UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





ANNUAL
REPORT


PURSUANT
TO SECTIONS 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934


(Mark
One)


þ
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.





For
the fiscal year ended December 31, 2009


OR


o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.





For
the transition period from _________ to _________


Commission
File Number 333- 152050











MOGGLE,  INC.


(Exact
name of registrant as specified in its charter)


Delaware
              (State
      or other jurisdiction of
              incorporation
      or organization)
            
            35-2327649
              
              (IRS
      Employer
              Identification
      No.)


111
Presidential Boulevard


Suite
212


Bala
Cynwyd, PA 19004





(Address
of principal executive offices) (Zip Code)





Registrant’s
telephone number, including area code: (215) 463-4099





Securities
registered pursuant to Section 12(b) of the Act:





None





Securities
registered pursuant to Section 12(g) of the Act:





None





Indicate
by check mark if the registrant is a well known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o or No þ










Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o or No þ





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 þ or No o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes  oNo  o


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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer o
            Accelerated
      filer o
            Non-accelerated
      filer o
              (Do
      not check if a smaller reporting company)
            Smaller
      reporting company þ





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes o or No þ





The
aggregate market value of the common stock held by non-affiliates of the
registrant was $ 0  as  of  June 30, 2009 based on
the closing price and the average bid and asked prices of the common stock of
the registrant on that date as reported by the OTC Bulletin Board.





We
had 46,711,561 shares of common stock outstanding as of the close of business on
March 30, 2010.





DOCUMENTS
INCORPORATED BY REFERENCE





NONE













MOGGLE
INC.
 
 FORM 10-K
ANNUAL REPORT
 Year
Ended December 31, 2009
 
 Unless
otherwise noted, the terms “we,” “us,” “our” refer to the combined and ongoing
business
 operations
of Moggle, inc.
 PageSPECIAL NOTE REGARDING FORWARD LOOKING
      STATEMENTS
              1PART
      IItem 1.
              Business
              1Item 1A.
              Risk Factors
              15Item 2.
              Properties
              28Item 3.
              Legal Proceedings
              28Item 4.
              Submission of Matters to a Vote of Security
      Holders
              29PART
      IIItem 5.
              Market for the Registrant’s Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities
              29Item 6.
              Selected Financial Data
              30Item 7
              Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
              30Item 7A.
              Quantitative and Qualitative Disclosures about Market
      Risk
              37Item 8.
              Financial Statements and Supplementary Data
              37Item 9A
              Controls and Procedures
              38Item 9B
              Other Information
              38PART
      IIIItem 10.
              Directors, Executive Officers and Corporate
      Governance
              39Item 11.
              Executive Compensation
              41Item 12.
              Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
              45Item 13.
              Certain Relationships and Related Transactions, and Director
      Independence
              48Item 14.
              Principal Accountant Fees and Services
              49PART
      IVItem 15.
              Exhibits and Financial Statement Schedules
              49
   Table of Contents
  SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This Annual Report on Form 10K for
the Year Ended December 31, 2009 (this "Report") contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. We claim the protection of the safe harbor contained in the Private
Securities Litigation Reform Act of 1995 for these forward looking statements.
Our forward-looking statements relate to future events or our future performance
and include, but are not limited to, statements concerning our business
strategy, future commercial revenues, market growth, capital requirements, new
product introductions, expansion plans and the adequacy of our funding. Other
statements contained in this Report that are not historical facts are also
forward-looking statements. We have tried, wherever possible, to identify
forward-looking statements by terminology such as “may,” “will,” “could,”
“should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates” and other comparable terminology.
 
 We caution investors that any
forward-looking statements presented in this Report, or that we may make orally
or in writing from time to time, are based on the beliefs of, assumptions made
by, and information currently available to, us. Such statements are based on
assumptions and the actual outcome will be affected by known and unknown risks,
trends, uncertainties and factors that are beyond our control or ability to
predict. Although we believe that our assumptions are reasonable, they are not
guarantees of future performance and some will inevitably prove to be incorrect.
As a result, our actual future results can be expected to differ from our
expectations, and those differences may be material. Accordingly, investors
should use caution in relying on past forward-looking statements, which are
based on known results and trends at the time they are made, to anticipate
future results or trends.
 
 For further discussion of risks
effecting us and our operations and other factors see, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and “Risk
Factors” in this Report.
 
 This Report and all subsequent
written and oral forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We do not undertake any
obligation to release publicly any revisions to our forward-looking statements
to reflect events or circumstances after the date of this
Report.
 
 
 PART I
 
 ITEM
1. BUSINESS
 
 Overview
 
 We were
incorporated in Delaware on February 11, 2008 under the name Chimera
International Group, Inc. On April 4, 2008 we amended our certificate of
incorporation and changed our name to Moggle, Inc. Our principle offices are
currently located at 111 Presidential Boulevard, Suite 212, Bala Cynwyd,
Pennsylvania 19004. We occupy this office, which is leased by an affiliate of
one of our executive officers directors, on a rent free basis. Our current
telephone number is (215) 463-4099. We have established a web site to help
introduce our Platform to the online gaming world (www.playmoggle.com).
Readers  are strongly cautioned that any information appearing on our
web site should not be deemed to be a part of this Report, and should not be
utilized in making a decision to buy our securities.
 
 We are a
start up venture  and have not generated any revenues  as of
the date of this Report. We intend to develop an online game platform which will
allow internet users to play massive multiplayer online games (“MMOG(s)”)
through their web browser without the need to download any software (the
“Platform”). We intend to develop multiple MMOGs for use on our Platform. Our
Platform will be designed to allow MMOG players to link into major online social
networks such as FacebookTM and MySpace TM and engage in MMOG play with their
friends and colleagues. Our Platform will also seek to allow game developers and
other interested parties to develop web based MMOGs directly by licensing our
Platform tools or by retaining our services.  We are attempting to
develop and incorporate technology into the Platform which we believe will be
desirable to movie studios, book publishers and other media creators which will
allow for the rapid transformation of existing media into MMOGs. The Platform
will also seek to support integration with in game advertising content providers
and other mainstream in game ad content providers and provide advertising
management and tracking capabilities. We expect that it will take between one
and a half and three years to fully develop the Platform provided that we have
succeeded in raising approximately $10,000,000 in capital. However as a result
of the many risks which we outlined in this Report included in the ”Risk
Factors” section and elsewhere ,  there is no assurance that we will
be able to raise all or any part of such capital, Furthermore even if we are
successful in raising funds, there is no assurance that  we will be
able to develop the Platform according to our business plan, and if ,developed
generate revenues sufficient to sustain our business.
 
 1
 Table of Contents
  Industry
Background
 
 We
consider our proposed business to be part of the overall entertainment industry.
At the most fundamental level, Moggle's products will compete generally with
other forms of entertainment, such as motion pictures, television and music, for
the leisure time and discretionary spending of consumers. The specific industry
which our products will compete in is the video game industry. Our management
believes that video games have increasingly become a mainstream entertainment
choice for both children and adults. We believe that new generations of console
game systems, improved graphics and expanded artificial intelligence
capabilities of new game consoles have significantly enhanced game play and
enabled rapid significant industry growth.
 
 The video
game market reflects consumer spending on console games (including handheld
games), personal computer games, online and web games and wireless games played
on mobile phones. According
to  PricewaterhouseCoopers  (‘PWC”) in a report
entitled  Global Entertainment and Media Outlook 2007 – 2011, the
video game market in the United States, Europe, Middle East, Africa, Asia
Pacific, Latin America and Canada will increase from $31.6 billion to $48.9
billion in 2011.
 
 Video
games are played by a large majority of the general
American  population . DFC Intelligence (“DFC”) estimates that over
120,000,000 people play video or computer games in the United States
alone.  Despite general  conceptions that game players are
generally children and teens, the Entertainment  Software  
Association  (“ESA”)  found that user demographics,
which directly apply to our video game industry, show that:
 
 *
              Sixty-seven  percent
      of American  households  play  computer and
      video  games.*
              The
      average game PLAYER is 35 years old and has been playing games
      for  12 years.
 *
              Thirty-five  percent
      of American  parents say they
      play  computer  and video games.*
              Eighty
      percent of gamer parents say they play video games with their
      kids.
 
 Due to
overall increases in broadband availability on a global basis, together with
better networking technology and multimedia encoding techniques, it is becoming
increasingly feasible to provide the same if not better quality game
entertainment through the Internet than was previously delivered only through
more conventional distribution mediums such as TV game consoles. With the millennialgeneration growing
up with the internet and online connectivity as expectations for communication
and entertainment, the Company believes that the online segment of the video
game industry will grow significantly. According to DFC in a June 2006 report
entitled “Online Game Market”, worldwide online game revenue is expected to
increase from $3.4 billion in 2005 to $13.1 billion in 2011. While PWC forecasts
that online game revenue will reach at least $11.8 billion by 2011. DFC
estimates that the number of worldwide online game players will reach
364,000,000 people by 2011. Clearly the projections for growth in the online
game market are substantial.
 
 The
online game market is composed of two major segments,   massive
multiplayer online games (‘MMOGs”)  and casual games. MMOGs are
typically played by thousands of people worldwide on a simultaneous basis with
games continuing for weeks or months such as World of
Warcraft.  Casual games  are typically puzzle, card and/or
arcade style games designed for one or a limited number of players such as
Tetris. We currently intend to focus our efforts in designing products for
the  MMOG portion of the online game market .We believe that the
convergence of technologies involving MMOG’s, social networking and virtual
worlds combined with increased broadband capacity and speed will increase market
demand. We further believe that, improved graphics and expanded artificial
intelligence capabilities of the new MMOG engines and platforms will enhance
game play and help grow our industry significantly. DFC has projected that total
MMOG worldwide revenues will increase from $1.8 billion in 2005 to $5.9 billion
in 2011.
  2
 Table of Contents
  The
development of MMOG’s has occurred over the last thirty years - although the
timeline is subjective – based on what is considered ‘Massively Multiplayer’. In
the 1980’s  a handful of games were available generating user bases in
the hundreds. In the 1990’s the number of online players increased in the US
with EverQuest in 1999 achieving 550,000 users as the first 3D MMOG. South Korea
has traditionally had a much higher availability of broadband than most other
countries. This has also lead to the establishment of online game rooms in South
Korea which continue to be popular today. In 1998, Lineage was made specifically
for the South Korean game rooms and attained a maximum of 30 million
subscribers. Toontown was the first MMOG developed specifically for children and
it reached 110,000 subscribers in 2006. In 2004 World of Warcraft (“WoW”), a 3D
RPG was released. WoW has over 10 million subscribers with revenues estimated to
be in the $700 - $800 million a year range. WoW is expected to be the world’s
first billion dollar game.
 
 We  believe  MMOG
games  will  continue  to  experience  significant  growth  for
the following reasons:
 
 *
              The
      convergence of technologies involving MMOG’s  social networking
      and virtual worlds combined with increased broadband capacity and speed
      will increase market demand.
 
 *
              The
      games offer  regular  content  updates
      with  changing  story lines  through
      downloads and flexible architecture,  keeping the game dynamic
      and fresh for players.
 
 *
              The
      games  extend the realism of game play,  by
      offering  cutting edge technology,  which makes the
      player feel they are actually part of the
  environment.
 
 *
              Improved
      graphics and expanded artificial intelligence capabilities
      of  MMOG will stimulate
interest.
 
 *
              The
      games create new  opportunities  to
      foster  competition and mutual aid,
      by  engaging  mutual  friends or players in
      a  `combat',  team or support
    situation.
 
 *
              The  games  present  a  compelling  new  social  environment,  and  an  opportunity  to
      meet new friends and share similar mind frames, existence, and survival
      techniques.
 
 *
              The
      games offer an  attractive  new and
      recurring  revenue  source for
      game  companies,  as evidenced by the
      top  performers  who attain many
      subscribers  in  their   compelling   games  as
      well as unique advertising  and product sale opportunities
      and  (see  “Our Revenue Model”
  below).
 
 Our plan
is to develop our Platform and MMOGs, assuming we have raised sufficient
capital, of which there can be no assurance, to allow us to capture market share
in this rapidly growing industry by taking advantage of recent technological
advances in online software development and the continuing increase of global
broadband access.
 
 Our
Platform
 
 Rather
than focusing on the development of a single MMOG, we intend to create an online
Platform which will allow for multiple functions and revenue opportunities in
the growing online game marketplace. We intend to  design our Platform
so that  game players  can  play state of the art
web based MMOGs without the need to download any software , developers
can  build  state of the art web based MMOGs and movie
studios, book publishers and other media creators can rapidly transform their
existing media into MMOGs. We believe this strategy will allow us to take
advantage of multiple revenue sources and help ameliorate risk. As of the date
of this Report, we have commenced the development of  the first stage
of our Platform, the Game Development Layer,  through an agreement
with FX Labs. We are actively working with FX Labs to complete the development
of this stage. We are in the process
of  identifying  desired features and goals  for
the remaining stages of the Platform that we will attempt to develop and create
with any capital that we may raise. There can be no assurance that even if
successfully raise $10,000,000 in capital, we will be successful in reaching all
and/or any of our goals for the Platform. Moreover there can be no assurance
that even if we develop the Platform in accordance with our plans, that it will
achieve market acceptance and generate revenues to sustain our
operations.
  3
 Table of Contents
 
 We intend
to introduce the online MMOG community to our Platform by developing one or two
initial  MMOGs for use on the Platform. Our intention is for such
MMOGs to showcase the ability of the Platform to rapidly create state of the art
true web based MMOGs.  Our MMOGs, unlike many existing MMOGs currently
on the market today, will allow internet users to play MMOGs through their web
browser without the need to download any software. We believe that there are
many advantages to the use of the true web based development architecture we
intend to create including;
 
 1)
              The
      ability to retain control of the worldwide distribution of the
      games.2)
              The
      ability to change content and direction to millions of users in one
      action. We believe this will be very  useful for the delivery of
      advertisements as well as the introduction of new items of interest to the
      gamers.
 3)
              The
      ease of delivery of upgrades, new features and promotional
      events4)
              The
      ability to create and launch new titles
rapidly
 5)
              The
      immediate and easy access worldwide by anyone with an internet
      connection.6)
              The
      ability to directly integrate with common online social
      networks
 7)
              The
      integration with  leading in-game advertising, tracking and
      reporting  systems.8)
              The
      ability to run on a variety of platforms including mobile devices.
      This is a rapidly growing market particularly in
  Europe.
 
 The
planned Platform will be comprised of multiple layers including a Game
Development Layer, Game Engine Layer, Social Network Layer, Client Layer,
Content Management Layer and a 2D-3D Conversion Layer.The Game Development Layer
("GDL") is currently being developed  by the Company in conjunction
with FX Labs. FX Labs  provides game development outsourcing services
to the Company from FX Lab's production studios in India. Jo Webber, the
Company's Chairman of the Board, has an eight year relationship working with FX
Labs. The GDL will be designed to allow users to easily and efficiently create
and edit all material aspects of  a Virtual World in
both  Windows and Macintosh   operating systems. This
Game Engine Layer ("GEL") will be developed to allow hardware accelerated state
of the art 3D games to be streamed into a web browser window without the need
for any software downloads. The GEL will be based on the OpenGL standard. We
intend to design the GEL so that it will allow for the development of MMOGs that
can be played on multiple platforms including Windows and
Macintosh  environments as well as mobile devices. In addition, the
unique streaming aspect of the planned GEL will allow games to be developed that
are near 'instant play'. When a player first runs a game
only minimal data is streamed to their machine. Additional data such
as 3D models, terrain and sound will be seamlessly streamed over the Internet as
and when required and cached on the user's local machine.  We intend
to design the architecture to also support the ability to provide content
distribution across multiple servers and geographies thus allowing developers to
use other specialized content delivery technologies for their
games.
 
 We
believe that the GDL and GEL will be well suited for the development of MMOGs
and Virtual Worlds. Data can be incrementally downloaded as the player explores
the world around them. Multiple world environments will be supported and each
world can be seamlessly spanned across multiple servers allowing all players to
share the same world if desired.  The 2D-3D Conversion Layer, along
with the  GDL and GEL, will be designed  to incorporate
planned proprietary technology which we believe will shorten the development
time of online games from the typical industry time of 12 to 36
months  to less than six months. We believe that this technology
will  provide a framework to allow Moggle and its licensees the
ability to rapidly create and distribute games based on existing media sources
such as  movies, photos,  books, TV shows and other
sources.  This technology will be designed to allow for the
transformation of  existing  2D media characters into 3D
MMOG game ready characters almost instantaneously. We believe that this will
allow publishers, movie studios, and other media producers to rapidly create
promotional and revenue-based games in a reduced time frame and at a
reduced cost. We also intend for the Platform  to support
 integration with mapping APIs from providers like Google Map API, Yahoo
Maps, Microsoft Maps and others. This integration will make it possible for
games to use location mapping, real time traffic analysis, street level views
and other value added mapping services available. We believe that this will
greatly enhance the user experience for racing games.
 
 The
Platform will also contain a Social Network Layer ("SNL"). The SNL will consist
of API’s that will be compliant with the Open SocialTM and FacebookTM standards.
These API’s will provide game developers the ability to allow users on social
networking sites to play their games without leaving the respective sites.
Specifically the API’s will support user authentication, friend discovery,
network and group discovery and profile management. Other uses of this API will
be to connect to any other application that is compliant with the Open Social
and FacebookTM standards. We also intend to allow for detailed personalization
of characters in a more expansive way than  presently provided by
many  MMOG games today. We believe that this will be a exciting
feature that has the potential to connect the user more directly to a game. We
intend to incorporate into the Platform   technology to directly
create characters from social network profiles and photographic images, allowing
a much stronger personalization of the game by individuals, families, sports
teams, schools and other social groups.
 
