-LOOKING STATEMENTS
This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set out in the section hereof entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These risks include, by way of example and not in limitation:
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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.
The above list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other risks described in this report should be considered carefully and readers should not place undue reliance on our forward-looking statements.
Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the forward-looking statements are made, and we undertake no obligation to update forward-looking statements should these beliefs, estimates, and opinions or other circumstances change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these forward-looking statements to actual results.
Our financial statements are stated in United States dollars (“US$”) and are prepared in accordance with United States generally accepted accounting principles (“GAAP”).
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the shares of our common stock.
As used in this Annual Report, the terms "we," "us," "our," "ProGaming Platforms," and “Issuer” mean ProGaming Platforms Corp. unless the context clearly requires otherwise.
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ITEM 1.
Formation and year of organization
We were incorporated on May 26, 2010, in the State of Delaware. Our authorized capital consists of 500,000,000 shares of our common stock (the “Common Shares”) with a par value of $0.0001 per common share.
Our principal executive offices are currently located in Israel at the following address: 60 Mazeh Street, Apartment 12, Tel Aviv, 65789, Israel. Our telephone number is +972 (54) 2229702. Our website is http://www.progamingcorp.com
Bankruptcy, Receivership or Similar Proceeding
We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal actions or proceedings.
Recent Corporate Developments
On March 1, 2012, we filed a Certificate of Amendment of our Certificate of Incorporation effecting a forward stock split of the Company’s issued and outstanding shares of Common Stock at a ratio of ten-to-one (the “Forward Split”). The Certificate of Amendment provides that each ten (10) outstanding shares of the Company's Common Stock, par value $0.0001 per share, will be split and converted, automatically, without further action, into ten (10) shares of Common Stock. The Forward Split has been reflected in this Annual Report on Form 10-K.
In April 2011, we raised $40,000 and issued 400,000 shares of our common stock to two non–US investors. These transactions did not involve any underwriters, underwriting discounts or commissions, nor any public offering. We believe these transactions were exempt from registration pursuant to Regulation S of the Securities Act of 1933 (the "Securities Act").
Recent Business Developments
On July 10, 2011, we executed a license agreement with GT-SAT International S.A.R.L ("GT-SAT"), a corporation organized under the laws of Luxemburg. Such license agreement granted GT-SAT a non-exclusive right to develop websites and offer online games based on our proprietary gaming platform in Europe, with an exclusive license to develop websites and offer online games based on our proprietary gaming platform in Luxembourg, Belgium, and Holland. In consideration of such license, GT-SAT made an upfront, non refundable, payment of $90,000 and has agreed to pay us royalties on future revenues. On December 26, 2011 GT-SAT has terminated the license agreement. The stated reason for termination was the economic situation in Europe.
On July 1, 2011, we executed a license agreement with Yanir Levin Ltd., an Israeli corporation. Such license agreement granted the licensee a non-exclusive right to develop websites and offer online games based on our proprietary gaming platform in Asia, with an exclusive license to develop websites and offer online games based on our proprietary gaming platform in Israel. In consideration of the license granted to the licensee, the licensee made an upfront, non refundable, payment of $29,000 and has agreed to pay us royalties on future revenues.
Business of Issuer
We are engaged in the development of an online gaming platform and intend to enter into licensing agreements with online game service providers in the United States in order to allow them to offer games of skill on our platform as part of their member services.
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The Online Gaming Market
We are currently focusing our marketing efforts on two complementary niche markets: the online gaming market and the online advertizing market.
The online gaming market is the market for games played over the internet. Online games can range from simple text-based games to games incorporating complex graphics and virtual worlds populated by many players simultaneously. Online games include single-player online games and multiplayer online games. Multiplayer online games appeal to online gaming communities, for whom online gaming is a form of social activity.
The online advertizing market is the market for online advertizing campaigns designed to increase the traffic volume of websites. We believe that our proprietary platform will enables advertisers to increase the effectiveness of such campaigns by offering material rewards to winners of online gaming tournaments.
The Market Opportunity
The online gaming market is one of the fastest growing global markets today. According to the CNBC.com article entitled “Rivals Square Off in $15 Billion Online Gaming Market” dated March 26, 2010, the online gaming market is currently estimated to be worth $15 billion. With regard to North America, according to a report by BBC News dated March 24, 2009, the findings of analysts Screen Digest suggested that the multiplayer online gaming market in Europe and North America had grown by 22% and was worth $1.4 billion.
According to a press release issued on July 10, 2009 by comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, there were 87 million U.S. visitors at online game websites in May 2009, an increase of 22 percent from the prior year. comScore noted a significant increase in the size of its audience during the past year as consumers increasingly opted for cheaper entertainment alternatives, driven in part by the reality of economic challenges. According to comScore, Yahoo! Games ranked No. 1 in the online gaming category with 19.4 million visitors, representing a 6-percent increase over the past year, followed by EA Online with 18 million visitors (up 34 percent), Nickelodeon Casual Games with 14.8 million visitors, and WildTangent Network with 13.8 million visitors (up 16 percent).
Edward Hunter, comScore director of gaming solutions, concluded that “Online gaming continues to be one of the top gaining categories over the past year growing at ten times the rate of the total U.S. Internet population and reaching nearly one out of every two Internet users.” He added that “the growth in the category is occurring not only at the top gaming destination sites, but also through viral distribution platforms, including widgets and applications. In fact, some online gaming companies that distributed their games across sites are reaching as many people as the top online gaming sites.” (source: comScore, Inc. July 10, 2009 press release) .
Similarly, in 2009, 21.3 million PC Game full-game digital downloads were purchased in the United States (source: the website of NPD Group).
Today, a gamer wishing to play online must purchase a client account from a game service provider and then he can either play online with friends connected to a private game server or subscribe to a commercial game server and play with other subscribers. The leading business model for the online gaming market that we are aware of is "pay per access," whereby a gamer pays the online game service provider a fee (typically a monthly fee) for the right to access the game service provider’s online games.