CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
For the Fiscal Year Ended December 31, 2006
EMAZING INTERACTIVE, INC.
(Exact name of registrant as specified in its charter)
Nevada 333-138111 20-4672080
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
101 C North Greenville, Suite 255, Allen, Texas 75002
(Address of principal executive offices (zip code))
972-984-8796
(Registrant's telephone number, including area code)
(Former address)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 Act of 1934 during the past
12 months and (2) has been subject to such filing requirement for the past
90days Yes [X] No [ ].
Indicate by a check mark whether the company is a shell company (as defined by
Rule 12b-2 of the Exchange Act: Yes [ ] No [ X ].
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 2006: $ -0-
Shares of common stock outstanding at December 31, 2006: 5,350,000
PART I.
ITEM 1. DESCRIPTION OF BUSINESS
We were incorporated on April 21, 2006 in the State of Texas and redomiciled to
become a Nevada corporation in October 2006. In this report, we refer to EMazing
Interactive, Inc. as "we," "us" or "EMazing" unless we specifically state
otherwise or the context indicates otherwise. We are a gaming organization that
is working with prominent marketing services connected to the gaming scene. We
specialize in providing marketing awareness of products and services of our
customers to millions of on-line gaming players and enthusiasts.
To date, our business development activities have primarily been concentrated in
web server access and company branding in hosting web based e-games. This
activity is structured whereby our partners and sponsors are provided premium
web site exposure identifying their company, name, and product offerings.
We generate revenues through our partnerships and sponsors. Sponsoring EMG
GAMING will bring a product and/or brand name into the spotlight of gamers
worldwide. Our customer's brand will be synonymous with the youthful intelligent
image that pro-gaming has. Our customers have prime advertising space on our
website, IRC channel every hour 24/7 and clothes, which we will wear at
competitive events all year round. It is primarily through our fee structure for
web server access that we generate revenue. Although our web site creates
product awareness for our sponsors and partners, our revenue is generated by
fees which our partners and sponsors remit to us for that exposure. In the
E-Gaming industry, partners and sponsors will pay top dollar for a popular
gaming web site as they can maximize their product and name exposure.
We also generate revenue through EMazing Servers, a "Game Server" rental company
whereby we rent game servers for players to play a computer game of their
choice. We rent game servers for over 32 different games, the most popular being
Half Life's Counter Strike and variations of this game. We rent by the hour, day
or month. This rental program is unique for our type of service as most
companies choose to rent by the month. We feel this gives us a competitive
advantage over our competition.
We have three standard packages designed for our prospective partners. Our
"Gold" package is aimed to give maximum publicity to our prospective partners,
forcing their product into the world of pro-Gaming and showing everybody that
their company really cares about the gamers. The Silver" package is aimed at
companies with a lower budget that are looking to get their product noticed. The
"Bronze" package is for companies with limited budgets but still want
involvement in the eSports industry. Following is a chart outlining the benefits
of our partnerships/sponsors at the Gold, Silver and Bronze levels.
- ------------------------------------- ----------------------------------- -----------------------------------
GOLD PARTNER FEATURES SILVER PARTNER FEATURES BRONZE PARTNER FEATURES
- ------------------------------------- ----------------------------------- -----------------------------------
1. High priority branding on 1. Branding on our website 1. Branding on IRC for a
our website, clothing, and IRC limited time
computer cases and IRC channel
2. High priority advertising 2. Limited advertising on 2. Listed as a supporter
on television, radio, eSports television, radio, eSports for a limited time
websites and magazine and magazine special features
interviews
3. Main sponsor image, banner 3. Listed as an official 3. Special features
and description of company on supporter on our website negotiable
our website with a rotational banner and
a small logo
2
4. Special features on your 4. Special features on your
products: e.g. news and reviews products: e.g. news and
reviews
5. Product/brand endorsement 5. Product endorsement on
on our website and at events our website and limited
endorsement at events
6. Availability for press
attendances and media events.
Product testing and feedback
Price: $5,000.00 per month Price: $2,500.00 per month Price: One time payment of
$1,500.00+
- ------------------------------------- ----------------------------------- -----------------------------------
During 2006, we filed and had approved form SB-1 to raise funds. A portion of
the proceeds of the offering are being used to further develop E-Gaming software
and lease server capacity and access through server lease agreements. The
development of software is the key aspect of our business model in that it is
through the game itself that a company such as ours achieves notoriety and
industry following thereby affording us the opportunity to promote our sponsors
and partners on a fee structured basis. This software development is the game
itself and as it achieves acceptance and favorability (more players playing it)
the more our company positions it self as a provider of leading edge E-Gaming
programs. Part and parcel to this is providing access to the game itself on the
World Wide Web. To achieve this, we lease servers or portals, web based access
points to allow E-Game players to access our web site and therefore our on-line
games. These servers are a major source of revenue for us as we charge access
fees to these servers.
