SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC  20549UNITED STATESFORM 10-KSB x
ANNUAL REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED: September 30,
  2008ORo
TRANSITION REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM
  __________________TO _________________ COMMISSION FILE NUMBER 33-20783-D GOTTAPLAY INTERACTIVE, INC.(Name
of Small Business Issuer in Its Charter) NEVADA
20-1645637(State or other jurisdiction of
(IRS Employerincorporation or organization
Identification No.)  64 Commercial AvenueGarden City, New York
11530(Address of principal executive offices)
(Zip Code) (800) 826-2379(Registrants
telephone number, including area code) Securities registered pursuant to Section
12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None COMMON STOCK, PAR VALUE $.001 PER SHARE   Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 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.     Yes xNoo

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained,
to the best of the Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB o.

The Registrants revenue for its most recent fiscal year:  $975,495.

The aggregate market value of the Registrants common stock, $.001 par
value, held by non-affiliates as of December 31, 2008 on the OTC Bulletin
Board, was: $597,609.

As of December 31, 2008 there were 39,840,574 shares of the
Registrants common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:
No documents are incorporated by reference into this Annual Report on
Form 10-KSB.

2

Table of Contents

Item 1.
Description of Business.
4Item 2.
Description of Property.
20Item 3.
Legal Proceedings.
20Item 4.
Submission of Matters to
  a Vote of Security Holders.
21PART IIItem 5.
Market for Common Equity
  and Related Stockholder Matters.
21Item 6.
MANAGEMENTS DISCUSSION
  AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
23Item 7.
Consolidated Financial
  Statements.
33Item 8.
Changes in
  and
  Disagreements with Accountants on Accounting and Financial Disclosure.
33Item 8A.
Controls and Procedures
33Item 8B.
Other Information
34PART IIIItem 9.
Directors, Executive
  Officers, Promoters, Control Persons and Corporate Governance; Compliance
  With Section 16(a) of the Exchange Act.
34Item 10.
Executive Compensation.
36Item 11.
Security Ownership of
  Certain Beneficial Owners and Management and Related Stockholder Matters.
36Item 12.
Certain Relationships
  and Related Transactions.
37Item 14.
Principal Accountant
  Fees and Services.
37SIGNATURES
393

PART I

Item
  1.
Description
  of Business.We are an on-line video game rental subscription business dedicated to
providing customers with a quality rental experience through our web site,
www.gottaplay.com.  The service is an
alternative to store based gaming rentals.
We seek to provide our customers with a large selection of video game
rental choices on a monthly subscription basis.  Customers can sign-up via our web page to rent and/or buy video
games of their choice.  Once they have
made their selection(s), the titles are then shipped to the customer via first
class mail. Active subscribers can retain the games for an indefinite amount of
time as long as they are active paying subscribers.  Customers can exchange their selections at anytime by returning
their game(s) in our pre-paid and pre-addressed envelope. We also offer gamers
a trading platform in which to they can trade their personal games among other
subscribers.  We also have purchased and
wholesaled previously owned games.

History of the Company

Gottaplay Interactive, Inc. (the Company) was formed in Nevada in
July 2004 under the name of Donobi, Inc. and is the successor to H-NET.NET,
Inc., which was formed under the laws of Colorado in May 1986.  On July 24, 2006, pursuant to a Merger
Agreement (the Agreement), Gotaplay Interactive, Inc. (Gotaplay), a
privately held Nevada corporation, merged with Donobi, Inc.  In accordance with the Agreement, the
Registrant (a) completed a one for 6 reverse stock split; (b) issued 17,744,618
post-reverse split shares of common stock to the former stockholders of
Gotaplay; (c) amended the Articles of Incorporation by changing the name of the
Registrant from Donobi, Inc. to Gottaplay Interactive, Inc.; and, (d) except
for William M. Wright, III and Norm Johnson, the directors of the Registrant
resigned and the three former directors of the Gotaplay were elected to the
board of directors of Registrant. As a result of the Merger, voting control
changed and, except for Mr. William M. Wright, III, who remained as Chief
Operating Officer, the other current officers resigned and were replaced by
Officers selected by Gotaplays management (see Directors and Executive
Officers).

Upon consummation of the Merger we assumed all of the business
operations of Gotaplay to include their assets, their debts and their
commitments, such as leases and consultant agreements.

Effective August 1, 2007, we completed the divestiture of Donobi by
selling all of the outstanding stock to Focus Systems, Inc., a Washington
corporation.  Focus Systems, Inc. is
controlled by William M. Wright, III, our then Chief Operating Officer.  In consideration for the stock, Focus
Systems, Inc. received all the assets and assumed significantly all the liabilities
associated with this operation. As part of the transaction, Mr. Wright, III
resigned from his position as Chief Operating Officer and Director and Norm
Johnson also resigned as Director.

Donobi, was our wholly-owned subsidiary, commonly referred to as the
Internet service provider (ISP) business (Donobi) with operations in
Washington, Oregon and Hawaii. It offered Internet connectivity to individuals,
multi-family housing, businesses, organizations, educational institutions and
government agencies. Donobi provided high quality, reliable and scalable
Internet access, web hosting and development, equipment co-location, and
networking services to underserved rural markets. Donobis overall strategy was
to become the dominant Internet service provider for residents and small to
medium-sized businesses within certain rural and semi-rural areas in the United
States.

We are headquartered at 64 Commercial Avenue, New York 11530 and our
telephone number is (800) 826-2379. We maintain an Internet site on the World
Wide Web (WWW) at www.gottaplay.com.
Information contained on our Web site is not and should not be deemed to
be a part of this Form 10-KSB.

4

Industry Overview

According to a 2008 study by the
Entertainment Software Association (ESA), an association exclusively
dedicated to serving the business needs of companies that produce and publish
computer and video games for game consoles, personal computers and the
Internet, the following ESA recent statistics are about the gaming industry:


U.S. combined computer and video games sales grew approximately 28%
  in 2007 to $9.5 billion over $7.4 billion recorded in 2006.  Sales in 2007 were more than triple the
  overall  industry sales since 1996.
Video game sales for 2007 and 2006 were approximately $8.64 billion
  and $6.46 billion, respectively, or an impressive increase of 33.7%.
Sixty-five percent of American households play computer and/or video
  games.
Average age of a gamer is 35 years and that person has been playing
  for 13 years; 49% of the gamers are age 18 to 49 years; 26% are over 50 years
  old; and,  25% of the gamers are under
  18 years old.
Forty percent of game players are women.
Twenty-six percent of Americans over age 50 played video games, an increase
  of 9 percent over 1999.
Thirty-six percent of heads of households play games on a wireless
  device, such as a PDA or cell phone, up from 20 percent in 2002
Sixty-three percent of parents believe games are a positive part of
  their childrens lives.
Ninety-four percent of game players under the age of 18 report that
  their parents are present when  they
  purchase and/or rent games.
Among the most frequent gamers are adult males with an average of 15
  years of gaming, whereas women averaged of
  12 years of gaming.In October 2008, video game sales jumped 18 percent, per the market
research firm NPD Group.

Combined video game software sales and rentals in the United States
increased 23.7% in 2007 as reported by Jupiter Research.

From all indicators and market analyses, the  videogame industry, both in terms of sales and rental
revenues,  appears to be somewhat
resistant to the gloom enveloping the rest of the national economy and
extremely strong to continue its niche and growth in the entertainment market.
It seems clear that interactive entertainment is a great value in a down
economy because it allows those persons playing games to be entertained at
home as compared to a more expensive alternative to going out.

Sales of video games and consoles continue to be hot selling items.
GameStop Corporation, the largest stand-alone retailer in the world, predicts a
conservative growth rate between 10 to 15 percent next year, an excellent
growth in sales even in our repressed economy.

Accordingly, based on all available industry data and studies, we
believe all indicators point to a long-term, incremental increase in video game
usage and continued popularity.  Our
company has positioned itself to attract new and existing gamers by offering
three cost-effective rental pricing programs as an alternative to buying the
newest and expensive releases.

Trends and Developments

The on-line video game rental market is increasing as more next
generation platforms are being introduced to the market.  A result of
the introduction of new consoles, the retail cost of new game purchases
has increased.  Consumers now prefer to
rent and try new release games before they invest in the actual purchase.  In addition, Internet users continue to utilize  the
Internet as a primary venue for spending
their entertainment dollars and accessing websites to service their needs. This
trend can be documented with the increasing popularity of on-line movie rentals
shipped via the United States Postal Service (USPS).  Consumers are now finding the use of the
Internet to facilitate instant, convenient and secure access to various and
affordable services and products, and not spend their valuable time in their
vehicle to pick up and return a product, such as a video game.  Delivery of these products is to their front
door via the USPS.  This type of
delivery service is expected to grow substantially over the next several years
due its convenience and cost savings to the end user, our video game
subscriber.

5

The video game operations known external market trends have been
limited due to the fact that the business in which we operate is an emerging
segment within the on-line industry. However, these trends are generally
limited to competition from well established retailers and newly formed on-line
game rental companies.  There may be a
negative impact to our operations due to the seasonal availability of popular
game titles, and therefore, revenues and inventory costs tend to increase
during the latter part of the calendar year due to the holiday season. We also
believe that there could be a negative impact on the operations of our company
due to a lack of titles from certain suppliers. In addition, the introduction
of new gaming platforms can create scarcity of game titles resulting in
subscriber dissatisfaction and higher costs associated with the limited
available titles.  Certain games may not
be available due to high consumer demand of a specific title or a lack of the
required capital to purchase enough units of high demand games to fill customer
requests. If we are not successful in raising the capital or establishing a
credit line, these purchases, more likely than not, will not meet our
projections and the anticipated.

Business Overview

We are providing approximately 985 active subscribers monthly access to
a comprehensive library of approximately 3,900 gaming titles, spanning six of
the most popular gaming consoles. We have multiple subscription plans, which
allow subscribers to have one to three titles out at the same time with no due
dates, late fees or shipping charges.
In addition to our standard plan, we offer other service plans with
different price points that allow subscribers to keep either fewer or more
titles at the same time.  Aided by our
subscriber rating system, subscribers select titles on our web site, receive
them by first-class mail, which are returned by them at their convenience using
our prepaid mailers. Once a title has been returned, we mail the next available
title in the subscribers queue.

We utilize proprietary technology developed internally to manage the
processing and distribution of our comprehensive library of games from our
distribution center (DC) located in the State of New York. Game Distribution
Software (GDS) is a network of administrative functions including order
fulfillment, inventory forecasting and procurement, inventory control, billing
and customer service.  If we eventually
need more distribution centers, our GDS network is capable of communicating with
each DC to determine which games can be sent out to subscribers enabling
maximum usage of on hand inventory throughout the entire company, which in turn
reduces the amount of inventory purchases that we need to make. This propriety
software has an automated process of tracking and routing titles to and from
any DC, if we had more than one,  and
would  allocate order responsibilities
among them. Our GDS software also provides us with the opportunity to scale up
our operations quickly at any given time.

Currently, we have one DC, whereas in the past we had several DCs
strategically located throughout the United States.  All but the New York distribution center have been closed due to
cost containment and reducing our overhead.

Games are shipped throughout the United States from our distribution
center in New York by the United States Postal Service (USPS).  All games are mailed first class.  Games can
take from  one to nine days to
reach subscribers, depending on their address.
Slow delivery of games, popular games constantly out of stock, games
sent that are damaged, to the wrong address, are critical barriers to
overcome.  It is difficult to add new
members and retain existing subscribers if problems like these described
continue without short-term resolution.

Today, we primarily promote our service to consumers through the
internet via our website and various search engines.  We do not have a formal marketing and advertising program at this
time.  We are in the process of
developing this very important element of a successful company. We plan to
utilize the various mediums such as
television spots,  magazine and
newspaper insertions, college campus alliances, grocery and pharmacy chain
marketing.  We also would like to
develop a strategic relationship with the leading game console manufacturers
and gaming promoters.  We will implement
selected advertising and marketing campaigns upon adequate funding of the
business.

6

Our current rental program, which is common among to on-line video game
rental companies, is a free ten-day trial period of our service.  At the end of the trial period, subscribers
are automatically enrolled as paying subscribers, unless they cancel their
subscription.

We have almost every title available excluding adult content.

We are focused on growing our subscriber base and revenues and
utilizing our proprietary technology to minimize operating costs. The
technology is extensively employed to manage and integrate our operations,
including a website interface, order processing, fulfillment operations and
customer service.  We believe our
proprietary technology provides us with a competitive advantage over our
competitors whereby it allows us to maximize the library utilization and to run
the fulfillment operations in an extremely flexible manner with minimal capital
requirements.

All of the video game rental revenues are generated in the United
States, and substantially all the revenues are derived from monthly
subscription fees.

Gottaplays Web Sitewww.gottaplay.com.

We have applied substantial resources to plan, develop and maintain
proprietary technology to implement the features of our web site, such as
subscription account signup and management, inventory optimization, overall
subscriber satisfaction, and customer support.
The software is written in a variety of programming languages and runs
on industry standard platforms.

We believe our dynamic software optimizes subscriber satisfaction and
management of the library by allowing each subscriber to view its current queue
and rental history, as well as current inventory levels and real-time
availability. The proprietary software also enables subscribers to prioritize
their selections.  In addition, the
proprietary game search engine indexes its extensive library by title, genre,
developer and publisher among others.

The GDS has been developed keeping scalability at its core.  Expanding operations, including the roll-out
of new distribution centers can be done with ease and in the most effective
manner of time requiring the least amount of resources.  The software has enabled our network of
distribution centers across the country to communicate with one another in a
real-time environment resulting in optimum levels of operation, delivery and
customer satisfaction.  Inventory levels
can be viewed by all distribution centers by using the software.

The Gottaplay account signup and management tools provide an easy to
use subscriber interface familiar to on-line shoppers.  We have integrated a real-time postal
address validation to help subscribers enter correct postal addresses and to
determine the additional postal address fields required to assure speedy and
accurate delivery.  We use an on-line
credit card authorization service to help the subscribers avoid typographic
errors in their credit card entries.
These features help prevent fraud and subscriber disappointment
resulting from failures to initiate a trial subscription.

Throughout our website, we have extensive measurement and testing
capabilities, allowing us to continuously optimize our website for our needs,
as well as those of our subscribers.

Our website is run on hardware and software co-located at a certified
service provider offering a reliable network of connections, power, air
conditioning and other essential infrastructure. Our website is managed
twenty-four hours a day, seven days a week by our service provider.  They also utilize a variety of proprietary
software, freely available and commercially supported tools, integrated in a
system designed to rapidly and precisely diagnose and recover from
failures.  They conduct upgrades and
installations of software in a manner designed to minimize disruptions to our
subscribers.

7

Merchandizing

All subscribers and site visitors are given many opportunities to rate
titles.  We also provide ratings,
reviews and third party recommendations to assist them with selecting and
prioritizing their queue.  The game
rating service is used to help subscribers compare rating and recommendations
from our on-line shared community of gamers, as well as our Content on Demand
service, to further assist in the selection process of renting games.  Reviews, ratings and discussions are
compiled and shared with our on-line gaming community.  Content on Demand is an exclusive service offered
to our subscribers, which provides subscribers with reviews, screenshots,
trailers and industry ratings.

We also provide subscribers with decision support information about
each title in its library.  This
information includes:


Factual data,
  including rating, special game features and screen formats; and
Editorial
  perspective, including plot synopses, game trailers and reviews written by
  our editors, third parties and by other Gottaplay subscribers.Marketing

Our only marketing and advertising this past year has been through
content our web-site and, if someone was searching for a game rental service,
then  internet search engines, such as
Google and Yahoo our company name would
be displayed and linked back to our web-site

Suppliers

We purchase our games directly from distributors and wholesalers.   We are also planning to acquire our
games
from manufacturers, developers and distributors under revenue sharing
agreements.  We would like to obtain
certain titles at a low initial cost in exchange for a commitment to share a
percentage of the subscription revenue for a finite period of time.  After the revenue sharing agreement expires,
the agreement generally would grant us the right to acquire the title for a
minimal cost.

Fulfillment Operations

We currently stock approximately 3,900 titles, which span the six most
popular stationary and game console platforms.
We have allocated resources for the development, maintenance and testing
of the proprietary technology that helps us manage the fulfillment of
individual orders and the integration of our web site, transaction processing
systems, fulfillment operations, inventory levels and coordination of the
distribution centers.

Our mission is to continuously improve on the delivery time to each
subscriber resulting in less attrition and greater subscriber retention.  We continue to work closely with the U. S.
Postal Service in an effort to improve our delivery and mailing cost per unit.  In the future, we will strive to set minimal
delivery times but due to the fact we have only one distribution center located
on the east coast today, we want to be as efficient and effective as possible
in timely mailing the games.  In due
time,  we will set delivery time targets
by various regions.

Customer Service

We believe our ability to establish and maintain long-term
relationships with subscribers depend, in part, on the strength of our customer
support and service operations. We encourage and utilize frequent communication
with and feedback from the subscribers in order to continually improve the web
site and our service. Our customer service center is open seven days a
week.  We primarily utilize e-mail to
proactively correspond with subscribers. This department also focuses on
eliminating the causes of customer support calls and automating certain
self-service features on the web site, such as the ability to report and
correct most shipping problems and credit card related issues.

Competition

The market for in-home video game entertainment is intensely
competitive and subject to rapid change.
Many consumers maintain simultaneous relationships with multiple in-home
game entertainment providers and can easily shift spending from one provider to
another.  For example, consumers may
rent a game from Blockbuster, buy a game from Wal-Mart and subscribe to
Gottaplay, or some combination thereof, all in the same month.

8

Game rental outlets and retailers with whom we compete include
Blockbuster, Hollywood Entertainment, Amazon.com, Wal-Mart Stores and Best
Buy.  We believe our scalable business
model, the subscription service with home delivery and instant  access to our comprehensive library,  competes favorably against
traditional game
rental outlets.

We also compete against other on-line game subscription services, such
as GameFly.com and NumbThumb.com among others.

On-line video gaming (OVG) has received considerable media attention
recently.  Within a few years, we
believe OVG will become widely available to Internet enabled game consoles subscribers.  OVG carries as many titles as can be
effectively merchandized on a game console platform, which we believe to be
generally up to 100 recent releases. For consumers who primarily want the
latest big releases, OVG may be a convenient distribution channel.  We believe this strategy of developing a
large and growing subscriber base and the ability to personalize the library to
each subscriber by leveraging the extensive database of user preferences, also
positions us favorably, to provide digital distribution as that market
develops. We are investigating this venue and, if funding is available,  plan to enter the OVG market in the future
by offering gaming servers to allow gamers to play each other over the Internet.

Intellectual Property

We use a combination of copyright, trade secret laws and
confidentiality agreements to protect our proprietary intellectual property. We
intend to aggressively register the trademark for the Gottaplay.com name and
copyrights on the content of our web site. We intend to file applications for
additional trademarks as well.

Enforcement of intellectual property rights is costly and time
consuming. To date, we have relied primarily on proprietary processes and
know-how to protect our intellectual property. It is uncertain, if and when,
our patent and trademark applications may be allowed and whether they will
provide us with a competitive advantage.

From time to time, we may encounter disputes over rights and
obligations concerning intellectual property. We believe our service offering
does not infringe on the intellectual property rights of any third party.
However, there can be no assurance that we will prevail in any intellectual
property dispute.


Employees and Contractors

We have three full-time employees.
One of these individuals performs in certain administrative and
compliance functions and while the other two individuals are in charge of
customer service, all computer/ software and internet technology and support
functions.  None of the employees are
represented by a labor union or a collective bargaining agreement. We consider
our relations with these employees to be very good.

In addition, we use the services of hourly contract labor along with
independent consultants and financial advisors.

Government Regulation

There are currently few laws or regulations directly governing access
to, or commerce upon, the Internet. Due to the increasing popularity and use of
the Internet, it is possible that a number of laws and regulations may be
adopted with respect to the Internet, covering issues such as user privacy,
pricing and characteristics and quality of products and services.

Also, it is possible that laws will be adopted or current laws
interpreted in a manner to impose liability on on-line service providers, such
as us, for linking to third party content providers and other Internet sites
that include materials that infringe copyrights or other rights of others. Such
laws and regulations if enacted could have an adverse effect on our business,
operating results and financial condition. Moreover, the applicability to the
Internet upon the existing laws governing issues such as property ownership,
copyright defamation, obscenity and personal privacy is uncertain, and we may
be subject to claims that our services violate such laws. Any such new
legislation or regulation or the application of existing laws and regulations
to the Internet could have a material adverse effect on our business, operating
results and financial condition.

