Digital Brand Media & Marketing Group, Inc. - Quarter Report: 2008 November (Form 10-Q)

rtg_10q-113008.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended: November 30, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from ________ to ________

Commission file number: 333-85072

RTG VENTURES, INC.

(Exact name of small business issuer as specified in its charter)

Florida		59-3666743
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

c/o Paykin & Krieg, LLP 185 Madison Avenue New York, NY 10016

(Address of principal executive offices)

(917) 488-6473

(Issuer's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, or non-accelerated filer.

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

Indicate by check mark whether the registrant has filed all the documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes[X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 123,818,885 shares of Common Stock, par value $.001 per share, as of January 15, 2009.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X].

RTG VENTURES, INC. AND SUBSIDIARY

(A Developmental Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2008

(Unaudited)

INDEX

	Page No.
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Financial Statements (Unaudited)	3
Balance Sheets	3
Statements of Operations	4
Statement of Stockholders' Deficit	5
Statements of Cash Flows	6
Notes to Unaudited Consolidated Financial Statements	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures About Market Risk	13
Item 4T. Controls and Procedures	14

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	14
Item 1A. Risk Factors	14
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	14
Item 3. Defaults Upon Senior Securities	14
Item 4. Submission of Matters to a Vote of Security Holders	14
Item 5. Other Information	14
Item 6. Exhibits	14
SIGNATURES	15

RTG VENTURES, INC. AND SUBSIDIARY

(A Developmental Stage Company)

CONSOLIDATED BALANCE SHEETS

	November 30,			August 31,
	2008			2008
	(Unaudited)
ASSETS

CURRENT ASSETS - CASH	$	70		$	70

TOTAL	$	70		$	70

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	764,782		$	773,447
Notes payable		25,000			25,000

TOTAL CURRENT LIABILITIES		789,782			798,447

STOCKHOLDERS' DEFICIT
Preferred stock, par value .001;
authorized 2,000,000 shares, issued - none		-			-
Common stock, par value .001; authorized 200,000,000 shares;
123,818,885 and 118,818,885 shares issued and outstanding, respectively		123,819			118,819
Additional paid in capital		4,866,750			4,694,250
Deficit accumulated during development stage		(5,780,281	)		(5,611,446	)

TOTAL STOCKHOLDERS' DEFICIT		(789,712	)		(798,377	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	70		$	70

See notes to unaudited consolidated financial statements.

RTG VENTURES, INC. AND SUBSIDIARY

(A Developmental Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended November 30,						Cumulative From July 17, 2000 (Inception) To
	2008			2007			November 30, 2008

REVENUES	$	-		$	-		$	-

COSTS AND EXPENSES:
General and administrative		158,335			127,364			4,384,885
Impairment of intangibles		-			-			26,475
Interest expense		10,500			-			915,000
Merger and acquisition costs		-			-			634,751

LOSS BEFORE OTHER INCOME		(168,835	)		(127,364	)		(5,961,111	)

OTHER INCOME - FORGIVENESS OF DEBT		-			-			180,830

NET LOSS	$	(168,835	)	$	(127,364	)	$	(5,780,281	)

NET LOSS PER SHARE:
Basic and Diluted	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF SHARES:
Basic and Diluted		123,818,885			118,818,885

See notes to unaudited consolidated financial statements.

RTG VENTURES INC AND SUBSIDIARY

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

(Unaudited)