BUSINESS OPERATIONS:
GOVERNMENT REGULATION:
At the present time, there are no Federal Government regulations on computer
games over the internet or on dedicated servers.
OUR QUALIFICATIONS
Our qualifications are our reputation and experience in the industry. G. Edward
Hancock, President, and our contract workers and volunteers have over 50 years
combined experience in the E-Gaming industry.
INDUSTRY & COMPETITION:
Market Analysis Summary:
Gamers are just as fanatical about pro-gaming teams as football fans are with
their NFL teams. They watch their matches, attend events, emulate what they
wear, buy the hardware they use, and follow the new trends players bring about.
Counter-Strike 1.6 is the world renown FPS (First Person Shooter) game and is
the #1 online action game in the world. Counter-Strike 1.6 offers the most
competition and biggest prize pots in the gaming industry. With all the new
advancements within the eSports community it also brings about new games, such
as Counter-Strike Source. Source is the newest addition to the Counter-Strike
family bringing amazing graphics, new maps, and different techniques than
Counter-Strike 1.6. The graphics on this engine are amazing and offer high
quality details to this game as well. Bringing in this game offers computer
companies and hardware companies more sales due to gamers needing a better
computer to run the video game.
(Source:http://www.csnation.net/articles.php/cssguide_200/)
Online gaming has emerged as one of the biggest growing industries in the new
millennium. The Far East has played a significant role in paving the way for
recognition for online gamers. Multiplayer online games have generated over 1
billion dollars in revenue for the first time, in 2004. A large proportion of
this figure has come from player subscription games such as Everquest and Star
3
Wars Galaxies, but a significant amount has also come from the first person
shooter game sales. This figure does not include the emergence of sponsored
players and teams as has been seen in Asia over the last 18 months with many
players earning above $100,000 in sponsorship deals. These players have become
cult figures in their respective countries and "national heroes". The way it
stands now, is that this status will start migrating to the already maturing
gaming markets such as the US, where global events here now command higher
earnings for the winners. Typical earnings of a team range between $20k and $40k
for the larger events, though this is small compared to the events of Asia.
These events have caused an influx from many large companies wanting to gain
access to this emerging market. Names such as Nike, Pepsi, Red Bull, and Oakley
have begun their sponsorship programs globally with an emphasis on the US
Market. Gaming leagues and competitions such as WSVG, CPL, ESWC, WCG and WEG
have become very popular in the US and the world, culminating in the Asian model
for sponsored clans and players increasingly hugely as a result. News of these
events is starting to hit mainstream television and press with news of the
winning tournaments being broadcasted on channels such as:
1. BBC News Online
2. CNN
3. ABC
4. Fox News
5. MTV
6. Fuse Network
7. CBC Television in Canada
8. Many major online news services such as Yahoo, MSN, Reuters
As more mainstream media becomes involved in promoting gaming events, this
allows more companies outside the gaming community to get involved as named
above.
Besides these news sites and television, there are various ways to follow
events. These methods include online radio, such as TSN (www.tsncentral.com),
streaming video and in-game viewing tools such as HalfLife-TV. These programs
allow the viewer to watch the actual in game action from the point of view of
any player they like or if preferred a map overview. Over 30,000 people watched
the last CPL (www.thecpl.com) finals on HalfLife-TV alone.
(Source: http://www20.tomshardware.com/game/200408071/cyberathlete-14.html)
GAMING STATISTICS
1. A $35 million global market only three years ago, pay-per-play gaming
reached $137 million in 2003 and is forecast to grow at an impressive
compound annual growth rate (CAGR) of 40 per cent to 2007 to become
the second largest online gaming sub-sector behind Multi-player Online
Games. (Source: http://www.screendigest.com/ezine/0404/#games)
2. Screen Digest forecasts that the total online PC games market will top
$2.2 billion by 2007.
(Source:http://www.screendigest.com/ezine/0404/#games)
3. Nick Gibson, a games industry analyst and the author of the report
states: "The casual online gaming market has matured rapidly since the
end of the dotcom boom era and a number of new, high margin revenue
models have emerged that have, following a three year hiatus, returned
rapid growth to this sector. Amazingly, every single one of the major
casual games service providers reported that this growth was being
predominantly fuelled by middle-aged and female gamers, the antithesis
of the MMOG and hard-core gaming markets."
(Source:http://www.screendigest.com/ezine/0404/#games)
4. The barriers that keep the average gamer from having a say in the
future of his or her hobby are falling away and the doors are opening
4
for new talent. Having just passed the 11 billion dollar mark, the
gaming industry has started to assume a position as a true defining
force in culture and a shaper of our digital future. (Source:
http://www4.tomshardware.com/business/20040401/gdc-11.html#conclusion)
5. Clearly, the most powerful force driving the games market is consumer
demand. According to a new study from the Entertainment Software
Association (ESA), "Essential Facts about the Computer and Video Game
Industry," more than half (54 percent) of all US households have
purchased or plan to purchase one or more games this year.