9

We are also subject to various federal, state and local laws that
govern the access to and the use of our website, the disclosure, retention, and
security of subscriber records and information, including laws pertaining to
the use of our membership transaction database.  We must comply with various regulations affecting our business,
including federal, state and local securities, advertising, consumer
protection, credit protection, minimum wage, labor and employment, health and
safety and other regulations.

Available Information, Investor Relations and
Certifications

We file annual and quarterly reports, proxy and  information statements and other information
regarding our Company activities  with
the Securities and Exchange Commission (SEC).  The public may access these reports and any materials we filed
with the SEC at the SECs Internet site: http://www.sec.gov.

Our Internet website is www.gottaplay.com, and the Investor Relations
section may be accessed via our website.
The information contained on the
website does not constitute part of this annual report on Form 10-K.

Our Stock Transfer Agency is:

Colonial Stock Transfer Company
66 Exchange Place
Salt  Lake City, Utah 84111
Ph: 801-355-5740
Web: www.colonialstock.com

Our Independent Registered Public Accounting Firm is:

Lake and Associates, CPAs LLC 
1905 Wright Boulevard
Schaumburg, IL 60193

Our Stock Listing is:

Gottaplay Interactive, Inc. $001 par value common stock trades over the
counter under the symbol GTAP.OB.

Certifications filed are:

We have filed with the SEC the certifications of our Interim Chief
Executive and Interim Chief Financial Officer required under Section 302 of the
Sarbanes-Oxley Act of 2002 with respect to this Annual Report on Form 10-KSB.
The certifications are attached hereto as Exhibits 31.1 and 32.1, respectively.

RISK FACTORS

The actual results of our Company may differ materially from those
anticipated in our forward-looking statements.
Gottaplay operates in a market environment that is difficult to forecast
and predict and involves significant risks and uncertainties, many of which
will be beyond our Companys control.
Additional risks and uncertainties not presently known to us, or that
are not currently believed to be important to you, if they materialize, also
may adversely affect our Company. If any of the following risks actually
occurs, our business, financial condition and results of operations could be
harmed.  In that case, the trading price
of our common stock could decline, and you could lose all or part of your
investment.

10

Risks Relating to Our Business

Gottaplay has not had an operating profit
since its inception. Continuing losses may exhaust our capital resources and
force us to discontinue operations.

Through September 30, 2008, Gottaplay has incurred cumulative losses of
approximately $11.4 million.  We cannot
assure you that  we will achieve
profitability in the immediate or in the near-term or at any future time.

We have had significant working capital
deficits, which makes it more difficult to obtain capital necessary for our operations,
which may have an adverse effect on our future business.

As of September 30, 2008, we had a working capital deficit of
$3,687,143.  If all of the current
liabilities were to become due at the same time, we would not be able to pay
them in full, which most likely would have a material negative impact on our
business and future prospects.

We cannot assure you that we can achieve or sustain profitability on a
quarterly or annual basis in the future.
If revenues grow more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted accordingly, we will
continue to incur losses.  We will
continue to incur losses until we are able to establish significant
subscriptions for our game rentals over the Internet. Our possible success is
dependent upon the successful development and marketing of our web site and
products, as to which there is no assurance. Any future success that we might
enjoy will depend upon many factors, including factors out of our control or
which cannot be predicted at this time. These factors may include changes in or
increased levels of competition, including the entry of additional competitors
and increased success by existing competitors, changes in general economic
conditions, increases in operating costs, including costs of supplies,
personnel and equipment, reduced margins caused by competitive pressures and
other factors. These conditions may have a materially adverse effect upon us or
may force us to reduce or curtail operations.
In addition, we may require additional funds to sustain and expand our
sales and marketing activities, particularly if a well-financed competitor
emerges.  If we need additional
financing, however there can be no assurance that financing will be available
in amounts or on terms acceptable to us, if at all. The inability to obtain
sufficient funds from operations and external sources would require us to
curtail or cease operations. Any additional equity financing will involve
substantial dilution to our then existing shareholders.

If our efforts to attract game rental
subscribers are not successful, our revenues will be affected adversely.

We must continue to attract and retain subscribers. To succeed, we must
continue to attract a number of subscribers who have traditionally used game
retailers and game rental outlets. Our ability to attract and retain
subscribers will depend in part on our ability to consistently provide our
subscribers a high quality experience for selecting, receiving, playing and
returning titles. If consumers do not perceive our service offering to be of
quality, or if we introduce new services that are not favorably received by
them, we may not be able to attract or retain subscribers. If our efforts to
satisfy our existing subscribers are not successful, we may not be able to
attract new subscribers, and as a result, our revenues will be affected
adversely.

If we experience excessive rates of
subscriber turn over, our revenues and business will be harmed.

We must minimize the rate of loss of our existing subscribers while
adding new subscribers. Subscribers cancel their subscription to our service
for many reasons, including a perception that they do not use the service
sufficiently, delivery takes too long, the service is a poor value and customer
service issues are not satisfactorily resolved. We must continually add new
subscribers both to replace subscribers who cancel and to grow our business
beyond our current subscriber base. If too many subscribers cancel our service,
or if we are unable to attract new subscribers in numbers sufficient to grow
our business, our operating results will be adversely affected. Further, if
excessive numbers of subscribers cancel our service, we may be required to
incur significantly higher marketing expenditures than we currently anticipate
replacing these subscribers with new subscribers.

11

If we are unable to offset an increase in
demand for games with an increase in subscriber retention,  our operating margins and our operating
results may be affected adversely.

Subscribers to our service can play as many games as they want every
month and, depending on the service plan, may have out between one and three
games at a time.  As a result, our
subscribers have been able to exchange more titles each month, which has
increased our operating costs. If we establish additional DCs or further
refine our distribution process and GDS, we may see a continued increase in
usage by our subscribers.  In addition,
subscriber demand for games may increase for a variety of other reasons beyond
our control, because of: (a.) manufacturer promotions, (b.) the introduction of
new gaming platforms, and, (c.) the scarcity of the most popular games. If our
subscriber retention does not increase or our operating margins do not improve
to an extent necessary to offset the effect of increased operating costs, our
operating results will be adversely affected.

If our subscribers select titles that are
more expensive for us to acquire and deliver more frequently, our expenses will
increase.

Certain titles cost us more to acquire depending on the source from
whom they are acquired and the terms on which they are acquired. If subscribers
select these titles more often on a proportional basis compared to all titles
selected, then our acquisition costs could increase, and our gross margins
could be adversely affected.

If we do not correctly anticipate our short
and long term needs for game titles, our subscriber satisfaction and results of
operations may be adversely affected.

If we do not acquire sufficient copies of popular games/titles, we may
not satisfy subscriber demand, and our subscriber satisfaction and results of
operations could be adversely affected.
Conversely, if we attempt to mitigate this risk and acquire more games
than actually needed to satisfy our subscribers demands, our inventory
utilization would become less effective and our gross margins would be
adversely affected.  Our ability to
accurately predict subscriber demand is critical in ordering an adequate
inventory to meet our subscriber demands for games in the more popular
platforms and titles.  If we do not
achieve this balance, our business may be adversely impacted.

Any significant disruption in service on our
Web site or in our computer systems could result in a loss of subscribers.

Subscribers and potential subscribers access our service through our
Web site, where the game selection process is integrated with our delivery
processing systems and software. Our reputation and ability to attract, retain
and serve our subscribers is dependent upon the reliable performance of our Web
site, network infrastructure and fulfillment processes. Interruptions in these
systems could make our Web site unavailable and hinder our ability to fulfill
selections. Service interruptions or the unavailability of our Web site could
diminish the overall attractiveness of our subscription service to existing and
potential subscribers.

Our servers are vulnerable to computer viruses, physical or electronic
break-ins and similar disruptions, which could lead to interruptions and delays
in our service and operations, as well as, loss, misuse or theft of data. Any
attempts by hackers to disrupt our Web site service or our internal systems, if
successful, could harm our business, be expensive to remedy and damage our
reputation. We do not have an insurance policy that covers expenses related to
direct attacks on our Web site or internal systems. Efforts to prevent hackers
from entering our computer systems are expensive to implement and may limit the
functionality of our services. Any significant disruption to our Web site or
internal computer systems could result in a loss of subscribers and adversely
affect our business and results of operations.

12

Our servers utilize a number of techniques to track, deter and thwart
attacks from computer viruses, physical or electronic break-ins and similar
disruptions, which could lead to interruptions and delays in our service and
operations as well as loss, misuse or theft of data. We currently use both
hardware and software to secure our systems, network and, most importantly, our
data from these attacks. This includes several layers of security in place for
our protection and that of our members data. We also have procedures in place
to ensure that the latest security patches and software are running on our
servers - thus maintaining another level of security.

If we experience excessive credit card
chargebacks, we may be suspended from processing credit card transactions for
that particular credit card company, such as MasterCard, VISA and American
Express, for an indeterminate period of time, which would significantly and
indefinitely harm our business.

We charge our subscribers a monthly subscription fee via the three
major credit card companies, MasterCard, VISA and American Express.  If we experience excessive chargebacks over
several successive months with any of these respective credit card companies,
we may be suspended  from processing
charges in the future.  Excessive
chargebacks in our business may result from: (a.) fraud, (b.) disputed
transactions, and (c.) subscribers not completely understanding the proper
procedure(s) to cancel their ten-day trial period and/or their regular
subscription.  Accordingly, we implemented
several additional procedures to: (a.) discover and mitigate a fraudulent
transaction submission, (b.) more accurately validate the authorized user of
the credit card, and (c.) provide clearer and better website instructions for
the customer who desires to cancel their subscription.

We must minimize and contain the rate and number of chargeback
transactions per total transactions processed over a specified period of time
or a credit card company may cancel all processing privileges in accordance
with the terms of our agreement. If we should lose the ability to process with
any of these three major credit card companies, we will lose a significant
amount of revenue and cash flow, all of which may cause the company to fail.

If our credit card processor significantly
increases our processing fees, or alters the processing and  operating rules under which we operate,
these changes could increase our operating expenses and adversely affect our
business.

Our subscribers pay their monthly subscriptions using credit
cards.  Our acceptance of these payments
requires a fee to be immediately deducted from the approved subscriber fee by
the credit card processor.  These fees
may increase for a variety of reasons such as, increase rates by the processor
or the numbers of transactions have changed causing the base fee structure to
increase or decrease depending on the then effective processing
arrangement.  Any significant increase
in these fees will adversely affect our results of operations.

If government regulation of the Internet or
other areas of our business changes or if consumer attitudes toward use of the
Internet change, we may need to change the manner in which we conduct our
business, or incur greater operating expenses.

The adoption or modification of laws or regulations relating to the
Internet or other areas of our business could limit or otherwise adversely
affect the manner in which we currently conduct our business. In addition, the
growth and development of the market for on-line commerce may lead to more
stringent consumer protection laws, which may impose additional burdens on us.
If we are required to comply with new regulations or legislation or new
interpretations of existing regulations or legislation, this compliance could
cause us to incur additional expenses or alter our business model.

The manner in which Internet and other legislation may be interpreted
and enforced cannot be precisely determined and may subject either us or our
customers to potential liability, which in turn could have an adverse effect on
our business, results of operations and financial condition. The adoption of
any laws or regulations that adversely affect the popularity or growth in use
of the Internet could decrease the demand for our subscription service and
increase our cost of doing business.

13

In addition, if consumer attitudes toward use of the Internet change,
consumers may become unwilling to select their entertainment on-line or
otherwise provide us with information necessary for them to become subscribers.
Further, we may not be able to effectively market our services on-line to users
of the Internet. If we are unable to interact with consumers because of changes
in their attitude toward use of the Internet, our subscriber acquisition and
retention may be affected adversely.

If our efforts to build strong brand identity
and improve subscriber satisfaction and loyalty are not successful, we may not
be able to attract or retain subscribers, and our operating results will be
affected adversely.

The Gottaplay brand is still young, and we must continue to build
strong brand identity. To succeed, we must continue to attract and retain a
number of owners of video game players who have traditionally relied on
store-based rental outlets and persuade them to subscribe to our service
through our Web site. We may be required to incur significantly higher
advertising and promotional expenditures than we currently anticipate
attracting numbers of new subscribers. We believe that the importance of brand
loyalty will increase with a proliferation of game subscription services and
other means of distributing games disks. If our efforts to promote and maintain
our brand are not successful, our operating results and our ability to attract
and retain subscribers will be affected adversely.

If we are unable to manage the mix of
subscriber acquisition sources, our subscriber levels may be affected adversely
and our marketing expenses may increase.

We utilize a mix of incentive-based and fixed-cost marketing programs
to promote our service to potential new subscribers. We obtain a portion of our
new subscribers through our on-line marketing efforts, direct links and our
active affiliate program. While we opportunistically adjust our mix of
incentive-based and fixed-cost marketing programs, we attempt to manage the
marketing expenses to come within a prescribed range of acquisition cost per
subscriber. If we are unable to maintain or replace our sources of subscribers
with similarly effective sources, or if the cost of our existing sources
increases, our subscriber levels may be affected adversely and our cost of
marketing may increase.

If we are unable to market our service, our
ability to attract new subscribers may be affected adversely.

We need to market our service through various marketing channels and
other effective means.  If we are not
able to market our services and create a positive image  through the various channels, our company
identity could be lost in the massive marketing mainstream whereby a potential
subscriber could select another competitor services because our name did not
receive prominence and recognition  in
the channel regardless if we are more capable and reliable in servicing that
customer. Without a positive, exclusive
image of our company we may never attract the long-term, loyal
gamer.  If we enter into marketing
channel activities and arrangements and then these channels are no longer
available to us or are adverse to our business. In addition, we may be
foreclosed from certain channels due to competitive reasons. If another  company that would  promote our service decides to enter our
business or a similar
business, we may no longer be given access to such channels, and lose valuable
exposure. If the available marketing channels are curtailed, our ability to
attract new subscribers may be affected adversely.

If we are unable to compete effectively, our
business will be affected adversely.

The market for in-home gaming products is intensely competitive and
subject to rapid change. Many consumers maintain simultaneous relationships
with multiple in-home entertainment providers and can easily shift spending
from one provider to another. For example, consumers may rent a game from
Blockbuster, buy a game from Wal-Mart and subscribe to our service, or some
combination thereof, all in the same month. Competitors may be able to launch
new businesses at relatively low cost. Game rentals represent only one of many
existing and potential new technologies for playing games. If we are unable to
successfully compete with current and new competitors and technologies, we may
not be able to achieve adequate market share, increase our revenues or achieve
profitability.

14

Our principal competitors include, or could include:

Game rental
  outlets, such as Blockbuster and Hollywood Entertainment;
Game retail
  stores, such as GameStop, Best Buy, Wal-Mart and Amazon.com;
Subscription game
  rental services, such as GameFly and GameznFlix; and
On-line game
  sites.Many of our competitors have longer operating histories, larger
customer bases, greater brand recognition and significantly greater financial,
marketing and other resources than we do. Some of our competitors have adopted,
and may continue to adopt, aggressive pricing policies and devote substantially
more resources to marketing and Web site and systems development than we do.
The growth of our on-line subscription business since our inception may attract
direct competition from larger companies with significantly greater financial
resources and national brand recognition. Increased competition may result in
reduced operating margins, loss of market share and reduced revenues. In
addition, our competitors may form or extend strategic alliances with
manufacturers and distributors that could adversely affect our ability to
obtain titles on favorable terms.

If we experience delivery problems or if our
subscribers or potential subscribers lose confidence in the U.S. Post Service,
we could lose subscribers, which could adversely affect our operating results.

We rely exclusively on the U.S. Postal Service to deliver game disks
from our DC and to return the game disks to us from our subscribers. We are
subject to risks associated with using the public mail system to meet our
shipping needs, including delays caused by bioterrorism, potential labor activism
and inclement weather. Our games are also subject to risks of breakage and loss
during delivery and handling by the U.S. Postal Service. The risk of breakage
is also impacted by the materials and methods used to replicate our game disks.
If the entities replicating our game disks use materials and methods more
likely to break during delivery and handling or we fail to timely deliver the
games to our subscribers, our subscribers could become dissatisfied and cancel
our service, which could adversely affect our operating results. In addition,
increased breakage rates and loss of our games will increase our cost of
acquiring games.

Standards for compliance with Section 404 of
the Sarbanes-Oxley Act of 2002 are uncertain, and if we fail to comply in a timely
manner, our business could be harmed and our stock price could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley
Act of 2002 require annual assessment of our internal control over financial
reporting, and attestation of its assessment by our independent registered
public accountants. The SEC has extended the compliance dates for certain
filers and, accordingly, we believe that this requirement may first apply to
our annual report for fiscal 2008.  The
standards that must be met for management to assess the internal control over
financial reporting as effective are new and complex, and require significant
documentation, testing and possible remediation to meet the detailed
standards.  We may encounter problems or
delays in completing activities necessary to make an assessment of our internal
control over financial reporting.   In
addition, the attestation process by our independent registered public
accountants is new and we may encounter problems or delays in completing the
implementation of any requested improvements and receiving an attestation of
its assessment by our independent registered public accountants.  If we cannot assess our internal control
over financial reporting as effective, or our independent registered public
accountants are unable to provide an unqualified attestation report on such
assessment, investor confidence and share value may be negatively impacted.

Our articles of incorporation include
provisions to the effect that we may indemnify any director, officer or
employee.  In addition, provisions of
Nevada law provide for such indemnification.

Any indemnification of directors, officers or employees, could result
in substantial expenditures being made by us in covering any liability of such
persons or in indemnifying them. If we are required to incur expenditures as a
result of indemnification of our directors, officers or employees for any
reason, our net income will decrease as a result of settling such claim(s). We
do not have insurance coverage for our directors, officers and employees.  Therefore, our exposure and payment of any
claim and/or indemnification must come from operations or additional financing
arrangements.

15

We do not carry business insurance.

Our business is not protected by a comprehensive insurance policy.  As such, we are considered completely
at-risk to the extent we have adequate cash available to meet a catastrophic
event.  We do not maintain cash reserves,
nor do we have the liquidity of certain assets to meet: (a.) business interruption
needs, (b.) loss profits, (c.) theft and fire losses, (d.) earthquake and
hurricane, (e.) claims resulting from Internet personal identity theft, and,
(f.) many other incidences.

We do not have a directors and officers insurance policy.  We do not have a key-man life insurance
policy on our interim officer.

We could fail to attract or retain key
personnel and board members, which could be detrimental to our operations.

Our success largely depends on the efforts and abilities of our members
of the board, key outside advisors, our three employees and certain contracted
individuals.  We currently are operating
with an Interim Chief Executive Officer, who
also acts as the Interim: (a.) CFO, (b.) President, (c.) Secretary,   and (d.) Treasurer.  We have only two board members, one of
which
is the interim CEO.

Over the past fifteen months, we lost our original officer core and
board members due to resignations. The loss of the services of  these individuals diverted management
attention away from certain operational issues.  However, absolute controls for the distribution of games to our
subscribers, and,  the day-to-day
operations along with accounting, finance and Federal, State and local
compliance requirements were always maintained.

We also have key consultants, advisors and outside contractors who
manage elements of our operations, and if we were to lose their services, our
management would be required to expend considerable time and energy to find and
train their replacements. To the extent that we are smaller than our
competitors and have fewer resources we may not be able to attract the
sufficient number of qualified individuals.

We are subject to price volatility due to our
operations materially fluctuating.

As a result of the evolving nature of the markets in which we compete,
as well as the current nature of the public markets and our current financial
condition, we believe that our operating results may fluctuate materially, as a
result of which quarter-to-quarter comparisons of our results of operations may
not be meaningful.  If in some future
quarter, whether as a result of such a fluctuation or otherwise, our results of
operations fall below the expectations of securities analysts and investors,
the trading price of our common stock would likely be materially and adversely
affected. You should not rely on our results of any interim period as an
indication of our future performance. Additionally, our quarterly results of
operations may fluctuate significantly in the future as a result of a variety
of factors, many of which are outside our control.  Factors that may cause our quarterly results to fluctuate
include, among others:


our ability to
  retain existing gaming subscribers;
our ability to
  attract gaming subscribers at a steady rate;
our ability to
  maintain subscriber satisfaction;
the extent to
  which our subscriber services and products gain market acceptance;
introductions of
  products and services by competitors;
price competition
  in the markets in which we compete;
our ability to
  attract train and retain experienced and skilled management;
the amount and
  timing of operating costs and capital expenditures relating to the expansion
  of our business, operations and infrastructure; and
general economic
  conditions and economic conditions specific to the Internet service and
  gaming industry.16

If we are unable to respond to the rapid
changes in technology and services, which characterize our game rental
services, our business and financial condition could be negatively affected.