	Common Stock									Deficit Accumulated			Total
	Shares			Amount			Additional Paid in Capital			During Stage			Stockholders' Deficit
				(Restated)
Balance, July 17, 2000 to May 31, 2002		5,208,000		$	5,208		$	-		$	-		$	5,208
Issuance of common stock for services		500,000			500			-			-			500
Reverse acquisition of RTG		22,750,000			22,750			84,656			-			107,406
Shares issued for certain intangible rights		3,725,000			3,725			-			-			3,725
Value of stock options / warrants issued		-			-			4,500			-			4,500
Exchange of MJWC pre-merger shares for shares in the company		(500,000	)		(500	)		-			-			(500	)
Net loss		-			-			-			(786,573	)		(786,573	)
Balance, May 31, 2003		31,683,000			31,683			89,156			(786,573	)		(665,734	)
Issuance of common stock for services		450,000			450			4,050			-			4,500
Net loss		-			-			-			(227,500	)		(227,500	)
Balance, August 31, 2003		32,133,000			32,133			93,206			(1,014,073	)		(888,734	)
Issuance of common stock for services		500,000			500			239,500			-			240,000
Shares issued for exercise of options and warrants		3,500,000			3,500			611,500			-			615,000
Value of stock options issued		-			-			1,078,000			-			1,078,000
Shares issued for payment of accounts payable and services		2,100,000			2,100			634,900			-			637,000
Net loss		-			-			-			(2,435,303	)		(2,435,303	)
Balance, August 31, 2004		38,233,000			38,233			2,657,106			(3,449,376	)		(754,037	)
Capital contribution								13,500						13,500
Shares issued for payment of accounts payable and services		65,935,885			65,936			1,037,781			-			1,103,717
Shares cancelled		(300,000	)		(300	)		(89,700	)		-			(90,000	)
Shares issued for exercise of options and warrant		2,450,000			2,450			58,000			-			60,450
Interest expense		-			-			100,000			-			100,000
Net loss		-			-			-			(618,697	)		(618,697	)
Balance, August 31, 2005		106,318,885			106,319			3,776,687			(4,068,073	)		(185,067	)
Capital contribution		-			-			8,000			-			8,000
Value of stock options granted		-			-			6,123			-			6,123
Net loss		-			-			-			(133,836	)		(133,836	)
Balance, August 31, 2006		106,318,885			106,319			3,790,810			(4,201,909	)		(304,780	)
Shares issued for payment of interest expense		-			-			650,000			-			650,000
Shares issued for exercise of options		2,500,000			2,500			-			-			2,500
Shares issued for conversion of debentures		10,000,000			10,000			90,000			-			100,000
Net loss		-			-			-			(1,019,464	)		(1,019,464	)
Balance, August 31, 2007		118,818,885			118,819			4,530,810			(5,221,373	)		(571,744	)
Share based compensation		-			-			33,500			-			33,500
Extinguishment of debt		-			-			129,940			-			129,940
Net loss		-			-			-			(390,073	)		(390,073	)
Balance, August 31, 2008		118,818,885			118,819			4,694,250			(5,611,446	)		(798,377	)
Share based compensation		-			-			50,000			-			50,000
Shares issued for exercise of options		5,000,000			5,000			122,500			-			127,500
Net loss		-			-			-			(168,835	)		(168,835	)
Balance, November 30, 2008		123,818,885		$	123,819		$	4,866,750		$	(5,780,281	)	$	(789,712	)

See notes to unaudited consolidated financial statements.

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended November 30,						Cumulative From July 17, 2000 (Inception) To
	2008			2007			November 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(168,835	)	$	(127,364	)	$	(5,780,281	)

Adjustments to reconcile net loss to
net cash used in operating activities:
Stock based compensation		126,250			33,500			2,368,373
Impairment of intangibles		-			-			26,475
Shares issued in payment of interest expense		-			-			750,000
Other income		-			-			(146,044	)
Changes in assets and liabilities:
Notes receivable		-			-			88,178
Refundable income taxes		-			-			2,257
Accounts payable and accrued expenses		32,085			93,864			2,404,172
Accrued interest		10,500			-			10,500
Total adjustments		168,835			127,364			5,503,911
NET CASH USED IN OPERATING ACTIVITIES		-			-			(276,370	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable		-			-			254,940
Capital contribution		-			-			21,500
NET CASH PROVIDED BY FINANCING ACTIVITIES		-			-			276,440

INCREASE IN CASH		-			-			70

CASH - BEGINNING OF PERIOD		70			342			-

CASH - END OF PERIOD	$	70		$	342		$	(49,930	)

CASH PAID FOR :
Interest	$	-		$	-		$	-
Taxes	$	-		$	-		$	-
Supplemental Cash Flow Information:
Non-Cash Investing and Financing Activities
Adjustment to additional paid in capital to record extinguishment of note payable	$	-		$	-		$	129,940
Common stock issued for payment of accounts and loans payable	$	-		$	-		$	1,525,217
Proceeds from exercise of option and warrants offset in payment of accounts payable	$	127,500		$	-		$	805,450
Acquisition of intangibles for common stock	$	-		$	-		$	26,475

See notes to unaudited consolidated financial statements.

