UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 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:
000-27435
GAMEPLAN, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA |
| 87-0493596 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
3701 Fairview Road Reno, Nevada |
| 89511 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant's telephone number, including area code: (775) 815-4752
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
ý Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
ý Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 ¨ (Do not check if smaller reporting company) |
| Smaller Reporting Company ý |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
ý Yes ¨ No
As of May 3, 2012, the number of shares of Common Stock, $.001 par value, outstanding was 1,522,500.
TABLE OF CONTENTS
ITEM NUMBER AND CAPTION |
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3 | ||
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8 | |
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk | 14 | |
14 | ||
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15 | ||
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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds | 15 | |
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16 | ||
2
PART I – FINANCIAL INFORMATION
ITEM 1. Financial Statements.
GAMEPLAN, INC. | |||||
[A Development Stage Company] | |||||
Condensed Balance Sheets | |||||
(Unaudited) | |||||
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| March 31, 2012 |
| December 31, 2011 | ||
ASSETS | |||||
Current Assets |
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Cash | $ | 25 |
| $ | 17 |
Total Current Assets |
| 25 |
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| 17 |
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TOTAL ASSETS | $ | 25 |
| $ | 17 |
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LIABILITIES & STOCKHOLDERS' DEFICIT | |||||
Current Liabilities |
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Accounts Payable | $ | 6,785 |
| $ | 3,640 |
Accrued Director compensation |
| 12,500 |
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| 12,500 |
Payable to Shareholders |
| 1,191,531 |
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| 1,163,997 |
Total Current Liabilities |
| 1,210,816 |
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| 1,180,137 |
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Total Liabilities |
| 1,210,816 |
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| 1,180,137 |
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Stockholders' Deficit |
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Preferred Stock -- $0.001 par value; 50,000,000 shares authorized; 0 issued and outstanding |
| - |
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| - |
Common Stock -- $0.001 par value; 250,000,000 shares authorized; 1,522,500 issued and outstanding |
| 1,523 |
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| 1,523 |
Additional paid-in capital |
| 1,068,396 |
|
| 1,044,460 |
Accumulated deficit during the development stage |
| (2,280,710) |
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| (2,226,103) |
Total Stockholders' Deficit |
| (1,210,791) |
|
| (1,180,120) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 25 |
| $ | 17 |
See accompanying notes to condensed financial statements
3
GAMEPLAN, INC. | ||||||||||||||||||||||
[A Development Stage Company] | ||||||||||||||||||||||
Condensed Statements of Operations | ||||||||||||||||||||||
For the three month periods ended March 31, 2012 and 2011 and for the period from Inception April 27, 1984 through March 31, 2012 | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
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| For the Three |
| For the Three |
| Inception | |||||||||||||||||
| Months Ended |
| Months Ended |
| Through | |||||||||||||||||
| March 31, 2012 |
| March 31, 2011 |
| March 31, 2012 | |||||||||||||||||
Revenues |
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Consulting Fees | $ | - |
| $ | - |
| $ | 768,042 | ||||||||||||||
Commissions |
| - |
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| - |
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| 137,034 | ||||||||||||||
Book Sales |
| - |
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| - |
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| 40 | ||||||||||||||
Other Income |
| - |
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| - |
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| 27,168 | ||||||||||||||
Total Revenue |
| - |
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| - |
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| 932,284 | ||||||||||||||
Expenses |
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General and Administrative Expense |
| 4,553 |
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| 6,352 |
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| 2,233,286 | ||||||||||||||
Compensation |
| 23,936 |
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| 23,936 |
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| 327,129 | ||||||||||||||
Loss on Asset Sales |
| - |
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| - |
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| 29,477 | ||||||||||||||
Total Expenses |
| 28,489 |
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| 30,288 |
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| 2,589,892 | ||||||||||||||
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Operating Loss |
| (28,489) |
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| (30,288) |
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| (1,657,608) | ||||||||||||||
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Interest income |
| - |
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| - |
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| 16,064 | ||||||||||||||
Interest expense |
| (26,118) |
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| (23,237) |
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| (1,038,002) | ||||||||||||||
Total Other Income/(Expense) |
| (26,118) |
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| (23,237) |
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| (1,021,938) | ||||||||||||||
Net Loss before taxes |
| (54,607) |
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| (53,525) |
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| (2,679,546) | ||||||||||||||