Our game rental operation is directly impacted by changes in the
Internet services industry.  The
Internet products and services industry is subject to rapid technological
change, frequent new product and service introductions and evolving industry
standards.  Changes in technology could
affect the market for our services.  We
believe that our future success will depend largely on our ability to
anticipate or adapt to such changes, to offer on a timely basis, services and
products that meet these evolving standards and demand of our customers.  We cannot offer any assurance that we will
be able to respond successfully to these or other technological changes, or to
new products and services offered by our current and future competitors, and
cannot predict whether we will encounter delays or problems in these areas,
which could have a material adverse affect on our business, financial condition
and results of operations.

We may be unable to protect our intellectual
property adequately or cost effectively, which may cause us to lose market
share or reduce prices.

Our future success depends significantly on our ability to protect and
preserve its proprietary rights related to its technology and resulting
products.  We cannot assure you that we
will be able to prevent third parties from using our intellectual property
rights and technology without our authorization.  While we intend to pursue aggressively efforts to obtain patent
protection for our technology, we will also rely on trade secrets, common law
trademark rights and trademark registrations, as well as confidentiality and
work for hire development, assignment and license agreements with employees,
consultants, third party developers, licensees and customers. However, these
measures afford only limited protection and may be flawed or inadequate.  Also, enforcing intellectual property rights
could be costly and time-consuming and could distract managements attention
from operating business matters.

Our intellectual property may infringe on the
rights of others, resulting in costly litigation.

In recent years, there has been significant litigation in the United
States involving patents and other intellectual property rights. In particular,
there has been an increase in the filing of suits alleging infringement of
intellectual property rights, which pressure defendants into entering
settlement arrangements quickly to dispose of such suits, regardless of their
merits. Other companies or individuals may allege that we infringe on their
intellectual property rights.
Litigation, particularly in the area of intellectual property rights, is
costly and the outcome is inherently uncertain.  In the event of an adverse result, we could be liable for
substantial damages and we may be forced to discontinue our use of the subject
matter in question or obtain a license to use those rights or develop
non-infringing alternatives.  Any of
these results would increase our cash expenditures, adversely affecting our
financial condition.

We may not be able to manage our growth
effectively, which could adversely affect our operations and financial
performance.

The ability to manage and operate our business as we execute our
development and growth strategy will require effective planning.  Significant rapid growth could strain our
internal resources, and other problems that could adversely affect our
financial performance. We expect that our efforts to grow the game rental
services will place a significant strain on our personnel, management systems,
infrastructure and other resources.  Our
ability to manage future growth effectively will also require us to
successfully attract, train, motivate, retain and manage new employees and
continue to update and improve our operational, financial and management
controls and procedures.  If we do not
manage our growth effectively, our operations could be adversely affected,
resulting in slower growth and a failure to achieve profitability.

17

Risks Related to our Common Stock

Our common stock may be affected by limited
trading volume and may fluctuate significantly, which may affect our
shareholders ability to sell shares of our common stock.

There has been a limited public market for our common stock and there
can be no assurance that a more active trading market for our common stock will
develop.  An absence of an active
trading market could adversely affect our shareholders ability to sell our
common stock in short time periods, or possibly at all.  Our common stock has experienced, and is
likely to experience in the future, significant price and volume fluctuations,
which could adversely affect the market price of our common stock without
regard to our operating performance.  In
addition, we believe that factors such as quarterly fluctuations in our
financial results and changes in the overall economy or the condition of the
financial markets could cause the price of our common stock to fluctuate
substantially. These fluctuations may also cause short sellers to enter the
market from time to time in the belief that we will have poor results in the
future. We cannot predict the actions of market participants and, therefore,
can offer no assurances that the market for our stock will be stable or
appreciate over time.  The factors may
negatively impact shareholders ability to sell shares of our common stock.

Our common stock could be considered a penny
stock and may be difficult to sell.

Our common stock could be considered to be a penny stock if it meets
one or more of the definitions in Rules 15g-2 through 15g-6 promulgated under
Section 15(g) of the Exchange Act.
These include but are not limited to the following: (i) the stock trades
at a price less than $5.00 per share; (ii) it is not traded on a recognized
national exchange;  (iii) it is not
quoted on the NASDAQ Stock Market, or even if so quoted, has a price less than
$5.00 per share; or (iv) is issued by a company with net tangible assets less
than $2,000,000, if in business longer than three continuous years, or with
average revenues of less than $6,000,000 for the past three years.  The principal result or effect of being
designated a penny stock is that securities broker-dealers cannot recommend
the stock but must trade in it on an unsolicited basis.

Additionally, Section 15(g) of the Exchange Act and Rule 15g-2
promulgated thereunder by the SEC require broker-dealers dealing in penny
stocks to provide potential investors with a document disclosing the risks of
penny stocks and to obtain a manually signed and dated written receipt of the
document before effecting any transaction in a penny stock for the investors
account.

Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve
the account of any investor for transactions in such stocks before selling any
penny stock to that investor.  This
procedure requires the broker-dealer to:

(i)
obtain from the
  investor information concerning his or her financial situation, investment
  experience and investment objectives;(ii)
reasonably
  determine, based on that information, that transactions in penny stocks are
  suitable for the investor and that the investor has sufficient knowledge and
  experience as to be reasonably capable of evaluating the risks of penny stock
  transactions;(iii)
provide the
  investor with a written statement setting forth the basis on which the
  broker-dealer made the determination in (ii) above; and(iv)
receive a signed
  and dated copy of such statement from the investor, confirming that it
  accurately reflects the investors financial situation, investment experience
  and investment objectives.  Compliance
  with these requirements may make it more difficult for holders of our common
  stock to resell their shares to third parties or to otherwise dispose of them
  in the market or otherwise.18

There is no assurance of an established
public trading market, which would adversely affect the ability of investors in
Gottaplay to sell their securities in the public market.

Even though our shares of common stock are expected to continue to be
quoted on the OTC Bulletin Board, we cannot predict the extent to which a
trading market will develop or how liquid that market might become. In
addition, most common shares outstanding after the Merger, including the shares
issued to Gotaplay stockholders, are restricted securities within the meaning
of Rule 144 promulgated by the SEC, and will therefore be subject to certain
limitations on the ability of holders to resell such shares.  Accordingly, holders of our common stock may
be required to retain their shares for an indefinite period of time.  We are party to certain agreements and
holders of our warrants requiring us, under certain circumstances, to use our
best efforts to prepare and file with the Securities and Exchange Commission a
registration statement on an appropriate form covering the offer and resale to
the public of the shares of our common stock upon exercise of the warrants.
Consequently, we may expect to prepare and file with the Securities and
Exchange Commission as soon as practical, and to use our best efforts to cause
to be declared effective, such a registration statement.

The OTC Bulletin Board is an inter-dealer, over-the-counter market that
provides significantly less liquidity than the NASDs automated quotation
system (the NASDAQ Stock Market).
Quotes for stocks included on the OTC Bulletin Board are not listed in
the financial sections of newspapers, as are those for the NASDAQ Stock
Market.  Therefore, prices for
securities traded solely on the OTC Bulletin Board may be difficult to obtain
and holders of common stock may be unable to resell their securities at or near
their original offering price or at any price.
Market prices for our common stock will be influenced by a number of
factors, including:


issuance of new
  equity securities pursuant to a future offering,
changes in
  interest rates,
competitive
  developments, including announcements by competitors of new products or
  services or significant contracts, acquisitions, strategic partnerships, joint
  ventures or capital commitments,
variations in
  quarterly operating results,
change in
  financial estimates by securities analysts,
depth and
  liquidity of the market for Gottaplays common stock,
investor
  perceptions of Gottaplay and of game rental generally, and
general economic
  and other national conditions.The authorization and issuance of preferred
stock may prevent or discourage a change in our management.

We are authorized to issue up to 5,000,000 shares of preferred stock
without stockholder approval.  Such
shares will have terms, conditions, rights, preferences and designations as the
Board may determine.  The rights of the
holders of our common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be issued in the
future. The issuance of preferred stock, while providing desirable flexibility
in connection with possible acquisitions and other corporate purposes, could
have the effect of discouraging a person from acquiring a majority of our
outstanding common stock.

It may be difficult for a third party to
acquire us, and this could depress our stock price.

Nevada corporate law includes provisions that could delay, defer or
prevent a change in control of our company or our management.  These provisions could discourage
information contests and make it more difficult for you and other stockholders
to elect directors and take other corporate actions.  As a result, these provisions could limit the price that
investors are willing to pay in the future for shares of our common stock. For
example:


without prior
  stockholder approval, the Board of Directors has the authority to issue one
  or more classes of preferred stock with rights senior to those of common
  stock and to determine the rights, privileges and inference of that preferred
  stock;
there is no
  cumulative voting in the election of directors, which would otherwise allow
  less than a majority of stockholders to elect director candidates; and
stockholders
  cannot call a special meeting of stockholders.19

Item
  2.
Description
  of Property.We do not own any real estate. We rent/lease our offices and
distribution center and are described as follows:

a.
Our corporate and
  administrative office is headquartered at 64 Commercial Avenue, Garden City,
  New York 11530  This facility is owned
  by our interim CEOs company.  Our
  distribution center is also located at this facility.  Rent is $3,000 per month and we are on a
  month-to month arrangement.  Rents
  started in November 2008.b.
We lease an office
  at 1451 West Cypress Creek Road, Suite 300 in Ft. Lauderdale, Florida
  33309.  This office houses our
  customer service and technology departments.We believe these arrangements are adequate to support our immediate and
short-term operational needs.

During this past fiscal year, and through the date of this filing, we
closed and terminated all leased facilities that were in place at the beginning
of our fiscal year, with one exception, our Ft. Lauderdale, Florida office.

Item
  3.
Legal
  Proceedings.Lawsuit Settled

On October 17, 2007, we settled a lawsuit brought by Capital Group
Communications, Inc. (CGC) against Gottaplay and the counter-suit by us
against CGC was settled. The terms of the settlement provided:

a.
We rescind the
  cancellation of the 2,000,000 shares (the Settlement Shares) previously
  issued to CGC;b.
CGC grant to
  Phillip Knight, a Company shareholder, or his assigns, the right, but not the
  obligation, to purchase the Shares in various increments through March 2008
  for the total sum of $400,000.  The
  first tranche was paid November 13, 2007;c.
Phillip Knight, or
  his assigns, has agreed that he will return 50% of the Shares purchased by
  him from CGC to us, which Shares will be deemed cancelled;d.
Should Phillip
  Knight, or his assigns, not purchase the Shares as scheduled, then CGC shall
  be allowed to sell as many of the Shares, pursuant to Rule 144, as is
  necessary for CGC to realize a total of $400,000, less any proceeds
  previously received from Phillip Knight and return any unsold Shares to us;
  ande.
We issued to CGC,
  warrants to purchase 200,000 shares of common stock at an exercise price of
  $1.25, which warrants will terminate December 31, 2010.f.
CGC and Gottaplay
  have released all claims against each other.Wage and Expense Claim

We were notified in June 2008 by the State of California that a former
employee filed a claim for unpaid wages, expenses and other items totaling
$70,160.  We believe this claim is
substantially without merit and we will vigorously defend against it.  The State of California is the former
employees state of residence.

20

Collection Notice on Outstanding Judgment

We were recently notified that a Judgment was entered against us for
approximately $105,000 (the Judgment), which represents the balance due on an
obligation that the Company had incurred prior to our merger with Gotaplay
Interactive, Inc.     (The Company
merged with Gotaplay Interactive, Inc. and then changed its name to Gottaplay
Interactive, Inc.)  This liability was
originally settled with Donobi, Inc., also known as the ISP Division, for
$200,000 in July 2006.   On August 1,
2007, we sold the assets of the ISP Division to Focus Systems, Inc.
(Focus),  a company in which a former
director and officer of the Gottaplay is a principal, in exchange for the
assumption of the liabilities of that Division. Substantially all the
obligations of the ISP Division at the date of sale were assumed by Focus.
Pursuant to terms of the sale agreement, Focus is to indemnify us in the event
that the Company would have to pay any of the liabilities of the sold ISP
Division.  Accordingly, we have recognized
a contingent liability of $105,000 as of September 30, 2008.  We notified Focus about the judgment and we
will attempt to enforce our rights of indemnification should the Company be
forced to settle this claim.

Item
  4.
Submission
  of Matters to a Vote of Security Holders.None

PART II

Item
  5.
Market
  for Common Equity and Related Stockholder Matters.Our common stock is quoted on the OTC Bulletin Board under the symbol
GTAP (formerly DNOB). Our common stock has been quoted on the OTCBB since
July 2004.

For the periods indicated, the following table sets forth the high and
low bid prices per share of common stock. These prices represent inter-dealer
quotations without retail markup, markdown, or commission and may not
necessarily represent actual transactions. This table gives effect to our
thirty-two for one stock reverse split that occurred on January 26, 2004 and
our one for six stock reverse split that occurred on July 24, 2006.

High ($)
Low ($)Fiscal
  2007First quarter


3.00


1.50Second quarter


3.05


1.95Third quarter


2.40


1.26Fourth quarter


1.60


0.36Fiscal
  2008First quarter


.80


.32Second quarter


.39


.06Third quarter


.10


.03Fourth quarter


.05


.01Holders of Our Common Stock

As December 31, 2008, we had 523 record holders of our common stock.
The number of record holders was determined from the records of our transfer
agent and does not include beneficial owners of common stock whose shares are
held in the names of various security brokers, dealers, and registered clearing
agencies. The transfer agent of our common stock is Colonial Stock Transfer
Company, Inc., 66 Exchange Place, Salt Lake City, Utah 84111.

21

Dividends

We have never declared or paid any cash dividends on our common stock.
We do not anticipate paying any cash dividends to stockholders in the
foreseeable future. In addition, any future determination to pay cash dividends
will be at the discretion of the Board of Directors and will be dependent upon
our financial condition, results of operations, capital requirements, and such
other factors as the Board of Directors deem relevant.

Recent Sales of Unregistered Securities

The following sets forth information regarding all sales of our
unregistered securities during the fiscal year ended September 30, 2008. All of
these shares were exempt from registration under the Securities Act by reason
of Section 4(2) of the Securities Act, or Regulation D promulgated thereunder,
as transactions by an issuer not involving a public offering, or were exempt by
reason of the application of Regulation S. The recipients of securities in each
of these transactions represented their intentions to acquire the securities
for investment only and not with a view to or for sale in connection with any
distribution of the securities, and appropriate legends were affixed to the
share certificates and warrants issued in such transactions. All recipients had
adequate access, through their relationships with us or otherwise, to
information about us. Unless otherwise indicated, the issuances of the
securities described below were affected without the involvement of
underwriters.

In April 2007, we cancelled 2,000,000 shares of our common stock
previously issued to Capital Group Communications, Inc. (CGC) We had
cancelled the stock based upon, among other things, the non-performance of a
July 25, 2006 Agreement.  In July 2007,
Capital Group Communications, Inc. filed a law suit against us and certain
board of directors to rescind the cancellation and to recover from the us,
$125,000 that CGC had invested in an independent company with which the we had
previously entered into merger negotiations.
On October 17, 2007 all parties to the claim agreed to a settlement and
a mutual general release whereby the Company would rescind its cancellation of
the 2 million shares and CGC would receive $400,000 from the eventual sales of
these contract shares.  One of the
parties to the claim had the right, but not an obligation, to purchase the
contract shares in various increments through March 2008 at $0.20 per share as
follows: (a.) November 15, 2007  500,000 shares; January 15, 2008  500,000
shares; and, March 1, 2008  1,000,000 shares.

The party which had the right to purchase these contract shares also
agreed it will return 50% of the shares purchased to the Company and those
shares will be deemed cancelled upon receipt.
This party executed on the November 15, 2007 contract shares, but did
not elect to execute on the January 15th and March 1, 2008 contract
shares.  Accordingly, the Company
recognized the re-issuance of the 2.0 million rescinded contract shares on the
date of settlement, October 17, 2007.
In December 2007, the Company cancelled 250,000 shares pursuant to the
agreement with the party possessing the right to purchase the contract
shares.  Both of these transactions were
recognized at par value in the accompanying Consolidated Statements of
Stockholders Deficit.

On October 17, 2007 and December 21, 2007, we issued a total of 10,000
shares of common stock  to Uptick
Capital,  LLC for business advisory
services, rendered pursuant to a July 10, 2007 Consulting Agreement. Average
price per share for these issuances was $0.425.

On October 19, 2007 we issued 75,000 shares of common stock at $0.40
per share to Doug Rapoport in which he provided us with strategic planning and
corporate financial advisory services.

On August 7, 2007, we entered into an agreement with our counsel de
Castro, PC.  Under the terms of an
Engagement Letter, payment for services rendered were in the form of cash, to
be paid at an hourly rate, and 75,000 shares of common stock,  upon execution of the Engagement Letter and
150,000 share of common stock to be issued at a later date.  As of September 30, 2007, we had issued
75,000 shares of common stock with a fair market value of $0.75 per share. On
December 18, 2007 we issued the remaining 150,000 shares of common stock at a
value of $0.50 per share.

On October 19, 2007 we granted 25,000 warrants to Cathy Miller to
extend the due date on her promissory note issued in August 2007.  The exercise price was originally granted at
$0.60 per share but on September 30, 2008 the exercise price was revised to
$0.05 per share as consideration for extending her note to June 30, 2009.

On October 19, 2007 we granted 25,000 warrants to THI, Inc. to extend
the due date of its promissory note.
The exercise price was $0.60 per share, with an exercise period of one
year.  As of the date of this filing,
the exercise period of this grant has expired.

22

On November 26, 2007, we issued 3,333 shares of common stock with a
market price of $0.69  per share to The
Lexicomm Group pursuant to terms of a March 15, 2007 Consulting Agreement.  Lexicomm provided us with public relations
services and advice.

Item
  6.
MANAGEMENTS
  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.The following discussion and analysis should be read in conjunction
with the consolidated financial statements, including notes thereto, appearing
in this Form 10-KSB.

Some of the information in this Form 10-KSB contains forward-looking
statements that involve substantial risks and uncertainties.  You can identify these statements by
forward-looking words such as may,
will,   believes,  anticipates,  estimates,  expects,
continues and/or words of similar import. Forward-looking statements are
based upon our managements current expectations and beliefs concerning future
developments and their potential effects upon us. There may be events in the
future that we are not able to accurately predict or over which we have no
control. Our actual results could differ materially from those anticipated for
many reasons in these forward-looking statements. Factors that could cause or
contribute to the differences include, but are not limited to, availability of
financial resources adequate for short-, medium- and long-term needs, demand
for our products and services and market acceptance, as well as those factors
discussed and set forth under Risk Factors, Business, Managements
Discussion and Analysis of Financial Condition and Results of Operations and
elsewhere in this report.

We believe it is important to communicate our expectations, however,
our management disclaims any obligation to update any forward-looking
statements whether as a result of new information, future events or otherwise.

Application of Critical Accounting Policies
and Estimates

General

Our discussion and analysis of our financial condition and results of
operations as of and for the year ended September 30, 2008 are based upon our
audited consolidated financial statements, which are prepared in conformity
with accounting principles generally accepted in the United States of America
(GAAP).  As such, we are required to
make certain estimates, judgments and assumptions that management believes are
reasonable based upon the information available.  We base these estimates on our historical experience, future
expectations and various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for our judgments
that may not be readily apparent from other sources.  These estimates and assumptions affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the dates of the consolidated financial statements and the reported amounts
of revenue and expenses during the reporting periods.  These estimates and assumptions relate to such items as the
estimated term of a subscriber retention/relationship, amortization life and
method of new titles, accruals and other factors.  We evaluate these estimates and assumptions on an ongoing
basis.  Actual results could differ from
those estimates under different assumptions or conditions, and any differences
could be material.