 4
 Table of Contents
  The
Content Management Layer  ("CML") will be used to allow third party
content providers to provide dynamic content to games developed using the
Platform such as  in game advertisements, media such as movie
trailers, online advertisements and other web content. The CML will also be
designed to support integration with in game advertising content providers such
as IGA, Massive Incorporated, Game Creative, Jogo Media and other mainstream in
game ad content providers. API level integration will be made available for the
Platform. This will enable game developers to select an in-game provider and be
able to place ad content in the game via standard API's. This will support
static, dynamic and incidental content.  The CML will also provide an
ad management console for ad providers to manage the content that is pushed to
the games in real time. Depending on the type of API available from the ad
providers, ad metrics will be pushed back to the provider and also be available
to the developer. The Client Layer will allow for web based content game
management through multiple operating systems utilizing OpenGL and DirectX
codes
 
 Presently
we intend to develop and create our Platform, and the technology and software
needed to meet the features and goals we have set for the
Platform,  through  our association with FX Labs and, upon
the raising of sufficient capital, an in house development
team  consisting of producers, game designers, software engineers,
artists, animators, scriptwriters,  musicians
and  songwriters,  sound  effects and
special  effects experts and game testers. We may also seek to
rely on  third party  developers, in addition to FX Labs ,
artists and other personnel to supplement and support the in-house team that we
will hire. We plan to use international software developers to address different
technologies, languages and cultures and to provide the broadest based expertise
for the online gaming markets. Management shall make the decision as to whether
to use in-house or third party development resources based upon the creative and
technical challenges of the area of development. We may also seek to evaluate
any number of pre-market technologies that would allow Moggle to rapidly develop
its main Platform technology and accelerate our time to market .  If
we believe such technologies would assist us in achieving our business plan we
may acquire and/or license such technologies.
 
 
 Our
MMOGs
 
 Our games
will be based on intellectual property that is either wholly-owned by us or
licensed from third parties. We plan to develop our games using both internal
development resources and external development resources working for us pursuant
to contractual agreements. We plan to market and distribute our games for sale
throughout the world. We plan to develop, market and sell multiple MMOG’s that
will operate on and be delivered by the Platform. Our MMOGs will be fully
browser based games that  will not require any software downloads.
Accordingly our MMOGs may be accessed and played from anywhere in the world on
any computer that has an available internet connection. The games will all be
linked to social networks including; FacebookTM ,LinkedIn and MySpaceTM and will
encourage groups of friends, teammates, and business colleagues  to
enjoy online game focused entertainment together. All  MMOG’s will be
delivered online from central controlled servers by us.  We will make
all games available on a worldwide basis and will use the key marketing outlets
on the internet including the social networks to advertize the games and attract
new players.  Upon completion of development, each game will be
extensively play-tested to ensure compatibility with the appropriate browsers
and bandwidths.  To support our products after release, we plan to
provide online access to our customers on a 24 hour basis as well as operator
help lines during regular business hours. The customer support group will track
customer inquiries, and we plan to use this data to help improve the development
and production processes.
 
 The
initial MMOGs that we intend to develop will serve as a showcase for the MMOG
marketplace to become educated as to the features and benefits of our Platform.
One MMOG that we are currently considering creating with the proceeds of this
Offering is based on an international famous sport (the “MGame”). This MMOG is
in its most earliest stages of creation as only a high level and general concept
of what the game may be like has been discussed among the Company’s management.
Accordingly there can be no assurance that this game or any game like it will be
actually developed by the Company even if we successfully raise $10,000,000.
Should the Company’s management believe that a different game concept will
be  more suited to showcasing the Platform or for any other reason be
more beneficial to the Company, this game concept  may be dropped
entirely and another developed in its place.  The current idea for the
MGame  is to stage an online tournament type event that will be played
over a period of two-three months with various stages. One of the first stages
will involve the building of a player's online game entry. The player will
have to make choices about various components of the  game entry.
During the MGame there will be different kinds of game conditions and certain
choices will perform better in certain conditions. There will also be a series
of trials and other events to test the entrants  prior to the game.
The winners of these trials will receive rewards that can be used to increase
the player’s chances of winning the MGame.  Each trial will occur at a
certain time online, thus creating an audience.  We will attempt to
solicit advertisers for the various trials as well as for the MGame
itself.
 
 5
 Table of Contents
  The game
will be structured in a manner  that during the first month of setup
and trials, we can attract as many subscribers as possible and they can join in
the game as late as the day the MGame  begins.
 
 We are
anticipating advertising revenues for this game from various sources
including;
 
 ·
              manufacturers·
              Accessory
      manufacturers
 ·
              Local
      Businesses in visited cities·
              Lifestyle
      companies
 
 Some of
the anticipated types of advertising available from lowest price to
highest;
 
 ·
              Static
      Advertisements on Moggle’s host web site·
              Advertisements
      on Billboards and other locations in the
MGame
 ·
              Realtime
      advertising·
              Trial,
      city and other event sponsorship
 ·
              Overall
      game sponsorship
 
 The game
will be developed as a pure online game ( without any software downloads) with a
combination of animation and real images. Using readily available techniques and
integration technologies, gamers will be given a realistic game experience with
obstacles and real time conditions. The game will initially  be made
available as a time based tournament.
 
 The MGame
will attempt to show the MMOG marketplace many features associated with the
Platform including state of the art graphics and game play technologies, the
advantages of  a true web based browser MMOG by incorporating real
time information into game play thereby dynamically changing a users game
experience, the ability to insert real time advertising and  obtain
real time ad tracking and reporting information and the ability to create a web
based MMOG in a shorter time frame than typical industry standards.
 
 Plan
of Operations  and Projected Development Timeline
 
 
 During
the remaining months of the 2010 calendar year, our ability to execute on our
current plan of operations is dependent on raising approximately $10,000,000 in
capital. In the event that we are unsuccessful in these efforts we will utilize
our cash to attempt to complete a limited demonstration model of our Platform .
We will not be able to attempt the commercial development of  the
Platform or MMOGs. In such event we will attempt to  seek out
alternative forms of financing and/or attempt to enter into joint ventures or
partnerships in order to raise sufficient funds to attempt to execute on our
business plans to develop the Platform and multiple MMOGs.
 
 In the
event that we are successful in raising approximately $950,000 in capital, of
which there can be no assurance,  we will change  our plan
of operations to focus on the development of one or possibly two MMOGs utilizing
the GDL, instead of attempting to develop the entire Platform.
We  will significantly reduce our hiring plans by seeking
to  hire only a small number of key individuals and rely significantly
on  outsourced foreign labor. We believe that such capital will allow
us to continue operations through  2010 on a reduced basis. We will
look to raise additional funds in order to allow us to commence development of
the Platform.
 
 6
 Table of Contents
  In the
event that we are successful in raising approximately $5,000,000 in capital, of
which there can be no assurance, we will scale back our
current  hiring plans in 2010 but will proceed as planned with the
development of the entire  Platform. As a result of reduced funding a
smaller number of games will be attempted to be produced and marketing will be
delayed. It is anticipated that this lower level of funding will allow the
Company to operate, based on its current plan of operations, through 2010
without the need to generate revenues or seek out additional funding. However we
anticipate that due to the reduction of net proceeds available to us in such
event ,we will experience a   delay in introduction of the
Platform until 2011 or possibly 2012. Therefore at such time additional funding
will be needed if revenues from MMOGs are not sufficient to meet our cash flow
needs and marketing plans.
 
 In the
event that we are successful in raising approximately $10,000,000 in capital, of
which there can be no assurance,  we believe, based on our current
projections,  that such funds should be sufficient for us to complete
the development of the entire Platform and multiple MMOGs. Accordingly we
believe that such proceeds will be sufficient for us to continue our planned
operations throughout 2010 and 2011.
 
 The
foregoing use of proceeds and project implementation projections were
prepared by us in good faith based upon assumptions that we believe to be
reasonable. No assurance can be given, however, regarding the attainability of
the projections or the reliability of the assumptions on which they are based.
The projections are subject to the uncertainties inherent in any attempt to
predict the results of our operations, especially where new products and
services are involved. Certain of the assumptions used will inevitably not
materialize and unanticipated events will occur. Therefore, the actual results
of operations are likely to vary from the projections and such variations may be
material and adverse to the Company. Therefore the projections are included
solely to give prospective investors information concerning the Company’s
estimates of future operating results based on our assumptions and no assurance
can be given that such results will be achieved. The Company reserves the right
to conduct its business in a manner different from that set forth in the
assumptions as changing circumstances may require. Moreover  due
to changes in technology, new product announcements, competitive pressures,
system design and/or other specifications and other reasons set forth in the
Risk Factors section of this Report and other factors we may be required to
change the current plans for our Platform and MMOGs. Therefore, we cannot
provide any assurances that the Platform and MMOGs can be completed within our
projections. In case of budget over-runs and additional expansions, we may
choose to finance such capital expenditures through the issuance of additional
equity or debt securities, by obtaining a credit facility or by some other
financing mechanism. If we choose to seek financing for such expenditures, we
cannot provide any assurances that such financing will be available on terms
reasonably acceptable to us or at all.
 
 The
following sets forth the Company’s current timeline for the development of its
Platform and initial MMOGs assuming that the Company is successful in raising
approximately $10,000,000. The Company's inability to raise such funds, or
unanticipated problems or issues which the Company experiences in any of its
planned activities, could have an adverse effect on the Company’s ability to
meet such timeline. Accordingly there is no assurance that we will be successful
in meeting such goals.
 
 2010
 Platform
development work on the following areas:
 ·
              Development
      of Game Development Layer·
              Analysis
      and Design of 2D - 3D Technology
 ·
              Enhanced
      security in social networking layer
 
 2010-2011
 Platform  development
work continues:
 ·
              Game
      Engine layer·
              Asset
      management (2D-3D)
 ·
              Content
      Management Layer·
              Social
      Network Layer
 ·
              Client
      Layer·
              Platform
      testing occurs
 ·
              Development
      of  tournament style game·
              Marketing
      of game
 ·
              Release
      of game·
              Continuation
      of tournament style game
 ·
              Continuation
      of social network marketing
 
 7
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  2011-2012
 ·
              Marketing
      of company as a Technology Platform for game and online media development
      and release·
              Continuation
      of tournament style games
 
 Our Revenue
Model
 We have
not generated any revenues as of the date of this Report. We do not anticipate
that any revenues will be generated by us with unless we are successful in
raising capital. Even if we are successful in raising  capital and the
meeting of our Platform and MMOG development goals, of which there can be no
assurance, we do not project that any significant revenues will be realized
until the end of 2010 at the earliest. The following sets forth our time line as
to type of revenues which we project and our plans with respect to attaining
such revenues.
 
 REVENUE
      MODEL2010
              
              2011Placement
      and in-game advertising
              
              Placement
      and in-game advertisingCorporate
      game and Media Development
              
              Corporate
      game and Media DevelopmentSubscriptionsMicrotransactions
 
 
 Advertising
Revenue
 
 DFC
reports that North America is expected to be far and away the largest market for
online game advertising revenue, accounting for 51% of overall revenue in 2012.
North America online game advertising is forecasted to increase from about $235
million in 2006 to $481 million in 2012, a 104% increase.  DFC
also  forecasts that Worldwide online game advertising
revenue  is expected to grow to $936 million a 175% increase over the
approximate $305 million generated in 2005. By focusing our game Platform
technology to embrace advertising from the outset, we believe we may be well
positioned to sell and deliver in-game advertising in North America and
worldwide.
 
 We are
excited about the potential for advertising revenue driven by gameplay. We plan
to work with game industry ad placement companies to help promote advertising
opportunities within our framework. We intend to include in our Platform support
integration with in game advertising content providers such as IGA, Massive
Incorporated, Game Creative, Jogo Media and other mainstream in game ad content
providers. API level integration will be made available for these platforms.
This will enable game developers to select an in-game provider and be able to
place ad content in the game via standard API's. This will support static,
dynamic and incidental content.  The platform will provide an ad
management console for ad providers to manage the content that is pushed to the
games in real time. Depending on the type of API available from the ad
providers, ad metrics will be pushed back to the provider and also be available
to the developer.
 
 We will
provide outlets for three types of advertising:
 
 ·
              Placement
      Advertisements·
              In
      Game Advertising (2 tiers)
 ·
              Sponsorship
      Advertising
 
 Placement
advertising will be offered where a vendor can place advertisements around a
game on the site that launches it. The advertisements will not have sounds but
may be flash or other types of banner advertizing. In-game advertising will be
offered on two levels. The lower tier will show a non-moving image of a
company’s logo or message on a billboard or other outlet within the game. The
higher tier will be the incorporation of a company’s products as a natural part
of the game. This is more immersive and we believes we will be able to charge a
premium price for this level of product placement in an online game. In the
example of an online Soccer World Cup tournament, advertisers may advertise on
the team strip for Holland for example. Due to the technology being developed
there is also an opportunity to deliver advertising into a game during gameplay.
This allows a more ad-hoc premium advertising capability for a company that may
wish to drop in an advertisement to a well-profiled group of several thousand
gamers in a certain location or at a tournament. In the example about of a World
soccer tournament it could be an advertisement or offer placed as a result of
one player scoring a hat-trick. Sponsorship advertising will be available with
online tournaments. This is also a high-level placement - where the advertising
company will have a prime position and opportunity to deliver promotional offers
to tournament players. This real time advertising feature ,once developed, would allow
for updated promotions and products including special coupon arrangements for
seasonal shopping and products.
  8
 Table of Contents
  Statistics
from Neilsen , DFC Intelligence and many others indicate that time spent by
under 50’s on the internet is taking away from time they would otherwise spend
watching TV. This trend is on the increase and companies that traditionally use
TV as an advertising medium are looking to diversify their advertising spend.
The few Grand Audience events like the Superbowl and the final of American Idol
still attract huge numbers of viewers and as a consequence the price for
advertising is very high. We believe that a current problem with MMOG games and
other online games with respect to converting TV ad dollars to gaming ad dollars
is that there is no concept of an audience – the way an advertiser wants to
define it. On World of Warcraft, for example, its impossible to know who’s on
when and will they be back at the same time slot tomorrow or next week. Moggle
plans to develop its technology and games from the start with the ability to
advertise in mind.  Moggle plans to develop games in a manner that
will be attractive to mainstream advertisers looking to diversify from TV and
move into an online medium where they know their customers will be. Moggle
believes that the concept of creating Grand Audience’s will prove very
attractive to advertisers The idea of tournaments is to drive an audience
together at a set time –more closely aligned to the idea of watching a TV show
at a certain time and day, and remembering to be at home in time for the final
of American Idol, which 35 Millions Americans did. For example – should the
Company develop an MMOG based on a Grand Car Race concept there are many
potential advertisers including; Car manufacturers; Toyota, BMW, Aston Martin,
Ferrari etc., tire manufacturers, car magazines (subscription opportunities),
Oil companies; Exxon, Lukoil, Shell etc., beverage and food companies,
sunglasses, oil and lubricants, plus local advertisers in the cities that are
driven through, and hotels and restaurants used along the way.
 
 MMOG
Subscriptions
 
 DFC
reports that worldwide online game subscription revenue is forecasted to
increase from about $2.6 billion in 2006 to $6.6 billion in 2012, a 153%
increase.  By 2012, North America is expected to pass East Asia as the
largest market for online game subscription revenue. North America is forecasted
to increase from about $771 million in 2006 to $2.2 billion in 2011, a 191%
increase. Japan is expected to be the fastest growing market for online game
subscription revenue. Japan is forecasted to increase from about $177 million in
2006 to $807 million in 2012, a 356% increase.
 
 Subscription
revenue includes usage based fees for consumers to play a game online. They can
include metered usage, monthly or even annual subscription fees. The key
determinant of subscription revenue is that the consumer can no longer play the
game once the subscription expires. The Platform architecture to be developed by
Moggle will allow the rapid creation of MMOG’s. The emphasis of a totally online
Platform will  make our  MMOG’s  immediately
available online on a worldwide basis. Moggle plans to release at least one MMOG
title in 2009  and several in 2010. Moggle presently plans to sell
access to the MMOGs on a year subscription basis for around $100 per player. The
pricing of our MMOGs is subject to change due to a variety of factors including
pricing by competitors, the acceptance  of our MMOGs in the market
place and other factors. Accordingly we may be required to change our
subscription pricing model.
 
 We intend
to accept traditional forms of payment for subscriptions including credit cards.
Moggle is aware of an aversion to credit cards in many countries outside of the
US, and the likelihood of an audience of players that includes under 18’s. In
effort to reach these players Moggle will also accept the following payment
mechanisms and will remain flexible as new online payment options develop:
Paypal (PayPal is an e-commerce business allowing payments and money transfers
to be made through the Internet. It is owned by Ebay); Cellphones (Some non-US
based MMOG developers have started using this mechanism. Players call a certain
number each month and punch in a code to identify themselves. They then receive
a subscription fee in their monthly cell phone bill. Moggle will work with the
cell phone providers to establish a mutually beneficial arrangement for
promotions and billing) and Game Time Cards (These work in a similar manner to a
prepaid phone and can be sold in retail outlets or online.  These also
make excellent gifts for young players).
  9
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  Moggle
will pay attention to trends in online payments and will also be prepared to use
a micropayment model. The concept with micropayments is that instead of signing
up for a 12 month commitment to play an MMOG, the player will purchase the game
for an upfront fee ( or no fee) and will play without paying for a subscription.
Over time the player will be offered the opportunity to buy assets that can
enhance their gameplay such as maps and weapons for small amounts
($0.50  for a shield for example).  The player is not
obliged to buy the assets but to excel in the game it is assumed that they
will.  Possible variations on this model include:
 
 ·
              Retail
      price paid for game plus Micropayments for
  assets
 
 ·
              Subscription
      Model plus Micropayments for assets
 
 ·
              Free
      game plus Micropayements
 
 ·
              Subscription
      or Retail for game, player can win assets by skilful
    gameplay
 
 Digitally
distributed and promotional products
 
 As our
MMOGs gain traction, Moggle may seek to realize revenues from the sale of
digitally distributed products for use in MMOG play as well as products for use
outside of the game. These may include items that make it easier for players to
succeed in the game as well as branded items with respect to a particular
MMOG.  Additionally, Moggle will introduce promotional products both
as prizes and as revenue generators. These promotional products may include;
Miniature-scale character models, books and other consumer
products.
 
 Corporate
Game and Media Development
 
 We
believe that our Platform  will be well suited for the development of
MMOs and Virtual Worlds.  We are designing the Platform
to  incorporate proprietary technology which we intend to develop
which we believe will shorten the development time of online games from the
typical industry time of 12 to 36 months  to less than six months. The
Platform will be designed to allow MMOG developers to  rapidly
create,  distribute, monitor and serve on a cost efficient
basis,  a truly web based MMOG  on a worldwide
basis.
 
 We
believe that our Platform  will also  provide a framework to
allow Moggle and its licensees the ability to rapidly create and distribute
games based on existing media sources such as  movies,
photos,  books, TV shows and other sources.  We believe that
this will allow publishers, movie studios, and other media producers to rapidly
create promotional and revenue-based games in a reduced time frame and at a
reduced cost. We also believe that this technology will provide the ability to
rapidly take successful console or PC games and repurpose them to run online
with global access to players. The Platform will also be designed to
provide  the ability for individuals or smaller groups to create and
deploy games based on their local environments including college teams, schools
, workplace and other groups.
 
