CITRINE GLOBAL, CORP. - Annual Report: 2011 (Form 10-K)

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

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

PROGAMING PLATFORMS CORP.
(Exact name of Registrant as specified in its charter)
Delaware		98-0663823
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
60 Mazeh Street, Apartment 12, Tel Aviv, Israel		65789
(Address of principal executive offices)		(Zip Code)
+ 972 (54) 2229702
(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:
N/A		N/A
Title of each class		Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Act:
Shares of Common Stock, $0.0001 par value
Title of Class

 

 

 

 

·	risks related to our ability to continue as a going concern;

·	the uncertainty of profitability based upon our history of losses;

·	risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned development projects;

·	risks related to our ability to continue to fund research and development costs;

·	risks related to conducting business internationally due to our operations in Israel;

·	risks related to our ability to successfully develop our technology into commercial products,

·	risks related to our ability to successfully prosecute and protect our intellectual property;

·	risks related to tax assessments; and

·	other risks and uncertainties related to our prospects, properties, and business strategy.

 

 

 

 

 

We have designed our online gaming platform to allow online game service providers to protect novice gamers from entering games with high stakes by restricting such gamers to low entry amount games with players of their own level. Our online gaming platform is capable of creating a statistical gamer rank data file on each participating gamer and, based on rank, will allow him to enter games up to his maximum allowed amount. The software we have developed has the ability to detect if any gamer tries to abuse the level system by opening an account with a new name by ranking him according to his actual game performance.

 

To our knowledge, there are no other online gaming platforms that allow the kind of competitive online gaming that is capable of being offered by our online gaming platform, namely, an online gaming platform that can provide independent and objective results determination without the need for any self-reporting.

	·	Our business model is based on the successful and operating business model employed by the online gambling industry, even though our platform will be designed to host rings of paying members who stand to win rewards in online games of skill such as chess or checker games.
	·	The “reward for winning” model that we intend to follow offers an adrenalin rush to experienced online players looking for new thrills.
	·	Our system and technology will operate independently from user feedback, and all the reports and scores will be generated from the server itself, thus removing the possibility of fraud by or disputes between users.

 

Research and Development Activities and Costs

 

The success of our business is dependent on our ability to develop successfully our online gaming platform, and to secure licensing agreements with existing online game service providers in the United States. Our ability to achieve these goals is unproven, and the lack of operating history makes it difficult to validate our business plan. In addition, the success of our business plan is dependent upon acceptance of our platform by the online gaming community. Should the target market not be as responsive as we anticipate, we will not have in place alternate services or products that we can offer to ensure our continuing as a going concern.

We have a history of operating losses and we may not achieve future revenues or operating profits.

 

 

We have a going concern note indicating the possibility that we may not be able to continue to operate.

We have a limited operating history on which investors may evaluate our operations and prospects for profitable operations.

Our business plan may be unsuccessful.

Our officers have no experience in operating an online gaming platform.

Our executive officers and directors have significant voting power and may take actions that may be different than actions sought by our other stockholders.

Our officers and directors are located in Israel and our assets may also be held from time to time outside of the United States.

 

Since all of our officers and directors are located in Israel, any attempt to enforce liabilities upon such individuals under the U.S. securities and bankruptcy laws may be difficult.

•

the judgment was rendered by a court which was, according to the laws of the State in which the court is located, competent to render the judgment;

•

the judgment may no longer be appealed;

•

the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and

•

the judgment is executory in the State in which it was given.

•

the judgment was obtained by fraud;

•

there is a finding of lack of due process;

•

the judgment was rendered by a court not competent to render it according to the laws of private international law in Israel;

•

the judgment is in conflict with another judgment that was given in the same matter between the same parties and that is still valid; or

•

the time the action was instituted in the foreign court, a suit in the same matter and between the same parties was pending before a court or tribunal in Israel.

We may not be able to raise the required capital to conduct our operations and develop and commercialize our product.

 

If we continue to suffer losses, investors may not receive any return on their investment and may lose their entire investment. Our prospects must be considered speculative in light of the risks, expenses, and difficulties frequently encountered by companies in their early stages of development, particularly in light of the uncertainties relating to the new, competitive and rapidly evolving markets in which we anticipate we will operate. To attempt to address these risks, we must, among other things, further develop our technology and product, successfully implement our development, marketing and commercialization strategies, respond to competitive developments, and attract, retain, and motivate qualified personnel. A substantial risk is involved in investing in us because, as an early stage company we have fewer resources than an established company, our management may be more likely to make mistakes at such an early stage, and we may be more vulnerable operationally and financially to any mistakes that may be made as well as to external factors beyond our control.