Income Taxes |
| - |
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| - |
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| 1,164 | ||||||||||||||
Net Loss before extraordinary item |
| (54,607) |
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| (53,525) |
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| (2,680,710) | ||||||||||||||
Extraordinary item |
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"Lost Opportunity" settlement |
| - |
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| - |
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| 400,000 | ||||||||||||||
Net Income From Extraordinary Items |
| - |
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| - |
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| 400,000 | ||||||||||||||
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Net Loss | $ | (54,607) |
| $ | (53,525) |
| $ | (2,280,710) | ||||||||||||||
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Net Loss per share (basic and diluted) | $ | (0.04) |
| $ | (0.04) |
| $ | (2.39) | ||||||||||||||
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Weighted Average Number of shares outstanding (basic and diluted) |
| 1,522,500 |
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| 1,522,500 |
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| 954,947 | ||||||||||||||
See accompanying notes to condensed financial statements
4
GAMEPLAN, INC. | ||||||||
[A Development Stage Company] | ||||||||
Condensed Statements of Cash Flows | ||||||||
For the three month periods ended March 31, 2012 and 2011 and for the period from inception April 27, 1984 through March 31, 2012 | ||||||||
(Unaudited) | ||||||||
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| For the Three |
| For the Three |
| Inception | |||
| Months Ended |
| Months Ended |
| Through | |||
| March 31, 2012 |
| March 31, 2011 |
| March 31, 2012 | |||
Cash Flow Used for Operating Activities |
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Net Loss | $ | (54,607) |
| $ | (53,525) |
| $ | (2,280,710) |
Adjustments to Reconcile net loss to net cash used for operating activities: |
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Depreciation |
| - |
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| - |
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| 174,645 |
Bad Debt Expense |
| - |
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| - |
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| 911 |
Notes issued in exchange for interest expense |
| - |
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| - |
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| 59,588 |
Notes issued in exchange for accrued interest |
| - |
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| - |
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| 49,589 |
Stock issued for expenses |
| - |
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| - |
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| 3,000 |
Stock-based compensation |
| 23,936 |
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| 23,936 |
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| 327,129 |
Loss on disposal of assets |
| - |
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| - |
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| 29,477 |
Increase/(Decrease) in accounts payable |
| 3,145 |
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| 4,557 |
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| 6,785 |
Increase/(Decrease) in accrued director fees |
| - |
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| - |
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| 12,500 |
Increase/(Decrease) in accrued expenses |
| 26,118 |
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| 23,237 |
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| 686,911 |
Net Cash Flows Used for Operating Activities |
| (1,408) |
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| (1,795) |
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| (930,175) |
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Cash Flows used for Investing Activities |
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Capital expenditures |
| - |
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| - |
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| (520,761) |
Proceeds from disposal of property |
| - |
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| - |
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| 316,641 |
Net Cash Flows Used for Investing Activities |
| - |
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| - |
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| (204,120) |
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Cash Flows from Financing Activities |
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Shareholder loan proceeds |
| 1,416 |
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| 1,826 |
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| 1,625,547 |
Loan Principal Payments |
| - |
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| - |
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| (531,018) |
Proceeds from Issuance of Common Stock |
| - |
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| - |
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| 39,791 |
Net Cash Flows from Financing Activities |
| 1,416 |
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| 1,826 |
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| 1,134,320 |
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Net Increase in cash |
| 8 |
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| 31 |
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| 25 |
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Beginning Cash Balance |
| 17 |
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| 27 |
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| - |
Ending Cash Balance | $ | 25 |
| $ | 58 |
| $ | 25 |
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Supplemental Disclosures |
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Cash Paid for Taxes |
| - |
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| - |
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| - |
Cash Paid for Interest |
| - |
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| - |
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| - |
See accompanying notes to condensed financial statements
5
GAMEPLAN, INC.