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - NATURE OF BUSINESS

RTG Ventures, Inc. ("RTG" or the "Company") was incorporated in the state of Florida in September 1998 and was inactive until May 2003 when it acquired 100% of the outstanding common stock of MJWC, Inc. ("MJWC"), a British Virgin Island corporation, which is in the development stage.

MJWC was formed on July 17, 2000 and holds the contractual rights to promote and organize the Chinese Poker Championship, the Mah Jong Championship, and Chinese Chess Championship. On May 21, 2003 MJWC was acquired by RTG for 22,750,000 shares of RTG stock (the "Exchange"). The Exchange was completed pursuant to the Agreement and Plan of Reorganization between MJWC and RTG. The Exchange has been accounted for as a reverse acquisition under the purchase method for business combinations. Accordingly, the combination of the two companies was recorded as a recapitalization of MJWC, pursuant to which MJWC is treated as the continuing entity.

Effective August 27, 2003 the Company changed their fiscal year end from May 31 to August 31.

On May 22, 2003, the Company increased the number of authorized shares of common stock from 20,000,000 to 50,000,000.

On November 18, 2004, the Company increased the number of authorized shares of common stock from 50,000,000 to 100,000,000.

On August 12, 2005, the Company increased the number of authorized shares of no par value common stock from 100,000,000 to 200,000,000 and authorized capital of 2,000,000 no par value preferred shares. The Company amended both common and preferred stocks to reflect a par value of $.001 per share.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

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

Use of Estimates

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

Income Taxes

The Company accounts for income taxes under Statement of Financial Accounting Standard No.109, "Accounting for Income Taxes" ("SFAS109"). SFAS 109 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. SFAS 109 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax asset.

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Computation of Net Loss Per Share

The Company presents basic loss per share and, if appropriate, diluted earnings per share in accordance with SFAS 128, "Earnings Per Share ("SFAS 128"). Under SFAS 128 basic net loss per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted-average number of common share equivalents during the period. Common stock equivalents arise from the issuance of stock options and warrants. Dilutive earnings per share are not shown as the effect is anti-dilutive. There were no common stock equivalents for the quarter ended November 30, 2008 or the year ended August 31, 2008.

Fair Value of Financial Instruments

The Company's financial instruments consist of accounts payable, accrued expenses and notes payable. The Company considers the carrying amounts of these financial instruments to approximate fair value due to the short-term nature of these liabilities.

Stock Based Compensation

We account for the grant of stock options and restricted stock awards in accordance with SFAS 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123” (“SFAS 123R”). SFAS 123R requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation.

Recently Issued Accounting Standards

In February 2007, the FASB issued FASB Statement No. 159 “ The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115 ”. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. This Statement applies to all entities, including not-for-profit organizations. Most of the provisions of this Statement apply only to entities that elect the fair value option. The fair value option:

	·	May be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method
	·	Is irrevocable (unless a new election date occurs)
	·	Is applied only to entire instruments and not to portions of instruments.