Our lack of business diversification could result in the loss of your investment if revenues from our primary product decrease.

We need to retain key personnel to support our activities and ongoing operations, and a loss of certain key personnel could significantly hinder our ability to move forward with our business plan.

Since our officers and Directors may work or consult for other companies, their other activities could slow down our operations.

The commercialization of our online gaming platform will be delayed if third parties fail to enter into licensing agreements with us.

 

We depend on market acceptance of our online gaming platform. If our platform does not gain market acceptance, our ability to compete will be adversely affected.

We are a small company with limited resources compared to some of our current and potential competitors and we may not be able to compete effectively and increase market share.

Failure to meet customers’ expectations or deliver expected performance could result in losses and negative publicity, which would harm our business.

 

We may lose licensees if we experience system failures that significantly disrupt the availability and quality of our online gaming platform.

The online gaming market is subject to rapid technological change.

 

 

•

Identifying and responding to market demand for new products and services;

•

Keeping abreast of technological changes;

•

Timely developing and implementing new product/service offerings and features;

•

Maintaining quality of performance;

•

Providing cost-effective service and support; and

•

Promoting our products and services and expanding our market share.

If a third party asserts that we infringe upon its proprietary rights, we could be required to redesign our product, pay significant royalties, or enter into license agreements.

•	Be expensive and time-consuming to defend;
•	Result in negative publicity;
•	Force us to stop operating our platform;
•	Divert management’s attention and our other resources; or
•	Require us to enter into royalty or licensing agreements in order to obtain the right to operate our platform, which right may not be available on terms acceptable to us, if at all.

Our online gaming platform will employ proprietary technology, which will be difficult to protect.

•	some foreign countries may not protect our proprietary rights as fully as do the laws of the United States;
•	if a competitor were to infringe on our proprietary rights, enforcing our rights may be time consuming and costly, diverting management’s attention and our resources;
•	measures like entering into non-disclosure and non-competition agreements afford only limited protection;
•	unauthorized and/or unidentifiable parties may attempt to copy aspects of our products and develop similar software or to obtain and use information that we regard as proprietary; and
•	our competitors may be able to design around our intellectual property rights or independently develop products that are substantially equivalent or superior to our products.

 

We face risks related to compliance with corporate governance laws and financial reporting standards.

We may not have effective internal controls.

Our online gaming platform may be subject to government regulation, and failure to comply with applicable regulations could result in fines, suspensions, seizure actions, injunctions and criminal prosecutions.

Future regulation of online gaming could restrict our business, prevent us or our licensees from operating our platform, and/or increase our cost of doing business.

 

 

For the Fiscal Year Ended December 31, 2011
For the Quarter ended		High				Low
March 31			-				-
June 30			-				-
September 30		$	0.23			$	0.23
December 31		$	0.13			$	0.13

 

 

 

 

 

 

	•	Securing licensing agreements with online game service providers in the United States who, as part of the services offered by such online game service providers, will offer their member players the opportunity to utilize our online gaming platform to play games of skill.
	•	Advertising our online gaming platform online on gamers’ portals, blogs and forums with a view to achieving maximum exposure to the online gaming community.
	•	Hosting annual public relations events to raise awareness of our online gaming platform and the opportunity it offers to online game service providers to expand their business.

 

 

Our ability to create sufficient working capital to sustain us over the next twelve month period, and beyond, is dependent on our entering into additional licensing agreement and on our success in issuing additional debt or equity, or entering into strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

 