 SALES
AND MARKETING STRATEGY
 
 General
Marketing
 
 Moggle’s
marketing strategy follows a layered approach based upon timed introduction of
our products to the market. We will plan public relations promotional activities
for Moggle including coverage in broadcast, print and online media targeting
enthusiast, lifestyle and major mainstream outlets.
 
 Lifestyle
Marketing
 
 Lifestyle
marketing has been employed by many successful companies including most recently
Apple. The Apple advertising campaign portrays the Mac as simple and ‘hip’ to
use and the PC as cumbersome. It invites viewers to join in the ‘Mac
Experience’.  Many game companies focus their marketing efforts only
on the hardcore gamers and often put off the more casual gamer by portraying the
game as complex and difficult to get involved with unless you are already
spending 50 hours a week playing games. Moggle plans to appeal to the much
larger demographic of the casual user in addition to the hardcore gamer with
separate marketing messages.
 
 10
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  Influencer
Targeting and Viral Marketing
 
 We plan
to increase our corporate public relations efforts by establishing relationships
with leading technology consultants, business reporters, gamers and guild
leaders. By attracting guild leaders to Moggle we aim to impress them with our
games and in return they potentially can drive large numbers of subscribers to
our games by virtue of their influence on other members of their guilds. We
recognize the importance of blogging as a reporting outlet and plan to work
closely with the blogging community – particularly the technology bloggers to
get our tournament competitions to the forefront. We believe the interest that
we can drive in Moggle with the release of our early MMOG s in 2010 will
position Moggle well, as we plan the major promotion of our platform technology
in 2011.
 
 Generally,
our marketing plan for products released will include a broad range of media
including, television, print, in-theater, radio, internet advertising and
promotional events. Additionally, to the extent required we will pursue support
by promotional activities such as trailers, posters, pre-sell giveaways at
retail stores, game kiosks at sporting and outdoor events, game demos and
promotions with major consumer brands. We also plan to promote our MMOGs and
Platform technology to retailers by display at select retailer specific trade
shows. Additionally, we plan to conduct print and cooperative retail advertising
campaigns for most titles and prepare a range of promotional sales and marketing
materials to increase awareness among retailers.
 
 
 Seasonality
 
 The
interactive entertainment software market is highly seasonal, with sales
typically significantly higher during the third quarter of the calendar year,
due primarily to the increased demand for interactive games during the year-end
holiday buying season. We plan to launch promotional packs for our games around
this timeframe to allow consumers to purchase a pre-paid subscription to one or
more of our games. The pack will also include a soft gift such as a T-shirt or
game play item.
 
 Competition
 
 The
online game platform technology and MMOG industry is intensely competitive. It
is characterized by the continuous introduction of new titles and the
development of new technologies. The business is driven by hit titles, which
requires significant investment in technology, production and marketing.
Competition in the segment is also based on product quality and features, timing
of product releases, brand-name recognition, access to distribution channels,
and effectiveness of marketing and price.
 
 In
general, Moggle will compete in the video game market for the sale of
interactive entertainment software with Sony, Microsoft and Nintendo, each a
large developer and marketers of software for its own console platforms. Each of
these competitors also has the financial resources to withstand significant
price competition and to implement extensive advertising campaigns, particularly
for prime-time television spots. In addition to the manufacturers, we will also
compete with  publishers and developers of interactive entertainment
software, such as Activision, Atari, Electronic Arts, LucasArts, Namco, Sega,
THQ, Take-Two Interactive Software, Ubisoft, and Vivendi Games. Some of
our  competitors are very large, diversified corporations that have
begun to develop games based upon their own highly recognizable brands, and, as
a result, stand to become more direct competitors. Disney Interactive Studios
recently expanded its internal software game publishing efforts and Viacom has
expanded its efforts in interactive entertainment software
publishing.
 
 Competition
in the MMOG segment is also highly competitive and characterized by frequent
product introductions, new business models and new platforms. Our competitors in
the MMOG industry vary in size from small companies to very large companies with
dominant market shares and substantial financial resources. The barriers to
entry in the online games segment are significantly less onerous, due to the
lack of the requirement for a specific hardware platform. The game player's
personal computer and a high speed internet connection serve as the platform. As
the proportion of households with a broadband connection increases, we expect
new competitors to enter the market and existing competitors to allocate more
resources toward developing online games. As a result, we expect competition in
the online games market segment to intensify. In addition, we may face stronger
competition from console game companies, such as Sony, Microsoft, Electronic
Arts, Nintendo and Sega, many of which have announced their intention to expand
their game services and offerings over the Internet. For example, Electronic
Arts co-developed and launched “FIFA online,” a sports online game based on its
best-selling package sports game franchise “FIFA” series, with Neowiz in 2006
and recently announced its investment in Neowiz and further co-development plan
for a series of online games. Many of our competitors have significantly greater
financial, marketing and game development resources than we have. As a result,
we may not be able to devote adequate resources to develop, acquire or license
new games, undertake extensive marketing campaigns, adopt aggressive pricing
policies or adequately compensate our game developers to the same degree as
certain of our competitors.
 
 11
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  Our
current and potential competitors in the online games market segment include
major media companies, traditional video game publishing companies, and
companies that specialize in online games. Competitors in the MMOG online game
segment, include Electronic Arts, Jagex, Midway, NC Soft, Ankama Games, Sony and
Vivendi. Hits have captured a significant percentage of overall subscribers and
this trend is expected to continue. Blizzard Entertainment, a division of
Vivendi is the largest competitor in the MMOG market segment with its Wizard of
Warcraft game. As of April 2008, it has approximately 10,000,000 subscribers or
over 62% of the total subscriber market (1), compared to second place Jagx's
Runescape with 1.2 million subscribers.
 
 The
five  biggest  MMOG  games  known to us
as of the date hereof are:
 
 Game Name
              Market
                Characteristics
              
              Pricing
              Subscribers(1)
              Share(1)World
      of Warcraft
              Unique
      user experiences,
              
              Subscription
      based play,
              10
      million
              62
              %(www.worldofwarcraft.com)
              user
      and respective teams
              
              options
      include month to monthBlizzard
      Entertainment
              can
      play at their own pace
              
              pkg
      ($14.99 per month); 3(division
      of Vivendi)
              
              
              month
      plan ($13.99 per month);6
      month plan ($12.99 per month)Runescape
              Ability
      to develop skills
              
              Monthly
      subscription as low
              1.2
      million
              7.5
              %www.runescape.com
              with
      mini games / villains
              
              as
      $5 USD per monthJagex
      Ltd.
              added
      to each questLineage/Lineage
      II
              Offers
      range of games so
              
              $14
      - $15 monthly fee
              2.1
      million
              12.9
              %www.lineage.com
              you
      are not limited towww.lineage2.com
              specific
      game playNcsoft,
      Inc.Final
      Fantasy
              Fantasy
      world play combining
              
              $12.95
      per month
              500,000
              3.1
              %www.playonline.com
              magic,
      swords, monsters, whereSquare
      Enix Co. Ltd.
              players
      compete individually orwithin
      team environmentDofus
              Challenging
      game play compels
              
              $13.95
      per month
              450,000
              2.8
              %www.dofus.com
              players
      to enter differentAnkama
      Games
              universes
      and worlds of fantasy
 
 ----------
 (1)
Source:MMOGchart.com study version 23.0 released April 2008
 
 Other
successful MMOGs which we are aware of based on internet searches conducted
by  the Company include:
 
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  East
      Asia
              MMOGs
      Lineage/Lineage II games earn $200MM/yearChina MMOGs Fantasy Westward
      Journey; World of Legend/Legend of Mir over $100 million a
      year.  Virtual item games like Kart Rider
    booming.Miniclip
              30+
      million users. Consumers: 12-24, male.NeoPets
              Claiming
      over 100 million accounts. Top 10 stickiest site. 80%
    sub-17.Guild
      Wars
              3
      million players; retail only, free online.Habbo
      Hotel
              Could
      be first $100 mln product with digital item.Shockwave
              18
      million users. Club Penguin: 2.6 million users in 1
  year.OGame
              Space
      MMOG. 2 million players, primarily in
Germany
 
 We will
face significant competition for our Platform technology and our attempts to
market such technologies to third party game developers
and  publishers, movie studios, and other media
producers.  Several companies have developed, and are in the process
of developing, platforms which  allow third parties to rapidly create
MMOG’s and contain other features of our planned Platform such as Icarus Studios
LLC, Multiverse Network, Inc., Kaneva LLC.  Unity , Hero Engine and
Big World. The Company’s Platform will be in competition with these companies
and others. The Company will also compete with companies that develop MMOG's,
game engines  and associated systems  for third parties such
as SmartFox, Chaos and CryEngine. The Company will also compete with On-Line
game distribution hubs and developers such as SGN, Zygna, Shockwave and
Playfish. The Company’s Platform will be in competition with these companies and
others. In addition portions of the Company’s planned Platform technologies will
be in competition with numerous companies that have developed and are developing
3D game engines as well as companies which provide server and back end support
for MMOGs. We also will compete with online casual game and game portal
companies such as Instant Action and the Social Gaming Network as well as
others. Many of our competitors have significantly greater financial, marketing
and game development resources than we have.
 
 As the
online game industry in many of our proposed markets is relatively new and
rapidly evolving, our current or future competitors may compete more
successfully as the industry matures. In particular, any of our competitors may
offer products and services that have significant performance, price, creativity
or other advantages over the Platform and our  MMOG(s). These products
and services may significantly effect the demand for the Platform and
our  MMOG(s), assuming it is developed. In addition, any of our
current or future competitors may be acquired by and/or receive investments
from or enter into other strategic relationships with larger, longer-established
and better-financed companies and therefore obtain significantly greater
financial, marketing and game licensing and development resources than we have.
Increased competition in the online game industry in our markets could make it
difficult for us to attract users for the Platform and our MMOG(s). If we are
unable to compete effectively in our principal markets, our business, financial
condition and results of operations could be materially and adversely
affected.
 
 Intellectual
Property
 
 We have
not filed for any patent and/or copyright protection for our Platform, MMOGs
and/or  planned products. Presently we intend to rely on trade secret
protection and/or  confidentiality agreements with our employees,
customers, business partners and others to protect our intellectual property
rights. Despite certain precautions taken by us, it may be possible for third
parties to obtain and use our intellectual property without authorization. This
risk may be increased due to the lack of any patent and/or copyright
protection.  If any of our proprietary rights are misappropriated or
we are forced to defend our intellectual property rights, we will have to incur
substantial costs. Such litigation could result in substantial costs and
diversion of our resources, including diverting the time and effort of our
senior management, and could disrupt our business, as well as have a material
adverse effect on our business, prospects, financial condition and results of
operations. Management will from time to time determine whether applying for
patent and copyright protection is appropriate for us. We have no guarantee
that, if filed, any applications will be granted or, if awarded, whether they
will offer us any meaningful protection from other companies in our business.
Furthermore, any patent or copyrights  that we may be granted may be
held by a court to infringe on the intellectual property rights of others and
subject us to the payment of damage awards.
 
 13
 Table of Contents
  We cannot
be certain that the Platform and our MMOG(s) will not infringe upon patents,
copyrights or other intellectual property rights held by third parties. While we
know of no basis for any claims of this type, the existence of and ownership of
intellectual property can be difficult to verify and we have not made an
exhaustive search of all patent filings. Additionally, most patent applications
are kept confidential for twelve to eighteen months, or longer, and we would not
be able to be aware of potentially conflicting claims that they make. We may
become subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. If we
are found to have violated the intellectual property rights of others, we may be
enjoined from using such intellectual property, and we may incur licensing fees
or be forced to develop alternative technology or obtain other licenses. In
addition, we may incur substantial expenses in defending against these third
party infringement claims and be diverted from devoting time to our business and
operational issues, regardless of the merits of any such claim.
Issues.  In addition, we intend to recruit employees from other online
game developers, including certain potential competitors. To the extent these
employees will be used  in the development of  portions of
the Platform and our MMOG(s) which are  similar to the development in
which they were involved at their former employers, we may become subject to
claims that such employees or we have improperly used or disclosed trade secrets
or other proprietary information. If any such claims were to arise in the
future, litigation or other dispute resolution procedures might be necessary to
retain our ability to offer our current and future games, which could result in
substantial costs and diversion of our financial and management resources.
Successful infringement or licensing claims against us may result in substantial
monetary damages, which may materially disrupt the conduct of our business and
have a material adverse effect on our reputation, business, financial condition
and results of operations.
 
 Government
Regulation
 
 Our
business, the Platform  and our MMOG(s)  may subject to
increasing regulation of content, consumer privacy, distribution and online
hosting and delivery in the key territories in which we desire to conduct
business. If we do not successfully respond to these regulations, our business
may suffer. Legislation is continually being introduced that may affect both the
content of MMOG(s) and  their distribution as well as utilization of
online game platforms. For example, data and consumer protection laws in the
United States and Europe impose various restrictions on web sites. Those rules
vary by territory although the Internet recognizes no geographical boundaries.
Other countries, such as Germany, have adopted laws regulating
content  in games  transmitted over the Internet that are
stricter than current United States laws. In the United States, the federal and
several state governments are continually considering content restrictions on
products such as ours, as well as restrictions on distribution of such products.
For example, recent legislation has been adopted in several states, and could be
proposed at the federal level, that prohibits the sale of certain games (e.g.,
violent games or those with “M (Mature)” or “AO (Adults Only)” ratings) to
minors. Any one or more of these factors could harm our business by limiting the
proposed features we plan on incorporating into the Platform and MMOG(s), by
limiting the size of the potential market for our products, and by requiring
costly additional differentiation in the Platform and MMOG(s) for different
territories to address varying regulations.
 
 Internet
Websites
 
 We have
secured the rights to the Internet domain name www.playmoggle.com. We do not have
the financial resources to fully deploy and market this website at this time. We
intend to more fully develop and market a fully functional, e-commerce website
upon the raising of capital. Information on our website is not a part of this
Report and should not be utilized in making a decision to purchase our
securities.
 
 Employees
 
 We have
no other employees other than our two executive officers. In addition we have
retained certain consultants. In the event we are successful in raising
sufficient capital, we intend to expand our current management to retain skilled
directors, officers, and employees with experience relevant to our business
focus. In order to develop and create our Platform, and the technology and
software needed to meet the features and goal we have set for the
Platform,  we will need to hire an in house development
team  consisting of producers, game designers, software engineers,
artists, animators, scriptwriters,  musicians
and  songwriters,  sound  effects and
special  effects experts and game testers. We intend to hire
these employees upon successfully raising capital, of which there can be no
assurance. We may also seek to rely  third party work for hire
developers , artists and other personnel to supplement and support the in-house
team that we will hire. We plan to use international software developers to
address different technologies, languages and cultures and to provide the
broadest based expertise for the online gaming markets. Management shall make
the decision as to whether to use in-house or third party development resources
based upon the creative and technical challenges of the area of development. We
may also seek to evaluate any number of pre-market technologies that would allow
Moggle to rapidly develop its main Platform technology and accelerate our time
to market .  If we believe such technologies would assist us in
achieving our business plan we may acquire and/or license such
technologies.
  14
 Table of Contents
  As of the
date of this Report we have engaged FX labs  to assist us in the
development of certain portions of the Platform. Upon the raising of sufficient
capital, we may engage additional outside developers to further assist
us.
 
 
 ITEM
1A.  RISK FACTORS
 
 The
following section includes some of the material factors that may adversely
affect our business and operations. This is not an exhaustive list, and
additional factors could adversely affect our business and financial
performance. Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is not possible
for us to predict all such risk factors, nor can we assess the impact of all
such risk factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. This discussion of risk factors
includes many forward-looking statements. For cautions about relying on such
forward looking statements, please refer to the section entitled “Forward
Looking Statements” at the beginning of this Report immediately prior to
Item 1.
 
 Because
our auditor has issued a going concern opinion regarding our Company, there is
an increased risk associated with an investment in our Company.
 
 We have
generated no revenues since our inception, which makes it difficult to evaluate
whether we will operate profitably. We were incorporated on February 11, 2008
and we have incurred cumulative net losses of ($3,220,362) since our
inception through December 31, 2009. Moreover the Company believes that it will
take between one and a half and three years to develop our Platform and MMOG(s)
during which time no revenues will be generated. Accordingly the Company will be
dependent solely on the raising of capital in order to continue operations for
up to thirty six months. As of December 31, 2009 and March 29, 2010 we had cash
in the amount of $44,710 and $5,300 respectively. Our future is dependent upon
our ability to raise capital through the sale of our Common Stock and/or
Preferred Stock, through the possible exercise of outstanding options and
warrants, through debt financing  and/or through a future public
offering of our securities. Our ability to raise capital is unknown. We do not
have any formal commitments or arrangements for the advancement or loan of
funds. For these reasons, our auditors stated in their report that they have
substantial doubt we will be able to continue as a going concern. As a result,
there is an increased risk that you could lose the entire amount of any
investment in the shares of our Company.
 
 Our
recent failure to publicly raise capital may be an indication of our inability
to secure future financing, which is necessary for us to attempt to consummate
our business plan.
 
 In
September 2008 we withdrew a prior registration statement which sought to
register 12,000,000 shares of our Common Stock on behalf of the Company on a
“best efforts” basis (the “Prior Offering”). The Prior Offering sought to raise
up to $12,000,000. However the Company raised only $2,560 in the Prior
Offering. In September 2009, the Company filed a new registration statement
seeking to raise up to an additional $12,000,000. Through the date of this
Report we have raised only $100,000 under such new registration statement. The
Company’s business plans are dependent on the Company’s ability to raise capital
in the new registration statement  or if unsuccessful,  through
private placements of our Common Stock and/or Preferred Stock, through the
possible exercise of outstanding options and warrants, through debt
financing and/or through a future public offering of our securities. The
Company estimates that it will require capital of at least an additional
approximate $10,000,000 in order to attempt to fully consummate its current
business plans. The Company’s existing capital will only allow the Company to
operate for a very limited period of time. Our failure to successfully raise
substantial capital in the Prior Offering and the fact that we have only raised
through the date of this Report a limited amount of capital, may be an
indication that we will be unable to raise the capital in this Offering
which is needed to attempt to effectuate our business plans. If the Company
raises less than $10,000,000 in capital, management will be required to adjust
its plans and allocate any capital that is raised in a manner which it believes,
in its sole discretion, will be in the best interest of the Company. The
Company’s failure to raise sufficient capital in the future may jeopardize the
Company’s ability to operate as a going concern. No assurance whatsoever can be
given or is made that the Company will be successful in its efforts to raise
capital. In the event the Company fails to raise such capital,
the  Company will not have adequate funds to conduct its operations.
If that happens, any  investment in the Company will be
lost.
 