[A Development Stage Company]
Notes to Condensed Financial Statements
March 31, 2012
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These interim financial statements include all adjustments consisting of normal recurring entries, which in the opinion of management, are necessary to present a fair statement of the results for the period. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for the period ended March 31, 2012, are not necessarily indicative of the operating results for the full year.
NOTE 2 – RELATED PARTY TRANSACTIONS
During the three months ended March 31, 2012, shareholders loaned an additional $1,416 to the Company to pay operating expenses. These loans bear interest at 9% per annum. The payable to shareholders accrued an additional $26,118 in interest for the three months ended March 31, 2012. These loans are due on March 1, 2013.
NOTE 3 – GOING CONCERN
The Company has incurred losses from inception, has a net working capital deficiency, and has no operating revenue source as of March 31, 2012. Financing the Company’s activities to date has primarily been the result of borrowing from a shareholder and others. The Company’s ability to achieve a level of profitable operations and/or obtain additional financing may impact the Company’s ability to continue as it is presently organized. Management plans include continued development of the business, as discussed in NOTE 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4 – RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.
NOTE 5 – STOCK BASED COMPENSATION
On October 17, 2008 the Board adopted an Incentive Stock Option Plan and, pursuant to that Plan, adopted the following Incentive Stock Option Plan for each Director: Each Director (5) was given the option to purchase 10,000 Rule 144 shares of the common voting stock of GamePlan, Inc. yearly for a period of 5 years at the strike price of $2.00 per share through all option periods. Each option exercise period shall be for a term of three (3) years from the date of the option grant. The first option period commenced on the date of this meeting (Oct. 17, 2008). Subsequent options shall be granted on Oct. 17, 2010, Oct. 17, 2011, Oct. 17, 2012 and the final stock option grant on Oct. 17, 2013 on condition that the Directors are Directors at the time of the subsequent option grants. The Company is obligated to issue the options if the director satisfies the service requirement. Finally, all necessary approvals were obtained. In all events, GamePlan Inc. shall have the right of first refusal to meet the sale price of the stock.
6
A summary of the status of the Company’s option plans as of March 31, 2012 is presented below:
| Shares |
| Weighted Average Exercise Prices |
| Weighted Average Remaining Contractual Life in Months |
| Intrinsic Value | |
Outstanding at December 31, 2011 | 200,000 |
| $ | 2.00 |
| 41 |
| - |
Granted | - |
| $ | - |
| - |
| - |
Forfeited | - |
| $ | - |
| - |
| - |
Outstanding at March 31, 2012 | 200,000 |
| $ | 2.00 |
| 38 |
| - |
Exercisable at March 31, 2012 | 100,000 |
| $ | 2.00 |
| 5 |
| - |
Non-vested at March 31, 2012 | 100,000 |
| $ | 2.00 |
| 48 |
| - |
The Company recognized $23,936 and $23,936 in stock-based compensation during the three months ended March 31, 2012 and 2011, respectively. The remaining $151,596 will be recognized ratably over the requisite service period.
7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
From time to time, our representatives or we have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the Securities and Exchange Commission. Words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project or projected", or similar expressions are intended to identify "forward-looking statements". Such statements are qualified in their entirety by reference to and are accompanied by the discussion of certain important factors included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 that could cause actual results to differ materially from such forward-looking statements.
Management is currently unaware of any trends or conditions other than those mentioned in this management's discussion and analysis that could have a material adverse effect on the Company's consolidated financial position, future results of operations, or liquidity. However, investors should also be aware of factors that could have a negative impact on the Company's prospects and the consistency of progress in the areas of revenue generation, liquidity, and generation of capital resources. These include: (i) variations in revenue, (ii) possible inability to attract investors for its equity securities or otherwise raise adequate funds from any source should the Company seek to do so, (iii) increased governmental regulation, (iv) increased competition, (v) unfavorable outcomes to litigation involving the Company or to which the Company may become a party in the future and, (vi) a very competitive and rapidly changing operating environment.
The risks identified here and in the Company's Form 10-K for the fiscal year ended December 31, 2011 are not all inclusive. New risk factors emerge from time to time and it is not possible for management to predict all of such risk factors, nor can it assess the impact of all such risk factors on the Company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.