(Source:http://cgw.pennnet.com/Articles/Article_Display.cfm?Section=
Articles&Subsection=Display&Article_ID=209404)
6. By 2010, 450 million homes worldwide will have broadband connectivity
at speeds greater than 1Gbit/second. In addition, of the more than 2
billion mobile phones in use, at least half will be connected to 3G
networks, which will feature data transfer speeds in excess
100Kbit/second and make the downloading of games and assets practical.
(Source:http://cgw.pennnet.com/Articles/Article_Display.cfm?Section=
Articles&Subsection=Display&Article_ID=209404)
7. The report concludes that the electronic gaming market will expand at
a compound annual growth rate of 20 percent and will top $55 billion
in annual revenue by the end of the decade.
(Source:http://cgw.pennnet.com/Articles/Article_Display.cfm?Section=
Articles&Subsection=Display&Article_ID=209404)
Themis Group (a community and communications services company catering to games,
technology, and entertainment enthusiasts) CEO and co-founder Alex Macris says
"It's clear that the online gaming portion of the industry continues to
experience surging growth, especially in the area of subscription-based games."
The age demographic of videogame and computer game users converges to a median
point of 29 years. Younger players raised on a steady diet of fantasy action
shooters were raving about the whole squad concept of working with teammates
online toward a shared goal while living with the reality that one bullet kills
and getting maimed slows a soldier down. The same trend is emphasized by the
success of Half-Life and its squad-based add-ons, Team Fortress Classic and
Counter-Strike.
OUR BUSINESS STRATEGY
We are EMG (EMAZING GAMING), a gaming organization that is working with
prominent marketing services connected to the gaming scene. Currently, the
entire team consists of contract workers including management, sales, technical
development, press and our primary team / players department. We comprise of
people who have specific gaming experience, a pre-requisite for employment with
our company is experience in the gaming world. Combined, our organization holds
well over 50 years of experience in management alone.
Management is primarily consisted of our President and CEO. As CEO, he is
responsible for coordinating and leading the entire organization to achieve
optimal results and goals. This includes directing contract consultants and
measuring results. He also manages the budget to satisfy needs for traveling and
accommodations to PR events and tournaments. Additionally, our CEO is
responsible for strategic thinking and placement within the E-Gaming industry,
constantly looking for new opportunities. As such, he is instrumental in
building and maintaining sponsor and partner relationships.
The sales department handles contacts to other companies and controls all
marketing possibilities. They make proper detailed statistics and documentation
on the amount of exposures that the partner in question receives. These workers
are on contract.
The technical development area works with the organizations' technical
structure, which includes the website, design material, marketing channels, and
technical equipment. Also provides technical solutions and services with the
5
integration of the partners' products and the popularity/demand of the latest
hardware. These workers are on contract.
Team/Players: The current team of players the backbone to the organization. The
team practices and competes in order to keep EMG ORGANIZATION as a world leading
organization. The team is the primary marketing channel for sponsors and the
organization. The team wears branded clothing and as they perform and succeed
spectators and other participants are drawn to play the same games. These
workers are on contract.
Press department: Works to provide the public with the latest updates regarding
the team and e-sports through our website and other means of communication. Also
provides detailed coverage of the teams' progress in tournaments and leagues.
These workers are on contract.
EMG GAMING has three major financial objectives to reach its goal as the best
and highest-ranking Professional Counter-Strike team in the world:
1. Maintain Equipment on the Cutting Edge - It goes without saying that
when competing in the technologically advanced arena of professional
gaming, you want to remain on the leading edge of the technology
curve. Faster machines, graphics cards, and other equipment can mean
the difference between winning and losing at this level.
2. Ability to Travel to Tournaments - There is no use in being
professional if one can't afford to travel to the various events and
tournaments here at home and abroad. Travel and accommodations
represent a significant portion of our costs.
3. Ability to Train - Professional gamers train for up to 12 hours per
day, every day to stay at the top of their game. This does not allow
much time for work, and often professional gamers are forced to drop
out because they need financial stability to survive. A monthly living
allowance would not only allow us to focus on training, but it would
also bring greater stability to the team members.
EMazing utilizes their website, emazinggaming.com, as the portal to which
e-games are accessed on the World Wide Web. Through links on the website we are
able to better manage our visitors, game selection, and visitor profiles,
effectively providing us the ability to ultimately understand our customers and
their playing habits from which we can then develop more challenging and
exciting game content.