This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, “ Fair Value Measurements ”. No entity is permitted to apply this Statement retrospectively to fiscal years preceding the effective date unless the entity chooses early adoption. The choice to adopt early should be made after issuance of this Statement but within 120 days of the beginning of the fiscal year of adoption, provided the entity has not yet issued financial statements, including required notes to those financial statements, for any interim period of the fiscal year of adoption. This Statement permits application to eligible items existing at the effective date (or early adoption date). However, the amendment to FASB Statement No. 115, “ Accounting for Certain Investments in Debt and Equity Securities ,” applies to all entities with available-for-sale and trading securities. Some requirements apply differently to entities

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

that do not report net income. The following are eligible items for the measurement option established by this Statement:

Recognized financial assets and financial liabilities except:

	a)	An investment in a subsidiary that the entity is required to consolidate;
	b)	An interest in a variable interest entity that the entity is required to consolidate;
	c)	Employers’ and plans’ obligations (or assets representing net overfunded positions) for pension benefits, other postretirement benefits (including health care and life insurance benefits), postemployment benefits, employee stock option and stock purchase plans, and other forms of deferred compensation arrangements, as defined in FASB Statements No. 35, “Accounting and Reporting by Defined Benefit Pension Plans” , No. 87, “Employers’ Accounting for Pensions” , No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions” , No. 112, “Employers’ Accounting for Postemployment Benefits” , No. 123 (revised December 2004), “Share-Based Payment”, No. 43, “Accounting for Compensated Absences” , No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” , and No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” , and APB Opinion No. 12, “Omnibus Opinion—1967” ;
	d)	Financial assets and financial liabilities recognized under leases as defined in FASB Statement No. 13, “Accounting for Leases” (This exception does not apply to a guarantee of a third-party lease obligation or a contingent obligation arising from a cancelled lease.);

	e)	Deposit liabilities, withdrawable on demand, of banks, savings and loan associations, credit unions, and other similar depository institutions;
	f)	Financial instruments that are, in whole or in part, classified by the issuer as a component of shareholder’s equity (including “temporary equity”). An example is a convertible debt security with a noncontingent beneficial conversion feature.

Firm commitments that would otherwise not be recognized at inception and that involve only financial instruments;

Nonfinancial insurance contracts and warranties that the insurer can settle by paying a third party to provide those goods or services; and

Host financial instruments resulting from separation of an embedded nonfinancial derivative instrument from a nonfinancial hybrid instrument.

The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. A not-for-profit organization shall report unrealized gains and losses in its statement of activities or similar statement.

In March 2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective for the Company beginning November 30, 2008. Management believes that, for the foreseeable future, this Statement will have no impact on the financial statements of the Company once adopted.

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 - GOING CONCERN

The Company's consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realizations of assets and liquidation of liabilities in the normal course of business. The Company has incurred an accumulated deficit for the period from July 17, 2000 (inception) through November 30, 2008 of $5,780,281 and had negative working capital at November 30, 2008 of $789,712. The Company incurred a net loss for the year ended August 31, 2008 of $390,073 and the quarter ended November 30, 2008 of $168,835. These factors, among others, raise substantial doubt about its ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company.

NOTE 4 - NOTES PAYABLE

In July 2008, the Company issued a note for $25,000. The note was payable on September 30, 2008 and is currently in default. Accrued interest totaled $12,500 on September 30, 2008 and will continue to accrue interest and penalties of $100 per day until the note is satisfied.

In September 2004 the Company issued an interest free $60,000 convertible debenture which was convertible into 6,000,000 common shares at $.01 per share. In December 2004 the Company issued a similar $40,000 debenture, convertible into 4,000,000 common shares. A value of 100,000 was attributed to the beneficial conversion of the notes and was amortized as interest expense during the year ended August 31, 2005. On January 30, 2007, the Company issued 10,000,000 shares to the debenture holder, having a market value of $.075 per share, in full settlement of the outstanding debentures payable. The excess market value of the shares over the note payable ($650,000) was charged to interest expense and credited to paid-in-capital.