The information set forth in the following discussion should be read with the financial statements of Gameplan, Inc. included elsewhere herein.
Business Overview
For the last several years the Company attempted to bring to market through mergers or acquisitions comprehensive business plans described in the Company’s previous Annual Reports. After many years of focused efforts to do so, we have not been able to gain traction for these plans. The game plan did not work and had to change.
The difficult but obvious conclusion is that the best interest of our shareholders dictates a change from those business plans back to the business plan that the Company originally employed and in which we have considerable expertise. That plan, summarized in the Company History that follows, is to acquire, develop, manage and/or consult gaming opportunities and gaming related opportunities throughout the world, (“New Plan”).
Summary of Company history
The Company (Qsip # 36465 c 10 5, Tax I.D. # 870493596, publicly traded under the symbol GPLA.OB) was incorporated in Utah on August 26, 1981 under the name Sunbeam Solar, Inc. On April 27, 1984, common stock was sold publicly. During the latter part of 1991, Robert G. Berry purchased ninety percent (90%) of the Company’s stock. On December 23, 1991 the Company merged with GamePlan, Inc., a Nevada public corporation. From 1992 to 1995 GamePlan actively sought gaming opportunities both in Indian and non-Indian venues and had gaming consulting contracts with the Menominee Tribe in Wisconsin and the San Carlos Apache Tribe in Arizona. From 1996 until the present time the Company has been a public shell and is current in all regulatory filings required of bulletin board companies. On August 1, 2011 the Company amended its articles of incorporation to increase the Company’s authorized common stock from 50,000,000 to 250,000,000 shares and the creation of a class of preferred stock, par value $0.001, with 50,000,000 authorized. The preferred stock will have the designations, rights, and preferences as may be determined by the board of directors.
8
The Company effected a reverse split of its outstanding common stock on a basis of one for ten (1:10), while retaining the current value of $0.001. All fractional shares were rounded up to the nearest whole share. The Company retroactively applied the effects of the reverse split to all periods presented. Of the 250 million shares authorized there are 1,522,500 common shares outstanding with no appreciable market value. As of March 31, 2012, the Company is indebted to its controlling shareholders in the amount of $1,191,531.
Summary of the New Plan
The New Plan of the Company is to focus on owning, operating, managing and/or consulting on gaming and gaming related projects throughout the world. The Company will hire employees as needed and focus on acquiring existing profitable traditional gaming properties and ancillary gaming development opportunities together with seeking opportunities for development, management and consulting services with American Indian Gaming Tribes. The Company will also closely monitor emerging gaming jurisdiction in and out of the United States and make appropriate acquisitions and/or participate in joint ventures.
Each of these acquisitions/property development projects will be in separate entities that will be owned in whole or by a majority of the stock ownership in the Company. Each subsidiary will be responsible for operating not more than one gaming facility.
Regulation
Gaming regulation generally
Extensive federal, state, provincial, tribal and/or local laws, regulations and ordinances, which are administered by the appropriate regulatory agency or agencies in each jurisdiction (the “Regulatory Authorities”), govern the ownership, management, and operation of gaming facilities. These laws, rules, regulations and ordinances vary from jurisdiction to jurisdiction; however, each are directed to the responsibility, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations.
Neither the Company nor any subsidiary of the Company will own, manage, operate or consult relative to a gaming facility or gaming related facility unless proper licenses, permits and approvals are obtained. An application for a license, permit or approval may be denied for any cause. Most Regulatory Authorities also have the right to license, investigate, and determine the suitability of any person who has a significant relationship with the Company or any of its subsidiaries, including officers, directors, employees, and security holders of the Company or its subsidiaries. In the event a Regulatory Authority were to find a security holder to be unsuitable, the Company could be sanctioned and may lose its licenses and approvals if the Company recognizes any rights in any entity with such unsuitable person in connection with such securities. The Company will be required to repurchase its securities at fair market value from security holders that the Regulatory Authorities deem unsuitable.