Our consolidated financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (SEC)
and, in the opinion of management, include all adjustments necessary for a fair
statement of the consolidated results of operations, financial position, and
cash flows for each period presented.
Our consolidated financial statements reflect the results of operations,
financial position, changes in stockholders deficit and cash flows.

A summary of the significant accounting policies which we believe are
the most critical to aid in fully understanding and evaluating the accompanying
consolidated financial statements include the following:

23

Revenue Recognition and Deferred Revenues

A.  Subscriptions

In accordance with the SECs Staff Accounting Bulletin No. 104, Revenue Recognition,revenue is
recognized when persuasive evidence of an arrangement exists, delivery has
occurred, the fee is fixed or determinable, and collectability is
probable.

We offer an initial ten-day subscription trial period. At any time
during the initial ten-day period, a new subscriber has the right to rescind
their agreement.  If the subscriber does
not cancel during the ten-day period, we will initiate a charge on his/her
credit card according to the plan selected by the subscriber. Thereafter, we
will charge a subscribers credit card monthly for our services until the
subscriber cancels his subscription. We recognize subscription revenue ratably
during each subscribers monthly subscription period.  For financial reporting purposes, we allocate subscription fees
over the number of days in the month for which the fee was charged.

A subscriber has the option to select from one of three monthly rental
plans: (a.) for $12.95 per month, the subscriber is allowed one video game in
his possession, (b.) for 20.95 per month, the subscriber is allowed up to two
video games in his possession, and (c.) for $28.95 per month, the subscriber is
allowed up to three video games in his possession.

All deferred subscription revenue at month end is recognized as revenue
in the following month. All authorized refunds to subscribers are recorded as a
reduction of revenues and any revenues from sales of used video games will be
recorded upon shipment.

B.  Retail/Wholesale

The Company sold previously owned DVD games and recognized this revenue
from these sales upon shipment of the product, at which time, the title and
risk of loss transfer to the customer.

Fair Value of Financial Instruments

Financial instruments consist principally of cash, trade and related
party payables, accrued liabilities, and short and long-term debt
obligations.  The carrying amounts of
such financial instruments in the accompanying consolidated balance sheets
approximate their fair values due to their relatively short-term nature.  It is our opinion that we are not exposed to
significant currency or credit risks arising from these financial instruments.

Use of Estimates

The preparation of our consolidated financial statements are in
conformity with GAAP and, as such, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could
differ materially from our estimates.

Stock-Based Compensation

We account for stock-based compensation in accordance with the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standard No. 123 (R), Share-Based
Payment, which establishes standards for transactions in which an
entity exchanges its equity instruments for goods and services.  This standard replaces SFAS No. 123 and
supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock-Based Compensation.
This standard requires a public entity to
measure the cost of employee services, using an option-pricing model, such as
the Black-Scholes Model, received in exchange for an award of equity
instruments based on the grant-date fair value of the award.  This eliminates the exception to account for
such awards using the intrinsic method previously allowable under APB No.
25.  Shares of common stock issued for
services rendered by a third party are recorded at fair market value, generally
the quote at the close of market trading on the day.

Loss Per Common Share

We compute basic and diluted loss per share of common stock by dividing
the net loss by the weighted average number of common shares outstanding
available to common stockholders during the respective reporting period.  However, common stock equivalents have been
excluded from the computation of diluted loss per share of common stock for the
years ended September 30, 2008 and 2007, respectively, because their effect
would be anti-dilutive.

24

Reclassifications

Certain reclassifications have been made to the previously reported
amounts to conform to our Companys current year presentation.

Recently Issued Authoritative Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB)
issued two new statements: (a.) SFAS No. 141(revised 2007), Business
Combinations, and (b.) No. 160, Noncontrolling Interests in Consolidated Financial
Statements.These
statements are effective for fiscal years beginning after December 15, 2008 and
the application of these standards will improve, simplify and converge
internationally the accounting for business combinations and the reporting of
noncontrolling interests in consolidated financial statements.  The Company is in the process of evaluating
the impact, if any, on SFAS 141 (R) and SFAS 160 and does not anticipate that
the adoption of these standards will have any impact on its consolidated
financial statements.

(a.)  SFAS No. 141 (R) requires
an acquiring entity in a business combination to: (i) recognize all (and only)
the assets acquired and the liabilities assumed in the transaction, (ii)
establish an acquisition-date fair value as the measurement objective for all
assets acquired and the liabilities assumed, and (iii) disclose to investors and other users all of the
information they will need to evaluate and understand the nature of, and the
financial effect of, the business combination, and, (iv) recognize and
measure the goodwill acquired in the business combination or a gain from a
bargain purchase.

(b.) SFAS No. 160 will improve the relevance, comparability and
transparency of financial information provided to investors by requiring all
entities to: (i) report noncontrolling (minority) interests in subsidiaries in
the same manner, as equity but separate from the parents equity, in
consolidated financial statements, (ii) net income attributable to the parent
and to the non-controlling interest must be clearly identified and presented on
the face of the consolidated statement of income, and (iii) any changes in the
parents ownership interest while the parent retains the controlling financial
interest in its subsidiary be accounted for consistently.

In February 2008, the FASB issued Financial Staff Positions (FSP) FAS
157-2, Effective Date of FASB Statement No. 157 (FSP
FAS 157-2), which delays the effective date of SFAS No. 157, Fair Value Measurement(SFAS
157), for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually). SFAS 157 establishes a framework for
measuring fair value and expands disclosures about fair value measurements. FSP
FAS 157-2 partially defers the effective date of SFAS 157 to fiscal years
beginning after November 15, 2008, and interim periods within those fiscal
years for items within the scope of this FSP. FSP FAS 157-2 is effective for us
beginning January 1, 2009. The Company is currently evaluating the potential
impact of the adoption of those provisions of SFAS 157, for which the
effectiveness was delayed by FSP SFAS 157-2, on the Companys financial position
and results of operations.

In March 2008, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 161, Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement No. 133 (SFAS No.
161). The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entitys financial
position, financial performance and cash flows. It is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The Company does not believe that SFAS No. 161 will have a material
impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities (SFAS No. 161). SFAS No. 161
requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company
uses derivative instruments, how derivative instruments and related hedged
items are accounted for under FASB Statement No. 133 Accounting for Derivative Instruments and Hedging Activities
and how derivative instruments and related hedged items affect a companys
financial position, financial performance and cash flows. SFAS No. 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. The adoption of this statement is not
expected to have a material effect on the Companys future financial position
or results of operations.

25

In May 2008, the FASB released SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles.   SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in
the preparation of financial statements of nongovernmental entities that
presented in conformity with generally accepted accounting principles in the
United States of America. SFAS No. 162 will be effective 60 days following the
SECs approval of the PCAOB amendments to AU Section 411, The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles.  The FASB has stated that it does not expect
SFAS No. 162 will result in a change in current practice. The Company does not
believe the application of SFAS 162 will have a significant impact, if any, on
the Companys consolidated financial statements.

In May 2008, the FASB issued SFAS No. 163, Accounting
for Financial Guarantee Insurance Contracts--an interpretation of FASB
Statement No. 60(SFAS No. 163). SFAS No. 163 interprets
Statement 60 and amends existing accounting pronouncements to clarify their
application to the financial guarantee insurance contracts included within the
scope of that Statement. SFAS No. 163 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and all interim
periods within those fiscal years. As such, the Company is required to adopt
these provisions at the beginning of the fiscal year ended December 31, 2009.
The Company is currently evaluating the impact of SFAS No. 163 on its financial
statements but does not expect it to have an effect on the Companys financial
position, results of operations or cash flows.

In May 2008, the FASB issued FSP APB 14-1,Accounting for Convertible Debt Instruments that may
be Settled in Cash
upon Conversion (Including Partial Cash Settlement) (FSP
APB 14-1). FSP APB 14-1 applies to convertible debt securities that, upon
conversion, may be settled by the issuer fully or partially in cash. FSP APB
14-1 specifies that issuers of such instruments should separately account for
the liability and equity components in a manner that will reflect the entitys
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years after December 15, 2008, and must be applied on a
retrospective basis. Early adoption is not permitted. The Company is assessing
the potential impact of this FSP on the convertible debt issuances.

In June 2008, the FASB issued FASB Staff Position (FSP) EITF 03-6-1, Determining
Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities (FSP
EITF 03-6-1). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the earnings allocation in computing
earnings per share under the two-class method as described in SFAS No. 128,
Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings-per-share pursuant to the two-class
method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning after December 15, 2008 and all prior-period earnings per share
data presented shall be adjusted retrospectively. Early application is not
permitted. The Company is assessing the potential impact of this FSP on the
earnings per share calculation.

In June 2008, the FASB ratified EITF No. 07-5, Determining
Whether an Instrument (or an Embedded Feature) is Indexed to an Entitys Own
Stock(EITF 07-5). EITF 07-5 provides that an entity
should use a two-step approach to evaluate whether an equity-linked financial
instrument (or embedded feature) is indexed to its own stock, including
evaluating the instruments contingent exercise and settlement provisions. EITF
07-5 is effective for financial statements issued for fiscal years beginning
after December 15, 2008. Early application is not permitted. The Company is
assessing the potential impact of this EITF 07-5 on the financial condition and
results of operations.

Overview, History, Merger and Business

Gottaplay Interactive, Inc. (the Company) was formed in Nevada in
July 2004 under the name of Donobi, Inc. and is the successor to H-NET.NET,
Inc., which was formed under the laws of Colorado in May 1986.  On July 24, 2006, pursuant to a Merger
Agreement (the Agreement), Gotaplay Interactive, Inc. (Gotaplay), a
privately held Nevada corporation, merged with Donobi, Inc.  Upon consummation of the Merger we assumed
the business operations of Gotaplay to include their assets, their debts and
their commitments and obligations, such as leases and independent consulting
agreements.

26

From the date of the merger, July 24, 2006 until August 1, 2007 we
operated two distinct business, (a) our on-line video game subscriptions and
rentals, and, (b) our Internet service connectivity.  On August 1, 2007 we sold all the issued and outstanding stock of
Donobi, Inc. (a wholly-owned subsidiary, and, commonly referred to as the
internet service provider division) for $100 and other valuable
consideration.  In consideration for the
stock, the purchaser received all the assets and assumed significantly all the
liabilities, associated with this business operation. We accounted for this
transaction under SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Accordingly, the results of operations, less
applicable provision for any income taxes, of the discontinued operation have
been segregated from continuing operations for the fiscal years ended September
30, 2007 and 2006, respectively, and are reported as a separate line item on
our Consolidated Statements of Operations.
As such, by segregating the results of the discontinued operations,
allows for a more meaningful and enhanced comparability analysis of the results
of the continuing operations.  Any
reference to revenues and expenses in the subsequent management discussion and
analysis will pertain only to our continuing operations.  We recognized a net loss $256,721 on the
disposition of this operation and is reported in the Consolidated Statements of
Operations and Cash Flows under the caption, discontinued operations.

The decision to sell this business was primarily influenced by the
recurring net losses, its loss of market share, and the immediate need to
generate significant capital to pay off delinquent debts and tax liens.  The purchaser was a privately-held company,
partially owned and controlled by our former Chief Operating Officer, who also
resigned his positions as Director and COO.
Terms of the sale, stipulated we sell all assets related to the Internet
service provider business and the purchaser agreed to assume:

a.
substantially all
  trade and vendor debts, andb.
all existing and
  unexpired leases, andc.
other business
  related short and long-term notes payable and commitments, andd.
release the
  Gottaplay from all liens, litigation and claims, both current and future,
  associated with the ISP operations.In addition, as part of the August 1, 2007 agreement, we agreed to
assume $171,513 of this businesss current liabilities, described as follows:

a.
a promissory note
  with a balance due of $95,000, in default, accruing interest at 18% per
  annum,  plus accrued interest of
  $40,400, andb.
three vendors
  trade accounts payable totaling $36,113.On February 28, 2007, our wholly owned subsidiary, Gottaplay
Management, Inc. (GMI), a Nevada corporation, merged a privately held Florida
company, an on-line video game trading company, called Gamershare, Inc. (GSI)
into its operations.  In consideration
for the merger, we paid the former sole shareholder of GSI $60,000 in cash and
issued him 220,000 shares of our $0.001 par value common stock.  The shares were valued at market, or $2.55
per share, on the date of closing.  The
total value of these shares was $561,000. We also agreed to issue up to another
170,000 shares of our $0.001 par value common stock to the former shareholder
of GSI, if this video game trading business achieves certain revenue
milestones.  The former shareholder of
GSI also received a three year employment agreement with us.

Because of the divesture of the ISP business on August 1, 2007, our
primary business has been the on-line video game rental subscription business
which is dedicated to providing customers a quality rental experience through
our web site www.gottaplay.com.  This
service is an alternative to store based gaming rentals.  We offer our customers an extensive
selection of video games for a monthly subscription fee which is based upon one
of three subscription plans.  Customers
sign-up via our web page and once credit is processed and approved, we send
them the video game(s) of their choice, depending on the plan selection.  All games are shipped to the customer via U.
S. Postal Service first class mail.
Active subscribers can retain the games for an indefinite period of time
as long as they are active paying subscribers.
Customers return/exchange their selections at anytime by returning their
game(s) in our pre-paid, pre-addressed mailers. We also provide a subscriber
the option to purchase new and/or used video game titles at discounted prices
and trade games.

27

In November 2008, we have entered into a memorandum of understanding
with Play N Trade, one of the largest and fastest growing video game
franchisors, to manage their in-store rental program. The agreement is for a
beta test in eight stores for thirty days then expanding to two regions.

Play N Trade is one of the fastest-growing franchises worldwide across
all industries. To date, the company has sold more than 550 franchises, opened
over 220 stores, and is currently opening a new store every other day. The
company provides exceptional training, support and marketing systems to its
store owners, who in turn provide an outstanding customer experience for their
shoppers. Play N Trade customers can try any video game before they buy, participate
in local and national tournaments, have their consoles and games repaired, as
well as buy, sell and trade video games. If we can process Play N Trades
transactions as designed, this service will then add a new source of recurring
revenues to our company. Additionally, we anticipate only a moderate initial
capital investment in upgrading our systems to meet Play N Trades added usage
and security.

The results of operations for this past fiscal year have been very
disappointing. Our stock value dropped to an all-time low.  Our sales and cash flows plummeted. We had
negative cash flows from operations. Our prior officer core, management team
and several board members had all resigned as of the filing of this report.
Regardless of the significant events and major changes that affected our
Company this past fiscal year, we believe we have put last years results
behind us and have instituted the necessary and corrective measures to re-grow
our core business, regain market share and improve cash flows from
operations.  We have a new board, new
leadership and a new management team. Collectively, these individuals are
committed to the success of the Company by instilling, following and advocating
basic, fundamental business principles and disciplines across all departments
in the Company.

Because member subscriptions were dropping rapidly this fiscal year,
which in turn caused our revenues to drop approximately 10% per month, we
closed all but one facility, laid off all but three employees and did not pay most
of our vendor bills. Over the past fifteen months we closed four of the five
facilities/offices and terminated the leases. Our Florida facility is the only
remaining active lease from the prior fiscal year. We rent our distribution
center, which also houses our corporate office in Garden City, New York from
our Interim CEOs company,  Pacific Link
International. Rents to Pacific Link began November 1, 2008. We also extended
our lease for another year our operations center located in Ft. Lauderdale,
Florida.

Over the past fifteen months, all of Gottaplays original executive
officers and other key management personnel resigned.  We are currently operating with one interim officer, Mr. Matthew
Skidell, who bears all the titles, roles and responsibilities of Interim CEO,
CFO, Secretary, President and Treasurer.
Mr. Skidell is also on the Board of Directors.

Our board is now comprised of only two board members, Mr. Skidell and
Mr. Michael Rocchetti, both of whom are relatively new but intimately active in
the management and governance of our company.
All prior Board members as of September 30, 2007 and one other current
year Board member appointee have resigned, the last resignation on November 4,
2008.

We intend to grow our on-line video game rental business through
technological innovations and adaptations, the implementation of our short and
long-term business plans and a long-term commitment to delivering high-quality
product and services to every subscriber.
We believe that the key to our success will depend in a large part on
our ability to promote our services and add a significant number of new
subscribers.  We need to reach out to
our present and past subscriber base and re-establish a positive relationship
and instill a high level of confidence that we will be the industry leader we
once were.

We seek to differentiate our services from our competitors by offering
a fair price for exceptional service and the delivery of our subscribers first
choice of product selection each time. We believe our primary competition in
the on-line video game rental market is three established web-based
companies: (a.)  GameFly, (b.) Gamerang,
and (c.) Gameznflix., and, two nationally known local neighborhood
establishments, (d.) Blockbuster and (e.) Hollywood Entertainment.   As a result of our collected efforts, we
need to grow our business by earning the confidence of gamers that we will
deliver games of their choice, sustain a reasonable and controlled growth
pattern of new subscribers, while maintaining existing memberships over a
longer period of time in order to achieve our immediate financial goals.

Our focus this next year is to re-build and strengthen our established
core business foundation and concentrate in key areas, such as: (a.) innovate
and offer unique subscriber plans, (b.) provide timely customer service, (c.)
respond effectively to our subscriber needs and desires, (d.) concentrate and
focus on DVD delivery, and (e.) require efficiency, effectiveness and
accountability across all operations and departments of our Company.

28

Our achievements will be measured in our strategic business plan,
whereby we have set attainable and reasonable membership and financial goals
for the next fiscal year.

Summary of Consolidated Results of Operations

Any measurement and comparison of revenues and expenses from continuing
operation should not be considered necessarily indicative or interpolated as
the trend to forecast our future revenues and results of operations. We have
excluded from our analysis all references to, and financial results of, our
discontinued operations in order to enhance comparability and meaningfulness of
our continuing operations.

Revenues

A. Subscriptions

On-line video game rental revenue for the year ended September 30, 2008
was $510,045 as compared to $497,409 for the year ended September 30, 2007, a
disappointing increase of $12,636. Although, we are reporting an increase in
revenue, it is significantly less than what was forecasted over a year ago. Our
monthly sales have declined each month from a high of $66,235 in October 2007
to a low of $23,658 in September 2008. We were losing approximately 10% of net
sales each month. We have had twelve consecutive months of decreasing sales and
subscriber enrollments. We expect this downward spiral in sales and enrollment
trend to continue through the first quarter of our next fiscal year and then
level off in January 2009. Our decrease in monthly revenues is directly
proportional to the decrease in the number of active subscribers.  For our current fiscal year, we
processed  over 27,300 member payments,
ranging from a high of 3,500 in October 2007 to a low of 1,200 in September
2008, an overall decrease in membership activity of approximately 65%. Our
average net monthly receipt for per active subscriber was approximately
$17.60.  We had 985  active members as of September 30, 2008.

We believe that with an investment in marketing/advertising and rebuild
our video game library with new releases, we will begin to realize positive
results in subscriber memberships and increased revenues.  However, unless we are able to purchase new
releases quickly in order to re-build our library with contemporary titles with
quantities to meet demand and market our business effectively, our business and
our revenues will continue to suffer.

We also believe that the following factors, although not exclusive,
have contributed significantly to our poor revenue results: (a.) the current
state of the depressed national economy, (b.) our lack of capital to purchase
the latest versions and new releases for our library, and (c.) not adequately
advertising and marketing our business to attract new subscribers.

B. Retail/Wholesale

We sold $465,450 of previously owned DVD games to a single customer
during the second quarter of our current fiscal year.  These sales were incidental to our normal operations and may not
occur again the future.  Our margin was
7%.

Costs and Expenses

We have summarized the following selected categories of expenses for
comparative and analyses purposes. All percentages are factored using
subscription revenues as the denominator.
We believe the wholesale revenues were incidental to our normal
day-to-day operations of renting video games and possibly non-recurring in the
future.  Therefore, we believe that a
more meaningful presentation and analyses of our overall expenses should be
based on the measurement of our subscription revenues of $510,045.