All games currently provided by EMazing are third party developed. Through the
proceeds of this offering, we will use a portion of the proceeds to develop our
own game portfolio. Game development is a capital and time intensive process,
usually taking 18-24 months to take a game from concept form to fee based web
play. It is our intent to be an industry leading game developer as well as
content provider through our interactive website.
Industry and Competitors
The Industry:
The eSports industry is highly competitive. eSports is technologically based and
through the medium of the internet is readily accessible to most anyone with a
computer and a credit card. Barriers to entry are high due to server costs
(owned and/or leased), travel expenses, and general living expenses. The more
successful and enthusiastic eSport competitors are reliant on sponsors and
partners to generate funds to undergird living, travel and equipment maintenance
costs. Although highly competitive, it is also highly fragmented. eSports is
worldwide in scope and difficult to assess from a competitive standpoint as
games are often hot and therefore streaky in play before another company puts
out a more desirable game program. Even so, server capacity, speed and graphics
generally determine the amount of play a game will generate.
Marketing Strategy:
6
We aim to fit our partners' needs and their marketing strategies when
customizing a partnership between EMG GAMING and companies. We are always open
to new input and ideas and we put our partners' needs first.
The following is an outline of our business exposure table:
--------------
- --------------------------------------------------------------------------------------------------
EXPOSURE OF PARTNERS
- ----------------------- --------------------------------------------------------------------------
PARTNER EXPOSURE
- ----------------------- --------------------------------------------------------------------------
HEAD PARTNERS CLOTHING (FRONT, BACK), GAME, PC'S, WEB SHOP, HOMEPAGE, CHAT, QUIZ, MISC.
MAIN PARTNERS CLOTHING (COLLAR, SLEEVES AND THIGHS), WEB SHOP, HOMEPAGE, CHAT, MISC.
PARTNERS WEB SHOP, HOMEPAGE, CHAT, MISC.
- ----------------------- --------------------------------------------------------------------------
EXPOSURE EXPLAINED
- ----------------------- --------------------------------------------------------------------------
CLOTHING: CHEST, BACK, COLLAR, THIGH AND SLEEVES
PC: STICKERS ON THE SIDE OF PC TOWER
GAME: BANNER IN MESSAGE OF THE DAY IN OUR COUNTER-STRIKE SOURCE SERVER
WEB SHOP: PRINT ON PRODUCTS (IF POSSIBLE)
HOMEPAGE: BANNERS, SPONSOR SECTION AND FRONT PAGE
CHAT: JOIN MESSAGE, TEXT COMMERCIALS
QUIZ: PRODUCT AND COMPANY ENDORSEMENTS
MISC.: CS-MOVIES, WALLPAPERS, CUSTOM CS, SCREENSAVERS ETC.
- ----------------------- --------------------------------------------------------------------------
Future Products and Services:
The Company plans to gravitate away from leasing servers and instead purchase
their own servers. This will greatly reduce overhead costs associated with
operations. Additionally, the company will continuously be upgrading equipment,
graphics, and technology to increase speed.
Sources and Availability of Raw Material:
We are a service business and do not use raw materials. We use products in
performing our service that are readily available from many sources.
Dependence on One or a Few Major Customers:
We rely heavily on sponsors and partners. Sponsors receive greater visibility
whereas partners are provided advertising and media coverage. We are not
dependent on any one sponsor or partner.
Costs and Effects of Compliance with Environmental Laws:
We are not aware of nor do we anticipate any environmental laws with which we
will have to comply.
Number of Employees:
We have one employee, the President. The day to day duties are performed by the
President, contract workers and volunteers.
Operations and Technology:
We are highly dependent on technology. Our operations and customer service model
is dependent on internet servers, software, computer graphics programs, and
memory.
Research and Development:
The company has in development numerous products that will require the use of a
material amount of the assets of the company. Since inception, the company has
spent $30,600 on company-sponsored software development. Future expenditures
will be dependent on the operating income generated.
7
ITEM 2. DESCRIPTION OF PROPERTY
The company shares an office at 101 C North Greenville, Suite 255, Allen, Texas
75002.
ITEM 3. LEGAL PROCEEDINGS
The company is not involved in any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to a vote to the security holders during
2006.
8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
The Common Stock is not currently quoted on any exchange.
Shareholders
As of December 31, 2006, there were 2 record holders of the Common Stock. As of
March 26, 2007, there were 67 record holders of the Common Stock.
Dividends
The Company has not paid cash dividends on any class of common equity since
formation and the Company does not anticipate paying any dividends on its
outstanding common stock in the foreseeable future.
Warrants
The Company has no warrants outstanding.