The Company’s Articles of Incorporation will be amended to authorize the Company to redeem securities held by persons whose status as a security holder, in the opinion of the Company’s Board of Directors, jeopardizes gaming licenses or approvals of the Company or any of its subsidiaries. Once obtained, licenses, permits, and approvals must be periodically renewed in some jurisdictions and not in others and generally are not transferable. The Regulatory Authorities may at any time revoke, suspend, condition, limit, or restrict a license for any cause they, in their sole discretion, deem reasonable.
Fines for violations may be levied against the holder of a license, and in some jurisdictions, gaming operation revenues may be forfeited to the state. No assurance can be given that any licenses, permits, or approvals will be obtained by the Company or any of its subsidiaries or, if obtained, will be renewed or not revoked in the future. In addition, the rejection or termination of a license, permit, or approval of the Company or any of its employees or security holders in any jurisdiction may have adverse consequences in other jurisdictions. Certain jurisdictions require gaming operators licensed therein to seek approval from the state before conducting gaming in other jurisdictions. The Company and its subsidiaries may be required to submit detailed financial and operating reports to Regulatory Authorities.
9
The political and regulatory environment for gaming is dynamic and rapidly changing. The laws, regulations and procedures pertaining to gaming are subject to the interpretation of the Regulatory Authorities and may be amended. Any changes in such laws, regulations or their interpretations could have a material adverse effect on the Company.
Indian gaming regulation generally
The terms and conditions of management contracts or management related contracts for the operation, and under certain circumstances consulting, of Indian-owned casinos, and of all gaming on Indian land in the United States, are subject to the Indian Gaming Regulatory Authority (“IGRA”). IGRA is administered by the National Indian Gaming Commission (“NIGC”). Certain contracts, such as pure development contracts without a management contract, are subject to the provisions of statutes relating to contracts with Indian tribes, which are administered by the Secretary of the Interior (the “Secretary”) and the Bureau of Indian Affairs (“BIA”) under USC section 81. The regulations and guidelines under which NIGC will administer the IGRA are evolving. The IGRA and those regulations and guidelines are subject to interpretation by the Secretary and NIGC and may be subject to judicial and legislative clarification or amendment.
The Company may need to provide the BIA or NIGC with background information on each of its directors and every shareholder who holds five percent or more of the Company issued and outstanding stock (“5% Shareholders”), including a complete financial statement, a description of such person’s business history and gaming experience as well as listing the jurisdictions in which such person holds gaming licenses. Background investigations of key employees also may be required. The Company’s Articles of Incorporation will be amended to contain provisions requiring directors and 5% Shareholders to provide such information.
The IGRA currently requires NIGC to approve management contracts and certain collateral agreements for Indian-owned casinos. The NIGC may review any of the Company’s management contracts and collateral agreements for compliance with the IGRA at any time in the future. The NIGC will not approve a management contract if a director or a 5% Shareholder of the management company (i) is an elected member of the Indian tribal government that owns the facility purchasing or leasing the games; (ii) has been or is convicted of a felony gaming offense; (iii) has knowingly and willfully provided materially false information to the NIGC or the tribe; (iv) has refused to respond to questions from the NIGC; or (v) is a person whose prior history, reputation and associations pose a threat to the public interest or to effective gaming regulation and control, or create or enhance the chance of unsuitable activities in gaming or the business and financial arrangements incidental thereto.
Additionally, the NIGC will not approve a management contract if the management company or any of its agents have attempted to unduly influence any decision or process of tribal government relating to gaming, or if the management company has materially breached the terms of the management contract or the tribe’s gaming ordinance, or a trustee exercising due diligence would not approve such management contract.
A management contract can be approved only after NIGC determines that the contract provides, among other things, for (i) adequate accounting procedures and verifiable financial reports, which must be furnished to the tribe; (ii) tribal access to the daily operations of the gaming enterprise, including the right to verify daily gross revenues and income; (iii) minimum guaranteed payments to the tribe, which must have priority over the retirement of development and construction costs; (iv) a ceiling on the repayment of such development and construction costs; and (v) a contract term not exceeding five years and a management fee not exceeding 30% of profits; provided that the NIGC may approve up to a seven-year term if NIGC is satisfied that the capital investment required, the risk exposure, and the income projections for the particular gaming activity justify the longer term.