29

Cost of Subscription Revenues

Costs of revenues includes all direct costs in the production of our
revenues and includes such items as amortization of our game library, postage
and delivery, credit card fees and shipping materials and other.  The following table presents comparative
expenses by category for the years ended September 30:

2008

2007Amount

Percent of
Revenue

Amount

Percent of
RevenueAmortization of
  games

$
139,000


27.2

$
371,907


74.8Postage, delivery
  and related


48,724


9.6


132,767


26.7Credit card fees


25,035


4.9


119,914


24.1Shipping materials
  and other


11,884


2.3


53,857


10.8Customer
  acquisition








972,729


195.5Non-cash
  compensation








168,000


33.8$
224,643


44.0

$
1,819,174


365.7The decrease in the cost of subscription revenues may be attributable
to:

a.
Customer
  acquisition costs in our current fiscal year were non-existent. As result,
  our subscriber base decreased significantly, this in turn caused our revenues
  to decrease.  Because of the credit
  card fraud we encountered in fiscal 2007 and the poor results from our
  marketing affiliates in fiscal 2007 we halted all affiliate marketing efforts
  in late summer of 2007 and did not re-institute any marketing activity
  through fiscal 2008 and into early fiscal 2009.b.
Lower game
  amortization expense over fiscal 2007, is primarily a result of not
  purchasing new games.  As of September
  30, 2008, substantially all games in our library are fully amortized, except
  for the estimated minimal salvage value on each game.c.
Because our
  subscriber base decreased approximately 65%,
  the frequency and multiples of mailing the games also decreased, but
  not in the same ratio.d.
As explained
  above, we incurred proportionately lower credit card processing fees due
  primarily to not having in this fiscal year the same high number of
  incidences processing the fraudulent chargebacks, whereby each chargeback
  then carried a $30 transaction/processing fee.e.
Shipping materials
  and other expenses decreased primarily due to significantly fewer mailings
  and fewer materials used.Fulfillment and Operations

This category is primarily comprised of those services and expenses
that directly pertain to the support services rendered to our subscribers,
wages and other costs for our fulfillment personnel and our distributions
centers operations. The total cost of fulfillment and operations for fiscal
2008 and 2007 was $283,824 and $529,554, respectively.  The following table illustrates our major
classifications of expenses and relative percentages to net revenues expenses
by category for the years ended September 30:

2008

2007Amount

Percent of 
Revenue

Amount

Percent of
RevenueFulfillment, customer service, related
  burden

$
158,910


31.1

$
331,055


66.6Connectivity, communications and data lines


78,915


15.5


86,763


17.5Facilities, rents and related


39,156


7.7


42,920


8.6Other and small equipment


6,843


1.3


68,816


13.8283,824


55.6


529,554


106.5Less related party expenses


54,688


10.7


131,803


26.5$
229,136


44.9

$
397,751


80.030

Technology and Development

This category is primarily comprised of expenses for maintaining our
website, website enhancements and backend software maintenance.  These costs are reasonable and comparable
for each period reported and within our forecast.

Advertising and Marketing

Advertising and marketing for fiscal 2008 was in essence, non-existent.
Because of the lack of working capital, we had restricted advertising and
marketing to a minimum this fiscal year.

General and Administrative Expenses

General and administrative expenses are broadly categorized in the
following table by category for the years ended September 30,

2008

2007Amount

Percent of
Revenue

Amount

Percent of 
RevenueNon-officer wages, burden and consultants
  supporting corporate and administrative functions

$
269,745


52.9

$
471,726


94.8Non-cash compensation


110,250


21.6


1,449,957


291.5Facilities and related


56,482


11.1


79,148


15.9Professional fees


462,712


90.7


388,413


78.1Taxes, fees and other


13,106


2.6


16,289


3.3Communications and connectivity


17,218


3.4


15,142


3.0Office and general


20,968


4.1


53,356


10.7Settlements and other


191,604


37.5


(42,027
)

(8.4
)Depreciation and amortization


147,017


28.8


88,734


17.81,289,102


252.7


2,520,738


506.7Less related party expenses


45,000


8.8


43,000


8.6$
1,244,102


243.9

$
2,477,738


498.1Overview of Expenses

Under the circumstances, we believe our administrative costs were under
control, as expected, and, within the proximate range of managements
forecasts.  However, the percentages of
expenses to revenues are grossly skewed due to the fact we had a significant
net lost of our subscriber base during fiscal 2008 to absorb these expenses.

Liquid Market

There is currently a limited trading market for our shares of common
stock, and there can be no assurance that a more substantial market will ever
develop or be maintained.  Any market
price for our shares of common stock is likely to be very volatile and number
factors beyond our control may have a significant adverse effect.  In addition, the stock markets generally
have experienced, and continue to experience, extreme price and volume
fluctuations which have often been unrelated to the operating performance of
these small companies.  These fluctuations
have inversely affected the market price of many small capital companies.  These broad market fluctuations, as well as
general current economic and political conditions, may also adversely affect
the market price of our common stock.
Further, there is no correlation between the present limited market
price of our common stock and our revenues, book value, assets and other
established criteria of value.  The
present limited quotations of our common stock should not be considered
indicative of the actual value of our common stock.

31

Impact of Inflation

We believe that inflation has had negligible effect on our operations
over the past two years.  We have the
flexibility to offset inflationary increases of various expenses such as the
cost of labor and direct payroll taxes.
We can arbitrarily increase our subscriber plan fees to offset these
anticipated increases, all the while trying to increase our subscriber base and
continue the improvement of our overall operating procedures and systems.  By these elements alone, we can absorb most,
if not all, increased non-controlled operating costs with increased fees and
more efficient operations, thereby, meeting our expected forecasted margins.

Liquidity and Capital Resources

Our consolidated financial statements as of and for the year ended September
30, 2008 have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. For the year ended September 30, 2008, we had a net
loss of $1,980,499 and negative cash flows from operations of $995,900.  Also at September 30, 2008, we had a working
capital deficit of $3,687,143 and a stockholders deficit of $3,226,421. Our
working capital deficit at September 30, 2008 may not enable us to meet certain
financial objectives as presently structured.

We had a cash balance of $28,663 at September 30, 2008. We finance our
operations and capital requirements primarily through private debt and equity
offerings. Our current forecast anticipates substantial negative cash flows
from operations. Therefore, we will have to raise capital through either equity
instruments and/or debt, not only to sustain our operations but to grow and
improve our operations according to our fiscal 2009 business plan.

At September 30, 2008, the book value of our common stock was a
negative $0.10 per share, our current ratio was 0.08, our cash to debt ratio
was a 0.01 and our acid test ratio was 0.08.
These are unacceptable results, and if we are going to survive and stay
in business we will have to improve our performance quickly and attract
favorable financing/equity arrangements immediately.

Our level of indebtedness at September 30, 2008 was approximately $4.0
million, all classified as current liabilities.  Approximately 62% of these debts are past due and should have
been paid in the normal course of business.
Accordingly, our past due debts may make it very  difficult for us to pay our obligations
timely and as long as these debts are outstanding, it will have an adverse
impact on our results of operations and cash flows as long as these debts are
outstanding. Our excessive debt limits our ability and flexibility to: (a.)
meet changing business and industry initiatives, (b.) invest in strategic
initiatives, (c.) negotiate favorable credit terms and services, (d.) enjoy low
interest rates, and (e.) attract qualified investors.

If we incur more debt, without substantially paying off/down and/or
converting the current debts into common stock, greatly intensify the risk of
our failure.  New debt would require us
to pay interest and we cannot pay interest accruing today.  If we did pay interest, that would reduce
our available funds available for operations, working capital, certain capital
expenditures, product development and other general purposes.  Additional debt may also decrease our
ability to refinance or restructure our indebtedness and further limit our
ability to adjust to changing market conditions.

Our continuation as a going concern is dependent on our ability to collect
our receivable, grow revenues, obtain additional equity and/or favorable
financing, and, generate sufficient cash flows from operations to meet our
obligations on a timely basis.

The operating results of our business can vary significantly depending
on a number of factors, many of which are outside our control:

32

a.
Demand for our
  services and market acceptance lags,b.
Announcements and
  introduction of our new products and services and/or by our competitors,c.
Our ability to upgrade
  infrastructure, develop new and improved systems to meet and anticipate
  growth and demand,d.
Changing
  governmental rules, regulations and requirements,e.
Customer/subscriber
  resilience and apathy due to foreign insurrections and our national and  local economies,f.
Product pricing
  competition, andg.
Lack of
  investor/banking short-term working capital to facilitate unanticipated cash
  shortagesWe are currently developing and redefining our core business strategy.
We need financing with favorable terms and equity infusion.  We need to increase our membership quickly,
which in turn will provide much needed working capital.  If we cannot obtain such financing on terms
acceptable to us, our ability to fund our on-going operations will be
materially adversely affected.  If we
incur debt, the risks associated with our business and with owning our common
stock would also increase.  If we raise
capital through the sale of equity securities, the percentage ownership of our
stockholders will be diluted accordingly. In addition, any new equity
securities may have rights, preferences, or privileges senior to those of our
common stock.

Item
  7.
Consolidated
  Financial Statements.The information required by this item is included in pages F-1 through
F-22 attached hereto and incorporated by reference.  The index to the consolidated financial statements can be found
on page F-1.

Item 8.
Changes in and Disagreements with Accountants on Accounting and
  Financial Disclosure.For the years ended September 30, 2008 and September 30, 2007, there
have been no disagreements between Lake & Associates, LLC. and us on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope of procedures Lake & Associates, CPAs report on our
consolidated financial statements for the fiscal years ended September 30, 2008
and September 30, 2007 indicated that substantial doubt existed regarding our
ability to continue as a going concern.

Item
  8A (T).
Controls
  and ProceduresWe maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and
reported within the specified time periods. Our Chief Executive Officer and our
Chief Financial Officer (collectively, the Certifying Officers) are
responsible for establishing and maintaining adequate internal control over
financial reporting for us.  The
controls and procedures established by us are designed to provide reasonable

assurance that information required to be disclosed by the issuer in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commissions
rules and forms.

To evaluate the effectiveness of our internal controls over financial
reporting, we have adopted the framework prescribed by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO ).  We believe that this framework will assist
in the provision of reasonable assurance of the effectiveness and efficiency of
operations, the reliability of financial reporting, and compliance with
applicable laws and regulations.  In
adopting the COSO framework, we maintain a control environment, perform risk
assessments, carry out control activities, emphasize quality information and
effective communication, and perform monitoring.  In the maintenance of a control environment, we are committed to
integrity and ethical values as well as to competence.  We strive to assign authority and
responsibility in a manner that supports our internal controls, and we also
maintain human resources policies and procedures designed to support our
internal controls.  Our risk assessments
are designed to ensure the achievement of company-wide and process-level
objectives as well as to identify and analyze risks while managing change.  We believe that all of these components
together form a foundation for sound internal control through directed
leadership, shared values and a culture that emphasizes accountability for
control.

33

As of the end of the period covered by this report, the Certifying
Officers evaluated the effectiveness of our disclosure controls and procedures.
Based on the evaluation, the Certifying Officers concluded that our disclosure
controls and procedures were effective to provide reasonable assurance that
information required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the applicable rules and forms, and that
it is accumulated and communicated to our management, including the Certifying
Officers, as appropriate to allow timely decisions regarding required
disclosure.

The Certifying Officers have also concluded, based on our evaluation of
our controls and procedures that as of September 30, 2008, our internal
controls over financial reporting are effective and provide a reasonable
assurance of achieving their objective.

Due to its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements under all potential
conditions. Therefore, effective internal control over financial reporting
provides only reasonable, and not absolute, assurance that a restatement of our
financial statements would be prevented or detected.

This annual report does not include an attestation report of our
registered public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only managements report in this annual
report.

Item
  8B.
Other
  InformationNone.

PART III

Item
  9.
Directors,
  Executive Officers, Promoters, Control Persons and Corporate Governance;
  Compliance With Section 16(a) of the Exchange Act.Directors and Executive Officers

The names of our current directors and executive officers, their
principal occupations, and the year in which each of our directors and
executive officer initially joined the board of directors are set forth below.

Name
Age
First Elected or Appointed
PositionMatthew Skidell
40
April 17, 2008
Director and
  Interim Chief Executive Officer; Interim Chief Financial Officer; Interim
  President, Secretary and TreasurerMichael Rocchetti
39
September 18, 2008
DirectorMatthew Skidell, Esq.,is a Director of  the
Board, the  Interim Chief Executive
Officer and he holds all other officer positions on an interim basis. Matthew
Skidell is a graduate of Boston University and received his JD in 1993 from St.
Johns School of Law.  Mr. Skidell is also
the sole shareholder and president of Pacific Link International Corp
(PLIC).  PLIC is a GSA certified
business that manufactures and distributes nationally  housekeeping supplies, apparel and personal care items to
hospitals, nursing homes, VAs and correctional facilities.  Mr. Skidell also is a partner and the
president of e-Scrap Destruction, an environmentally conscious company that
securely disposes of and safely destroys/recycles of non-appliance electronic
type equipment powered with either by a plug-in or a battery.  In 2003, Mr. Skidell founded Document
Destruction, Inc. (DDI), a mobile shredding company.  In two years DDI became the dominate
and  leading mobile shredding company on
Long Island, New York.  In the spring of
2006 DDI was sold to CINTAS.

34

Michael Rocchetti,a Director of Gottaplay, graduated
with a BS in Economics and Finance from the University
of Connecticut in 1991.  After
graduating from college, Mr. Rocchetti was a financial advisor for a several
years and holds his Series 7 and 63 licenses.
In the last ten years Mr. Rocchetti has been an active participant in
capital funding for many private and public companies.  In addition to Mr. Rocchettis professional
experiences noted above, Mr. Rocchetti started a furniture company in 1991,
Weiss Furniture and Sleep Shop,retail furniture and bedding store
located in Groton, Connecticut USA. Upon his election to the board of
directors, he was also appointed to the boards operations committee, whereby
he provides guidance to the company in its financial
affairs and actively participates in day-to-day decisions rendered by
company.  In March 2008, and
before Mr. Rocchetti was appointed a director, he was a participant in a
private round of funding for Gottaplay and became a shareholder in our
company.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than 10 percent of
the companys common stock to file with SEC the initial reports of ownership and
reports of changes in ownership of the common stock.  Officers, directors and greater than ten percent stockholders are
required by the SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely upon a review of Forms 3, 4 and 5, and amendments thereto,
furnished to us during our current fiscal year, our officers and directors may
not have timely filed the required Forms,
as required by Section 16(a) of the Securities Exchange Act of 1934.

Code of Ethics

We are presently working with our legal counsel to prepare and adopt a
code of ethics that applies to our interim: (a.)  principal chief executive officer, (b.) principal financial
officer, (c.) principal accounting officer,
or controller, or other persons performing similar functions (the Code
of Ethics). The Code of Ethics is being designed with the intent to deter
wrongdoing, and to promote the following:


Honest and ethical
  conduct, including the ethical handling of actual or apparent conflicts if interest
  between personal and professional relationships
Full, fair,
  accurate, timely and understandable disclosure in reports and documents that
  a small business issuer files with, or submits to, the Commission and in
  other public communications made by the small business issuer
Compliance with
  applicable governmental laws, rules and regulations
The prompt
  internal reporting of violations of the code to an appropriate person or
  persons identified in the code
Accountability for
  adherence to the codeAudit Committee

We do not have a separately designated standing audit committee.
Pursuant to Section 3(a) (58) (B) of the Exchange Act, the entire Board of
Directors acts as an audit committee for the purpose of overseeing the accounting
and financial reporting processes, and our audits of the financial statements.
The Commission recently adopted new regulations relating to audit committee
composition and functions, including disclosure requirements relating to the
presence of an audit committee financial expert serving on its audit
committee. In connection with these new requirements, our Board of Directors
examined the Commissions definition of audit committee financial expert and
concluded that we do not currently have a person that qualifies as such an
expert. Presently, there are only five (5) directors serving on our Board, and
we are not in a position at this time to attract, retain and compensate
additional directors in order to acquire a director who qualifies as an audit
committee financial expert, but we intend to retain an additional director who
will qualify as such an expert, as soon as reasonably practicable. While
neither of our current directors meets the qualifications of an audit
committee financial expert, each of our directors, by virtue of his past
employment experience, has considerable knowledge of financial statements,
finance, and accounting, and has significant employment experience involving
financial oversight responsibilities. Accordingly, we believe that our current
directors capably fulfill the duties and responsibilities of an audit committee
in the absence of such expert(s).

35

Item
  10.
Directors
  and Executive Officers Compensation.We do not have a compensation plan for our directors. We have not paid
our directors a fee for their services during the fiscal years ended September
30, 2007 and 2008, respectively.

The following table summarizes the compensation earned by or paid to
our Chief Executive Officer and the other most highly compensated executive
officers whose total salary and bonus exceeded $100,000 for services rendered
in all capacities during the fiscal year ended September 30, 2008.  We referred to these individuals as our
named executive officers.

Name and Principal Position

Year

Salary Paid
($)

Bonus
($)

Other Annual
Compensation
($)

Securities
Underlying
Options
(#)

All other
Compensation
($)John P. Gorst,Chairman and


2008


N/A

$
-0-

$
-0-


-0-

$
-0-CEO (2)


2007

$
111,116

$
-0-

$
-0-


-0-

$
-0-William M. Wright,
  III,Chief Operating


2008


N/A


N/A


N/A


N/A


N/AOfficer (3)


2007

$
103,600

$
-0-

$
-0-


-0-

$
-0-(1)
The compensation
  described in this table does not include medical, group life insurance or
  other benefits received by the named executive officer that are available
  generally to all of our salaried employees, and may not include certain
  perquisites and other personal benefits received by the name executive
  officer that do not exceed the lesser of $50,000 or ten percent (10%) of any
  such officers salary and bonus disclosed in the table.(2)
Mr. Gorst  resigned his position as CEO on February
  20, 2008, and was paid $17,918 as the CEO during fiscal year ended September
  30, 2008.(3)
Mr. Wright
  resigned his position as COO on August 1, 2007.(4)
No other officer
  or director of the Company received compensation in  excess of $100,000 in either the past two years.Item
  11.
Security
  Ownership of Certain Beneficial Owners and Management and Related Stockholder
  Matters.The following table sets forth certain information regarding beneficial
ownership of our common stock as of September 30, 2008:


By each person who
  is known by us to beneficially own more than 5% of our common stock;
By each of our
  then officers and directors; and
By all of our then
  officers and directors as a group.36

Name


Number


PercentJohn P. Gorst (1)
  (2)


3,568,073


10.55
%M. Carroll Benton
  (3)


3,564,392


10.54
%Asra Rasheed (4)


1,922,000


5.73
%Mark H. Levin (5)


3,568,666


10.56
%Capital Group
  Communications


1,666,922


5.0
%All executive
  officers and directors as a group (1 person)


3,568,073


10.55
%* Less than 1%(1)
Director. Resigned
  as Director on October 2, 2008.(2)
Includes 3,068,073
  shares of common stock and 500,000 stock options exercisable within 60 days.(3)
Includes 3,064,392
  shares of common stock and 500,000 stock options exercisable within 60 days.(4)
Includes 1,672,000
  shares of common stock and 250,000 stock options exercisable within 60 days.(5)
Includes 3,068,666
  shares of common stock and 500,000 stock options exercisable within 60 days.Item
  12.
Certain
  Relationships and Related Transactions.In June 2005 we entered into a five-year agreement with Insynq, Inc.
whereby it would supply our technology and communications infrastructure and
programming expertise. Insynq, Inc. is partially owned and managed by two of
our then officers and directors.  During
the fiscal year ended September 30, 2008, the amount of services provided
totaled $18,688.  In October 2008, the
agreement was terminated with a settlement in the form of cash, paid in October
2008, and the issuance of common stock on November 7, 2008.

A private company, owned by a prior director, who resigned his
directorship in September 2008, is owed $90,xxx for services rendered.  Under the terms of the Agreement we incurred
a total $45,000 of services from this party.
These services were accrued at $5,000 per month, pursuant to the
Agreement executed in February 2007 and expiring in February 2010. Also,
additional services of $36,000 were provided outside the Agreement. The
services under this Agreement were mutually terminated.

A private company, owned by a prior officer, was due $28,000 in the
form of an 18% defaulted promissory note, plus accrued interest of $44,532 was
settled as of September 30, 2008 with the issuance of 232,500 shares of common
stock on November 7, 2008.

A private company, owned by two of our prior officers, is due
$8,715.  This amount is unsecured,
non-interest bearing and due on demand.

In July 2008, our two directors participated in a round of financing
that raised a total of $126,900 in the form of 6% unsecured convertible notes
payable.  The two directors loaned us a
total of $30,000.