ITEM 6 MANAGEMENT DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION
SUMMARY OF 2006
In June of 2006, we started testing three approaches with different hardware as
we needed to set a standard performance benchmark. This was done with Intel and
AMD processors and the third differential was the physical memory. We found that
certain configurations had better performance and as we injected these new
configurations into our customer servers we found and created the XDEF service
(proprietary to eMI). This was a great break through for the company as it set
us apart from the competition.
In the latter part of 2006, we filed a registration statement with the U.S.
Securities & Exchange Commission in order to raise funds to expand our business
and execute our business plan. The filing became effective on December 21, 2006
which gave us the opportunity to sell up to 1,000,000 shares of common stock at
$0.50 per share. As of March 26, 2007, we had raised $106,500 by selling 213,000
shares of common stock under that registration statement.
In October 2006, we started researching a better way to maximize our profits
while keeping the integrity of the network. EMazing had done everything it could
on the hardware side and now needed further market research and software
programming to achieve maximization.
Market research indicated that there are tens of thousands of players in the US
and the number is growing every year. A small percentage of these players are in
leagues from amateur to professional. The larger percentage of the playing
community are young adults who do not have a lot a lot of money and therefore
our model had to be cost effective for the average teenager budget.
The software solution had to allow more users with the same XDEF service at a
better price. Thus we designed a prototype for a subscription based game rental
service. The model allows a player to pay by the week, month or even year and
provides flexibility on the time, of use, similar to a gym membership.
Over the first six months of 2007, this will require a significant amount of
programming. The implementation will begin during the second quarter and will be
9
completed by the end of the third quarter. Although this will take time and
additional funds, the rewards are potentially great. Our projections show that
sales should triple overnight and provide us with a platform for sustained
growth.
The process works like this: the only time the server is live and taking up
resources is when a member/customer is playing. When he/she logs out the server
is put to sleep, so even if we have sold 100 servers and only 20 customers are
playing, that's only 20 processes running.
We decided to build it statically but in parallel and continue to run the
current service to maintain our customer base. In November, the programmers
started working on the project and we kept costs down by agreeing to share the
technology as they are primarily game builders.
In February 2007, we started running the new Service in manual mode and testing,
perfecting, configuring the new process.
Results for the Period April 11 (date of inception) to December 31, 2006
Revenues for the period ended December 31, 2006 were $11,963.
Total operating expenses for the period were $93,352 for 2006 generating a net
operating loss of $81,389. Our largest expenses for the year were Computer
(server) Expense of $24,234, Contract Services of $19,869 and Telephone Expense
of $16,592. These costs represent the core of our business and with the
implementation in 2007 of our new service we expect savings in these areas of
about 15%. Since we are a new business, we had many costs that were
non-recurring one time costs which we estimate at $10,000.
Net loss for the period was $81,389.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company, together with the independent auditors'
report thereon of The Hall Group, CPAs appear on pages F-1 through F-9 of this
report.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Management of
Emazing Interactive, Inc.
Rockwall, Texas
We have audited the accompanying consolidated balance sheet of Emazing
Interactive, Inc. and subsidiary of December 31, 2006 and the related
consolidated statements of operations, cash flows and stockholders' equity for
the period from April 11, 2006 (date of inception) to December 31, 2006. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit of these consolidated financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Emazing Interactive,
Inc. and subsidiary as of December 31, 2006, and the results of its operations
and its cash flows for the period then ended in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has suffered significant losses and will
require additional capital to develop its business until the Company either (1)
achieves a level of revenues adequate to generate sufficient cash flows from
operations; or (2) obtains additional financing necessary to support its working
capital requirements. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 5. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ The Hall Group, CPAs
- ------------------------
The Hall Group, CPAs
Dallas, Texas
February 10, 2007
F-1
EMAZING INTERACTIVE, INC.
Consolidated Balance Sheet
December 31, 2006
ASSETS
Current Assets
Cash and Cash Equivalents $ 71
--------
Total Current Assets 71
Fixed Assets
Computer Equipment 19,950
Gaming Software 38,488
Less: Accumulated Depreciation (13,882)
--------
Total Fixed Assets 44,556
--------
TOTAL ASSETS $ 44,627
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 60,218
Other Current Liabilities 23,948
--------
Total Liabilities (All Current) 84,166
Stockholders' Equity
Common stock, $.001 par value, 50,000,000 shares
authorized,5,350,000 shares issued and outstanding 5,350
Additional Paid-In Capital 36,500
Retained Earnings (Deficit) (81,389)
--------
Total Stockholders' Equity (Deficit) (39,539)
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,627
========
The accompanying notes are an integral part of these financial statements.
F-2
EMAZING INTERACTIVE, INC.