The IGRA established three separate classes of tribal gaming — Class I, Class II and Class III. Class I includes all traditional or social games played by a tribe in connection with celebrations or ceremonies. Class II gaming includes games such as bingo, pull-tabs, punch boards, instant bingo and card games in which the players bet against other players. Class III gaming includes casino-style gaming including table games such as blackjack, craps and roulette, as well as gaming machines such as slots, video poker, lotteries, and pari-mutuel wagering in which players bet against the gaming operation, otherwise referred to as “betting against the house..”
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The IGRA prohibits substantially all forms of Class III gaming unless the tribe has entered into a written agreement with the state in which the casino is located specifically authorizing the types of commercial gaming the tribe may offer (a “tribal-state compact”). The IGRA requires states to negotiate in good faith with tribes that seek tribal-state compacts, and grants Indian tribes the right to seek a federal court order to compel such negotiations with default provisions if the state does not negotiate in good faith. Many states have refused to enter into such negotiations. Tribes in several states have sought federal court orders to compel such negotiations under the IGRA; however, the Supreme Court of the United States held in 1996 that the Eleventh Amendment to the United States Constitution immunizes states from suit by Indian tribes in federal court without the states’ consent.
Because Indian tribes are currently unable to compel states to negotiate tribal-state compacts, The Company may not be able to develop and manage casinos in states that refuse to enter into or renew tribal-state compacts.
In addition to the IGRA, tribal-owned gaming facilities on Indian land are subject to a number of other federal statutes. The operation of gaming on Indian land is dependent upon whether the law of the state in which the casino is located permits gaming by non-Indian entities, which will change over time as more and more jurisdictions seek entry into the casino business so as to receive painless “sin taxes” rather than having their citizens travel to adjacent states to engage in gaming activities there. Any such changes will significantly increase competition with non-Indian gaming and that will have a material adverse effect on the casinos managed by The Company.
Title 25, Section 81 of the United States Code states that “no agreement shall be made by any person with any tribe of Indians, or individual Indians not citizens of the United States, for the payment or delivery of any money or other thing of value in consideration of services for said Indians relative to their lands unless such contract or agreement be executed and approved” by the Secretary or his or her designee. An agreement or contract for services relative to Indian lands that fails to conform with the requirements of Section 81 will be void and unenforceable. Any money or other thing of value paid to any person by any Indian or tribe for or on his or their behalf, on account of such services, in excess of any amount approved by the Secretary or his or her authorized representative will be subject to forfeiture.
The Indian Trader Licensing Act, Title 25, Section 261-64 of the United States Code (“ITLA”) states that “any person other than an Indian of the full blood who shall attempt to reside in the Indian country, or on any Indian reservation, as a trader, or to introduce goods, or to trade therein, without such license, shall forfeit all merchandise offered for sale to the Indians or found in his possession, and shall moreover be liable to a penalty of $500. . .” No such licenses have been issued to The Company to date. The applicability of the ITLA to Indian gaming management contracts is unclear. The Company believes that the ITLA is not applicable to its management contracts, under which The Company provides services rather than goods to Indian tribes. The Company further believes that the ITLA has been superseded by the IGRA.
Indian tribes are sovereign nations with their own governmental systems which have primary regulatory authority over gaming on land within the tribe’s jurisdiction. Because of their sovereign status, Indian tribes possess immunity from lawsuits to which the tribes have not otherwise consented or otherwise waived their sovereign immunity defense. Therefore, no contractual obligations undertaken by tribes to the Company would be enforceable by the Company unless the tribe has expressly waived its sovereign immunity as to such obligations. Courts strictly construe such waivers. Additionally, persons engaged in gaming activities, including the Company, are subject to the provisions of tribal ordinances and regulations on gaming. These ordinances are subject to review by NIGC under certain standards established by the IGRA.
Non-gaming regulation generally
The Company and its subsidiaries to be formed are subject to certain federal, state, and local safety and health laws, regulations and ordinances that apply to non-gaming businesses generally, such as the Clean Air Act, Clean Water Act, Occupational Safety and Health Act, Resource Conservation Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act. Coverage and attendant compliance costs associated with such laws, regulations and ordinances may result in future additional cost to our operations.