 15
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 There
is no assurance that even if we successfully raise capital that we will meet our
goals.
 
 Even if
we successfully raise $10,000,000 in capital, of which there can be no
assurance, there can be no assurance that all of our  goals can be
achieved. Moreover if less than $10,000,000 is raised, management will be
required to adjust its plans and allocate proceeds in a manner which it
believes, in its sole discretion, will be in the best interest  of the
Company. It is highly likely that if $10,000,000 is not raised by the
Company,  there will be a need for additional financing in the future,
without which the ability of the Company to operate as a going
concern  may be jeopardized. No assurance whatsoever can be given or
is made that such additional financing, if and when needed, will be available or
that it can be obtained on terms favorable to the Company. Accordingly the
Company may not have adequate funds to conduct its operations.  If
that happens, any  investment in the Company will be
lost.
 
 Our
business plans are totally dependent upon  future capital
raises
 
 The
Company is dependent on raising substantial additional capital as its existing
capital will only allow the Company to operate for a very limited period of
time. The Company estimates that it  will require capital of
approximately $10,000,000  in order to attempt to fully consummate its
current business plans. The Company anticipates that it will take, assuming
adequate funding is available, between  one and a half and three years
to fully develop its Platform. Accordingly the Company will not generate any
revenues in the foreseeable future and will be solely dependent on raising
capital. There can be no assurance that such capital  will be
available when needed, or if available, on attractive terms. The Company’s
inability to raise   capital will have a material adverse effect on
the Company and may result in the loss of any investment made in the Company's
stock
 
 Our
absence of operating history and early development stage of our Company possess
significant risks to our ability to generate revenue and operate
successfully
 
 We have
not generated any revenue from the products and services which we intend to
develop and, if developed, market. We expect to generate all of our future
revenues from the development and marketing of our Platform, MMOGs and game
development services. Accordingly, we have no revenue generating operating
history upon which an evaluation of the Company, its business plans and our
prospects can be based and it is difficult or impossible for the Company to
predict future results of operations . Our prospects must be considered in light
of the risks, expenses, and difficulties frequently encountered by companies in
the early stages of a new business enterprise, particularly companies in highly
competitive markets. Since the Company is among many that have entered the
on-line gaming market, it also faces many risks specific to its business
including those related to successfully developing the Platform and MMOGs,
successfully commercializing the Platform and any MMOG that is developed for use
on the Platform, the need to manage existing and expanding operations, the
continuing need to raise additional capital, the dependence upon and need to
hire key personnel, and the need to increase spending to adequately market and
sell the Platform and MMOGs. To address these risks, we must, among other
things, respond to competitive developments, continue to attract, retain and
motivate qualified persons, and continue to upgrade our technologies. We cannot
provide any assurances that we will be successful in addressing such risks. The
Company's failure to do so could have a material adverse effect on its business,
prospects, financial condition and results of operations and result in investors
who purchase Shares losing their entire investment.
 
 We
are totally dependent on the potential development of the Platform and
MMOG(s)
 
 The
Company’s entire business plan is dependent on the future development of the
Platform and MMOG(s) and, after such development, the marketing and sale of the
Platform and MMOG(s). The Platform and the Company’s initial MMOG are in their
early conceptual stages and need significant work and funding. We will be
totally dependent upon receipt of substantial capital to attempt to execute our
business plans. There can be no assurance that even if substantial capital is
raised, that the Company will successfully develop the Platform and/or any
MMOG(s). Moreover even if the Company successfully develops the Platform, there
can be no assurance that the Company will be successful in developing any
MMOG(s), and if developed, successful in marketing and selling any such
MMOG(s).
 
 16
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  Our
plans are dependent upon key individuals and the ability to attract
qualified personnel  as well as our relationship with outside
developers
 
 In order
to successfully develop the Platform and MMOG(s), the Company will be dependent
upon Jo Webber, Alfredo Villa, and Ernest Cimadamore as well as the services of
FXLabs Studio Private Limited ("FX Labs") an  outside game and
software development firm which has entered into a professional services
agreement with the Company. The loss of any of the foregoing individuals or the
termination of the Company's  agreement  with FXLabs could
have a material adverse effect upon the Company's business prospects and
prohibit the Company from successfully achieving its goals. Moreover our success
continues to depend to a significant extent on our ability to identify, attract,
hire, train and retain qualified professional, creative, technical and
managerial personnel. Competition for such personnel is intense, and there can
be no assurance that we will be successful in identifying, attracting, hiring,
training and retaining such personnel in the future. The competition for
software developers, quality content creators, game programmers, creative
personnel and technical directors is especially intense because the software and
entertainment markets have significantly expanded over the past several years.
If we are unable to hire, assimilate and retain such qualified personnel in the
future, such inability would have a material adverse effect on our business,
operating results and financial condition. The Company may also depend
on  third party contractors and other partners, in addition to
FXLabs,  to develop the Company's Platform, MMOGs and game development
services as well as any future enhancements thereto, if initially developed.
There can be no assurance that we will be successful in either attracting and
retaining qualified personnel, or creating arrangements with such third parties.
The failure to succeed in these endeavors will have a material adverse effect on
the Company and its ability to consummate its business plans.
 
 If
the Platform and/or MMOG(s) fail to gain market acceptance, we may not have
sufficient capital to pay our expenses and to continue to operate
 
 In the
event that the Company is successful in raising the capital necessary to
successfully complete the development of the Platform and MMOG(s), our ultimate
success will depend on generating revenues from the Platform MMOG(s) and our
game development services. The market for on-line game products is subject to
continually changing consumer and industry preferences and the frequent
introduction of new products. As a result, the Platform and MMOG(s) even if
developed may not achieve and sustain market acceptance sufficient to generate
revenues to cover our costs and allow us to become profitable or even continue
to operate.
 
 Product
development schedules are long and frequently unpredictable, and we may
experience delays in introducing the Platform and MMOG(s), which may adversely
affect our ability to continue our operations.
 
 We have
projected that the development cycle for the Platform and our first MMOG will be
between one and a half and three years, assuming that we raise sufficient
capital. In addition, the creative process inherent in on-line game development
makes the length of the development cycle difficult to predict, especially in
connection with new technologies and development tools. As a result, it may take
in excess of three years to develop the Platform and MMOG(s). If any
unanticipated delay effects the release of the Platform and MMOG(s), we may not
achieve anticipated revenues and may not have the capital necessary to continue
operations.
 
 We
currently depend on and may continue to be dependent on third parties to
complete the development of the Platform and MMOG(s), and any increased costs
associated with third party developers or any delay or interruption in
production would negatively affect both our ability to develop the Platform and
MMOG(s) and our ability to continue our operations.
 
 We
currently depend on our agreement with FXLabs to develop the initial stages of
our Platform. Even if we are successful in raising capital we  may
continue to need to rely on FXlabs and other third parties to complete the
development of portions of the Platform and MMOG(s). The costs associated with
relying on third parties may increase our development costs and negatively
affect our ability to operate. Since we have less control over a third party
because we cannot control the developer’s personnel, schedule or resources we
may experience delays in finalizing the Platform and MMOG(s). In addition
aspects of the Platform and MMOG(s) may not match our expectations. If this
happens we could lose anticipated revenues from the Platform and MMOG(s) and may
not have the capital necessary to continue our operations. In addition we may be
required to rely on certain technology that we will license from third parties,
including software that we integrate and use with our internally developed
software. We cannot provide any assurances that these third party technology
licenses will be available to us on commercially reasonable terms. The inability
to establish any of these technology licenses, or the loss of such licenses if
established, could result in delays in completing our Platform and MMOGs until
equivalent technology could be identified, licensed and integrated. Any such
delays could materially adversely affect our business, operating results and
financial condition.
 
 17
 Table of Contents
  Developing
a new On-Line Platform and MMOGs involve substantial risks
 
 Developing
online platforms and games internally requires substantial development costs,
including the costs of employing skilled developers and acquiring or developing
game engines and software which enable the creation of products with the latest
technological features. Moreover in order to succeed, we may be required to
acquire, or license aspects necessary to complete the Platform and MMOG(s) from
third parties, of which there can be no assurance. The online game market is
highly competitive. Even if the Platform and MMOG(s) are developed, in order to
successfully distribute and operate the Platform and MMOG(s), we also need a
sizable game management and support staff, continued investment in technology
and a substantial marketing budget. If we are not able to develop, launch,
market or operate the Platform and MMOG(s) successfully, we may not be able to
generate revenues to offset our initial development, acquisition, and/or
marketing costs, and our future business, financial condition and results of
operations will be materially and adversely affected.
 
 Once
developed, the success of the Platform and MMOG(s) will be subject to many
factors, including the quality, uniqueness and playability of the Platform and
MMOG(s) and the launch by our competitors of other games and development
services that may gain more market acceptance than the Platform and MMOG(s). Our
inability to launch the Platform and MMOG(s), and if launched, the lack of
popularity or market acceptance of it, will have a materially adverse effect on
our business, prospects, reputation, financial condition and results of
operations and most likely result in the loss of a subscribers entire
investment.
 
 We
face the risks of changing consumer and industry preferences and uncertainty of
market acceptance of our new games.
 
 Online
games and platforms are a new and evolving entertainment concept. The level of
demand and market acceptance of online games in general, and of any one online
game in particular, such as the MMOG(s) we are developing for use on the
Platform are subject to a high degree of uncertainty. As consumer and industry
preferences and trends evolve, there is a high degree of uncertainty about
whether users will continue to value some or all of the key features which we
intend to incorporate into the Platform and MMOG(s) . The failure of the
marketplace to deem our features desirable may discourage use of our Platform
and MMOG(s) and limit the ability of the Company to generate revenues. Further,
entertainment from other sources, including movies, cable TV and IPTV, among
others, could erode the growth of the online game industry. A decline in the
popularity of online games in general will likely have a materially adverse
affect on our business and prospects.
 
 We operate in a highly competitive
industry and compete against many large companies
 
 Many
companies worldwide are dedicated to developing and/or operating online games.
We expect more companies to enter the online game industry and a wider range of
online games to be introduced. Our competitors in the MMOG game industry
vary in size from small companies to very large companies with dominant market
shares and substantial financial resources. In addition several companies have
developed, and are in the process of developing, platforms designed to allow
third parties to create MMOG’s such as Icarus Studios LLC, Multiverse Network,
Inc. , Kaneva LLC, Unity, Hero Engine and Big World. The Company’s Platform will
be in competition with these companies and others. The Company will also compete
with companies that develop MMOG's, game engines and associated
systems  for third parties such as SmartFox, Chaos and CryEngine. The
Company will also compete with On-Line game distribution hubs and developers
such as SGN, Zygna, Shockwave and Playfish. We also will compete with online
casual game and game portal companies such as Instant Action and the Social
Gaming Network. In addition, we may face stronger competition from console game
companies, such as Sony, Microsoft, Electronic Arts, Nintendo and Sega, many of
which have announced their intention to expand their game services and offerings
over the Internet. For example, Electronic Arts co-developed and launched “FIFA
online,” a sports online game based on its best-selling package sports game
franchise “FIFA” series, with Neowiz in 2006 and recently announced its
investment in Neowiz and further co-development plan for a series of online
games. Many of our competitors have significantly greater financial, marketing
and game development resources than we have. As a result, we may not be able to
devote adequate resources to develop, acquire or license new games, undertake
extensive marketing campaigns, adopt aggressive pricing policies or adequately
compensate our game developers to the same degree as certain of our
competitors.
 
 18
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  As the
online game industry in many of our proposed markets is relatively new and
rapidly evolving, our current or future competitors may compete more
successfully as the industry matures. In particular, any of our competitors may
offer products and services that have significant performance, price, creativity
and/or other advantages over the Platform and MMOG(s). These products and
services may significantly effect the demand for the Platform and MMOG(s),
assuming they are developed. In addition, any of our current or future
competitors may be acquired by and/or receive investments from or enter into
other strategic relationships with larger, longer-established and
better-financed companies and therefore obtain significantly greater financial,
marketing and game licensing and development resources than we have. Increased
competition in the online game industry in our markets could make it difficult
for us to attract users for the Platform and MMOG(s). If we are unable to
compete effectively in our principal markets, our business, financial condition
and results of operations could be materially and adversely
affected.
 
 Our
management has no experience in our relatively new industry, which may make it
difficult for you to evaluate our business prospects
 
 Our
senior management and employees do not have any direct experience in the online
gaming industry. There can be no assurance that such employees will be
successful in working together to develop the Platform and MMOG(s). In addition,
the online game industry is a relatively new industry. The world’s first
massively multiplayer online role playing game to be introduced commercially was
developed and distributed by one of our competitors in 1996. Since then, only a
limited number of companies have successfully commercialized such online games
on an international scale. You must consider our business prospects in light of
the risks and difficulties we will encounter in the future in a new and rapidly
evolving industry. We may not be able to successfully address these risks and
difficulties, which could materially harm our proposed business prospects,
financial condition and results of operations.
 
 Rapid
technological change may adversely affect our future revenues and
profitability
 
 The
online game industry is subject to rapid technological change in such areas as
hardware, software and content programming. We need to anticipate the emergence
of new technologies and games, assess their likely market acceptance, and make
substantial game development and related investments. In addition, new
technologies in online game programming or operations could render the Platform
and MMOG(s) obsolete or unattractive to potential users, thereby limiting our
ability to recover our development costs and materially and adversely affecting
our business, financial condition and results of operations.
 
 Undetected
programming errors or flaws in our Platform and MMOG(s) could harm our
reputation or decrease market acceptance of the Platform and the MMOG(s), which
would materially and adversely affect our business prospects, reputation,
financial condition and results of operations
 
 The
Platform and MMOG(s) may contain programming errors or flaws, which may become
apparent only after its release. In addition, the Platform and MMOG(s) may be
developed using programs and engines developed by and/or licensed from third
party vendors, which may include programming errors or flaws over which we have
no control. If our users have a negative experience with the Platform and
MMOG(s) related to or caused by undetected programming errors or flaws, they may
be less inclined to continue or resume use of the Platform and MMOG(s) or
recommend the Platform and PMMOG(s) to other potential users. Undetected
programming errors in the Platform and/or MMOG(s) can also cause our users to
cease playing MMOG(s), divert our resources or delay market acceptance of the
Platform and MMOG(s), any of which could materially and adversely affect our
business, financial condition and results of operations.
 
 Unexpected
network interruptions, security breaches or computer virus attacks could harm
our business
 
 Should
the Platform and MMOG(s) be successfully developed, the Company will be required
to develop, and maintain a substantial computer network infrastructure over
which users will access the Platform and MMOG(s). Any failure to maintain
satisfactory performance, reliability, security and availability of such network
infrastructure, whether maintained by us or by third parties, may cause
significant harm to our ability to attract and maintain users for the Platform
and MMOG(s). Major risks relating to any such future network infrastructure
include:
 
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  ·
              any
      breakdowns or system failures, including from fire, flood, earthquake,
      typhoon or other natural disasters, power loss or telecommunications
      failure, resulting in a sustained shutdown of all or a material portion of
      our servers;
 
 ·
              any
      disruption or failure in the national or international backbone
      telecommunications network, which would prevent users in certain countries
      in which our games are distributed from logging onto or playing our games
      for which the game servers are all located in other
      countries; and
 
 ·
              any
      security breach caused by hacking, loss or corruption of data or
      malfunctions of software, hardware or other computer equipment, and the
      inadvertent transmission of computer
viruses.
 
 
 Current
on-line game providers have experienced situations where users attempt to gain
an unfair advantage by modifying their games execution files saved on the users’
computers to facilitate the progression of their game characters. Unauthorized
character manipulation may negatively impact the image and users’ perception of
the Platform and MMOG(s) and could limit the popularity of the Platform and
MMOG(s)
 
 Any of
the foregoing factors could reduce a future users’ satisfaction, harm our
business and reputation, have a material adverse effect on our financial
condition and results of operations and result in the loss of a subscriber's
entire investment.
 
 Our
Lack of Patent and/or Copyright Protection and any unauthorized use of the
Platform and/or the MMOG(s) by third parties, may adversely affect ourbusiness
 
 We have
not filed for any patent and/or copyright protection for our Platform, MMOGs
and/or planned products. Presently we intend to rely on trade secret protection
and/or confidentiality agreements with our employees, customers, business
partners and others to protect our intellectual property rights. Despite certain
precautions taken by us, it may be possible for third parties to obtain and use
our intellectual property without authorization. This risk may be increased due
to the lack of any patent and/or copyright protection. If any of our proprietary
rights are misappropriated or we are forced to defend our intellectual property
rights, we will have to incur substantial costs. Such litigation could result in
substantial costs and diversion of our resources, including diverting the time
and effort of our senior management, and could disrupt our business, as well as
have a material adverse effect on our business, prospects, financial condition
and results of operations. Management will from time to time determine whether
applying for patent and copyright protection is appropriate for us. We have no
guarantee that, if filed, any applications will be granted or, if awarded,
whether they will offer us any meaningful protection from other companies in our
business. Furthermore, any patent or copyrights that we may be granted may be
held by a court to infringe on the intellectual property rights of others and
subject us to the payment of damage awards.
 
 We
may be subject to claims with respect to the infringement of intellectual
property rights of others, which could result in substantial costs and diversion
of our financial and managementresources
 
 We cannot
be certain that the Platform and MMOG(s) will not infringe upon patents,
copyrights or other intellectual property rights held by third parties. While we
know of no basis for any claims of this type, the existence of and ownership of
intellectual property can be difficult to verify and we have not made an
exhaustive search of all patent filings. Additionally, most patent applications
are kept confidential for twelve to eighteen months, or longer, and we would not
be able to be aware of potentially conflicting claims that they make. We may
become subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. If we
are found to have violated the intellectual property rights of others, we may be
enjoined from using such intellectual property, and we may incur licensing fees
or be forced to develop alternative technology or obtain other licenses. In
addition, we may incur substantial expenses in defending against these third
party infringement claims and be diverted from devoting time to our business and
operational issues, regardless of the merits of any such claim. In addition, we
intend to recruit employees from other online game developers, including certain
potential competitors. To the extent these employees will be used in the
development of portions of the Platform and MMOG(s) which are similar to the
development in which they were involved at their former employers, we may become
subject to claims that such employees have improperly used or disclosed trade
secrets or other proprietary information. If any such claims were to arise in
the future, litigation or other dispute resolution procedures might be necessary
to retain our ability to offer our current and future games, which could result
in substantial costs and diversion of our financial and management resources.
Successful infringement or licensing claims against us may result in substantial
monetary damages, which may materially disrupt the conduct of our business and
have a material adverse effect on our reputation, business, financial condition
and results of operations.
 