Consolidated Statement of Operations
From April 11, 2006 (Date of Inception) to December 31, 2006
REVENUES $ 11,963
OPERATING EXPENSES
Depreciation 13,882
General and Administrative:
Accounting and Professional 5,820
Computer Expenses 24,234
Contract Services 19,869
Licenses and Fees 4,322
Office Expense 3,241
Telephone 16,592
Travel Expense 5,392
-----------
TOTAL OPERATING EXPENSES 93,352
-----------
NET OPERATING (LOSS) (81,389)
OTHER INCOME (EXPENSE)
None 0
-----------
TOTAL OTHER INCOME (EXPENSE) 0
-----------
NET (LOSS) BEFORE INCOME TAXES (81,389)
Provision for Income Taxes (Expense) Benefit 0
-----------
NET (LOSS) $ (81,389)
Beginning Retained Earnings 0
-----------
ENDING RETAINED EARNINGS (DEFICIT) $ (81,389)
===========
EARNINGS PER SHARE
Weighted Average of Outstanding Shares 5,350,000
===========
Income (Loss) for Common Stockholders (0.02)
===========
The accompanying notes are an integral part of these financial statements.
F-3
EMAZING INTERACTIVE, INC.
Consolidated Statement of Changes in Stockholders' Equity
From April 11, 2006 (Date of Inception) to December 31, 2006
Retained
Common Stock Paid-In Earnings
Shares Amount Capital (Deficit) Totals
------------- ------------- ----------------- ----------------- ----------------
Beginning Stockholder's Equity 0 $ 0 $ 0 $ 0 $ 0
Common Stock Issued For:
Assets 5,000,000 5,000 25,600 30,600
Services 250,000 250 1,000 1,250
Cash 100,000 100 9,900 10,000
Net Income (Loss) 0 0 0 (81,389) (81,389)
------------- ------------- ----------------- ----------------- ----------------
Ending Stockholders' Equity
Equity (Deficit) 5,350,000 $ 5,350 $ 36,500 (81,389) $ (39,539)
============= ============= ================= ================= ================
The accompanying notes are an integral part of these financial statements.
F-4
EMAZING INTERACTIVE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FROM APRIL 11, 2006 (DATE OF INCEPTION) TO DECEMBER 31, 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $(81,389)
Adjustments to reconcile net income to net cash
provided by operating activities:
Common Stock Issued for Services 1,250
Depreciation 13,882
Increase in Accounts Payable 60,218
Increase in Other Current Liabilities 23,948
--------
Net Cash Provided by Operating Activities 17,909
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (27,838)
--------
Net Cash (Used) by Investing Activities (27,838)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of Common Stock for Cash 10,000
--------
Net Cash Provided by Financing Activities 10,000
--------
NET INCREASE IN CASH AND CASH EQUIVALENTS 71
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 0
--------
CASH AND CASH EQUIVALENTS AT END OF YEAR 71
========
SUPPLEMENTAL DISCLOSURES
Cash Paid During the Year for Interest Expense 0
========
Noncash Investing Activity
Issues 5,000,000 shares of Common Stock for the following:
Computer Equipment 15,600
Gaming Software 15,000
Services 1,250
--------
Total Noncash Investing Activity 31,850
========
The accompanying notes are an integral part of these financial statements.
F-5
EMAZING INTERACTIVE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------------------------------
Nature of Activities, History and Organization:
-----------------------------------------------
Emazing Interactive, Inc. (The "Company") operates as an online gaming
facilitator through its subsidiary Emazing Gaming, LLC. The Company is
located in Allen, Texas and was incorporated on April 11, 2006 under
the laws of the State of Texas. On October 2, 2006, the Company
converted its corporate charter to domicile in Nevada.
Significant Accounting Policies:
--------------------------------
The Company's management selects accounting principles generally
accepted in the United States of America and adopts methods for their
application. The application of accounting principles requires the
estimating, matching and timing of revenue and expense. Below is a
summary of certain significant accounting policies selected by
management.
Basis of Presentation:
----------------------
The Company prepares its financial statements on the accrual
basis of accounting.
Cash and Cash Equivalents:
--------------------------
All highly liquid investments with original maturities of
three months or less are stated at cost which approximates
market value.
Fixed Assets:
-------------
Fixed assets are depreciated over their useful lives of three
years. Repairs and maintenance is charged to expense as
incurred.
Principles of Consolidation:
----------------------------
The financial statements include the accounts of Emazing
Gaming, LLC, an operating subsidiary. All significant
intercompany transactions and balances have been eliminated.
Earnings (Loss) per Share:
--------------------------
Earnings (loss) per share (basic) is calculated by dividing
the net income (loss) by the weighted average number of common
shares outstanding for the period covered. As the Company has
no potentially dilutive securities, fully diluted earnings
(loss) per share is identical to earnings (loss) per share
(basic).