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Property
The Company has no real estate holdings.
Presently, the principal executive offices of the Company are the personal residence and telephone number of Robert G. Berry, currently the President and CEO and one of two principal shareholders of the Company. That business address will change in the near future. The Company also has offices at 8655 East Via de Venturta, Ste: G-200, Scottsdale, AZ 85258, (480) 346-1177. The Company only has an oral agreement for the Arizona office.
Patents, Service Marks, Domain Names and Licenses
Patents
None
Service Marks
None. All previous service marks under the terminated plan have been abandoned.
Domain Names
All domain names have been abandoned except for gameplan-usa.com
Licenses
None.
Employees
The Company has five members on the Board of Directors. The Company currently has three officers, Robert G. Berry, President and CEO; Ray Brown, Secretary and Executive Vice President and David W. Young, Treasurer and Senior Vice President.
No one receives cash compensation and the Company has no further employees other than those mentioned above.
The Company plans to assemble a strong team of gaming industry experts that have superior expertise and successful track-records in all aspects of casino development, construction and management. Further, the Company has access to individual specialists mirroring each of the functional areas found in a casino project. The functional areas include design, construction & development, gaming operations, hospitality, finance/accounting, legal/regulatory, security systems, information technology, retail, marketing, entertainment and human resources.
The Company believes this team when developed will represent a valuable asset that will provide a competitive advantage in creating and enhancing relationships with Indian tribes in the Indian casino business and in the pursuit of non-Indian casino opportunities.
OPERATING RESULTS - OVERVIEW
For the three months ended March 31, 2012 we incurred a net loss of $54,607 an increase of $1,082 from $53,525 for the three months ended March 31, 2011. The basic loss per share for the current and prior year three months ended March 31 was $(0.04) and $(0.04), respectively.
Details of changes in revenues and expenses can be found below.
OPERATING RESULTS REVENUES
Revenues for the three months ended March 31, 2012 and 2011 were $0.
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OPERATING RESULTS COST OF SALES
There were no sales and consequently no costs were incurred for the three months ended March 31, 2012 and 2011.
OPERATING RESULTS OPERATING EXPENSES
Operating expenses for the three months ended March 31, 2012 decreased by $1,799 to $28,489 as compared to $30,288 for the three months ended March 31, 2011. Theses operating expenses were incurred for general business purposes including accounting and consulting fees incurred in relation to our filings with the Securities and Exchange Commission. Compensation expenses were $23,936 for the current and prior year quarters, respectively. These stock based compensation expenses were incurred for our officers and directors in lieu of cash compensation.
OPERATING RESULTS INTEREST EXPENSES
Interest expense for the three months ended March 31, 2012 increased $2,881 to $26,118 as compared to $23,237 for the prior year three month period, due to additional funding of our operations by our shareholders.
LIQUIDITY
As of March 31, 2012, the Company’s only asset was $25 in cash. The Company had total liabilities of $1,210,816, of which $1,191,531 is owed to two shareholders.
Plan of Operation
The New Plan of the Company is to focus on owning, operating, managing and/or consulting on gaming and gaming related projects throughout the world. The Company will reorganize its Board of Directors and Officers, hire employees as needed and focus on acquiring existing profitable traditional gaming properties and ancillary gaming development opportunities together with seeking opportunities for development, management and consulting services with American Indian Gaming Tribes. The Company will also closely monitor emerging gaming jurisdictions in and out of the United States and make appropriate acquisitions and/or participate in joint ventures.
Each of these acquisitions/property development projects will be in separate entities that will be owned in whole or by a majority of the stock ownership in the Company. Each subsidiary will be responsible for operating not more than one gaming facility.
The Company will assemble a strong team of gaming industry experts that have superior expertise and successful track-records in all aspects of casino development, construction and management. Further, the Company has access to individual specialists mirroring each of the functional areas found in a casino project. The functional areas include design, construction & development, gaming operations, hospitality, finance/accounting, legal/regulatory, security systems, information technology, retail, marketing, entertainment and human resources.