ITEM 7A.             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

		December 31,
ASSETS		2011				2010
						Restated
Current Assets:
Cash and cash equivalents		$	110,847			$	68,868
Restricted cash			3,940				-
Prepaid expenses and other receivables			229				1,460
Total current assets			115,016				70,328
Property and Equipment, net			801
Total Assets		$	115,817			$	70,328
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and other current liabilities		$	24,640			$	7,644
Related parties payable			33,000				-
Deferred revenues			5,800				-
Total current liabilities			63,440				7,644
Long-term deferred revenues			20,292				-
Total liabilities			83,732				7,644
Commitments and Contingencies			-				-
Stockholders' Equity:
Common stock, par value $0.0001 per share, 500,000,000 shares
authorized; 50,400,000 and 50,000,000 shares issued and
outstanding at December 31, 2011 and 2010			504				500
Stock subscription receivable			(300	)			(300	)
Additional paid-in capital (net of offering costs)			133,882				93,886
Accumulated deficit			(102,001	)			(31,402	)
Total stockholders' equity			32,085				62,684
Total Liabilities and Stockholders' Equity		$	115,817			$	70,328

 

 

										For the
							For the period from			period from
		For the Year Ended					inception to			inception to
		December 31,					December 31,			December 31,
		2011					2010			2011
							Restated
Revenues, net		$	92,908			$	-			$	92,908
Expenses:
Research and development			50,026				17,100				67,126
Selling, general and administrative			104,685			$	14,302				118,987
Total operating expenses			154,711				31,402				186,113
(Loss) from Operations			(61,803	)			(31,402	)			(93,205	)
Financial expense			(8,796	)			-				(8,796	)
Net (loss)		$	(70,599	)			(31,402	)			(102,001	)
(Loss) Per Common Share:
(Loss) per common share - Basic and Diluted		$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Shares
Outstanding - Basic and Diluted			50,280,137				29,363,636

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

 

 

										Additional				Common
		Common stock								Paid-in				Stock				Accumulated
		Shares				Amount				Capital				Subscriptions				(Deficit)				Totals
Balance as of inception (May 26, 2010)
Common stock issued for cash			50,000,000			$	500			$	76,786			$	(300	)		-				$	76,986
Contribution  of services  from shareholder			-				-				17,100				-			-					17,100
Net (Loss) for the period (Restated)			-				-				-				-				(31,402	)			(31,402	)
Balance as of December 31, 2010 (Restated)			50,000,000				500				93,886				(300	)			(14,302	)			62,684
Common stock issued for cash			400,000				4				39,996												40,000
Net (Loss) for the year																			(70,599	)			(70,599	)
Balance as of December 31, 2011			50,400,000			$	504			$	133,882			$	(300	)		$	(102,001	)		$	32,085

 

 

 

 

PROGAMING PLATFORMS CORP.

Basis of Presentation and Organization

 

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

		%
Computers and electronic equipment			33

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2011
						Quoted Prices in Active				Significant Other				Significant
						Markets for Identical Assets				Observable Inputs				Unobservable Inputs
		Total				(Level 1)				(Level 2)				(Level 3)
Cash and cash equivalents		$	110,847			$	110,847			$	-			$	-
Restricted cash			3,940				3,940				-				-
Total assets at fair value		$	114,787			$	114,787			$	-			$	-

Fair Value Measurements at December 31, 2010
						Quoted Prices in Active				Significant Other				Significant
						Markets for Identical Assets				Observable Inputs				Unobservable Inputs
		Total				(Level 1)				(Level 2)				(Level 3)
Cash and cash equivalents		$	68,868			$	68,868			$	-			$	-
Total assets at fair value		$	68,868			$	68,868			$	-			$	-

 

 

The Company commenced a capital formation activity by filing a Registration Statement on Form S-1 with the SEC (the "Registration Statement") to register and sell in a self-directed offering 2,000,000 shares of newly issued common stock at an offering price of $0.05 per share for proceeds of up to $100,000. The aforementioned registration statement was approved by the SEC, with an effective date of October 25, 2010 and the shares registered pursuant to this Registration Statement were sold by the Company as described in Note 3 below.

 

 

The provision (benefit) for income taxes for the year ended December 31, 2011 and the period from inception to December 31, 2010, was as follows (assuming a 23% effective tax rate):

		2011				2010
Current tax provision:
Federal-
Taxable income		$	-			$	-
Total current tax provision		$	-			$	-
Deferred tax provision
Federal-
Loss carryforwards		$	16,238			$	3,290
Change in valuation allowance			(16,238	)			(3,290	)
		$	-			$	-

		2011				2010
Loss carryforwards		$	16,238			$	3,290
Less- Valuation allowance			(16,238	)			(3,290	)
Total net deferred tax assets		$	-			$	-