Item
  13.
ExhibitsNone

Item 14.
Principal
  Accountant Fees and Services.Audit Fees

The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the audit of our
annual consolidated financial statements and the reviews of our consolidated
financial statements included in Forms 10-KSB and 10-Qs, respectively, or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or other engagements for those fiscal years
were:

37

Audit Fees2007

$
39,9002008

$
40,000Review
  Fees2007

$
11,2502008

$
11,750Audit
Related Fees

The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are reasonably
related to the performance of the audit or review of the issuers financial
statements and are not report above.

2007

$
1,0002008

$
-0-Taxes

The aggregate fees billed in of the last two fiscal years for the
products and services provided by the principal accountant for tax compliance,
tax advice and tax planning.

2007

$
5,3002008

$
3,750All Other Fees

The aggregate fees billed in each of the last two fiscal years for the
due diligence, review of SB-2 and other ancillary services provided by the
principal accountant, other than the services reported above were:

2007

$
5,0252008

$
37,87538

SIGNATURES

In accordance with the Section 13 or 15(d) of the Securities Exchange
Act, the Company caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Gottaplay
  Interactive, Inc./s/ Matthew
  SkidellMatthew SkidellInterim Chief
  Executive OfficerDated: January 09, 2009

SIGNATURES

TITLE(S)

DATE/s/
Matthew Skidell

Interim Chief
  Executive Officer

January 09, 2009Matthew Skidell

Interim Chief
  Financial OfficerInterim Principal
  Accounting and Finance Officer/s/
Michael Rocchetti

Director

January 09, 2009Michael Rocchetti39

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Audited Consolidated Financial Statements as of and for the Years Ended
September 30, 2008 and 2007

Index
  to Consolidated Financial Statements
F-1Report
  of Independent Registered Public Accounting
  Firm
F-2Consolidated
  Balance Sheet
F-3Consolidated
  Statements of Operations
F-4Consolidated
  Statements of Stockholders Deficit
F-5Consolidated
  Statements of Cash Flows
F-7Notes
  to Consolidated Financial Statements
F-8F-1

(LAKE LOGO)
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Gottaplay Interactive Inc.

We have audited the accompanying consolidated balance sheets of
Gottaplay Interactive Inc. and subsidiaries as of September 30, 2008 and 2007
and related consolidated statements of operations, stockholders deficit, and
cash flows for the years ended September 30, 2008 and 2007. These financial
statements are the responsibility of the companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits 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. The Company has determined that it is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Gottaplay Interactive Inc., as of September 30, 2008 and 2007 and the results
of its operations and its cash flows for the years ended September 30, 2008 and
2007 in conformity with accounting principles generally accepted in the United
States of America.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company has suffered recurring
losses and has yet to generate an internal cash flow that raises substantial
doubt about its ability to continue as a going concern. Managements plans in
regard to these matters are described in Note 3. The financial statements do
not include any adjustments that might result from the outcome of this uncertainty.

\s\ Lake & Associates CPAs
LLC
LAKE & ASSOCIATES CPAS LLC

BOCA RATON FLORIDA

JANUARY 9, 2009

20283 State Road #7Suite 300Boca Raton, Florida 33498Phone: 561.982.9874Fax: 561.982.7985

F-2






Gottaplay Interactive, Inc.
and Its Wholly Owned SubsidiariesConsolidated Balance Sheets

September 30,2008

2007AssetsCurrent assetsCash and cash equivalents

$
28,663

$
149,355Account receivable


295,450


Prepaid expenses and other current assets


1,991


13,315Amount held in escrow, net of $126,900 for doubtful
  realization





Total current assets


326,104


162,670Property and equipmentFixed assets, net


442,197


643,609Video game library, net


14,911


121,364Total property and equipment


457,108


764,973Other assetsDeposits


3,614


11,225Total assets

$
786,826

$
938,868Liabilities and
  Stockholders DeficitCurrent liabilitiesAccounts payable

$
607,199

$
569,839Accounts payable  related parties


155,500


95,950Accrued liabilities


611,441


370,561Accrued liabilities  related parties





35,460Deferred revenues


10,993


36,633Notes payable


1,365,000


461,000Note Payable  related party





28,000Convertible notes payable, net of discounts


1,238,234


953,220Convertible notes payable  related parties, net of
  discounts


24,880


Total current liabilities


4,013,247


2,550,663Stockholders deficitPreferred stock, $0.001 par value, 5,000,000 shares
  authorized, none issued and outstanding





Common stock, $0.001 par value, 100,000,000 shares
  authorized, 33,307,898 and 31,319,565, respectively, shares issued and
  outstanding


33,307


31,319Treasury stock


(379
)

(379
)Additional paid-in capital


7,638,872


7,502,157Common stock authorized, but unissued


231,470


4,300Additional paid-in capital  treasury stock


230,614


230,614Accumulated deficit


(11,360,305
)

(9,379,806
)Total stockholders deficit


(3,226,421
)

(1,611,795
)Total liabilities and stockholders deficit

$
786,826

$
938,868The accompanying notes are an integral part of these consolidated
financial statements.

F-3

Gottaplay Interactive, Inc.
and Its Wholly Owned SubsidiariesConsolidated Statements of Operations

Years ended September 30,2008

2007Revenues

$
975,495

$
497,409Cost of revenues


659,643


1,819,174Loss before operating expenses


315,852


(1,321,765
)Operating expensesFulfillment


229,136


397,751Technology and development


98,018


76,348Advertising and marketing


14,755


228,750General and administrative


1,244,102


2,477,738Officers compensation


62,204


325,422Related party expenses


99,688


174,803Totaloperating expenses


1,747,903


3,680,812Loss from operations


(1,432,051
)

(5,002,577
)Other income (expense)Interest income





30Loss on disposition of assets


(26,689
)

Other income


120


2,840Interest expense


(521,879
)

(1,028,053
)Total other expense


(548,448
)

(1,025,183
)Loss from continuing operations before income taxes


(1,980,499
)

(6,027,760
)Provision for income taxes





Loss from continuing operations


(1,980,499
)

(6,027,760
)Discontinued operations, including $256,721 loss on sale





(580,297
)Loss from discontinued operations, net of $-0- tax





(580,297
)Net loss

$
(1,980,499
)
$
(6,608,057
)Weighted average shares outstanding of common stock, basic
  and diluted


33,234,956


30,842,347Net loss per common share from continuing operations

$
(0.06
)
$
(0.20
)Net loss per common share from discontinued operations


(0.00
)

(0.02
)Net loss per common share outstanding, basic and diluted

$
(0.06
)
$
(0.22
)The
accompanying notes are an integral part of these consolidated financial
statements.

F-4


Gottaplay Interactive,
Inc.
and Its Wholly Owned SubsidiariesConsolidated Statements of Stockholders
DeficitYears Ended September 30, 2008 and 2007
 Common Stock Authorized but
Unissued

Subscription Receivable and
Prepaid ServicesTreasury StockCommon Stock
  
  
  
  Additional Paid in Capital
  
  Additional Paid-In Capital
  
  
  
  Accumulated Deficit
  
  Total Stockholders DeficitShares

Amount

AmountBalance at September
  30, 2006


28,893,433

$
28,893

$
(379
)
$
230,614

$
3,586,369

$


$
(2,450,000
)
$
(2,771,749
)
$
(1,376,252
)Allocation of discount
  on notes payable issued with warrants














1,104,991











1,104,991Stock subscription
  units, net of expenses














(163,500
)

2,285,000








2,121,500Issuance of common stock
  at $1.25 per share of previously authorized subscription units


1,828,000


1,828








2,283,172


(2,285,000
)







Authorization to issue
  common stock at market value for non-employee contracted services

















173,550








173,550Issuances of common
  stock previously authorized, at market values


75,171


75








169,175


(169,250
)







Issuances of common
  stock at market values for non-employee contracted services


253,704


253








248,262











248,515Issuance of warrants
  for services rendered














9,042











9,042Issuance of common
  stock at market value to merge company


220,000


220








560,780











561,000Issuance of commons
  stock at $1.25 per share in redemption of convertible notes payable


96,000


96








119,904











120,000Recognition of prepaid
  services




















1,200,000





1,200,000Charge unamortized
  portion of prepaid services and cancel issuance of common stock


(2,000,000
)

(2,000
)







(1,248,000
)




1,250,000





 Continued on next page. The accompany notes are an integral part of these consolidated
financial statements. F-5   Gottaplay Interactive, Inc.
and Its Wholly Owned SubsidiariesConsolidated Statements of Stockholders
DeficitYears Ended September 30, 2008 and 2007

- Continued from previous
page -

Common Stock Authorized but Unissued
  
  Subscription Receivable and
      Prepaid ServicesTreasury StockCommon Stock
  
  
  
  Additional Paid in Capital
  
  Additional Paid-In Capital
  
  
  
  Accumulated Deficit
  
  Total Stockholders DeficitShares

Amount

AmountIssuance of common
  stock in conjunction with settlement of debts


1,916,667


1,917








732,002











733,919Exercise of 40,000
  warrants; stock unissued

















100,000








100,000Issuance of common
  stock for exercise of warrants


40,000


40








99,960


(100,000
)







Shares cancelled


(3,410
)

(3
)



















(3
)Net loss for the year ended
  September 30, 2007























(6,608,057
)

(6,608,057
)Balance at September
  30, 2007


31,319,565


31,319


(379
)

230,614


7,502,157


4,300





(9,379,806
)

(1,611,795
)Issuance of shares of
  common stock previously authorized but unissued


8,333


8








4,292


(4,300
)







Rescission of
  cancelled shares of common stock pursuant to settlement agreement


2,000,000


2,000








(2,000
)










Cancellation of shares
  of common stock


(250,000
)

(250
)







250











Issuance of common
  stock for services


80,000


80








32,170











32,250Issuance of common
  stock for debt


150,000


150








67,350











67,500Authorization to issue
  common stock for settlements of obligations and debts

















231,470








231,470Allocation of
  discounts on notes payable issued with warrants














34,653











34,653Net Loss for the year
  ended, September 30, 2008























(1,980,499
)

(1,980,499
)Balance at September
  30, 2008


33,307,898

$
33,307

$
(379
)
$
230,614

$
7,638,872

$
231,470

$


$
(11,360,305
)
$
(3,226,421
)The accompany notes are an integral part of these consolidated
financial statements.

F-6


Gottaplay Interactive, Inc.
and Its Wholly Owned SubsidiariesConsolidated Statements of Cash Flows Years ended September 30,2008

2007Increase (Decrease) in CashNet loss

$
(1,980,499
)
$
(6,608,057
)Adjustment to reconcile net loss to cash (used) in
  operating activities:Depreciation and amortization


288,101


463,419Amount reserved due to doubtful asset realization


126,900


Basis of disposed assets


48,556


4,772Amortization of discounts


217,648


900,338Sharebased compensation for services rendered


32,250


431,107Amortization of prepaid expenses





1,200,000Changes in assets and liabilities:Account receivable


(295,450
)

Accounts payable


37,360


280,701Accounts payable  related parties


59,550


49,821Accrued liabilities


511,849


253,980Accrued liabilities  related parties


(35,460
)

(5,668
)Deferred revenue


(25,640
)

32,152Other current assets


18,935


(3,622
)Net cash (used) in operating activities


(995,900
)

(3,001,057
)Cash flows from investing activities:Purchase of DVD library


(28,792
)

(475,095
)Cash paid to merged company





(60,000
)Purchase of equipment and leaseholds





(72,308
)Deposits on leased facilities





(15,657
)Deposits returned on leased facilities





7,740Net cash (used) in investing activities


(28,792
)

(615,320
)Cash flows from financing activities:Proceeds from notes payable


1,192,500


380,000Payments on notes payable


(288,500
)

(201,625
)Proceeds from convertible notes





921,825Proceeds from stock subscription units





2,285,000Payment for commission due on stock subscription units





(163,500
)Proceeds from exercise of warrants





100,000Net cash provided by financing activities


904,000


3,321,700Cash flows from discontinued operations:Operating activities





461,160Investing activities





(3,904
)Financing activities





(74,354
)Net cash provided by discontinued operations





382,902Net increase in cash


(120,692
)

88,225Cash at beginning of period


149,355


61,130Cash at end of period

$
28,663

$
149,355 Supplemental disclosures andnon-cash investing and financing
activities- see Note 13. The accompanying
notes are an integral part of these consolidated financial statements. F-7   Gottaplay Interactive, Inc. and
Its Wholly Owned SubsidiariesNotes to Consolidated Financial Statements

Note 1  Description of Business

Gottaplay Interactive, Inc. (Gottaplay) is an on-line video game
rental subscription service, which began operations in October 2004. The
operation provides subscribers access to a comprehensive library of titles via
the internet as an alternative to store based gaming rentals. For the standard
subscription plan of $20.95 per month, subscribers can generally have up to two
titles out at the same time with no due dates, late fees or shipping charges.
In addition to the standard plan, the Company offers two other service plans
with different price points that allow subscribers to keep either fewer or more
titles at the same time. Subscribers select titles at the Companys website,
aided by its proprietary recommendation service, and generally receive the DVD
game within two to three business days delivered by U.S. Postal Service. The
gamers then return the DVD game at their convenience using the Companys
prepaid mailers. After a title has been mailed, the Company mails a title from
the subscribers game queue. All of the Companys subscription revenues are
generated in the United States of America.

Organization History and Background

On July
24, 2006, Gottaplay Interactive, Inc. (Gottaplay and the Company), formerly
known as Donobi, Inc. (Donobi), a publicly held company, merged with Gotaplay
Interactive, Inc. (Gotaplay), a privately held Nevada corporation.

As a
result of the merger agreement, the transaction was treated for accounting
purposes as a reverse merger, effective July 24, 2006. The legal acquirer was
Donobi, Inc. and the accounting acquirer was Gottaplay Interactive, Inc.

On February 28, 2007, the Companys wholly owned subsidiary, Gottaplay
Management, Inc. (GMI), a Nevada corporation, merged a privately held Florida
company called Gamershare, Inc. (GSI) into its operations. In consideration
for the merger, the Company paid the former sole shareholder of GSI $60,000 in
cash, issued 220,000 shares of its $0.001 par value common stock and executed a
three-year employment agreement to the former shareholder. The shares were
valued at market, or $2.55 per share, on the date of closing, and the total
value of these shares was $561,000. GMI is the surviving corporation.

On August
1, 2007, Gottaplay sold all the stock of Donobi, Inc. (a wholly-owned
subsidiary and commonly referred to as the internet service provider division)
for $100. In consideration for the stock, the purchaser received all the assets
and assumed significantly all the liabilities, associated with this divisions
operation. The Company accounted for this transaction under SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets. Accordingly,
the operating results, less applicable provision for any income taxes, of the
discontinued operation have been segregated from continuing operations for the
year ended September 30, 2007 and are reported as a separate line item on the
accompanying Consolidated Statements of Operations and Cash Flows. By
segregating the results of the discontinued operations, a more meaningful and
enhanced comparison of the results of operations from continuing operations are
presented. Any reference to revenues and expenses in the subsequent notes to
the consolidated financial statements, except for Note 4, will pertain only to
the Companys continuing operations.

Business Operational Changes

Since the beginning of its current fiscal year, the Company has
consolidated and simplified its distribution operations, and, completely
restructured its management and administrative roles and responsibilities.
During fiscal year ended September 30, 2008 and through the date of this
report, the Company closed and consolidated the operations three distribution
centers and one administrative office into one facility on the east coast.
Since May, 2008, all management and administrative functions were assumed by a
Director/Interim Officer. The Company currently has two board members; both are
active in the management and operations of the Company, and, three employees in
which to conduct the day-to-day business affairs and operational activities.

Basis of
Presentation

The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries. Each division and subsidiary company separately
accounts for its operations and transactions, and all inter-company and all
inter-divisional transactions have been eliminated.

Year-End and Domicile

The Company and its wholly owned subsidiaries adopted September 30th as
its fiscal year end and are domiciled in Nevada.

F-8

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements



Note 2  Summary of Significant Accounting Policies

Accounting Principles

The consolidated financial statements and accompanying notes are
prepared in accordance with accounting principles generally accepted in the
United States of America.

Principle of Consolidation

The financial statements include the accounts of Gottaplay Interactive,
Inc. and its subsidiaries. Intercompany transactions and balances have been
eliminated. Equity investments in which the Company exercises significant
influence but do not control and are not the primary beneficiary are accounted
for using the equity method. Investments in which the Company is not able to
exercise significant influence over the investee and which do not have readily
determinable fair values are accounted for under the cost method.

Managements Use of Estimates and Assumptions

The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles in the United States of America
requires management to make estimates, judgments and assumptions that affect
the reported amounts of the assets and liabilities, disclosure of contingent
assets and liabilities at the date of the consolidated financial statements,
and the reported amounts of revenue and expense during the reporting periods.
Examples, though not exclusive, include estimates and assumptions of: loss
contingencies; depreciation or amortization of the economic useful life of an
asset; stock-based compensation forfeiture rates; estimating the fair value and
impairment; potential outcome of future tax consequences of events that have
been recognized in our financial statements or tax returns; and determining
when investment impairments are other-than temporary. The Company bases its
estimates on historical experience and on various assumptions that the Company
believes to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results
may materially differ from these estimates under different assumptions and
conditions.

Reclassifications

Certain amounts reported in previous periods have been reclassified to
conform to the Companys current period presentation.

Revenue Recognition, Descriptions and Deferred

In accordance with the SECs Staff Accounting Bulletin No. 104, Revenue
Recognition,revenue is recognized when persuasive evidence of an
arrangement exists, delivery has occurred, the fee is fixed or determinable,
and collectability is probable.

A. Subscriptions.
  The Company offers a ten-day free subscription trial. At any time during the
  initial ten-day period, a new subscriber has the right to rescind their trial
  period agreement. If the subscriber does not cancel during the ten-day
  period, the Company will then charge his/her credit card account according to
  the plan selected by the subscriber, and until the subscriber cancels his/her
  subscription. The Company recognizes subscription revenue ratably during each
  subscribers monthly subscription period. For financial reporting purposes,
  the Company allocates subscription fees over the number of days in the month
  for which the fee was charged and will record deferred revenue at month end
  for subscription fees received, but not yet earned, which will be fully
  recognized in the following month. The Company recognized $10,933 and $36,633
  of deferred revenues as of September 30, 2008 and 2007, respectively. All
  authorized refunds to subscribers are recorded as a reduction of revenues.B.
  Retail/Wholesale. The Company sells previously owned DVD games and recognizes
  revenue from these sales upon shipment of the product, at which time, the
  title and risk of loss transfer to the customer. Because sales in this
  category first occurred during its second quarter of this fiscal year, there
  is no history of bad debts. Accordingly, no allowance for doubtful accounts
  has been recorded.F-9

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements
Cost of
Revenues

A. Subscriptions. Costs of this revenue category consists
  of depreciation on the video game library, mailers and postage, subscriber
  acquisition costs, credit card fees and other related expenses, which are
  directly attributable to the production of revenue.B.
  Retail/Wholesale. Cost of sales is
  comprised of DVD purchases and other ancillary costs directly associated with
  acquiring and holding the inventory.Cash, Cash Equivalents and Financial Instruments

The Company considers all highly liquid instruments with original
maturities of three months or less at the date of purchase to be cash
equivalents. In general, investments with original maturities of greater than
three months and remaining maturities of less than one year are classified as
short term investments.

Concentrations

The Company maintains its cash in a bank deposit account, which at time
may exceed the federally insured limits. The Company has not experienced any
losses in such account and believes it is not exposed to any significant credit
risk on cash and cash equivalents.

Fair value of Financial Instruments

Financial instruments consist principally of cash, trade and related party
payables, accrued liabilities, short-term obligations and notes payable. The
carrying amounts of such financial instruments in the accompanying consolidated
balance sheets approximate their fair values due to their relatively short-term
nature. It is managements opinion that the Company is not exposed to any
significant currency or credit risks arising from these financial instruments.

Loss per Common Share

Basic loss per common share is provided in accordance with SFAS 128, Earnings per
Share. Basic loss per common share is computed by dividing the net
loss available to the shareholders of common stock by the weighted average
number of common shares outstanding during the period. Diluted loss per common
share is computed by dividing the net loss by the weighted average number of
common shares including the dilutive effect of common share equivalents then
outstanding. Common stock equivalents are not included in the computation of
diluted net loss per common share because the effect would be anti-dilutive.