 20
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 Our
businesses may be adversely affected by developments affecting the economies of
the countries in which our games are distributed
 
 Even if
the Platform and MMOG(s) are successfully developed and obtain market
acceptance, of which there can be no assurance, our future performance will
depend in large part on the future economic conditions in the countries where we
will market the Platform and MMOG(s). Accordingly, our business, financial
condition, results of operations and prospects are subject to the economic,
political, legal and regulatory conditions and developments in these countries.
Any decline in the general economy or concern about an imminent decline could
delay decisions by prospective customers to make initial evaluations of, or
purchases of, our products. Any reduction of or delays in expenditures would
harm our business. Adverse developments in such markets may have an adverse
effect on the number of our subscribers and results of operations, which could
have a material adverse effect on our business.
 
 Technology
changes rapidly in the Online Gaming Industry and if we fail to anticipate or
successfully implement new technologies or the manner in which people play
MMOG(s), the quality, timeliness and competitiveness of the Platform and/or the
MMOG(s) will suffer.
 
 Rapid
technology changes in the MMOG industry will require us to anticipate years in
advance, which technologies we must implement and take advantage of in order to
make the Platform and MMOG(s) competitive in the market. Therefore, we have
developed a range of technical development goals that we hope to be able to
achieve with the Platform and MMOG(s). We may not be able to achieve these
goals, or our competition may be able to achieve them more quickly and
effectively than we can. In either case, the Platform and MMOG(s) may be
technologically inferior to our competitors’, less appealing to consumers and
industry participants or both. If we cannot achieve our technology goals within
the original development schedule of the Platform and MMOG(s) then we may delay
its release until these technology goals can be achieved, which may delay our
receipt of revenue and increase our development expenses and adversely affect
the Company’s ability to remain in operation.
 
 Our
business, the Platform and MMOG(s) are subject to increasing regulation of
content, consumer privacy, distribution and online hosting and delivery in the
key territories in which we desire to conduct business. If we do not
successfully respond to these regulations, our business may suffer.
 
 Legislation
is continually being introduced that may affect both the content of the MMOG(s)
and its distribution as well as utilization of the Platform. For example, data
and consumer protection laws in the United States and Europe impose various
restrictions on web sites. Those rules vary by territory although the Internet
recognizes no geographical boundaries. Other countries, such as Germany, have
adopted laws regulating the content of games transmitted over the Internet that
are stricter than current United States laws. In the United States, the federal
and several state governments are continually considering content restrictions
on products such as ours, as well as restrictions on distribution of such
products. For example, recent legislation has been adopted in several states,
and could be proposed at the federal level, that prohibits the sale of certain
games (e.g., violent games or those with “M (Mature)” or “AO (Adults Only)”
ratings) to minors. Any one or more of these factors could harm our business by
limiting the proposed features we plan on incorporating into the Platform and
MMOG(s), by limiting the size of the potential market for our products, and by
requiring costly additional differentiation in the Platform and MMOG(s) for
different territories to address varying regulations.
 
 21
 Table of Contents
  Potential
Breaches of the Company's Network System Could Have Material Adverse Affects On
Our Business
 
 A
significant aspect to the future success of our business if the Platform and
MMOG(s) are developed, will be the Company’s ability to allow players of MMOG(s)
to access the Platform and MMOG(s) in a secure and reliable internet
environment. Advances in computer capabilities, new discoveries in the field of
cryptography or other events or developments could result in compromises or
breaches of the Company's network systems. If any well-publicized compromises of
security were to occur, it could have the effect of substantially reducing the
sale and marketability of the Platform and MMOG(s) once it is developed. Anyone
who circumvents the Company's security measures could misappropriate its
exclusive information or cause interruptions in services or operations. The
Internet is a public network, and data is sent over this network from many
sources. In the past, computer viruses, software programs that disable or impair
computers, have been distributed and have rapidly spread over the Internet.
Computer viruses could theoretically be introduced into the Company's systems,
or those of its customers, which could disrupt operations, or make our
Platform and/or MMOG(s) inaccessible to customers. The Company may be required
to expend significant capital and other resources to protect against the threat
of security breaches or to alleviate problems caused by breaches. The Company's
security measures may be inadequate to prevent security breaches, and business
could be seriously impacted if they are not prevented.
 
 Because
our Platform, products and services have not yet been created we have no name
recognition, which may prevent us from generating revenues, which will reduce
the value of your investment.
 
 Because
we are a new company with new products and we have not conducted any significant
advertising, there is little or no recognition of the Moggle brand name.
However, substantially all of the Company’s future revenues are expected to be
derived from our Platform, which will offer MMOGs to users and game development
opportunities to interested parties. Accordingly, broad acceptance by customers
of the Company’s Platform, MMOGs and game development services are critical to
the Company’s future success. Further, the Company is depending on its being
able to successfully obtain major financial commitments from content creators,
webmasters, developers, programmers, Online advertisers, and aggregators to
utilize the Company’s Platform, MMOGs and game development services. Because of
our lack of name recognition, potential users of our products or joint venture
partners may purchase products other than ours that have brand recognition in
the market and we may be unable to generate sufficient revenues to meet our
expenses or meet our business plan objectives, which will reduce the value of
your investment.
 
 If
we are unable successfully to manage growth, our operations could be adversely
affected.
 
 Our
progress is expected to require the full utilization of our management,
financial and other resources, which to date has occurred with limited working
capital. Our ability to manage growth effectively will depend on our ability to
utilize the proceeds of this Offering, if any, to improve and expand operations,
including our financial and management information systems, and to recruit,
train and manage sales personnel. There can be no absolute assurance that
management will be able to manage growth effectively.
 
 If we do
not properly manage the growth of our business, we may experience significant
strains on our management and operations and disruptions in our business.
Various risks arise when companies and industries grow quickly. If our business
or industry grows too quickly, our ability to meet customer demand in a timely
and efficient manner could be challenged. We may also experience development or
production delays as we seek to meet increased demand for our products. Our
failure to properly manage the growth that we or our industry might experience
could negatively impact our ability to execute on our operating plan and,
accordingly, could have an adverse impact on our business, our cash flow and
results of operations, and our reputation with our current or potential
customers.
 
 Our
future growth is largely dependent upon our ability to develop technologies that
achieve market acceptance with acceptable margins.
 
 Our
future growth rate depends upon a number of factors, including our ability to
identify emerging technological trends in our target end-markets; develop and
maintain competitive products; create our Platform and MMOGs with innovative
features that differentiate our products from those of our competitors and
develop, manufacture and bring products to market quickly and cost-effectively.
Our ability to develop the Platform and MMOGs will require substantial
technological innovation and requires the investment of significant resources.
These development efforts may not lead to the development of the Platform and
/or MMOGs on a timely basis or  meet the needs of our customers as
fully as competitive offerings. In addition, the markets for our products may
not develop or grow as we anticipate. The failure of our products to gain market
acceptance or their obsolescence due to more attractive offerings by competitors
could significantly reduce our revenues and adversely affect our business,
operations and financial results.
 
 22
 Table of Contents
  We
will be dependent upon advertising revenue as a significant  source of
our revenue.
 
 We expect
that advertising revenue will be a significant source of revenue in the
foreseeable future, although we intend to reduce our dependence on it by
attempting to develop subscription revenue for our MMOGs and generate game
development revenues. Advertising contracts are often short-term and/or
terminable by the advertiser at any time with little notice. Thus, we have no
assurance that we will be able to obtain, and if obtained, retain advertising
contracts. Our ability to generate advertising revenue will, in addition to the
successful completion of our Platform and MMOGs, depend on several factors,
including:
 
 The
continued development of the Internet as an advertising medium;
 
 The
pricing of advertising on other Internet sites;
 
 The
amount of traffic;
 
 Pricing
pressures, delays and new product launches;
 
 Our
ability to achieve, demonstrate and maintain attractive user
demographics;
 
 Our
ability to develop and retain a skilled advertising sales force.
 
 We
may incur substantial unanticipated costs related to our Platform and
MMOGs
 
 Due to
changes in technology, new product announcements, competitive pressures, system
design and/or other specifications we may be required to change the current
plans for our Platform and MMOGs. Therefore, we cannot provide any assurances
that the Platform and MMOGs can be completed within our projections. In case of
budget over-runs and additional expansions, we may choose to finance such
capital expenditures through the issuance of additional equity or debt
securities, by obtaining a credit facility or by some other financing mechanism.
If we choose to seek financing for such expenditures, we cannot provide any
assurances that such financing will be available or if available on terms
reasonably acceptable to us.
 
 Any
Capacity Constraints Or System Disruptions Could Have A Material Adverse
Effect
 
 Our
business will rely significantly on Internet technologies and infrastructure.
Therefore, the performance and reliability of our Internet sites and network
infrastructure will be critical to our ability to attract and retain users,
advertisers, merchants and strategic partners. Any system error or failure, or a
sudden and significant increase in traffic, may result in the unavailability of
sites and significantly delay response times. Individual, sustained or repeated
occurrences could result in a loss of potential or existing users, advertisers
or strategic partners. In addition, because our advertising revenue is
expected to be directly related to the number of advertisements it delivers to
users, system interruptions or delays would reduce the number of impressions
delivered and thereby reduce its revenue.
 
 Our
systems and operations will be vulnerable to interruption or malfunction due to
certain events beyond our control, including natural disasters,
telecommunications failures and computer hacking. We will also rely on Web
browsers and online service providers to provide Internet access to its sites.
There can be no assurance that we will be able to expand our network
infrastructure, either ourself or through use of third-party hosting systems or
service providers, on a timely basis sufficient to meet demand. We may also have
to build redundant facilities or systems, produce a formal disaster recovery
plan and possibly obtain sufficient business interruption insurance to
compensate for losses that may occur. Any interruption to our systems or
operations could have a material adverse effect on the Company’s business and
our ability to retain users, advertisers and strategic partners. Currently, the
Company does not have the above-stated plans in place.
 
 Natural
Disasters Can Affect Our Business in a Negative Manner
 
 The
Company's operations and services depend on the extent to which its computer
equipment and the computer equipment of its third-party network providers is
protected against damage from fire, earthquakes, power loss, telecommunications
failures, and similar events.
 
 23
 Table of Contents
  Despite
precautions taken by the Company and its third-party network providers, over
which we have no control, a natural disaster or other unanticipated problems at
our headquarters or a third-party provider could cause interruptions in the
services that we provide. If disruptions occur, the Company may have no
means of replacing these network elements on a timely basis or at all. The
Company does not currently maintain fully redundant or back-up Internet services
or backbone facilities or other fully redundant computing and telecommunications
facilities. Any accident, incident, system failure, or discontinuance of
operations involving our network or a third-party network that causes
interruptions in our operations could have a material adverse effect on our
ability to provide services to our customers and, in turn, on our business,
financial condition, and results of operations.
 
 Our
Business will be Dependent Upon Broadband Carriers
 
 The
Company will rely on broadband providers to provide high speed data
communications capacity to our customer. The Company may experience disruptions
or capacity constraints in these broadband services. If disruptions or capacity
constraints occur, the Company may have no means of replacing these services, on
a timely basis or at all. In addition, broadband access may be limited or
unavailable in certain areas, thereby reducing our potential
market.
 
 Risks
of International Operations
 
 Once the
Platform and MMOGs are developed, the Company plans to attempt to market such
products in countries inside and outside of the United States. The markets in
which the Company is expected to undertake international expansion may have
technology and online industries that are less well developed than in the United
States.
 
 There are
certain risks inherent in doing business in international markets, such as the
following:
 
 Uncertainty
of product acceptance by different cultures;
 
 Unforeseen
changes in regulatory requirements;
 
 Difficulties
in staffing and managing multinational operations;
 
 State-imposed
restrictions on the repatriation of funds;
 
 Currency
fluctuations;
 
 Difficulties
in finding appropriate foreign licensees or joint venture partners;
 
 Potentially
adverse tax consequences;
 
 Less
stringent and/or narrower intellectual property protection.
 
 There is
a risk that these factors will have an adverse effect on our ability
successfully to operate internationally and on our results of operations and
financial condition.
 
 Acquisition
And Investment Strategy May Not Be Successful And Could Adversely Affect
Its Business
 
 In the
future, the Company may acquire additional products, technologies or businesses,
or enter into joint venture arrangements for the purpose of complementing or
expanding our business or we may make investments in  new unrelated
businesses, products, services or technologies. There can be no assurance that
we will be able to identify suitable acquisition or investment candidates. Even
if we identify suitable candidates, there can be no assurance that we will
be able to make such acquisitions or investments on reasonable commercial terms
or successfully assimilate personnel, operations, products, services or
technologies into our operations. This could disrupt our ongoing
business, distract the management and employees, increase our expenses,
including amortization of goodwill, and materially and adversely affect our
financial condition and results of operations. Furthermore, the incurrence or
issuance of debt or equity securities may be necessary to fund any future
acquisitions.
 
 24
 Table of Contents
  Projections
contained in this Report may not be attained
 
 The
project implementation projections, as well as other projections contained in
this Report, were prepared by the Company in good faith based upon assumptions
that the Company believes to be reasonable provided that the Company is
successful in raising sufficient capital. No assurance can be given, however,
regarding the attainability of the projections or the reliability of the
assumptions on which they are based. The projections are subject to the
uncertainties inherent in any attempt to predict the results of operations for
the Company, especially where new products and services are involved. Certain of
the assumptions used will inevitably not materialize and unanticipated events
will occur. Therefore, the actual results of operations are likely to vary from
the projections and such variations may be material and adverse to the
Company.
 
 The
projections are included solely to give prospective investors information
concerning the Company’s estimates of future operating results based on our
assumptions and no assurance can be given that such results will be achieved.
The Company reserves the right to conduct our business in a manner different
from that set forth in the assumptions as changing circumstances may
require.
 
 The ownership by the Company’s
Officers, Directors and Promoters of a large amount of our Common Stock may
limit minority shareholders’ ability to influence corporate
affairs.
 
 Our
officers, directors, promoters and their affiliates currently own an
aggregate of 17,214,287 shares of our Common Stock and aggregate warrants
and options to purchase an additional 10,085,715 shares of common stock.
Assuming that the only options and warrants exercised are by the Company’s
officers, directors, promoters and their affiliates, the Company would have
outstanding 56,797,276 shares of common stock. In such event our officers and
directors would own 27,300,002 shares or approximately 48.1% of our outstanding
common stock and be in a position to significantly affect all matters requiring
shareholder approval, including the election of directors. The interests of our
officers and directors may differ from the interests of other shareholders with
respect to the issuance of shares, business transactions with or sales to other
companies, selection of officers and directors and other business decisions. The
minority shareholders would have no way of overriding their decisions. This
level of control may also have an adverse impact on the market value of our
Shares because they may institute or undertake transactions, policies or
programs that result in losses, may not take steps to increase our visibility in
the financial community and/ or may sell sufficient numbers of shares to
significantly decrease our price per share.
 
 As
a public company we incur substantial expenses.
 
 Since
shares of our Common Stock are quoted on the Over the Counter Bulletin Board we
are subject to the information and reporting requirements of the U.S. securities
laws. The U.S. securities laws require, among other things, review, audit, and
public reporting of our financial results, business activities, and other
matters. SEC regulations, including regulation enacted as a result of the
Sarbanes-Oxley Act of 2002, have also substantially increased the accounting,
legal, and other costs related to becoming and remaining an SEC reporting
company. If we do not have current information about our Company available to
market makers, they will not be able to trade our stock. The public company
costs of preparing and filing annual and quarterly reports, and other
information with the SEC and furnishing audited reports to stockholders, will
cause our expenses to be higher than they would be if we were privately-held. In
addition, we are incurring substantial expenses in connection with the
preparation of this Registration Statement. These increased costs may be
material and may include the hiring of additional employees and/or the retention
of additional advisors and professionals. Our failure to comply with the federal
securities laws could result in private or governmental legal action against us
and/or our officers and directors, which could have a detrimental effect on our
business and finances, the value of our stock, and the ability of stockholders
to resell their stock.
 
 We
may be exposed to potential risks resulting from requirements under the
Sarbanes-Oxley Act of 2002.
 
 In
addition to the costs of compliance with having our shares of Common Stock
quoted on the OTC Bulletin Board, there are substantial penalties that could be
imposed upon us if we fail to comply with all of regulatory requirements. In
particular, under the Sarbanes-Oxley Act of 2002 we may be required to include
in our annual report our assessment of the effectiveness of our internal control
over financial reporting as of the end of our fiscal year. Furthermore, our
independent registered public accounting firm may be required to attest to
whether our assessment of the effectiveness of our internal control over
financial reporting is fairly stated in all material respects and separately
report on whether it believes we have maintained, in all material respects,
effective internal control over financial reporting. We have not yet completed
our assessment of the effectiveness of our internal control over financial
reporting. We expect to incur additional expenses and diversion of management’s
time as a result of performing the system and process evaluation, testing and
remediation required in order to comply with the management certification and
auditor attestation requirements.
 
 25
 Table of Contents
  If
a market for our shares of Common Stock does not increase, purchasers who
acquire Shares may be unable to sell their Shares.
 
 Presently
there is an extremely limited market for our shares of Common Stock on the OTC
Bulletin Board. The last trade reported by the OTC Bulletin Board for
shares of our Common Stock was on February 10, 2010. If activity in the market
for our shares of Common Stock does not increase, purchasers in this
Offering  may find it difficult to sell the Shares purchased in this
Offering. We currently do not meet the initial listing criteria for any
registered securities exchange, including the Nasdaq Stock Market. The OTC
Bulletin Board is a less recognized market than the foregoing exchanges. This
factor may further impair our stockholders’ ability to sell their
shares when they want and/or could depress our stock price. As a
result, stockholders may find it difficult to dispose of, or to obtain
accurate quotations of the price of, our securities because smaller quantities
of shares could be bought and sold, transactions could be delayed and security
analyst and news coverage of our company may be limited. These factors could
result in lower prices and larger spreads in the bid and ask prices for our
shares of Common Stock.
 