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

At November 30, 2008 and August 31, 2008 accounts payable and accrued expenses consisted of the following:

	November 30,		August 31,
	2008		2008
Trade Payables	$	47,014	$	41,704
Professional Fees		95,753		68,978
Officers Compensation		604,015		655,265
Accrued interest		18,000		7,500
	$	764,782	$	773,447

NOTE 6 - COMMON STOCK

In November 2008, Linda Perry an officer of the Company, exercised 3,000,000 stock options at an average exercise price of $.0255 per share or $76,500 in the aggregate and Lancer Corporation, a related party, exercised 2,000,000 stock options at an average exercise price of $.0255 or $51,000 in the aggregate. These amounts were offset against officer compensation payable by the Company. During the fiscal quarter ended November 30, 2008 there were no other exercises of stock options by the named executives. The named executives have never received stock appreciation rights.

RTG VENTURES, INC. AND SUBSIDIARY

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 7 - STOCK OPTIONS

On September 1, 2008, the Company granted 2,500,000 stock options with a fair value of $50,000. On September 1, 2007, the Company granted 2,500,000 stock options with a fair value of $33,500. The Black-Scholes option valuation model was used to estimate the fair value of the options granted. The model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options that have no vesting restrictions and that are fully transferable. For example, the expected volatility is estimated based on the most recent historical period equal to the weighted average life of the options granted. Options issued under the Company's option plans have characteristics that differ from traded options. This valuation model does not necessarily provide a reliable single measure of the fair value of its employee stock options. All stock options were exercised during November 2008 as discussed in note 6. No options were outstanding at November 30, 2008.

Principal assumptions used in applying the Black-Scholes model for options granted by the Company:

	September 1,
	2008	2007
Exercise Price	$ .034	$ .017
Market price	$ .034	$ .017
Risk-free interest rate	3.75%	4.25%
Expected life in years	1 year	1 year
Expected volatility	120%	276%

NOTE 8 - LITIGATION

We are not the subject of any legal proceedings and we are unaware of any proceedings presently contemplated against us by any federal, state or local government agency.

NOTE 9 - EMPLOYMENT AND CONSULTING AGREEMENTS

In April 2006, the Company entered into three year employment and consulting agreements with two officers for annual remuneration of $185,000 and $120,000. The Company also granted stock options to purchase a combined total of 2,500,000 common shares at a price of $.001 per share to such officers. The options vested immediately and expire in April 2009. Additional options to purchase 2,500,000 common shares will be granted each September that the agreement is in effect, starting 2007. Such option will be granted at market prices and expire after five years from the date of the grant. The initial options were exercised in full on January 30, 2007. 5,000,000 options issued on September 1, 2007 and September 1, 2008 were exercised in full during November 2008. No options under this plan were outstanding at November 30, 2008.

On April 29, 2008, the Company entered into a consulting agreement with Midwest Stock Consulting, LLC. Per the term of the agreement the Company engaged Midwest Stock Consulting LLC to provide investor relation services.

NOTE 10 - SHARE EXCHANGE AGREEMENT

In March 2007 the Company signed a Definitive Agreement with Atlantic Network Holdings, Ltd New Media TV Limited, both non U.S entities, and certain unaffiliated share holders, whereby all of the above entities shares would be exchanged for 1,273,059 preferred shares of the Company with voting rights of 1 preferred share equal to 100 common shares. The transaction remained pending as of January, 2009.

Item 2. Management's Discussion and Analysis or Plan of Operations

Cautionary Factors That May Affect Future Results

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

Company Overview

The following Plan of Operation should be read in conjunction with the consolidated financial statements and the notes thereto appearing elsewhere in this Report.

We are a development stage company and we have not generated any revenues in our present business.

We have financed our activity to date from sales of debentures and loans from shareholders and officers. The report of our independent registered public accounting firm, Sherb & Co., LLP, on our audited financial statements for the year ended August 31, 2008 contains an explanatory paragraph regarding our ability to continue as a going concern.

As reported in our Current Report on Form 8-K/A filed with the Commission on December 21, 2007, on December 20, 2007, we entered into an Amendment to Share Exchange Agreement with Atlantic Network Holdings Limited, a Guernsey company limited by shares ("ANHL"), New Media Television (Europe) Limited, a United Kingdom private company limited by shares and a majority owned subsidiary of ANHL ("NMTV"), and certain outside shareholders of NMTV (the "Amendment") which amended the terms of a Share Exchange Agreement previously entered into by the parties.