The following securities were not included in the computation of
diluted net loss per share of common stock as their effect would have been
anti-dilutive:

As of September 30,2008

2007Options to purchase common stock


2,207,000


2,207,000Warrants to purchase common stock


8,076,396


6,732,396Secured notes payable convertible into
  common stock


2,315,746


926,298Unsecured notes payable convertible into
  common stock


4,230,000


Stock authorized, but unissued


5,432,676


8,33322,261,818


9,874,027Dividends

The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since inception.

F-10

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements



Share-Based Payments

The Company adopted Statement of Financial Accounting standards
(SFAS) No. 123 (Revised December 2004), Share-Based Payment (SFAS No. 123R),
which requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors, including stock
options, employee stock purchases related to an employee stock purchase plan
and restricted stock units based on estimated fair values of the awards over
the requisite employee service period. SFAS No. 123R supersedes Accounting
Principles Board Opinion No. 25 (APB No. 25), Accounting for Stock Issued to
Employees, which the company previously followed in accounting for
stock-base awards. In March 2005, the SEC issued Staff Bulletin No. 107(SAB
No. 107), to provide guidance on SFAS 123R. The Company has applied SAB No.
107 in its adoption of SFAS No. 123R.

Under SFAS No. 123R, stock-base compensation cost is measured at the
grant date, based on the estimated fair value of the award, and is recognized
on a straight-line basis as expense over the employees requisite service
period. The Company adopted the provisions of SFAS 123R in its fiscal year
ended September 30, 2006, using the modified prospective application method.
The valuation provisions of SFAS 123R apply to new awards and to awards that
are outstanding on the effective date (or date of adoption) and subsequently
modified or cancelled; prior periods are not revised for comparative purposes.
Estimated compensation expense for awards outstanding on the effective date
will be recognized over the remaining service period using the compensation
cost calculated for pro forma disclosure under FASB Statement No. 123, Accounting
for Stock-Based Compensation.

Comprehensive Loss

The Company has no components of other comprehensive loss. Accordingly,
net loss equals comprehensive loss for all periods.

Advertising Expenses

Advertising costs are expensed as incurred. For the years ended
September 30, 2008 and 2007 advertising expenses totaled $0.00 and $25,852,
respectively.

Income Taxes

The Company follows SFAS No. 109, Accounting for Income Taxes for recording
the provision for income taxes. Deferred tax assets and liabilities are
computed based upon the difference between the consolidated financial statement
and income tax basis of assets and liabilities using the enacted marginal tax
rate applicable when the related asset or liability is expected to be realized
or settled. Deferred income tax expenses or benefits are based on the changes
in the asset or liability each period. If available evidence suggests that it
is more likely than not that some portion or all of the deferred tax assets will
not be realized, a valuation allowance is required to reduce the deferred tax
assets to the amount that is more likely than not to be realized. Future
changes in such valuation allowance are included in the provision for deferred
income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting
from income and expense items reported for financial accounting and tax
purposes in different periods. Deferred taxes are classified as current or
non-current, depending on the classification of assets and liabilities to which
they relate. Deferred taxes arising from temporary differences that are not
related to an asset or liability are classified as current or non-current
depending on the periods in which the temporary differences are expected to
reverse.

Game Library

The Company records the purchase of new and/or used games at cost. It
amortizes the video game library, less estimated salvage value of $1.00 per
game, on a sum-of-the-months accelerated basis over the estimated economic
useful life of each title. The Company believes this accelerated method more
closely matches product costs with the related revenues generated which,
approximates the pattern of subscriber demand for a title, which is
traditionally high when the title is initially released for rental and declines
rapidly over a relatively short period of time. Therefore, the Company
estimates the economic useful life of a new game is approximately one year. In
estimating the economic useful life of its video game library, the Company
considers other factors, such as, potential utilization, damage and loss, and
new releases. Amortization expense for the years ended September 30, 2008 and
2007 was $139,000 and $371,907, respectively.

As part of the normal course of business, the Company continually
assesses the reasonableness of the accounting estimates applied to the video
game library.

F-11

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements

Property,
Software and Leasehold Improvements

Property is recorded at cost. The cost of maintenance and repairs of
equipment is charged to operating expense when incurred. Depreciation and
amortization is determined based upon the assets estimated useful lives, and
is calculated on a straight-line basis when the asset is placed in service.
When the Company sells, disposes or retires equipment or replaces a leasehold
improvement, the related gains or losses are included in operating results.
Property is depreciated over five or seven years and begins when it is placed
in service.

Capitalized
software applications purchased for internal use are recorded at cost and are
amortized over sixty months.

Leasehold
improvements are recorded at cost and are amortized over the remaining lease
term.

Depreciation and amortization expense for the years ended September 30,
2008 and 2007 was $139,000 and $91,512, respectively.

(i) Impairment of Long-Lived Assets

In accordance with SFAS No.144, Accounting for the Impairment or
Disposal of Long-lived Assets, the Company assesses long-lived assets, such as
property and equipment and intangible assets subject to amortization, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset group may not be fully recoverable.
Recoverability of asset groups to be held and used in measured by a comparison
of the carrying amount of an asset group to estimated undiscounted future cash
flows expected to be generated by the asset group. If the carrying amount
exceeds its estimated future cash flows, an impairment charge is recognized by
the amount by which the carrying amount of an asset group exceeds the fair
value of the asset group. The Company evaluated its long-lived assets and no
impairment charges were recorded for any of the periods presented.

Related
Parties

Related
parties, which can be a corporation, individual, investor or another entity are
considered to be related if the party has the ability, directly or indirectly,
to control the other party or exercise significant influence over the Company
in making financial and operating decisions. Companies are also considered to
be related if they are subject to common control or common significant
influence. The Company had these relationships.

Recent Authoritative Accounting Pronouncements

In
December 2007, the Financial Accounting Standards Board (FASB) issued two new
statements: (a.) SFAS No. 141(revised 2007), Business Combinations, and
(b.) No. 160, Noncontrolling Interests in Consolidated Financial Statements.These
statements are effective for fiscal years beginning after December 15, 2008 and
the application of these standards will improve, simplify and converge
internationally the accounting for business combinations and the reporting of
noncontrolling interests in consolidated financial statements. The Company is
in the process of evaluating the impact, if any, on SFAS 141 (R) and SFAS 160
and does not anticipate that the adoption of these standards will have any
impact on its consolidated financial statements.

(a.) SFAS
No. 141 (R) requires an acquiring entity in a business combination to: (i)
recognize all (and only) the assets acquired and the liabilities assumed in the
transaction, (ii) establish an acquisition-date fair value as the measurement
objective for all assets acquired and the liabilities assumed, and (iii) disclose to investors and other users all of the
information they will need to evaluate and understand the nature of, and the
financial effect of, the business combination, and, (iv) recognize and measure the goodwill acquired in the business
combination or a gain from a bargain purchase.

(b.) SFAS No. 160 will improve the relevance,
comparability and transparency of financial information provided to investors by
requiring all entities to: (i) report noncontrolling (minority) interests in
subsidiaries in the same manner, as equity but separate from the parents
equity, in consolidated financial statements, (ii) net income attributable to
the parent and to the non-controlling interest must be clearly identified and
presented on the face of the consolidated statement of income, and (iii) any
changes in the parents ownership interest while the parent retains the
controlling financial interest in its subsidiary be accounted for consistently.

F-12

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements

In
February 2008, the FASB issued Financial Staff Positions (FSP)
FAS 157-2, Effective Date of FASB
Statement No. 157 (FSP FAS 157-2), which delays
the effective date of SFAS No. 157, Fair Value
Measurement(SFAS 157), for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually).
SFAS 157 establishes a framework for measuring fair value and expands
disclosures about fair value measurements. FSP FAS 157-2 partially defers the
effective date of SFAS 157 to fiscal years beginning after November 15,
2008, and interim periods within those fiscal years for items within the scope
of this FSP. FSP FAS 157-2 is effective for us beginning January 1, 2009.
The Company is currently evaluating the potential impact of the adoption of
those provisions of SFAS 157, for which the effectiveness was delayed by FSP
SFAS 157-2, on the Companys consolidated financial position and results of
operations.

In March
2008, the FASB issued Statement of Financial Accounting Standards (SFAS) No.
161, Disclosures
about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133 (SFAS No. 161). The new standard is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand
their effects on an entitys financial position, financial performance and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The Company does not believe
that SFAS No. 161 will have a material impact on its consolidated financial
statements. In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities (SFAS
No. 161). SFAS No. 161 requires companies with derivative instruments to
disclose information that should enable financial-statement users to understand
how and why a company uses derivative instruments, how derivative instruments
and related hedged items are accounted for under FASB Statement No. 133 Accounting for Derivative Instruments and Hedging
Activities and how derivative instruments and related hedged items
affect a companys financial position, financial performance and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The adoption of this
statement is not expected to have a material effect on the Companys future
financial position or results of operations.

In
May 2008, the FASB released SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities
that presented in conformity with generally accepted accounting principles in
the United States of America. SFAS No. 162 will be effective 60 days following
the SECs approval of the PCAOB amendments to AU Section 411, The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles. The FASB has stated that
it does not expect SFAS No. 162 will result in a change in current practice.
The Company does not believe the application of SFAS 162 will have a
significant impact, if any, on the Companys consolidated financial statements.

May 2008,
the FASB issued SFAS No. 163, Accounting
for Financial Guarantee Insurance Contracts--an interpretation of FASB
Statement No. 60 (SFAS No. 163). SFAS No. 163 interprets
Statement 60 and amends existing accounting pronouncements to clarify their
application to the financial guarantee insurance contracts included within the
scope of that Statement. SFAS No. 163 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and all interim
periods within those fiscal years. As such, the Company is required to adopt
these provisions at the beginning of the fiscal year ended December 31, 2009.
The Company is currently evaluating the impact of SFAS No. 163 on its financial
statements but does not expect it to have an effect on the Companys financial
position, results of operations or cash flows.

In May
2008, the FASB issued FSP APB 14-1, Accounting
for Convertible Debt Instruments that may be Settled in Cash upon Conversion
(Including Partial Cash Settlement)(FSP APB 14-1). FSP
APB 14-1 applies to convertible debt securities that, upon conversion, may
be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies
that issuers of such instruments should separately account for the liability
and equity components in a manner that will reflect the entitys nonconvertible
debt borrowing rate when interest cost is recognized in subsequent periods. FSP
APB 14-1 is effective for financial statements issued for fiscal years after
December 15, 2008, and must be applied on a retrospective basis. Early
adoption is not permitted. The Company is assessing the potential impact of
this FSP on the convertible debt issuances.

In June
2008, the FASB issued FASB Staff Position (FSP) EITF 03-6-1, Determining Whether Instruments Granted in
Share-Based Payment Transactions Are Participating Securities (FSP
EITF 03-6-1). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the earnings allocation in computing
earnings per share under the two-class method as described in SFAS No. 128,
Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings-per-share pursuant to the two-class
method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning after December 15, 2008 and all prior-period earnings per share
data presented shall be adjusted retrospectively. Early application is not
permitted. The Company is assessing the potential impact of this FSP on the
earnings per share calculation.

F-13

Gottaplay Interactive, Inc. and
Its Wholly Owned Subsidiaries
Notes to Consolidated Financial Statements



In June
2008, the FASB ratified EITF No. 07-5,Determining
Whether an Instrument (or an Embedded Feature) is Indexed to an Entitys Own
Stock (EITF 07-5). EITF 07-5 provides that an entity
should use a two-step approach to evaluate whether an equity-linked financial
instrument (or embedded feature) is indexed to its own stock, including
evaluating the instruments contingent exercise and settlement provisions. EITF
07-5 is effective for financial statements issued for fiscal years beginning
after December 15, 2008. Early application is not permitted. The Company is assessing
the potential impact of this EITF 07-5 on the financial condition and results
of operations.

Note 3 - Going Concern and Managements Plan

The Companys consolidated financial statements as of and for the years
ended September 30, 2008 and 2007 have been prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company recorded net losses of $1,980,499 and
$6,027,760 from continuing operations and $995,900 and $3,001,057 of negative
cash flows from operating activities for fiscal years ended September 30, 2008
and 2007, respectively. At September 30, 2008, the Company had a working
capital deficit of $3,687,143 and a stockholders deficit of approximately
$3,226,421. The accompanying consolidated financial statements do not include
any adjustments that might result from the ultimate outcome of these risks and
uncertainties. As of September 30, 2008, the Companys working capital deficit
may not enable it to meet certain financial objectives as presently structured.

The rate at which the Company expends it financial resources is
variable, may be accelerated, and will depend on many factors. In order to
obtain the necessary operating and working capital, the Company is seeking
public or private equity investors and/or private debt financing. There can be
no assurance that such additional funding, if any, will be available on
acceptable terms. The Companys continued existence as a going concern is
completely dependent upon its ability to: (a.) grow sales and (b.) secure
additional equity investments (c.) secure new debt financing and (d.)
restructure existing debt. There is no assurance that the Company will be successful
in any of these endeavors. Without sufficient, immediate, short-term financing,
it will be unlikely for the Company to continue as a going concern.

Note 4 
Discontinued Operations

In July
2007, the Company determined it was in the best long-term interest of the
Company to discontinue the operations of the internet service provider
division, a wholly-owned subsidiary, and put the assets and business up for
sale. The decision to sell this division was primarily influenced by the
recurring net losses, its loss of market share and the immediate need to
generate significant capital to pay off delinquent debts and tax liens. On
August 1, 2007, the Company consummated a sale agreement with its former Chief
Operating Officer, by selling the subsidiarys stock for $100 and other
valuable consideration. Terms of the sale stipulated that the Company sell all
assets related to the internet service provider (ISP) division to the
purchaser. In addition to the $100, the purchaser agreed to assume:

a.
substantially all trade and
  vendor debts, andb.
all existing and unexpired
  leases, andc.
other division related short and
  long-term notes payable and commitments, andd.
release the Company from all
  liens, litigation and claims associated with the ISP operations. (See also
  Note 14.)In
addition, as part of the August 1, 2007 agreement, the Company assumed $171,513
of current liabilities from this division and is described as follows:

a.
a promissory note with a balance
  due of $95,000, in default, accruing interest at 18% per annum, with accrued
  interest of $40,400, andb.
three vendor trade accounts
  payable totaling $36,113.F-14

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

The
Company recognized a net loss of $256,721 on the disposal of this operation and
is reported in the Consolidated Statements of Operations and Cash Flows within
the caption, discontinued operations. A summary of the disposition follows:

Assets

$
1,334,218Liabilities


1,077,398256,821Sale price


100Net loss

$
256,721Note 5 
Revenues and Account Receivable

The
following table is a breakdown of the Companys revenues:

Years ended September 30:2008

2007RevenuesSubscriptions

$
510,045

$
497,409Sales of DVDs


465,450


Total


975,495


497,409Cost of RevenuesSubscriptions


224,643


1,819,174DVDs


435,000


Total


659,643


1,819,174Income (Loss) before operating expensesSubscriptions


285,402


(1,321,765
)DVDs


30,450


Total

$
315,852

$
(1,321,765
)At
September 30, 2008, the Company had one customer account receivable totaling
$295,450.

Note 6 
Fixed Assets

The
following is a summary of fixed assets and related accumulated depreciation and
amortization at:

September 30,2008

2007Software

$
661,625

$
661,625Equipment and other


3,589


46,404Computers and related





37,045Leasehold improvements





8,795665,214


753,869Less: accumulated depreciation and
  amortization


223,017


110,260Fixed assets, net

$
442,197

$
643,609F-15

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Note 7
Video Game Library

The following is a summary of the video game library collection at:

September 30,2008

2007Video game library

$
500,394

$
579,949Less: accumulated
  amortization


485,483


458,585Video game
  library, net

$
14,911

$
121,364Note 8 
Accrued liabilities

The following table is a summary of accrued liabilities at:

September 30,2008

2007a. Interest

$
231,623

$
189,095b. Other accrued
  liabilities


288,718


101,330c. Wages and
  related burden


84,356


106,851d. Business taxes


6,744


8,745Total accrued
  liabilities

$
611,441

$
406,021Accrued
  liabilities

$
611,441

$
370,561Accrued
  liabilities  related party





35,460$
611,441

$
406,021Note 9  Related Party Transactions

As of and for the years ended September 30, 2008 and 2007, and as of
the date of this report, all related party relationships with the Company have
been severed. Accordingly, the following is a description of those transactions
and activities through the dates of terminating the relationship(s).

As of and for the years ended September 30, 2008 and 2007, the Company
had the following related party transactions:

a.
During fiscal
  years ended September 30, 2008 and 2007, Gottaplay received services from a
  public company, managed, directed and partially owned by two prior officers,
  stockholders and directors of the Company. These officers resigned their respective
  positions in fiscal 2008. Accounts payable to this public company as of
  September 30, 2008 and 2007, totaled $64,297 and $46,059, respectively.
  Gottaplay received services from the public company totaling $18,688 and
  $101,053, respectively. In October 2008, all existing agreements were
  terminated and amounts due this entity were settled for cash and stock.b.
A private company,
  owned by an officer, was due $28,000 in the form of a past due 18% promissory
  note, plus accrued interest of $44,532 and $35,460 as of September 30, 2008
  and 2007, respectively. This officer resigned in April 2008. All amounts due
  the officer and the company were agreed in principal in June 2008 to be
  settled in common stock and the full release and assumption of the officers
  personal guarantee on a lease obligation. The stock was authorized for
  issuance as of September 30, 2008 and subsequently issued in November 2008.F-16

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

c.
A private company,
  owned by a prior director, who resigned his position in October 2008, is owed
  $90,750 at September 30, 2008. During the years ended September 30, 2008 and
  2007, the Company received professional management and advisory services
  totaling $81,000 and $73,750, respectively. The prior directors company had
  executed in February 2007, a three year management consulting agreement,
  which has since been terminated.d.
A private company,
  owned by two of the Companys prior officers/directors and a prior director,
  is due $8,715. This amount is unsecured, non-interest bearing and due on
  demand.e.
As of September 30, 2008 and 2007, the prior officers, as a group,
  were owed for reimbursable expenses of $-0- and $13,673, respectively.f.
In July 2008, the two directors of the Company participated in a
  round of financing that raised a total of $126,900 in the form of 6%
  unsecured convertible notes payable. The two directors loaned the Company a
  total of $30,000. (See also Note 10.)

Note 10  Notes Payable

The Company has the following promissory notes due as of September 30,
2008 and 2007, and all are classified as a current liability. Pertinent details
of the notes are summarized as follows:

Collateral

Related
Party

Rate of
Interest

Number
of Notes



PrincipalDue Dates

2008

20071.

No


No


14
%

11



Extended to 6-30-2009

$
1,255,000

$
250,0002.

No


No


18
%

1



In default


95,000


95,0003.

No


No


18
%

1



In default


15,000


16,0004.














Paid in Full





100,0001,365,000


461,0005.




yes









Settlement (See also Note 8.b.)





28,000Total

$
1,365,000

$
489,000Note 11  Convertible Notes Payable

The following is a summary of the convertible notes payable:

Collateral

Related
Party

Rate of
Interest

Number
of Notes



PrincipalDue Dates

2008

20071.

Yes


No


9
%

8



Past due

$
1,157,873

$
1,157,8732.

No


No


6
%

16



July 2009


96,900


1,254,773


1,157,8732.a.