 Because
we do not expect to pay dividends for the foreseeable future, investors seeking
cash dividends should not purchase shares of Common Stock.
 
 We have
never declared or paid any cash dividends on our Common Stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our board of directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit agreements that we may be a
party to at the time. Accordingly, investors must rely on sales of their
Shares  after price appreciation, which may never occur, as the only
way to realize their investment. Investors seeking cash dividends should not
purchase the Shares in this Offering.
 
 Because
we are subject to the “Penny Stock” rules, the level of trading activity in the
shares of our Common Stock may be reduced.
 
 Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted on
NASDAQ). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer’s presumed control over the market, and
monthly account statements showing the market value of each penny stock held in
the customer’s account. In addition, broker-dealers who sell these securities to
persons other than established customers and “accredited investors” must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and purchasers of Shares in this Offering may find it
difficult to sell the Shares purchased.
 
 We
will be required to remain current in our filings with the SEC or  our
securities will not be eligible for continued quotation on the OTC Bulletin
Board.
 
 We are
required to remain current in our filings with the SEC in order for our shares
of Common Stock to continue to be eligible for quotation on the OTC Bulletin
Board. In the event that we become delinquent in our required filings with the
SEC, quotation of shares of our Common Stock will be terminated following a 30
day grace period if we do not make our required filing during that time. In such
event purchasers of Shares in this Offering may find it difficult to sell the
shares purchased.
 
 26
 Table of Contents
 
 Trading
of our Common Stock may be restricted by virtue of state securities “Blue Sky” laws to the extent
they prohibit trading absent compliance with individual state laws.
 
 State
Blue Sky restrictions in certain states may make it difficult or impossible
for purchasers of Shares in this Offering to sell Shares purchased in those
states. Absent compliance with such individual state laws, Shares purchased in
this Offering may not be traded in such jurisdictions. Because the securities
registered hereunder have not been registered for resale under the “Blue Sky” laws of any state,
the holders of such shares and persons who desire to purchase them in any
trading market that might develop in the future, should be aware that there may
be significant state “Blue
Sky” law restrictions upon the ability of investors to sell the Shares
purchased in this Offering  and of purchasers to purchase such Shares.
These restrictions prohibit the secondary trading of the Shares. We may not be
able to qualify our securities for resale in states that do not offer manual
exemptions and require shares to be qualified before they can be resold by our
shareholders. Accordingly, investors should consider the secondary market for
our securities to be a limited one. See also “PLAN OF DISTRIBUTION-State Securities-Blue Sky
Laws.”
 
 If
we issue shares of preferred stock with superior rights to the shares of Common
Stock purchased under this Report , it could result in a decrease in the value
of the shares purchased and delay or prevent a change in control of
us.
 
 Our board
of directors is authorized to issue up to 2,000,000 shares of preferred stock
(“Preferred Stock”). As of the date of this Report, we have not issued any
shares of preferred stock and we have no current intention to do so. However,
our board of directors has the power to establish the dividend rates,
liquidation preferences, voting rights, redemption and conversion terms and
privileges with respect to any series of Preferred Stock. Depending upon the
success of this Offering, combined with our future financial needs, our board
may, in the exercise of its business discretion, determine to issue shares of
Preferred Stock. The issuance of any shares of Preferred Stock having rights
superior to those of the Shares purchased under this Report may result in a
decrease in the value or market price of such shares. Holders of Preferred Stock
may have the right to receive dividends, certain preferences in liquidation and
conversion rights. The issuance of Preferred Stock could, under certain
circumstances, have the effect of delaying, deferring or preventing a change in
control of us without further vote or action by the stockholders and may
adversely affect the voting and other rights of the holders of the shares of our
Common Stock.
 
 Delaware
law and our charter may inhibit a takeover
 
 Provisions
of Delaware law, such as its business combination statute, may have the effect
of delaying, deferring or preventing a change in control of our company, even if
such transactions would have significant benefits to our stockholders. As a
result, these provisions could limit the price some investors might be willing
to pay in the future for shares of our Common Stock. We are subject to the
provisions of Section 203 of the Delaware General Corporation Law, which
restricts certain business combinations with interested stockholders. The
combination of these provisions effectively inhibits a non-negotiated merger or
other business combination.
 
 
 Our
articles of incorporation provide for indemnification of officers and directors
at our expense and limit their liability, which may result in a major cost to us
and hurt the interests of our shareholders because corporate resources may be
expended for the benefit of officers and/or directors.
 
 Our
articles of incorporation and applicable Delaware law provide for the
indemnification of our directors, officers, employees, and agents, under certain
circumstances, against attorney’s fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on our behalf. We will also bear the expenses of such litigation
for any of our directors, officers, employees, or agents, upon such person’s
promise to repay us, therefore if it is ultimately determined that any such
person shall not have been entitled to indemnification. This indemnification
policy could result in substantial expenditures by us, which we will be unable
to recoup.
 
 27
 Table of Contents
  We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against these types of liabilities, other than the
payment by us of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding, is asserted
by a director, officer or controlling person in connection with the securities
being registered, we will (unless in the opinion of our counsel, the matter has
been settled by controlling precedent) submit to a court of appropriate
jurisdiction, the question whether indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue. The legal process relating to this matter if it were
to occur is likely to be very costly and may result in us receiving negative
publicity, either of which factors  are likely to materially reduce
the market and price for our shares, if such a market ever
develops.
 
 Sales
of shares of our Common Stock relying upon rule 144 may depress prices in
the market for our Common Stock by a material amount.
 
 A
majority of  the currently outstanding shares of our Common Stock are
“restricted securities”
within the meaning of Rule 144 under the Securities Act of 1933, as amended. As
restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable
exemptions from registration under the Act and as required under applicable
state securities laws. Rule 144 provides in essence that a person who has held
restricted securities for a prescribed period may, under certain conditions,
sell every three months, in brokerage transactions, a number of shares that does
not exceed 1.0% of a company’s outstanding Common Stock. The alternative average
weekly trading volume during the four calendar weeks prior to the sale is not
available to our shareholders being that the OTCBB (if and when listed thereon)
is not an “automated quotation
system” and, accordingly, market based volume limitations are not
available for securities quoted only over the OTCBB. As a result of revisions to
Rule 144 which became effective on or about April 29, 1997, there is no limit on
the amount of restricted securities that may be sold by a non-affiliate (i.e., a
stockholder who has not been an officer, director or control person for at least
90 consecutive days) after the restricted securities have been held by the owner
for a period of two years. Presently shares of restricted Common Stock held by
non-affiliates of the Company may be sold, subject to compliance with Rule 144
six months after issuance. Sales under Rule 144 or under any other exemption
from the Act, if available, or pursuant to registration of shares of Common
Stock of present stockholders, may have a depressive effect upon the price of
the Common Stock in any market that may develop. We cannot predict whether the
proposed rule will be adopted, and if adopted, what its final provisions will be
and how it will affect our securities.
 
 ITEM
2.  PROPERTIES
 
 We do not
own any property, real or otherwise. Our principle offices are currently located
at 111 Presidential Boulevard, Suite 212, Bala Cynwyd, Pennsylvania 19004. We
occupy this office, which is leased by an affiliate of Peter Pelullo, the
Company’s former Corporate Development Manager and former director, on a rent
free basis. We intend to relocate our offices to 9-23 West Highland Avenue,
Philadelphia, Pennsylvania. We have entered into a two year lease for the West
Highland location which expires in April 2011 at a monthly rental of $2,867.54.
We may also lease additional space in other areas to house portions of our
development team and other employees should our operations require such
additional space. We have not yet identified specific locations which we may
lease. Mr. Villa and Mr. Cimadamore also work from their respective offices in
Switzerland and Philadelphia at no charge to our Company.
 
 We do not
have any investments or interests in any real estate. Our company does not
invest in real estate  mortgages,  nor does it invest
in  securities  of, or interests in, persons primarily
engaged in real estate activities.
 
 
 ITEM
3. LEGALPROCEEDINGS
 
 We are
not a party to
any  pending  legal  proceedings,  nor
are we aware of any governmental authority contemplating any legal proceeding
against us.
 
 28
 Table of Contents
 
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
 
 No
matters were submitted to our stockholders during the last quarter of
2008.
 
 PART II
 
 
 ITEM
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
 
 Market
Price for Equity Securities
 
 Shares of
our Common Stock have been quoted on the OTC Bulletin Board since October
2008.The last trade reported on the OT Bulletin Board for our Common stock was
on February 10, 2010 at a price of $1.90. the Company's share trade in an
extremely limited basis and often there is no price quoted on the OTC Bulletin
Board for the Company's stock.
 
 The
following table sets forth, for the calendar quarter indicated, the quarterly
high and low closing sale prices of our shares of Common Stock as reported on
the Over-the-Counter bulletin board in US dollars. The quotations listed below
reflect interdealer prices, without retail markup, markdown or commission and
may not necessarily represent actual transactions.
 
 Common StockHigh
              
              
              Low2008First
      Quarter
              
              
              -
              
              
              
              -Second
      Quarter
              
              
              -
              
              
              
              -Third
      Quarter
              
              
              -
              
              
              
              -Fourth
      Quarter
              
              
              2.00
              
              
              
              1.45
 
 
 
 Common StockHigh
              
              
              Low2009First
      Quarter
              
              
              2.30
              
              
              
              0Second
      Quarter
              
              
              0
              
              
              
              0Third
      Quarter
              
              
              0
              
              
              
              0Fourth
      Quarter
              
              
              0
              
              
              
              0
 
 Common
Stockholders
 
 As of
March 24, 2010 our shares of Common Stock were held by 44 stockholders of
record.
 
 Dividend
Policy
 
 We have
never declared or paid a cash dividend. At this time, we do not anticipate
paying dividends in the future. We are under no legal or contractual obligation
to declare or to pay dividends, and the timing and amount of any future cash
dividends and distributions is at the discretion of our Board of Directors and
will depend, among other things, on our future after-tax earnings, operations,
capital requirements, borrowing capacity, financial condition and general
business conditions. We plan to retain any earnings for use in the operation of
our business and to fund future growth. You should not purchase our Shares of
common stock on the expectation of future dividends.
 
 29
 Table of Contents
 
 ITEM
6.  SELECTED FINANCIAL DATA
 
 The
following table summarizes our consolidated financial data. Our summary
consolidated financial data is derived from our audited consolidated financial
statements as of December 31, 2009 and 2008, our first two years of operations,
which are included elsewhere in this Report. The information provided below is
only a summary and should be read in conjunction with our consolidated financial
statements and related notes and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” contained elsewhere in this
Report.
 
 
 Balance Sheet Data
      –
              
              As Of December 31,
      2009
              
              
              As Of December 31,
      2008Cash:
              
              $
              44,710
              
              
              $
              128,359Total
      Assets:
              
              
              93,913
              
              
              
              133,243Accounts
      Payable and Accrued Expenses:
              
              
              63,115
              
              
              
              0Total
      Current Liabilities:
              
              
              63,115
              
              
              
              0Total
      Stockholders’ Equity
              
              
              30,798
              
              
              
              133,243Total
      Liabilities and Shareholders’ Equity:
              
              $
              93,913
              
              
              $
              133,243
 
 Statement
      Of Operations Data:
              
              For The Period From January
      1, 2009 Through December 31, 2009
              
              
              For
      The Period From February 11, 2008  (Inception) Through
      December 31, 2008Revenues:
              
              $
              0
              
              
              $
              0Operating
      Expenses:
              
              
              2,236,919
              
              
              
              984,275Net
      Loss:
              
              
              (2,236,476
              )
              
              
              (983,886
              )Basic
      & diluted earnings per share
              
              
              (0.06
              )
              
              
              (0.03
              )Weighted
      Average shares
              
              
              38,121,640
              
              
              
              29,968,489
 
 
 ITEM
7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
 Overview
 
 We were
incorporated in Delaware in February 2008. We are a development stage company
and have had limited business operations. For the period from inception through
December 31, 2009, we have concentrated our efforts on developing a business
plan which is designed to allow us to create our massive multiplayer online
gaming platform (the “Platform”) and massive multiplayer online games (“MMOGs”)
for use on our Platform. Those activities included, but were not limited to,
securing initial capital in order to fund the development of a demonstration
model for portions of the Platform and working capital, securing a board of
directors, management personnel and consultants who we believe will assist us in
developing the Platform and meet our business goals, conducting market research
regarding the MMOG industry and our Platform and planned MMOGs, and other
pre-marketing activities.
  30
 Table of Contents
  Results
of Operations
  Comparison
of the Year Ended December 31, 2009 and the Period from February 11, 2008
(inception) to December 31, 2008
 
 The
following discussion analyzes our results of operations for the year ended
December 31, 2009 and for the period from February 11, 2008 (inception) to
December 31, 2008. The following information should be considered together with
our financial statements for such period and the accompanying notes
thereto.
 
 Net
Loss for Year Ended December 31, 2009 and for the Period from February 11, 2008
(inception) to December 31, 2008
 
 We
incurred a net loss of $2,236,476 for the year ended December 31, 2009, an
increase of $1,252,590 from a net loss of $983,886 for the period from February
11, 2008 (inception) to December 31, 2008 on zero net revenue for both
periods.  The following is a summary of the components of such
losses:
  Year
                  
                  
                  From
      InceptionEnded
                  
                  
                  February
      11, 2008December
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008Revenues
                  
                  $
                  -
                  
                  
                  $
                  -General
      and administrative
                  
                  
                  115,840
                  
                  
                  
                  58,919Consulting
                  
                  
                  1,483,528
                  
                  
                  
                  143,594Payroll
                  
                  
                  -
                  
                  
                  
                  404,292Professional
      fees
                  
                  
                  182,496
                  
                  
                  
                  190,932Research
      and development
                  
                  
                  102,570
                  
                  
                  
                  10,699Travel
                  
                  
                  352,485
                  
                  
                  
                  175,839Interest
      income
                  
                  
                  (443
                  )
                  
                  
                  (389
                  )NET
      LOSS
                  
                  $
                  2,236,476
                  
                  
                  $
                  983,886Basic
      and Diluted Net Loss Per Share
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.03
                  )Basic
      and Diluted Weighted AverageOutstanding
      Shares
                  
                  
                  38,121,640
                  
                  
                  
                  29,968,489Share
      Based Compensation
                  
                  $
                  1,329,031
                  
                  
                  $
                  513,069
 Lack of Revenue:
 As is common with a company in the development stage, the Company had
no revenue for the year ended December 31, 2009 and for the period from February
11, 2008 (inception) to December 31, 2008.  During such time we
devoted our efforts to formalizing our business plan and raising initial capital
to commence our operations.
 
 Expenses:
   The following amounts represent the most significant
components of expenses for the year ended December 31, 2009 and for the period
from February 11, 2008 (inception) to December 31, 2008:
  a)
                General
      and Administrative expenses: For the year ended December 31, 2009 general
      and administrative expenses were $115,840, an increase of $56,921 from
      $58,919 for the period from February 11, 2008 (inception) to December 31,
      2008.  The increase is primarily the result of increases in
      advertising of $5,700, video and logo animation of $15,600, office
      supplies of $6,100 and rent of $25,800 and a decrease in meals and
      entertainment of $14,100.
 
 b)
                Consulting
      Expense: For the year ended December 31, 2009, consulting expenses were
      $1,483,528, an increase of $1,339,934 from $143,594 for the period from
      February 11, 2008 (inception) through December 31, 2008.  This
      increase resulted primarily from the issuance of common stock to
      consultants at fair market values of $1,280,427 and various agreements
      related to the Company’s financing
activities.
 
 c)
                Payroll
      Expenses: During the year ended December 31, 2009 the Company incurred no
      compensation expenses as compared to $404,292 for the period from February
      11, 2008 (inception) through December 31, 2008, a decrease of
      $404,292.  The decrease resulted from the fair market value of
      option grants for options to purchase shares of the Company’s common stock
      for the period from February 11, 2008 (inception) through December 31,
      2008. The Black Scholes option pricing model was used to calculate the
      fair value of the options granted.
  31
 Table of Contents
  d)
                Professional
      Fees: During the year ended December 31, 2009, the Company incurred
      $182,496 of professional fees as compared to $190,932 for the period from
      February 11, 2008 (inception) through December 31, 2008, a decrease of
      $8,436.  The professional fees were for counsel,
      accounting, and other professional fees in connection with legal,
      accounting and other professional services with respect to the Company’s
      activities including the preparation and filing by the Company of
      Registration Statements under the Securities Act of 1933, as amended,
      related to certain of its securities (the “Registration
      Statements”).
 
 e)
                Research
      and Development:  During the year ended December 31, 2009, the
      Company incurred $102,570 of research and development expenses as compared
      to $10,699 for the period from February 11, 2008 (inception) through
      December 31, 2008, an increase of $91,871.  The increase was the
      result of the Company beginning development on its MMOG
      platform.
 
 f)
                Travel:
      For the year ended December 31, 2009 travel expenses were $352,485, an
      increase of $176,646 from $175,839 for the period from February 11, 2008
      (inception) through December 31, 2008.  The increase related to
      expenses associated with corporate development and raising capital for the
      Company.
   Liquidity
and Capital Resources
 
 We had
cash on hand of approximately $44,700 as of December 31, 2009 and $ 5,300 as of
March 29, 2010.  Since we have not realized any revenues, these funds
were generated through the sale of stock to our founders and initial investors.
Since our inception, we have been operating the Company in a minimalistic manner
due to limited cash resources. Rather than fully implementing our business plan,
we have utilized funds to research and develop our business plan and begin
creating a demonstration model showing a small portion of what our Platform will
be designed to accomplish. In May 2009 we entered into an agreement with FXLabs
to assist us in the construction of the first phase of the Platform. Through
December 31, 2009 we have paid FXLabs an aggregated of $100,024 in consulting
fees in connection with such work. We have not paid any salaries to management
and have utilized offshore programmers on a work for hire
basis to assist in developing the demonstration model. The Company’s
existing cash on hand will not be sufficient for the Company to complete its
current business plans. Continuation of the Company as a going concern is
dependent upon obtaining the additional working capital necessary to develop our
Platform and MMOGs. Management’s principal strategy to accomplish that task is
through the future sale of equity in the Company.  The Company
initially intended to rely on proceeds from the public sale of 12,000,000 shares
of its common stock at a price of $1.00 per share pursuant to the Registration
Statement, which was originally filed in July 2008, to raise the required
working capital. However the Company raised only $2,560 under the Registration
Statement through the sale of 2,560 shares of common stock.  In
October 2008, the Company withdrew the remaining 11,997,440 shares of common
stock from registration under the Registration Statement. In September 2009, the
Company filed a new registration statement seeking to raise up to an additional
$12,000,000. Through the date of this Report we have raised only $100,000 under
such new registration statement. The Company’s business plans are dependent on
the Company’s ability to raise capital in the new registration
statement  or if unsuccessful,  through private placements of our
Common Stock and/or Preferred Stock, through the possible exercise of
outstanding options and warrants, through debt financing and/or through a
future public offering of our securities. There is no assurance that the Company
will raise sufficient capital in order to meet its goals of completing the
development of the Platform and the Company’s MMOGs, and implementing a sales
and marketing effort to introduce the Platform, the Company’s MMOGs and game
development services to the online gaming industry.
  32
 Table of Contents
  Even if
we are successful in raising sufficient capital in order to complete the
development of the Platform and the Company’s MMOGs, our ability to continue in
business as a viable going concern can only be achieved when our
revenues reach a level that sustains our business operations. If we are
successful in raising a minimum of $10,000,000 by March 31, 2010, we project
that our Platform and MMOG’s will not be ready for full scale introduction to
the marketplace until the fourth quarter of 2010.  Accordingly we do
not project that significant revenue will be developed until the fourth quarter
of 2010 at the earliest. While it is impossible to predict the amount of
revenues, if any, that we may receive from our Platform, MMOGs and game
development services, we presently believe , based solely on our internal
projections, that we will generate revenues sufficient to fund our planned
business operations if the Platform and MMOGs are actually developed in
accordance with our plans. However there can be no assurance that our belief
will be realized. There can be no assurance that we will raise sufficient
proceeds, or any proceeds, for us to implement fully our proposed business plan
to aggressively develop, complete, and market the Platform, our MMOGs and our
game development services.  Moreover there can be no assurance that
even if our Platform and MMOGs are developed, that we will generate revenues
sufficient to fund our operations.  In either such situation, we may
not be able to continue our operations and our business might fail, and you may
lose any  investment that you have made in the Company. Based on our
current projections, we believe that should we raise a minimum of
$10,000,000, of which there can be no assurance, such proceeds will be
sufficient for us to continue our planned operations throughout
2010.
 