As was previously reported in our Current Report on Form 8-K filed with the Commission on March 21, 2007, on March 20, 2007 we entered into a Share Exchange Agreement with ANHL, NMTV and certain outside shareholders of NMTV (the "Exchange Agreement") pursuant to which ANHL and the outside shareholders of NMTV agreed to exchange all of their shares in NMTV for a 90% equity interest in the Company, NMTV would become a wholly-owned subsidiary of the Company and ANHL would own an approximate 80% interest in the Company.

As modified by the Amendment, the Exchange Agreement now provides for ANHL and the outside shareholders of NMTV to receive a 75% equity interest in the Company and ANHL will own an approximate 65% interest in the Company.

In addition, certain other provisions of the Exchange Agreement have been modified to reflect an agreement by ANHL to transfer to NMTV prior to closing of all of the issued and outstanding shares of Ecommercenet Limited and its subsidiaries (collectively, "Ecommercenet). Ecommercenet has developed an internet payment and financial transaction processing system geared toward online media purchases, which is anticipated to be operated in tandem with NMTV's online media business.

Item 3. QUANTITATIVE AND QUALATIVE DISCLOSURE ABOUT MARKET RISK

As a “smaller reporting company”, as defined by Rule 10(f)(1) of Regulation S-K, the Company is not required to provide this information.

Item 4T. CONTROLS AND PROCEDURES

CEO and CFO Certifications

As of the end of the period covered by this quarterly report, our company carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer ("the Certifying Officers"), an evaluation of the effectiveness of our "disclosure controls and procedures". The certifications of the CEO and the CFO required by Rules 13a-14(a) and 15d-14(c) of the Securities Exchange Act of 1934, as amended (the "Certifications") are filed as exhibits to this report. This section of this report contains information concerning the evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) ("Disclosure Controls") and changes to internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) ("Internal Controls") referred to in the Certifications and should be read in conjunction with the Certifications for a more complete understanding of the topics presented.

Evaluation of Disclosure Controls

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

Based on our management's evaluation (with participation of our principal executive officer and principal financial officer), as of the end of the period covered by this report, our principal executive officer and principal financial officer concluded that a deficiency was identified in our internal controls over financial reporting which constituted a "material weakness". Accordingly, management concluded that our disclosure controls and procedures were not effective.

The material weakness was the result of an insufficient number of personnel having adequate knowledge, experience and training to provide effective oversight and review over our financial close and reporting process.

Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Changes in Internal Controls

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

It is the responsibility of our management to establish and maintain adequate internal control over financial reporting. The material weakness identified relates to an insufficient number of personnel having adequate knowledge, experience and training to provide effective oversight and review over our financial close and reporting process. This is the result of limited financial resources. These control deficiencies in the aggregate did not result in any misstatements in the interim consolidated financial statements. Management is in the process of remedying the material weakness described above.

Internal control over financial reporting

Management has initiated the following activities intended to improve our internal control over financial reporting:

As reported in the Company's Current Report on Form 8-K filed with the SEC on April 24, 2006 and amended on April 28, 2006, the previous management was removed by written consent of our shareholders and replaced by the former executive officers and directors and the internal controls previously in place were re-instituted.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this item.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

During the three month period ended May 31, 2008 the Company did not sell any stock nor repurchase any of its equity securities.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

31.1	Chief Executive Officer - Rule 13a-14(a) Certification
31.2	Chief Executive Officer - Rule 13a-14(a) Certification
32.1	Chief Executive Officer - Sarbanes-Oxley Act Section
	906 Certification
32.2	Chief Financial Officer - Sarbanes-Oxley Act Section
	906 Certification

SIGNATURES

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

		RTG VENTURES, INC.

Date: January 16, 2009		By: /s/ Linda Perry
		Linda Perry, Chief Executive
		Officer

Date: January 16, 2009		By: /s/ Barrington Fludgate
		Barrington Fludgate, Chief
		Financial Officer