F-6
EMAZING INTERACTIVE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
NOTE 1 - CONTINUED
- -------------------
Website Software Development Costs:
-----------------------------------
The Company adopted EITF 00-02, "Accounting for website
developments costs". In accordance with EITF 00-02, the costs
incurred for the (i) website application and infrastructure
development; (ii) graphics development; and (iii) content
development, which took the website to a functional stage
where it could receive server and gaming orders, were
capitalized and are being amortized over three years.
Maintenance expenses or costs that do not result in new
revenue producing features or functions, such as updating
information and products or maintenance of the website or
promotion of the website using search engines, are expensed as
incurred. Prior to this development, Emazing had no website.
For the period ended December 31, 2006, $790 has been expensed
and $38,488 capitalized.
Use of Estimates:
-----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
NOTE 2 - FIXED ASSETS
- ---------------------
Fixed assets at December 31, 2006 are as follows:
Computer equipment $ 19,950
Gaming software 38,488
Less: Accumulated Depreciation (13,882)
------------
Total Fixed Assets $ 44,556
============
Depreciation expense was $13,882 for the year ended December 31, 2006.
F-7
EMAZING INTERACTIVE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
NOTE 3 - COMMON STOCK
- ---------------------
The Company is authorized to issue 50,000,000 common shares at a par
value of $0.001 per share. These shares have full voting rights. At
December 31, 2006, there were 5,350,000 shares outstanding as follows:
Shares
At Inception 5,000,000
April 24, 2006 250,000
June 30, 2006 100,000
---------
Total Shares Outstanding 5,350,000
=========
NOTE 4 - INCOME TAXES
- ---------------------
The Company has adopted Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes (SFAS No. 109), which requires the use
of the liability method in the computation of income tax expense and
the current and deferred income taxes payable. Under SFAS No. 109,
income tax expense consists of taxes payable for the year and the
changes during the year in deferred assets and liabilities. Deferred
income taxes are recognized for the tax consequences in future years of
differences between the tax bases and financial reporting bases of
assets and liabilities. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized.
Since the realization of any deferred tax benefits is contingent upon
future earnings, no deferred tax asset has been accrued since the
likelihood of future earnings has not been demonstrated.
The Company had net losses for the year ended December 31, 2006, and
therefore incurred no tax liabilities. The net operating losses and
their expiration dates are as follows:
Expiration
Period Ended Net (Loss) Date
------------ ---------- ----
December 31, 2006 ($81,389) 2026
F-8
EMAZING INTERACTIVE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006
NOTE 5 - FINANCIAL CONDITION AND GOING CONCERN
- ----------------------------------------------
Emazing has an accumulated deficit through December 31, 2006 totaling
$81,389 and had negative working capital of $84,095. Because of this
accumulated loss, Emazing will require additional working capital to
develop its business operations. Emazing intends to raise additional
working capital either through private placements, public offerings
and/or bank financing. See subsequent events per NOTE 6 below. There
are no assurances that Emazing will be able to either (1) achieve a
level of revenues adequate to generate sufficient cash flow from
operations; or (2) obtain additional financing through either private
placement, public offerings and/or bank financing necessary to support
Emazing's working capital requirements. To the extent that funds
generated from any private placements, public offerings and/or bank
financing are insufficient, Emazing will have to raise additional
working capital. No assurance can be given that additional financing
will be available, or if available, will be on terms acceptable to
Emazing. If adequate working capital is not available Emazing may not
continue its operations.
Emazing faces many factors in its ability to continue as a going
concern, including but not limited to, the promotion of its gaming
website, competition from larger and better capitalized companies, and
its ability to create traffic to its website and virtual store. To
date, much of Emazing's activities have been focused on advertising and
promotion to create its identity in the community, and its continued
existence is dependent upon the gaming public purchasing more time on
its gaming servers.
Should the above concerns materialize, it is conceivable that Emazing
would have to suspend or discontinue operations. Management believes
that the efforts it has made to promote its site will continue for the
foreseeable future. These conditions raise substantial doubt about
Emazing's ability to continue as a going concern. The financial
statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the
amount and classification of liabilities that might be necessary should
Emazing be unable to continue as a going concern.
NOTE 6 - SUBSEQUENT EVENT
- -------------------------
The Company sold common shares in the first quarter of 2007 pursuant to
their SB-1 filing effective December 2006. The amount sold as of the
date of this report was $83,500.
NOTE 7 - RELATED PARTY TRANSACTIONS
- -----------------------------------
Amounts due related parties was $23,948 at December 31, 2006.
F-9
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANICAL DISCLOSURES
None.
ITEM 8A. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
------------------------------------------------
We maintain controls and procedures designed to ensure that information
required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation
of those controls and procedures performed within 90 days of the filing
date of this report, our chief executive officer and the principal
financial officer concluded that our disclosure controls and procedures
were adequate.