The Company believes this team when developed will represent a valuable asset that will provide a competitive advantage in creating and enhancing relationships with Indian tribes in the Indian casino business and in the pursuit of non-Indian casino opportunities.
There have been no material developments towards implementation, funding, or development of the New Plan. No elements of the New Plan have been implemented and the Company has no revenues from business operations.
There may be market or other barriers to entry or unforeseen factors, which could render the New Plan to be not feasible. Accordingly, the Company may refine, rewrite, or abandon some or all elements of the New Plan, which might benefit the Company and its shareholders.
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Apart from any cash requirements necessary to implement the New Plan, the Company will continue to incur expenses relating to maintenance of the Company in good standing, filing required reports with the SEC and other regulatory agencies, and investigating potential business ventures. The Company believes that such additional maintenance expenses will be advanced by management or principal stockholders as loans to the Company. However, there can be no assurance that the management or stockholders will continue to advance operating funds to the Company.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 (the “Exchange Act”), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Our management evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2012, pursuant to paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act. This evaluation included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Quarterly Report. Our management has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of March 31, 2012.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II--OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal action.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company has not issued or sold any unregistered securities during the three months period ended March 31, 2012.
Item 3. Defaults Upon Senior Securities
None
Item 4. (Removed and Reserved)
Item 5. Other Information
Robert G. Berry Promissory Notes
On February 1, 1999, the Company entered into an amended and restated promissory note with Robert Berry, pursuant to which the Company agreed to pay Mr. Berry principal then owing to Mr. Berry of $182,256, representing Mr. Berry's unreimbursed cash advances to the Company as of that date. The Note was due February 1, 2001 and bore interest at the rate of prime plus 2%. During 1999, Mr. Berry advanced the Company $17,600. A new note was executed on February 1, 2000, which extended the maturity date to February 1, 2002. In 2000, Mr. Berry advanced $37,200 to the Company. The Company executed a further amended and restated note with Mr. Berry on January 1, 2001, which note replaced and superseded all previous notes of the Company payable to Mr. Berry. The new note was issued in the principal amount of $290,192, bore interest at the rate of prime plus 2%, and extends the maturity of the Company's obligations to Mr. Berry to February 1, 2003. The entire unpaid principal and interest was due at maturity. Additionally, the Company executed a further amended and restated note with Mr. Berry on January 1, 2002, which note replaces and supersedes all previous notes of the Company payable to Mr. Berry. The new note was issued in the principal amount of $327,408, bears interest at the rate of prime plus 2%, and maintained the maturity of the Company's obligations to Mr. Berry at February 1, 2003. Mr. Berry renewed this promissory note in the total amount of $484,626 after calculating additional advances to Jan. 1, 2006. As of March 31, 2012, the Company owes Berry $877,494. The Robert G. Berry Trust owns approximately 39.6% of the issued and outstanding shares of the Company. This note is due March 1, 2013.
Jon Jenkins Promissory Notes
As of February 1, 2001, the Company entered into an amended and restated promissory note payable to Jon and April Jenkins in the principal amount of $74,054. The note replaced and supersedes all previous notes of the Company payable to Jon or April Jenkins. The note bears interest at the rate of prime plus 2%. All principal and interest is due and payable on February 1, 2003. Mr. Jenkins agreed to renew this note in the total amount of $100,500 after calculating interest to Jan. 1, 2006. As of March 31, 2012, the Company owes Jenkins $314,037. Jenkins is a director and the beneficial and indirect owner of approximately 39.6% of the issued and outstanding shares of the Company. This note is due March 1, 2013.
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Item 6. Exhibits
Exhibit
Number
Name of Exhibit
31.1
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.(1)
31.2
Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.(1)
32.1
Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101.INS
XBRL Instance Document
101.SCH
XBRL Schema Document
101.CAL
XBRL Calculation Linkbase Document
101.DEF
XBRL Definition Linkbase Document
101.LAB
XBRL Labels Linkbase Document
101.PRE
XBRL Presentation Linkbase Document
______
(1)
Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
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| GAMEPLAN, INC. |
|
|
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Date: May 14, 2012 |
| /s/ Robert G. Berry |
|
| Robert G. Berry, |
|
| President, Chief Financial Officer and Director |
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