31,

 

2012

2011

 

 

 

Computers

$ 12,713

$ 12,713

Furniture & fixtures

3,472

3,472

Software

449

449

Accumulated depreciation

(13,494)

(10,021)

 

 

 

Property and equipment, net

$ 3,141

$ 6,163




F-13




Depreciation expense was $3,022 and $2,918 for the years ending December 31, 2012 and 2011, respectively.



NOTE 6 - INTANGIBLE ASSETS


During the year ended December 31, 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 outlook for these two websites was zero. Accordingly, the Company performed and impairment assessment on these two assets. The preliminary assessment, based upon undiscounted cash flows, indicated that these assets were impaired. The Company recorded a $17,540 impairment charge during the year ended December 31, 2012.


The following is a summary of intangible assets as of December 31, 2012 and December 31, 2011:

 

 

 

December 31, 2012

 

December 31, 2011

Intangible assets

 

 

 

 

  Website (CheckinSave.com)

 

$ 228,500

 

$ 228,500

  Website other (HazzSports.com and TotalScout.com)

 

-

 

34,985

  Accumulated depreciation

 

(91,020)

 

(33,313)

  Website, net

 

$ 137,480

 

$ 230,172


Amortization expense was $75,152 and $15,868 for the year ended December 31, 2012 and 2011, respectively.



NOTE 7 - INCOME TAX


As of December 31, 2012, the Company had net operating loss carry forwards of $1,007,291 that may be available to reduce future years’ taxable income through 2028 to 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.


Components of net deferred tax assets, including a valuation allowance, are as follows at December 31, 2012 and 2011:


Deferred tax assets:

2012

2011

Net operating loss carryforward

$ 1,007,291

$ 646,004

 

 

 

Total deferred tax assets

$ 352,552

$ 226,101

Less: Valuation allowance

(352,552)

(226,101)

Net deferred tax assets

$ -

$ -





F-14




The valuation allowance for deferred tax assets as of December 30, 2012 was $352,552. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2012.



NOTE 8 - RELATED PARTY TRANSACTIONS


At December 31, 2012, the Company owed a shareholder/director $72,267 for reimbursement company expenses paid for by the shareholder/director on behalf of the Company.


During the year ended December 31, 2012, the Company recorded a stock payable in the amount of $22,500 for compensation to the Company’s CFO.


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.


At December 31, 2010, the Company had a related party receivable of $4,255 for a loan to a relative of one of the shareholders. This related party receivable was collected by the Company during the year ended December 31, 2011.


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.



NOTE 9 - STOCKHOLDERS’ EQUITY


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


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


On July 26, 2011, the Company issued 200,000 shares of restricted common stock for services valued at $90,000 ($0.45 per share). The shares were valued at fair market value on July 26, 2011, the agreement date.


On September 22, 2011, the Company issued 300,000 warrants for services valued at $53,160. Each warrant is convertible into one share of common stock at an exercise price of $0.45. All warrants are fully vested and are exercisable at any time up to and including January 1, 2015. As of December 31, 2011, no warrants have been exercised. The fair value of these warrants was estimated at the grant date using Black-Scholes Option Pricing Model with current value of the stock at $0.37; dividend yield of 0%; risk-free interest rate of 0.34% (3 year Treasury Note rate at the issue date); volatility rate of 78.94%; and expiration date of 3.25 years.



F-15




On October 15, 2011, the Company issued 200,000 shares of common stock in satisfaction of a subscription payable for services valued at $74,000 ($0.37 per share). The shares were valued at fair market value on September 22, 2011, the agreement date.


On October 21, 2011 the Company issued 500,000 shares of common stock for the purchase of www.checkinsave.com valued at $210,000 ($0.42 per share). The shares were valued at fair market value on September 13, 2011, the agreement date.


On November 28, 2011 the Company issued 50,000 shares of common stock as payment of a referral fee valued at $19,450 ($0.39 per share). The shares were valued at fair market value on November 28, 2011, the agreement date.


During the year ended December 31, 2012, the Company recorded a stock payable in the amount of $22,500 for compensation to the Company’s CFO. As of December 31, 2012, these shares have not been issued and are reflected within the financial statements as a stock payable.


During the year ended December 31, 2012, the Company received $50,000 cash as payment for shares issued in a private placement agreement. As of December 31, 2012, the shares have not been issued and the Company has recorded a stock payable in the amount of $50,000.



NOTE 10 - STOCK OPTIONS


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 $1,870 was recorded as a stock based compensation expense in fiscal 2011.




F-16




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 options were not issued as part of the Company’s 2008 Stock Option Plan. 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.


The Company’s stock option activity for the years ended December 31, 2012 and 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, December 31, 2012

4,800,000

$ 0.33

1.17



NOTE 11 - OPERATING LEASES


The Company has a lease for its office rent. The payment is $2,300 per month through March 30, 2011. A new lease began on April 1, 2011 and ended on March 31, 2012. This lease was extended for an additional one year ending March 31, 2013. The payment is $2,000 per month for the new lease terms. Rent expense for the years ending December 31, 2012 and 2011 was $24,000 and $24,900, respectively.



NOTE 12 - SUBSEQUENT EVENT


As of February 7, 2013, the Company entered into an intellectual property purchase agreement (the “IP Agreement”) with Sportingblood Nutrition, LLC, a Delaware limited liability company (“Sportingblood”) for the acquisition of all right, title and interest in the Sporting Blood trademark and certain product formulations (the “Intellectual Property”). Pursuant to the IP Agreement, the Company issued 11,000,000 shares of common stock to Sportingblood.




F-17




Proceeding forward, the Company intends to minimize or eliminate its efforts in the social media website spaces and focus on its entry into the nutritional supplements industry with the Sportingblood line of nutritional supplements, which are specially formulated to be NSF Certified to ensure they do not include banned substances for athletes.


On February 13, 2013, the Company issued 100,000 units for a cash payment of $10,000. Each Unit consists of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.25 per share for a period of three years from the date of issuance.


On February 14, 2013, the Company issued 3,500,000 units for a cash payment of $350,000. Each Unit consists of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.25 per share for a period of three years from the date of issuance.


On February 21, 2013, the Company issued 100,000 units for a cash payment of $10,000. Each Unit consists of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.25 per share for a period of three years from the date of issuance.


On February 25, 2013, the Company issued 2,300,000 units for a cash payment of $230,000. Each Unit consists of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.25 per share for a period of three years from the date of issuance.


Therefore, as of February 25, 2013, the Company has a total of 32,050,000 shares of common stock issued and outstanding.


On February 27, 2013, 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 2,600,000 options to acquire common shares with terms of up to 5 years for an exercise price of $0.25 per share. Options must be exercised within 3 years from the last vesting date of the Option. In the event the Company commences an Initial Public Offering or the sale of substantially all of its assets or the sale of at least 75% of the common stock in a single transaction, then 100% of the remaining unexercised Options will immediately vest and become exercisable by the optionee. 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 of March 1, 2013, Charles Hazzard is no longer Chief Executive Officer, but was appointed as Executive Vice President. Andrew Bachman accepted appointment as Chief Executive Officer and Chairman of the Board of Directors, Ronald Smith and Christina Hazzard resigned from the Board of Directors, and James Dingman, age 39, accepted appointment to the Board of Directors.






F-18