(b) Changes in internal controls
----------------------------
There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to
the date of the evaluation of those controls by the chief executive
officer and principal financial officer.
10
PART III.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
As of December 31, 2006, the following persons serve as directors and officers
of the Company.
G. Edward Hancock Chief Executive Officer, President, Chief Financial
Officer and Director
G. Edward Hancock, now 18, started in eSports at age 13, being a very talented
game player at an early age opened doors for him at such an early age for the
level of competition offered. From the conception of the most popular game he
has been in the in the top 15% of American players. Coupled with his 10 year
computer and internet experience and knowledge of Game Servers helped him to
understand all aspects of the online gaming industry, particularly game servers
and performance.
In 2001, Mr. Hancock, in conjunction with a few other gamers, opened a game
server rental company in Southern California offering game servers to west coast
of United States; this was a very good learning experience. One of the biggest
lessons of this venture is the shelf life of the computer equipment and
facilities that housed them. If the data center was not set up for online play
then the performance suffered, and this business is all about performance.
In 2003, Mr. Hancock helped open a LAN Game Center in Lake Forest California;
this facility offered game play by the hour and was a very profitable business
in both financially and educationally. This business was sold and Mr. Hancock
re-located to Dallas Texas, the home of the biggest online gaming league in the
world, CAL, The Cyber Athletic League and CPL , The Cyber Professional League
where twice a year teams and players from all over the world come to compete for
over 100,000 in money and prizes. Mr. Hancock is now concentrating on managing
teams as well as competing as EMazing's sponsored teams, (called eMg) now
represent over 15 teams through out the world. Most of the teams are in the US
and Canada and are supplied game servers from the eMg XDEF network.
In late 2005, Mr. Hancock started up eMg's XDEF network, a high end gaming
server rental company specializing in high performance game servers as well as
low cost economical game servers for beginners. Over the next year, this
business has grown to one of the top US game server rental companies offering
the high end consistent service game servers demand.
ITEM 10. EXECUTIVE COMPENSATION
Our executive officer received $-0- in 2006.
11
ITEM 11. SECUIRTY OWNERSHIP OF MANANGEMENT AND BENEFICIAL OWNERS
As of December 31, 2006, the following persons are known to the Company to own
5% or more of the Company's Voting Stock:
Title/relationship Amount owned
to Issuer Name of Owner before offering Percent
- --------------------------------------------------------------------------------
President, Secretary
and Director G. Edward Hancock 5,000,000 93.46%
Shareholder Oxford Guild, Ltd. * 350,000 6.54%
--------------------------
All officers, directors, and
10% shareholders as a group 5,350,000 100.00%
* James Wilkinson is the beneficial owner of Oxford Guild, Ltd.
12
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTION
None.
ITEM 13. EXHIBITS, FINANICAL STATEMENTS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report: Included in Part
II, Item 7 of this report:
Independent Auditor's Report
Consolidated Balance Sheet as of December 31, 2006
Consolidated Statement of Operations for the period April 11, 2006
(date of inception) to December 31, 2006
Consolidated Statement of Stockholders' Equity for the period April 11,
2006 (date of inception) to December 31, 2006
Consolidated Statement of Cash Flows for the period April 11, 2006
(date of inception) to December 31, 2006
Notes to the Consolidated Financial Statements
(b) The company filed the following Form 8-K's in 2006.
None.
(c) Exhibits
31 Certification
32 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 - CEO and CFO
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) AUDIT FEES
The aggregate fees billed for professional services rendered by our auditors,
for the audit of the registrant's annual financial statements and review of the
financial statements included in the registrant's Form 10-KSB or services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for fiscal year 2006 was $3,860.
(2) AUDIT-RELATED FEES
$3,860
(3) TAX FEES
NONE
13
(4) ALL OTHER FEES
NONE
(5) AUDIT COMMITTEE POLICIES AND PROCEDURES
The Company does not have an audit committee.
(6) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
Not applicable.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Annual Report on Form 10-KSB to be signed on its
behalf by the undersigned hereunto duly authorized.
EMAZING INTERACTIVE, INC.
By: /s/ G. Edward Hancock
---------------------
G. Edward Hancock
Chief Executive Officer AND Chief Financial Officer
Dated: April 10, 2007
Exhibit 31
CERTIFICATION
I, G. Edward Hancock, certify that:
1. I have reviewed this annual report on Form 10-KSB of EMazing Interactive, Inc.
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: April 10, 2007
/s/ G. Edward Hancock
G. Edward Hancock
Chief Executive Officer and Chief Financial Officer
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of EMazing Interactive, Inc. (the “Company”) on Form 10-KSB for the period ending December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report’), I, G. Edward Hancock, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
/s/ G. Edward Hancock
G. Edward Hancock
Chief Executive Officer and Chief Financial Officer
April 10, 2007