No


Yes


6
%

2



July 2009


30,000


1,284,773


1,157,873Less unamortized discount









(21,659
)

(204,653
)$
1,263,114

$
953,220Unrelated parties

$
1,238,234

$
953,220Related Parties


24,880


Total

$
1,263,114

$
953,220F-17

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Secured Convertible Notes Payable

The Company has eight secured convertible notes payable which total
$1,157,873. These notes bear interest at 9% per annum and each investor was
granted a pro-rata security interest in all the Companys assets. The notes,
plus related accrued interest, were originally due on March 31, 2008. In May
2008, the notes were extended to August 15, 2008. As of September 30, 2008
these notes are currently in default. Conditions precedent to the May 2008
extension were:

a.
All accrued interest will be
  payable in $0.001 par value common stock at $.03 per share.b.
An extension or stand-still
  fee of $50,000 will be payable in shares of $0.001 par value common stock and
  valued at $0.03 per share.c.
Management fees of $7,500 per
  month for four months, or $28,000, will be paid in shares of the Companys
  $0.001 par value common stock and valued at $0.03 per share.d.
The existing convertible notes
  payable conversion price will be re-set from $1.25 to $0.50 per share.
  Originally, the notes were convertible into 926,298 shares of stock. Under
  the new terms, the notes are convertible into 2,315,746 shares of common
  stock.e.
The Company agreed to reset the
  exercise prices of the two year warrants (926,298) and the three year
  warrants (886,298) previously issued to the note holders from $1.25 to $0.60
  per share and from $2.50 to $0.75 per share, respectively.As of
September 30, 2008, the Company had not issued the shares of stock. On October
20, 2008, the Company issued 5,200,176 shares of common stock in consideration
for extension items a., b. and c. above. This transaction is recognized as of
September 30, 2008 in the accompanying Consolidated Statements of Stockholders
Deficit under the caption Common Stock Authorized but Unissued. The Company
also reset the exercise prices of items d. and e. above as of September 30,
2008.

For the years ended September 30, 2008 and 2007, the Company recognized
as interest expense, discounts, on these convertible notes payable totaling
$204,653 and $900,338, respectively, which equaled the estimated fair value of
the warrants granted, as determined using the Black-Scholes Option Pricing
Model. The unamortized balance at September 30, 2008 is $ -0-. Discounts were
recognized and amortized ratably over the term of each convertible note
payable.

Unsecured Convertible Notes Payable

In July 2008, the Company raised $126,900 from eighteen investors in
the form of convertible notes payable, bearing interest at 6% per annum, and
due within one year from the date of issuance. In addition to these notes, each
investor was granted 5,000 A warrants and B warrants for each $1,000
invested. The A warrants have an exercise date of June 30, 2009 and an
exercise price of $0.005 per share, and the B warrants have an exercise date
of January 1, 2010 and an exercise price of $0.03 per share. A total of
1,269,000 A and B warrants were granted.

For the year ended September 30, 2008, the Company recognized as
interest expense, discounts, on these convertible notes payable totaling
$12,995, which equaled the estimated fair value of the warrants granted, as
determined using the Black-Scholes Option Pricing Model. The unamortized
balance at September 30, 2008 is $21,658. Discounts were recognized and
amortized ratably over the term of each convertible note payable.

The Companys two directors loaned $30,000 of the $126,900 unsecured
convertible notes payable.

These notes plus accrued interest were authorized to be converted into
shares of the Companys $0.001 par value common stock in December 2008. (See
also Note 15.)

Note 12  Stock, Options and Warrants

Preferred Stock

The Company is authorized to issue 5,000,000 shares of its $0.001 par
value preferred stock. As of September 30, 2008, no shares are issued and
outstanding.

F-18

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Common Stock

The Company is authorized to issue 100,000,000 shares of its $0.001 par
value common stock. This class of stock allows a stockholder one vote for each
share of common stock held. At September 30, 2008, the issued and outstanding
shares of the Companys common stock totaled 33,307,898 shares. The Company
also had 5,432,676 shares of common stock, valued at $231,470, authorized, but unissued,
at September 30, 2008.

On July 25, 2006, the Company entered into a one year consulting
agreement with an investor relations firm (Firm) and issued 2 million shares
of par value common stock per terms of the agreement. The stock (contract
shares) was valued at $1.50 per share at the close of market on July 25, 2006.
On February 22, 2007, the Company terminated this agreement for lack of
performance and cancelled the 2 million contract shares issued. The Firm then
filed a lawsuit on July 13, 2007 against the Company and other parties to the
original transaction.

On October 17, 2007 all parties to the claim agreed to a settlement and
a mutual general release whereby the Company would rescind its cancellation of
the 2 million shares and the Firm will receive $400,000 from the eventual sales
of these contract shares. One of the parties to the claim had the right, but
not an obligation, to purchase the contract shares in various increments
through March 2008 at $0.20 per share as follows:

Dates

Contract Shares




Sale ProceedsNovember 15, 2007

500,000


$
100,000January 15, 2008

500,000



100,000March 1, 2008

1,000,000



200,000Totals

2,000,000


$
400,000The party which had the right to purchase these contract shares also
agreed it will return 50% of the shares purchased to the Company and those
shares will be deemed cancelled upon receipt.

This party executed on the November 15, 2007 contract shares, but did
not elect to execute on the January 15th and March 1, 2008 contract
shares.

Accordingly, the Company recognized the re-issuance of the 2.0 million
rescinded contract shares on the date of settlement, October 17, 2007. In
December 2007, the Company cancelled 250,000 shares pursuant to the agreement
with the party possessing the right to purchase the contract shares. Both of
these transactions were recognized at par value in the accompanying
Consolidated Statements of Stockholders Deficit.

Treasury Stock

The Company has 5,417 shares of common stock in treasury at September
30, 2008.

Options and Warrants

Under FASB Statement 123R, the Company estimates the fair value of each
stock award at the grant date by using the Black-Scholes option pricing model
with the following weighted average assumptions used for the grants,
respectively; dividend yield of zero percent for all periods:

a. expected volatility ranging from 158.94% and 110.19% and risk-free
interest rates ranging from 4.79% and 4.88%; and, expected lives ranging from
two months to three years during the year ended September 30, 2007, and

b. expected volatility ranging from 110.19% and 200.76% and risk-free
interest rates ranging from 4.01% and 4.10%; and, expected lives ranging from
one year to three years during the year ended September 30, 2008.

F-19

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

A summary of the Companys stock options and warrants as of and for the
years ended September 30, 2007 and 2008 is presented below:

Options and Warrants

Weighted Average Exercise Price

Weighted Average Grant Date Fair ValueBalance at September 30, 2006


3,129,309

$
0.75

$
0.75Granted


6,772,396


1.86


1.86Exercised


(40,000
)

2.50


2.50Expired/Cancelled


(922,309
)

1.34


1.34Balance at September 30, 2007


8,939,396


1.53


1.53Granted


1,519,000


.20


.20Exercised








Expired/Cancelled


(175,000
)

0.60


0.60Balance at September 30, 2008


10,283,396

$
1.12

$
1.12Exercisable, September 30, 2008


10,283,396

$
1.12

$
1.12The
following table summarizes information about the Companys outstanding stock
options and warrants at September 30, 2008:

Range of 
Exercise 
Prices

Number Outstanding

Weighted 
Average 
Exercise 
Price

Weighted 
Average 
Remaining 
Contractual 
Life

Number 
Exercisable

Weighted 
Average 
Exercise 
Price$
.00 - 0.50

3,476,000

$
.51

5.06

3,476,000

$
.51.51  1.00

2,212,596


.66

.71

2,212,596


.661.01  1.50

2,540,000


1.48

.63

2,540,000


1.481.51  2.50

2,054,800


2.50

1.49

2,054,800


2.5010,283,396




2.31

9,014,396The
following table summarizes information about the Companys outstanding stock
options and warrants at September 30, 2007:

Range of 
Exercise 
Prices

Number Outstanding

Weighted 
Average 
Exercise 
Price

Weighted 
Average 
Remaining 
Contractual 
Life

Number 
Exercisable

Weighted 
Average 
Exercise 
Price$
.00 - 0.50

2,207,000

$
.50

8.39

2,207,000

$
.50.51  1.00

525,000


.60

.87

525,000


.601.01  1.50

3,266,298


1.50

.51

3,266,298


1.501.51  2.50

2,941,098


2.50

1.34

2,941,098


2.508,939,396




2.80

8,939,396Options

No options were granted or exercised during fiscal year ended September
30, 2008 and 2007, respectively. Accordingly, 2,207,000 options were
outstanding and vested as of September 30, 2008.

F-20

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Warrants

The company granted a total of 1,519,000 warrants in fiscal year ended
September 30, 2008:

A.
200,000 warrants
  were deemed partial consideration for the settlement of a lawsuit,B.
1,269,000 warrants
  were granted in connection with raising $126,900 from investors (See Note
  8.), andC.
50,000 warrants
  were issued in connection with extending the due dates on two notes.One-hundred seventy-five thousand warrants expired during the fiscal
year.

As an added inducement to certain classes of note holders to extend the
due dates on certain unpaid debts that became due during the fiscal year ended
September 30, 2008, the Company offered to re-set the exercise prices and/or
extend the exercise period of previously granted warrants. These classes of
note holders accepted. Details of these modifications are:

a.
convertible note holders  reset
  the exercise prices of the two year warrants (926,298) and the three year
  warrants (886,298) previously issued to the note holders from $1.25 to $0.60
  per share and from $2.50 to $0.75 per share, respectively. The term to
  exercise did not change. (See also Note 8.)b.
note holders  extended the
  exercise period to June 30, 2009. (See also Note 7.)At September 30, 2008 and 2007, a total of 8,076,396 and 6,732,396
warrants were outstanding and exercisable.

Note 13  Incentive Plan

In February 2007, the Company adopted the 2007 Directors, Officers and
Consultants Stock Option, Stock Warrant and Stock Award Plan (the Plan). The
Plan provides for the issuance of incentive and non-qualified stock options,
stock appreciation rights and restricted stock to Directors, Officers,
Employees and Consultants. Upon the adoption of this Plan, the Company set
aside 3,000,000 shares of $0.001 par value common stock, which may be issued
upon the exercise of securities granted. As of September 30, 2008, no
securities have been granted or are outstanding.

Note 14  Income Taxes

Deferred tax assets and liabilities are recognized based on the
anticipated future tax effects arising from the differences between the
financial statement carrying amounts of assets and liabilities and their
respective tax bases of assets and liabilities using enacted tax rates. The
following is a reconciliation of the Federal and state statutory income tax
amount to the provision for income taxes for the years ended at:

September 30,2008

2007Federal and state statutory
  rates at 35%

$
620,900

$
2,313,000Permanent differences


(100
)

(5,000
)Temporary differences


(31,300
)

(147,600
)589,500


1,419,900Increase in valuation allowance

$
589,500

$
1,419,900F-21

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

The
significant components of the Companys deferred tax components are:

September 30,2008

2007Deferred tax assets:Net operating loss carryforwards

$
3,363,100

$
2,684,200Deferred revenues


3,800


13,000Depreciation and amortization


27,800


79,000Other


800


400Total deferred tax assets


3,395,500


2,776,600Deferred tax liabilities:Basis of disposed assets


1,200


3,000Total deferred tax liabilities


1,200


3,000Net deferred tax assets before valuation allowance


3.394,300


2,773,600Less: Valuation allowance


3,394,300


2,773,600$


$
For the
year ended September 30, 2008 and 2007, the Company incurred a net operating
loss and, accordingly, no provision for income taxes has been recorded. In
addition, no benefit for income taxes has been recorded due to the uncertainty
of the realization of any tax assets. At September 30, 2008, the Company had
approximately $3,363,100 of net operating losses available to offset future
federal and state taxable income. The net operating loss carryforwards, if not
utilized, will begin to expire in 2024. Utilization of these carryforwards is
significantly dependent on future taxable income, and, any future tax benefit
may be further limited due to a change of control in the Companys ownership as
defined by the Internal Revenue Code, Section 382.

For
financial reporting purposes, the Company has incurred a loss since its
inception and based on the available objective evidence, including the
Companys history of losses, management conservatively believes it is more
likely than not that the net deferred tax assets will not be fully realizable.
Accordingly, the Company provided for a full valuation allowance against its
net deferred tax assets at September 30, 2008 and 2007.

Note 15 
Supplemental Cash Flows Information

Supplemental
disclosures of cash flow information for the years ended September 30, 2008 and
2007, respectively, are summarized as follows:

Non-Cash Investing and Financing

Supplemental
disclosures of non-cash investing and financing activities for the years ended
are summarized as follows:

Years ended September 30,2008

2007Convert accrued liabilities and debentures into shares of
  common stock

$
67,500

$
523,919Stock authorized but unissued, for accrued liabilities and
  note payable


231,470


Issuance of convertible notes payable to investors who
  deposited funds directly into an escrow account


126,900


Allocation of discount for value of warrants issued with
  notes payable


36,543


1,104,990Convert loans into a common stock





210,000Issuance of common stock for software applications





561,000Issuance of common stock for prepaid professional services





240,000Issuance of common stock for redemption of convertible
  notes payable





120,000Charge unamortized portion of prepaid services to paid in
  capital due to non performance of underlying services





1,250,000Cancel 2,000,000 shares of common stock underlying
  non-performance of prepaid services





(1,250,000
)Convert notes and loans into secured convertible
  promissory notes





356,048Discontinued operations





733,919F-22

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Years ended September 30,2008

2007Cash Paid for Interest and TaxesInterest

$
124,559

$
Taxes





Discontinued operations -
  interest





20,927Note 16 
Commitments and Contingencies

Accounts
Payable

As of
September 30, 2008, the Company has recognized in the accompanying consolidated
balance sheets, under the classification accounts payable, approximately
$56,000, and/or portions thereof, of professional services rendered by a law
firm. The claim is being disputed by the Company as of the date of this report.

Facilities

The
Company is obligated on one lease through August 2009. Future minimum lease
payments are estimated at $8,140.

On
November 1, 2008, the Company entered into a month-to-month rental agreement
with its current Interim CEOs company for: (a.) corporate and administrative
offices, and (b.) warehouse space, for use as a distribution center for the
handling, mailing and receiving DVDs to/from its subscribers. Rent is $3,000
per month.

The
Company terminated four of its five commercial leases that were in effect at
the beginning of the current fiscal year. Terms of certain leases required
timely notification in order to vacate the premises without accruing additional
lease expense regardless whether the premise was physically occupied or vacant.
Accordingly, as of September 30, 2008 the Company accrued approximately $10,000
to satisfy the untimely termination of two leases.

Another
lessor was notified in October 2008 that the Company intended to terminate its
lease and vacate the premises in October 2008. As such, in October the Company
accrued estimated termination costs and various lessor fees of this lease
through April 2009 for an estimated charge of approximately $7,000.

For the
years ended September 30, 2008 and 2007, rental expense totaled approximately
$72,000 and $105,400, respectively.

Litigation Settlement

The Company settled a lawsuit in October 2007 with an investor
relations firm. See details of the settlement in Note 11.

Collection Notice on Outstanding Judgment

The Company was recently notified that a Judgment was entered against
it for approximately $105,000 (the Judgment), which represents the balance
due on an obligation that the Company had incurred prior to the merger with
Gotaplay Interactive, Inc. (The Company merged with Gotaplay Interactive, Inc.
and then changed its name to Gottaplay Interactive, Inc.) This liability was
originally settled for $200,000 in July 2006. On August 1, 2007, the
Company sold the assets of the ISP Division to Focus Systems, Inc. (Focus), a
company in which a former director and officer of the Company is a principal,
in exchange for the assumption of the liabilities of that Division.
Substantially all the obligations of the ISP Division at the date of sale were
assumed by Focus. Pursuant to terms of the sale agreement, Focus is to
indemnify the Company in the event that the Company would have to pay any of
the liabilities of the sold ISP Division. (See also Note 4.) Accordingly,
the Company recognized a contingent liability of $105,000 in the accompanying
Consolidated Balance Sheets as of September 30, 2008. The Company has notified
Focus about the judgment and will attempt to enforce rights of indemnification
should the Company be forced to settle this claim.



F-23

Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Other

The Company is also subject to various business disputes involving
ordinary and routine claims. The ultimate legal and financial liability with
respect to such matters cannot be estimated with certainty and requires the
judgment of legal counsel and the use of estimates in recognizing and recording
liabilities for potential litigation settlements. Estimates for losses from
litigation are made only after consultation with outside counsel. If estimates
of potential losses increase or the related facts and circumstances change in
the future, the Company may be required to recognize either more or less
litigation related expense.

The Company has received many notices from various collection agencies
and legal firms regarding certain unpaid, past due accounts payables. These
notices are evaluated for propriety and accuracy and then reconciled to the
vendors account payable. As of September 30, 2008 and as of the date of this
report, the Company is not in a position to pay these obligations associated
with these notices.

Claim for
Wages and Expenses

The
Company was notified in June 2008 by a State that a former employee filed in
their State of residence a claim for unpaid wages, expenses and other items
totaling $70,160. The Company believes that this claim is substantially without
merit and intends to vigorously defend against it.

Employment Agreement, Prior Officers and Management Personnel

At September 30, 2008, the Company is obligated for one employment
agreement. This agreement is in the second year of a three year term and the
current annual salary is $110,000 and the third and final year is $160,000.
This agreement also includes traditional incentive programs, corporate benefits
and a severance package. The anniversary date of this agreement is March 1.

All other employment agreements in existence at the beginning of this
fiscal year with the Companys prior executive officers and key management
persons have been mutually rescinded and settled, except for the one claim
discussed above.

Note 17 
Subsequent Events

Settlements

In May and
June 2008, the Company negotiated settlements with each of the Companys prior
officers and their two related companies (the Party or Parties). As of the
date of this report, one officer and two companies have settled with the
Company.

a.
The Board approved the
  settlement of one officer and the officers related company prior to
  September 30, 2008. The consideration for the overall settlement was
  recognized in the accompanying Consolidated Statement of Stockholders
  Deficit, under Common Stock Authorized but Unissued and was consummated on
  November 7, 2008. (See Equity  item D. below.)b.
In October 2008, the Board
  approved the settlement of a past due debt to a company managed by two prior
  officers of Gottaplay. The final settlement was for cash payments totaling
  $11,000 and the issuance of 600,000 shares of common stock. (See Equity 
  item E. below.)c.
In May 2008, the Company
  negotiated settlements with two other prior officers. The terms, conditions
  and consideration underlying these agreements have not been fulfilled by the
  Company as of the date of this report. Accordingly, the two prior officers have
  deemed their respective settlements to be void.F-24
Gottaplay Interactive, Inc. and Its Wholly
Owned Subsidiaries
Notes to Consolidated Financial Statements

Agreement

Between June and July 2008, the Company entered into an agreement with
a stockholder/investor and controlling party of certain note holders
(Stockholder), of the Company whereby the Stockholder and the Company,
together, would attempt, among other things, to achieve settlements with
certain creditors for less than the amount owed to them. Each party to this
agreement was to contribute approximately $125,000 to an escrow account of an
entity controlled by the Stockholder (the Entity). In July 2008, the Company
raised $126,900 from investors (See Note 8.) in the form of 6% convertible
notes. To facilitate and expedite the transfer of funds, the Company authorized
these investors to deposit their funds directly into the escrow account
controlled by the Stockholder. In accordance with the terms of the agreement,
the Stockholder was to pay into the escrow account a matching amount. The
Stockholder failed to match the Companys contribution. Accordingly, the
Company has requested from the Stockholder and the Entity, a full accounting
of, and the immediate return of the $126,900 because of a breach of the
agreement. On December 26, 2008, the Board of Directors authorized the officers
of the Company to consult with legal counsel to determine what action should be
taken to recover these funds.

Because of the high level of uncertainty with the realization of these
assets, the Company has reserved the entire amount of $126,900 on the
accompanying Consolidated Balance Sheets as of September 30, 2008.

Equity

From October 1, 2008 to December 31, 2008, the Company recognized and
recorded the following equity transactions:

Descriptions

Shares

Warrants/OptionsA.
Balance at
  September 30, 2008

33,307,898

10,283,396B.
Expiration of
  warrants in October 2008



(275,000)C.
Issuance on
  October 20, 2008 of 5,200,176 shares of common stock authorized but unissued
  as of September 30, 2008 for $78,000 of accrued liabilities and $78,006 of
  accrued interest on convertible notes payable,

5,200,176D.
Issuance on
  November 7, 2008 of 232,500 shares of common stock, authorized but unissued,
  as of September 30, 2008 in settlement of a $28,000 past due note, $44,533 of
  accrued interest and $2,931 of officer obligations

232,500E.
Issuance on
  November 24, 2008 of 600,000 shares of common stock in partial settlement of
  a $64,297 past due account payable

600,000F.
Issuance on
  December 23, 2008 of 500,000 shares of common stock to prior director as
  award for services rendered, valued at $0.03 per share or $15,000

500,000G.
On December 26, 2008,
  the Board approved and authorized the conversion of $126,900 of unsecured
  convertible notes payable and $3,494 of related accrued interest into
  4,346,461 shares of common stock, and granted 1,269,000 warrants to the
  eighteen note holders

4,346,461

1,269,000H.
Balance at
  December 31, 2008

44,187,035

11,277,396F-25