 During
2010, our ability to execute on our current plan of operations is dependent on
raising proceeds from the sale of equity capital. In the event that we are
unsuccessful in these efforts we will utilize our cash to attempt to complete a
limited demonstration model of our Platform. We will not be able to attempt the
commercial development of the Platform or MMOGs. In such event we will
attempt to  seek out alternative forms of financing and/or attempt to
enter into joint ventures or partnerships in order to raise sufficient funds to
attempt to execute on our business plans to develop the Platform and multiple
MMOGs.
 
 During
the remaining months of the 2010 calendar year, our ability to execute on our
current plan of operations is dependent on raising approximately $10,000,000 in
capital. In the event that we are unsuccessful in these efforts we will utilize
our cash to attempt to complete a limited demonstration model of our Platform .
We will not be able to attempt the commercial development of  the
Platform or MMOGs. In such event we will attempt to  seek out
alternative forms of financing and/or attempt to enter into joint ventures or
partnerships in order to raise sufficient funds to attempt to execute on our
business plans to develop the Platform and multiple MMOGs.
 
 In the
event that we are successful in raising approximately $950,000 in capital, of
which there can be no assurance,  we will change  our plan
of operations to focus on the development of one or possibly two MMOGs utilizing
the GDL, instead of attempting to develop the entire Platform.
We  will significantly reduce our hiring plans by seeking
to  hire only a small number of key individuals and rely significantly
on  outsourced foreign labor. We believe that such capital will allow
us to continue operations through  2010 on a reduced basis. We will
look to raise additional funds in order to allow us to commence development of
the Platform.
 
 In the
event that we are successful in raising approximately $5,000,000 in capital, of
which there can be no assurance, we will scale back our
current  hiring plans in 2010 but will proceed as planned with the
development of the entire  Platform. As a result of reduced funding a
smaller number of games will be attempted to be produced and marketing will be
delayed. It is anticipated that this lower level of funding will allow the
Company to operate, based on its current plan of operations, through 2010
without the need to generate revenues or seek out additional funding. However we
anticipate that due to the reduction of net proceeds available to us in such
event ,we will experience a   delay in introduction of the
Platform until 2011 or possibly 2012. Therefore at such time additional funding
will be needed if revenues from MMOGs are not sufficient to meet our cash flow
needs and marketing plans.
 
 In the
event that we are successful in raising approximately $10,000,000 in capital, of
which there can be no assurance,  we believe, based on our current
projections,  that such funds should be sufficient for us to complete
the development of the entire Platform and multiple MMOGs. Accordingly we
believe that such proceeds will be sufficient for us to continue our planned
operations throughout 2010 and 2011.
 
 The
foregoing use of proceeds and project implementation projections were
prepared by us in good faith based upon assumptions that we believe to be
reasonable. No assurance can be given, however, regarding the attainability of
the projections or the reliability of the assumptions on which they are based.
The projections are subject to the uncertainties inherent in any attempt to
predict the results of our operations, especially where new products and
services are involved. Certain of the assumptions used will inevitably not
materialize and unanticipated events will occur. Therefore, the actual results
of operations are likely to vary from the projections and such variations may be
material and adverse to the Company. Therefore the projections are included
solely to give prospective investors information concerning the Company’s
estimates of future operating results based on our assumptions and no assurance
can be given that such results will be achieved. The Company reserves the right
to conduct its business in a manner different from that set forth in the
assumptions as changing circumstances may require. Moreover due to
changes in technology, new product announcements, competitive pressures, system
design and/or other specifications we may be required to change the current
plans for our Platform and MMOGs. Therefore, we cannot provide any assurances
that the Platform and MMOGs can be completed within our projections. In case of
budget over-runs and additional expansions, we may choose to finance such
capital expenditures through the issuance of additional equity or debt
securities, by obtaining a credit facility or by some other financing mechanism.
If we choose to seek financing for such expenditures, we cannot provide any
assurances that such financing will be available on terms reasonably acceptable
to us or at all.
  33
 Table of Contents
  The
following summarizes our cash flows for the year ended December 31, 2009 and for
the period from February 11, 2008 (inception) through December 31,
2008:
 
 Cash
flows from Operating Activities:
  Year
                  
                  
                  From
      InceptionEnded
                  
                  
                  February
      11, 2008December
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008Net
      loss
                  
                  $
                  (2,236,476
                  )
                  
                  $
                  (983,886
                  )Cash
      flows from Operating ActivitiesAdjustments
      to reconcile net loss to net cashused
      in operating activitiesCompensation
      expense of stock and stock options
                  
                  
                  1,329,031
                  
                  
                  
                  513,069Depreciation
                  
                  
                  1,116
                  
                  
                  
                  698Other
      receivable
                  
                  
                  (42,768
                  )
                  
                  
                  -Deposits
                  
                  
                  (2,667
                  )
                  
                  
                  -Accounts
      payable
                  
                  
                  63,115
                  
                  
                  
                  -Net
      cash used in operating activities
                  
                  
                  (888,649
                  )
                  
                  
                  (470,119
                  )Cash
      flows from Investing ActivitiesPurchase
      of Equipment
                  
                  
                  -
                  
                  
                  
                  (5,582
                  )Net
      cash used in investing activities
                  
                  
                  -
                  
                  
                  
                  (5,582
                  )Cash
      flows from Financing ActivitiesProceeds
      from issuance of common stock
                  
                  
                  600,000
                  
                  
                  
                  504,060Proceeds
      from exercise of options
                  
                  
                  110,000
                  
                  
                  
                  90,000Proceeds
      from exercise of warrants
                  
                  
                  160,000
                  
                  
                  
                  10,000Stock
      issuance costs
                  
                  
                  (65,000
                  )
                  
                  
                  -Net
      cash provided by financing activities
                  
                  
                  805,000
                  
                  
                  
                  604,060Net
      increase (decrease) in cash and cash equivalents
                  
                  $
                  (83,649
                  )
                  
                  $
                  128,359
 34
 Table of Contents
  On March
3, 2008, the Company adopted an equity incentive plan which authorized the
issuance of stock options to officers, directors, employees and consultants
of the Company. The total number of shares of common stock reserved for issuance
under the plan is 25,000,000 shares subject to adjustment in the event of stock
split, dividend, recapitalization or other similar capital change. At December
31, 2009 options to purchase 9,625,000 shares of common stock were
outstanding under the 2008 plan.
 
 The Plan
is administered by the Board of Director’s, which selects the eligible persons
to whom options are awarded, determines the number of shares subject to each
option, the exercise price and the period during which options are exercisable.
Each option granted under the Plan is evidenced by a written agreement by the
Company and the grantee. Grants may be issued to employees (including officers)
and directors of the Company as well as to certain consultants and
advisors.
 
 The
exercise price for options granted under the plan is required to be no less than
the fair market value of the common stock on the date the option is granted,
except that options granted to 10% stockholders, are required to have an
exercise price of not less than 110% of the fair market value of the Common
Stock at the date of grant. Incentive stock options granted have a maximum term
of ten years.
 
 For the
year ended December 31, 2009, options to purchase 125,000 shares of the
Company’s common stock were granted. The Black Scholes option pricing model was
used to calculate the fair value of the options granted. For the year ended
December 31, 2009, the Company recognized $10,462 of compensation expense
relative to the options issued during the year and $38,142 for previously issued
options for a total of $48,604 for the year ended December 31,
2009.  During the period from inception through December 31, 2008 the
Company recognized compensation expense of $513,069 related to the stock
options. The following assumptions were used in the fair value
calculations:
 
 Risk free
rate – 2.4% to 3.7%
 Expected
term – 5 years
 Expected
volatility of stock – 51.8 to 58.3%
 Expected
dividend yield – 0%.
 
 The
following table summarizes the information with respect to options to purchase
9,625,000 shares of Common Stock which were currently outstanding and
exercisable as of December 31, 2009 under the Company’s equity incentive
plan:
 
 Exercise
                  
                  Options
                  
                  RemainingPrice
                  
                  Outstanding
                  
                  Life$0.04
                  
                  9,250,000
                  
                  Five
      (5) years$0.75
                  
                  250,000
                  
                  Five
      (5) years$2.30
                  
                  125,000
                  
                  Five
      (5) years
 Related
Party Transactions
 
 From
inception through December 31, 2009, the Company has utilized offices leased by
affiliates of certain of the Company’s board members without charge. There are
no commitments for any operating or capital leases for executive or corporate
offices.
 
 During
the year ended December 31, 2009 and for the period from February 11, 2008
(inception) to Dcember 31, 2008, the former manager of corporate development of
the Company advanced expenses on behalf of the Company in connection with
research of the Company’s business plans and the implementation of the Company’s
business plans.  Expenses totaling $117,219 and $70,089 were incurred
and reimbursed during the year ended December 31, 2009 and for the period from
February 11, 2008 (inception) to December 31, 2008.
 
 3D
Financial Corp Limited (“3D”), the Company’s largest shareholder is owned by
Alfredo Villa, the Company’s President, Chief Executive Officer and
Director and Peter Pelullo, the Company’s former manager of corporate
development. 3D purchased 19,000,000 shares of the Company’s common stock for
$19,000 as the Company’s initial founder. Messrs. Pelullo and Villa also each
individually purchased for $70,000, 2,000,000 shares of Common Stock
and warrants to purchase an additional 2,100,000 shares of Common
Stock.
 
 During
the year ended December 31, 2009, the former  manager of corporate
development exercised 2.75 million options and 1 million warrants to purchase
3,750,000 shares for a total of $150,000.  Previously, officers and
directors of the Company exercised an aggregate of 250,000 warrants and
2,250,000 options generating proceeds of $100,000 for the Company. In 2010 Mr.
Pelullo loaned the Company $20,000 for general working capital
purposes.
  35
 Table of Contents
  Contractual
Obligations
 
 The
Company entered into an employment agreement with Alfredo Villa, its President
and Chief Executive Officer. The agreement expires in 2011. The agreement calls
for a base salary of $200,000 per year payable at such time when the Company
receives a minimum in $5,000,000 in equity investments.
 
 The
Company has also entered into an employment agreement with Ernest Cimadamore,
its Secretary and Chief Financial Officer. The agreement expires in 2011. The
agreement calls for a base salary of $75,000 per year payable at such time when
the Company receives a minimum in $5,000,000 in equity investments.
 
 In
addition the Company has entered into an employment agreement with Peter
Pelullo, its former director of Corporate Development. The agreement was
transformed into a consulting agreement in 2010. The agreement calls for a base
salary of $180,000 per year payable through 2011 at such time when the Company
receives a minimum in $5,000,000 in equity investments.
 
 The
Company has also entered into a number of consulting agreements pursuant to
which the Company has issued an aggregate of 14,625,000 options. Under such
consulting agreements the Company is not obligated to make any monetary
payments, other than for reimbursement of expenses, to such consultants. One of
such agreements is with Jo Webber the Chairman of the Board of Directors of the
Company.
 
 Additional
terms regarding the foregoing agreements with the Company’s officers and
directors is set forth in the Executive and Directors Compensation section of
the Company’s Annual Report on Form 10K for the period from February 11, 2008
(inception) to December 31, 2008.
 
 Off-Balance
Sheet Arrangements
 
 We have
no significant off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures that is material to stockholders.
 
 Critical
Accounting Policies
 
 Our
financial statements are impacted by the accounting policies used and the
estimates and assumptions made by management during their preparation. A
complete summary of these policies is included in note 2 of the notes to our
financial statements. We have identified below the accounting policies that are
of particular importance in the presentation of our financial position, results
of operations and cash flows and which require the application of significant
judgment by management.
 
 Stock-based
Compensation
 
 We have
adopted the fair value recognition provisions Financial Accounting Standard
Board Accounting Standards Codification (“FASB ASC”) 718. In addition, the
Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 “
Share-Based Payment ”
(“SAB 107”) in March, 2005, which provides supplemental FASB ASC
718 application guidance based on the views of the SEC. Under FASB ASC
718, compensation cost recognized includes compensation cost for all
share-based payments granted beginning January 1, 2006, based on the grant
date fair value estimated in accordance with the provisions of  FASB
ASC 718.
 
 We have
used the Black-Scholes option-pricing model to estimate the
option fair values. The option-pricing model requires a number of assumptions,
of which the most significant are, expected stock price volatility, the expected
pre-vesting forfeiture rate and the expected option term (the amount of time
from the grant date until the options are exercised or expire).
 
 Compensation
expense for unvested options granted to non-employees in previous periods is
being amortized over the vesting period of the options.
  36
 Table of Contents
  Recently
Issued Accounting Pronouncements:
 
 Refer to
Note 1 of the Financial Statements.
 
 Income
Taxes:
 
 Income
tax expense for the year ended December 31, 2009 and for the period from
February 11, 2008 (inception) to December 31, 2008 was $0.
 
 As of
January 1, 2009, we had no unrecognized tax benefits, and accordingly, we have
not recognized interest or penalties during 2009 related to unrecognized
benefits.  There has been no change in unrecognized tax benefits
during year ended December 31, 2009, and there was no accrual for uncertain tax
positions as of December 31, 2009.
 
 There is
no income tax benefit for the losses for the year ended December 31, 2009 and
for the period from February 11, 2008 (inception) to December 31, 2008, since
management has determined that the realization of the net deferred tax asset is
not assured and has created a valuation allowance for the entire amount of such
benefits.
 
 December
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008Deferred
      tax asset for NOL carryforwards
                  
                  $
                  2,172,000
                  
                  
                  $
                  193,000Deferred
      tax asset for stock based compensation
                  
                  
                  94,000
                  
                  
                  $
                  155,000Valuation
      allowance
                  
                  
                  (2,266,000
                  )
                  
                  
                  (348,000
                  )$
                  -
                  
                  
                  $
                  -
  Year
                    
                    
                    February
      11, 2008Ended
                    
                    
                    (Inception)
      toDecember
      31,
                    
                    
                    December
      31,2009
                    
                    
                    2008Current
                    
                    $
                    (1,979,000
                    )
                    
                    $
                    (193,000
                    )Deferred
                    
                    
                    61,000
                    
                    
                    
                    (155,000
                    )Change
      in valuation allowance
                    
                    
                    1,918,000
                    
                    
                    
                    348,000$
                    -
                    
                    
                    $
                    -
 
 The
Company evaluates its valuation allowance requirements based on projected future
operations.  When circumstances change and cause a change in
management’s judgment about the recoverability of deferred tax assets, the
impact of the change on the valuation is reflected in current
income.
 
 ITEM
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 We do not
hold any derivative instruments and do not engage in any hedging
activities
 
 
 ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 All
information required by this item is listed in the Index to Financial Statements
in Part IV, Item 15(a) 1 of this Report.
 
 37
 Table of Contents
 
 ITEM
9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
 Not
applicable.
 
 
 ITEM
9A.  CONTROLS AND PROCEDURES
 
 Controls
and Procedures
 
 The
Company has not generated any revenues as of the date of this Report and has
concentrated its efforts on raising capital necessary to attempt to fulfill its
business plans. During the period from inception through December 31, 2009, the
Company’s financial information was maintained by its Chief Financial Officer
Ernest Cimadamore and over seen by the Company’s Chief Executive Officer Alfredo
Villa. The Company believes that it maintained disclosure controls and
procedures that were designed to ensure that information required to be
disclosed in the Company's Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms, and that such information was accumulated and communicated to the
Company's management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure
based closely on the definition of "disclosure controls and procedures" in Rule
13a-15(e) and 15d-15(e). Under the supervision and with the participation of our
management, including the Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15 (b) and 15d-15(b) as of the end of the
period covered by this report. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that these disclosure
controls and procedures are effective as of the end of the period covered by
this Report.
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Our internal control system was
designed to provide reasonable assurance regarding the reliability of financial
reporting and preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
All internal control systems, no matter how well designed, have inherent
limitations and may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
 
 Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of our internal controls over financial reporting  as
required by Exchange Act Rule 13a-15 (d) and 15d-15(d) as of the end of the
period covered by this report. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that these internal controls
over financial reporting  are effective as of the end of the period
covered by this Report.
 
 There
have been no changes in the Company's internal controls or in other factors that
have materially affected or are reasonably likely to materially affect
our  internal controls over financial reporting  during the
quarter covered by this Report.
 
 This
Report does not include an attestation report of the Company’s registered public
accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.
 
 
 ITEM
9B.  OTHER INFORMATION
 
 None.
 
 38
 Table of Contents
  PART III
 
 
 ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
 
 Number of
Directors. Our board of directors currently consists of three
persons. Our bylaws provide that the board of directors may consist of such
number of directors as determined by the Board of Directors from time to
time.
 
 We may
seek to add to our board independent directors who are qualified and willing to
serve on our board. Once we add a sufficient number of independent directors
into our board, we will comply with Securities & Exchange Commission, stock
exchange, and NASDAQ rules regarding board members, committees and other
corporate governance standards. There can be no assurance that we will be
successful in attracting independent directors.
 
 Independent
Directors. None of our current Directors are “independent,” as defined in
rules promulgated by the Securities & Exchange Commission, NASDAQ, or
various stock exchanges.
 
 Family
Relationships: There are no family relationships among our officers,
directors, or persons nominated for such positions.
 
 Committees.
Our board of directors currently does not have an audit committee, compensation
committee or any other committee. We are looking for a suitable candidate who
meets the definition of “financial expert” and would be independent, to join our
board of directors and chair our audit committee. We intend to form an audit
committee, compensation committee and other committees of our Board when we
recruit additional independent directors, including a financial expert and other
directors with the experience necessary for audit committee
membership.
 
 Code of
Ethics. We have not adopted a code of ethics applicable to our
executives, as defined by applicable rules of the SEC. We intend to adopt a code
of ethics after we recruit independent directors and when we do, the code will
be publicly available on our web site at www.playmoggle.com. If we make any
amendments to our code of ethics other than technical, administrative, or other
non-substantive amendments, or grant any waivers, including implicit waivers,
from a provision of our code of ethics to our chief executive officer, chief
financial officer, or certain other finance executives, we will disclose the
nature of the amendment or waiver, its effective date and to whom it applies on
our web site at www.playmoggle.com or in a report on Form 8-K filed with the
SEC.
 
 Compensation for
Board of Directors: Currently members of the Board of Directors do not
receive compensation for their services as Board members. The Company may
adopt a policy which will compensate existing and/or new board members . Board
members may receive additional compensation for participating in the Committees.
The amount of any compensation paid to board members and/or committee members
will be set and approved by the board based on the Board’s review of
compensation paid by companies which are similarly situated to the
Company.
 
 Our
executive officers and directors and their respective ages as of the date of
this Report are as follows:
 
 Directors:
 
 Name
              AgeJo
      Webber,
      Chairman
              45Pradeep
      Ittycheria
              33
 
 During
the year ended December 31, 2009 the Company had three  additional
directors  (Alfredo Villa, Fausto Paparelli and Mario Gabbrielli) all
of whom resigned in 2010.
 Executive
Officers:
 
 Name
              Age
              OfficesAlfredo
      Villa
              47
              President,
      CEOErnest
      Cimadamore
              46
              CFO,
      Secretary
 
 Set forth
below is a brief description of the background and business experience of our
executive officers and directors.
  39
 Table of Contents
  Jo
Webber                                                      
Chairman of the Board since 2008
 
 Jo Webber
is an experienced software executive who has spent her career providing software
technology to many corporations. She is presently the CEO of Energy Solutions, a
provider of complex software solutions for the worlds’ major energy companies.
Prior to joining Energy Solutions in 2006, Dr. Webber served as president and
CEO of InnaPhase Corporation, a company which supplied laboratory information
management systems to the pharmaceutical and biotechnology markets. When the
company was sold to Thermo Electron in 2004, she became vice president of Thermo
Informatics. She earned a doctorate in quantum physics and a Bachelor of Science
degree in applied chemistry from the University of Nottingham Trent in the
United Kingdom in 1986 and 1990respectively. Dr. Webber is a Chartered Chemist
and a Fellow of the Royal Society of Chemistry. She serves on the boards of
Maxwell Systems, a provider of construction accounting software applications,
and Octagon Research, a clinical R&D software and services provider. Ms
Webber may be deemed to be a promoter of the Company.
 
 Alfredo
Villa                                                  President,
and Chief Executive Officer since 2008 and Former Board
Member
 
 Presently,
Mr. Villa is a board member and partner of Gabbrielli & Associati in Milan,
Italy, a financial consulting company. Mr. Villa is the principal shareholder of
3D Financial Corporation Limited, the founding shareholder of the Company. Since
January 2000, Mr. Villa has been a director of Oranco, Inc., a public company
which is engaged in seeking and investigating the potential acquisition of
assets, properties or businesses. Mr. Villa is also a director of BrainSpark,
Ltd. and Mediapolis SpA and RCF Research, Consulting & Forcasting SA. He
co-founded Givigest Fiduciaria SA, a Swiss financial services company and SCF
SA, a financial consulting firm offering asset management services, both of
which entities were sold in 2001. He is a ‘Chartered Market Technician qualified
by Market Technicians Association in New York,, as well as an authorized
Financial & Commercial Fiduciary in the Swiss Canton of Ticino. Mr. Villa
graduated with a degree in Economics from University of Geneva, Switzerland Mr.
Villa’s career started at Banca della Svizzera Italiana as currency option
dealer, and then joined Soginvest Banca (CIAL Group). Mr. Villa is also Chairman
of “Fondazione Settembre Onlus” and VP of “Homes for Hope” Charities. Mr. Villa
may be deemed to be a promoter of the Company.
 
 Ernest
Cimadamore                                      Secretary
and Chief Financial Officer since 2008 and former Board Member
 
 Mr.
Cimadamore has over 25-years experience in the entertainment industry. Since
2003 he has been a co-owner of Pep-Soul Entertainment a Philadelphia based music
and entertainment company. From 2003 through 2006 Mr. Cimadamore served as the
secretary to TriMedia Entertainment Group, a publicly traded company where he
was also the president of their music division. . Mr. Cimadamore has represented
independent music companies in connection with multiple gold and platinum artist
projects for numerous major record companies, including Atlantic, Elektra, Sony,
Warner Bros. and Island. Over his 25 years in the music industry he has
successfully worked in the areas of operations, distribution, promotion, sales
and marketing. Mr. Cimadamore may be deemed to be a promoter of the
Company.
 
 
 Pradeep
Ittycheria                                         Board
Member since 2008
 
 Pradeep
Ittycheria has more than 9 years of experience at the senior executive and
project management level both domestically and internationally, with a main
focus on information management services, technology, product and software
development industry segments. He has broad based experience in the areas of
business development, operations, and management consulting. Mr. Ittycheria
currently serves as a Vice President of Development for Energy Solutions
International, a company engaged in the pipeline management software industry.
Additionally, during his career, Mr. Ittycheria has served in senior level and
project management positions at Thermo Fischer Scientific, AppLabs Inc.,
Breakaway Solutions (an ICG company: NASDAQ: ICGE) and ITTI (formerly,
Innovation Technology Transfer India) an IT Consulting and Software services
Company, headquartered in Bangalore, India. Mr. Ittycheria received a Bachelors
Degree in Computer Science from Bharathiar University in 1994 and a Masters in
Business Administration from Symbiosis Institute of Management studies in 1997.
Mr. Ittycheria replaced Mr. Pelullo as a member of the Company's board of
directors in November 2008.
  40
 Table of Contents
  Founder
and Promoter
 
 Peter
S.
Pelullo                          Founder,
Promoter and Former Corporate Development Manager and Former
Director
 
 Peter S.
Pelullo, has been an entrepreneur for the past 20 years. Mr. Pelullo is
currently the principal shareholder of International Corporate Management, Inc.
a private company which provides consulting services to American companies
seeking to develop and/or expand their presence in the European marketplace. Mr.
Pelullo is currently an owner and employee of 3D Financial Corp. Limited. He has
extensive experience in the music entertainment and technology industries where
he has established companies in both domestic and international markets. Mr.
Pelullo has significant experience in corporate finance, strategic planning,
cash flow management and international business development. Mr. Pelullo
resigned his position as a member of the Company’s board of directors in
November 2008.Mr Ittycheria replaced Mr. Pelullo on the Board of directors.
Mr. Pelullo may be deemed to be a promoter of the Company.
  
 Term
of Office
 
 Our
Directors are appointed for an initial term of one year or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board or the Shareholders of the
Company. We may have staggered terms when the number of directors increase to
seven or more.
 
 Significant
Employees
 
 We have
two significant employees: Alfredo Villa, who serves as our President and
CEO and Ernest Cimadamore, who serves as our CFO and Secretary. We have written
employment agreements with these persons, the key provisions of which are
described in the Executive and Director Compensation section set forth below.
During the year ended December 31, 2009 Peter Pelullo served as the Company's
Corporate Development Manager. In 2010 Mr. Pelullo resigned as the Company's
Corporate Development Manager and became a consultant to the
Company.
 
 
 EXECUTIVE AND DIRECTOR COMPENSATION
 
 The
following table sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company for the period from
January 1, 2009  to December 31, 2009 of the Chief Executive Officer
and each other executive officer of the Company. No executive officer
had annual salary and/or bonus for the period from January 1, 2009 to
December 31, 2009 in excess of $100,000.
 
 Summary Executive Compensation
Table
 Name
      and Principal Position
                Period
      ended
                  December
      31
                
                Salary
                
                
                
                Stock
                  Awards
                
                Option
                  Awards
                
                
                
                All
      other
                  Compensation
                
                TotalAlfredo
      Villa ,President & CEO
                2009
                
                0
                
                (1)
                
                0
                
                0
                
                
                
                0
                
                0Ernest
      Cimadamore , CFO
                2009
                
                0
                
                (2)
                
                0
                
                0
                
                
                
                0
                
                0Peter
      Pelullo, Former Corporate Development Manager
                2009
                
                0
                
                (3)
                
                0
                
                0
                
                
                
                0
                
                0
 
 41
 Table of Contents
  Alfredo
Villa
 
 (1) In
May 2008 the Company entered into three year employment agreement with Alfredo
Villa as President and Chief Executive Officer (the “Villa Agreement”). The
Villa Agreement provides for the payment of an annual salary to Mr. Villa of
$200,000 commencing at such time as the Company raises a minimum of $5,000,000
in equity capital. Under the Villa Agreement Mr. Villa is entitled to (i)
receive discretionary bonuses as declared by the Board of Directors; (ii)
reimbursement of reasonable business expenses ; (iii) receive five (5) year
stock options to purchase 1,000,000 shares of the Company’s common stock at a
price of $.04 per share; (iv) participate in the Company’s benefit programs
which are available to similarly situated employees; and (v) two (2) weeks paid
vacation and two (2) days paid sick leave per calendar year. The Villa Agreement
contains prohibitions on Mr. Villa competing with the Company, soliciting
Company personnel and/or disclosing confidential information about the Company.
The Villa Agreement also provides that all intellectual property developed
and/or created by Mr. Villa while he is employed with the Company shall be the
property of the Company. In the event the Company terminates Mr. Villa’s
employment without cause, as defined in the Villa Agreement, the Company shall
be required to pay Mr. Villa the salary required under the Villa Agreement as if
he remained an employee throughout the term of the Agreement. During the year
ended December 31,2009, Mr. villas also served as a director to the Company. Mr.
Villa resigned as a director in 2010.
 
 Ernest
Cimadamore
 
 (2) In
May 2008 the Company entered into three year employment agreement with Ernest
Cimadamore as Secretary and Chief Financial Officer (the “Cimadamore
Agreement”). The Cimadamore Agreement provides for the payment of an annual
salary to Mr. Cimadamore of $75,000 commencing at such time as the Company
raises a minimum of $5,000,000 in equity capital. Under the Cimadamore Agreement
Mr. Cimadamore is entitled to (i) receive discretionary bonuses as declared by
the Board of Directors; (ii) reimbursement of reasonable business expenses ;
(iii) receive five (5) year stock options to purchase 500,000 shares of the
Company’s common stock at a price of $.04 per share; (iv) participate in the
Company’s benefit programs which are available to similarly situated employees;
and (v) two (2) weeks paid vacation and two (2) days paid sick leave per
calendar year. The Cimadamore Agreement contains prohibitions on Mr. Cimadamore
competing with the Company, soliciting Company personnel, and/or disclosing
confidential information about the Company. The Cimadamore Agreement also
provides that all intellectual property developed and/or created by Mr.
Cimadamore while he is employed with the Company shall be the property of the
Company. In the event the Company terminates Mr. Cimadamore’s employment without
cause, as defined in the Cimadamore Agreement, the Company shall be required to
pay Mr. Cimadamore the salary required under the Cimadamore Agreement as if he
remained an employee throughout the term of the Agreement
 
 
 Peter
Pelullo.
 
 (3) In
May 2008 the Company entered into three year employment agreement with Peter
Pelullo as corporate development manager (the “Pelullo Agreement”). The Pelullo
Agreement provides for the payment of an annual salary to Mr. Pelullo of
$180,000 commencing at such time as the Company raises a minimum of $5,000,000
in equity capital. Under the Pelullo Agreement Mr. Pelullo is entitled to (i)
receive discretionary bonuses as declared by the Board of Directors; (ii)
reimbursement of reasonable business expenses ; (iii) receive five (5) year
stock options to purchase 2,750,000 shares of the Company’s common stock at a
price of $.04 per share; (iv) participate in the Company’s benefit programs
which are available to similarly situated employees; and (v) two (2) weeks paid
vacation and two (2) days paid sick leave per calendar year. The Pelullo
Agreement contains prohibitions on Mr. Pelullo competing with the Company,
soliciting Company personnel, and/or disclosing confidential information about
the Company. The Pelullo Agreement also provides that all intellectual property
developed and/or created by Mr. Pelullo while he is employed with the Company
shall be the property of the Company. In the event the Company terminates Mr.
Pelullo’s employment without cause, as defined in the Pelullo Agreement, the
Company shall be required to pay Mr. Pelullo the salary required under the
Pelullo Agreement as if he remained an employee throughout the term of the
Agreement. In 2010 the Company transformed the Pelullo Agreemnt to a consulting
agreement under the same terms and conditions.
 
 42
 Table of Contents
 
 Director
Compensation
 
 Name
              
              Fees
                Earned
      as
                Director
                Period
                Ended
                December
      31,
                2009
              
              
              Stock
                Awards
              
              
              Option
                Awards
              
              
              All
      other
                compensation
              
              
              TotalAlfredo
      Villa  (resigned 2010)  (1)
              
              
              0
              
              
              
              0
              
              
              $
              0
              
              
              
              0
              
              
              $
              0Ernest
      Cimadamore (resigned 2010) (1)
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Pradeep
      Ittycheria  (2)
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Jo
      Webber  (3)
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Mario
      Gabbrielli  (resigned 2010) (4)
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0Fausto
      Paparelli    (resigned
      2010) (5)
              
              
              0
              
              
              
              0
              
              
              $
              0
              
              
              
              0
              
              
              $
              0
 
 (1)           See
Notes 1 and 2 to the Executive Compensation Table set forth above.
 (2)           Effective
as of March , 2008 Mr. Ittycheria entered into a three year consulting agreement
with the Company (the “Ittycheria Agreement”). The Ittycheria Agreement provides
that Mr. Ittycheria will provide consulting services to the Company with respect
to (1) developing the Company’s planned gaming platform and games to be
played on such platform and (2) other services as requested by the Company.
Under the Ittycheria Agreement, Mr. Ittycheria received five (5) year options to
purchase 1,000,000 shares of the Company’s common stock at an exercise price on
$.04 per share. Mr. Ittycheria is entitled to reimbursement of expenses incurred
in connection with his work on behalf of the Company. The Ittycheria Agreement
contains prohibitions on Mr. Ittycheria disclosing confidential information
about the Company and provides that all intellectual property developed and/or
created by Mr. Ittycheria in the course of his performing services for the
Company shall be the property of the Company. The Black Scholes option pricing
model was used to calculate the fair value of the 1,000,000 options granted
under the Ittycheria Agreement. For accounting purposes, the Company recognized
compensation expense of $17,403 related to these stock options. The
following assumptions were used in the fair value calculations:
 
 Risk free
rate – 2.5%
 Expected
term – 5 years
 Expected
volatility of stock 51.8%
 Expected
dividend yield – 0%
 
 (3)           Effective
as of March 2008, Ms. Webber entered into a three year consulting agreement with
the Company (the “Webber Agreement”). The Webber Agreement provides that Ms.
Webber will provide consulting services to the Company with respect to
(1) analyzing and evaluating the proposed business plan of the Company
(2) analyzing and evaluating the capital requirements needed to pursue the
Company’s business plan; (3) evaluating potential business partnerships (4)
providing advice regarding business development (5) providing advice in
connection with the software and programming tasks required in order to develop
the Company’s online gaming platform and games to be developed for such platform
and (6) other services as requested by the Company. Under the Webber Agreement,
Ms Webber received five (5) year options to purchase 3,000,000 shares of the
Company’s common stock at ant exercise price on $.04 per share. Ms. Webber is
entitled to reimbursement of expenses incurred in connection with her work on
behalf of the Company. The Webber Agreement contains prohibitions on Ms. Webber
 disclosing confidential information about the Company and provides that
all intellectual property developed and/or created by Ms. Webber in the course
of her performing services for the Company shall be the property of the Company.
The Black Scholes option pricing model was used to calculate the fair value of
the 3,000,000 options granted under the Webber Agreement. For accounting
purposes, the Company recognized compensation expense of $52,950 related to
these stock options. The following assumptions were used in the fair value
calculations:
 
 Risk free
rate – 2.5%
 Expected
term – 5 years
 Expected
volatility of stock 51.8%
 Expected
dividend yield – 0%
 
 43
 Table of Contents
  (4)           In
June 2008 Mr. Gabbrielli was appointed as a member of the Company’s Board of
Directors. Mr. Gabriellei resigned in 2010. While a director Mr. Gabbrielli
received the sum of $5,000 per month for services rendered as a Director and has
been issued Options to purchase 1,250,000 shares of Common Stock of the Company.
These Options have a five (5) year term and are exercisable at a price of $.04
per share. . The Black Scholes option pricing model was used to calculate the
fair value of the 1,250,000 options granted to Mr. Gabbrielli. For accounting
purposes, the Company will recognize compensation expense of
$89,838 related to these stock options. The following assumptions were used
in the fair value calculations:
  Risk free
rate – 3.3%
 Expected
term – 5 years
 Expected
volatility of stock 51.8%
 Expected
dividend yield – 0%
 
 (5)           In
June 2008 Fausto Paparelli was appointed as a member of the Company’s Board of
Directors. Mr. Paparelli  resigned in 2010, Mr. Paparelli has been
issued Options to purchase 500,000 shares of Common Stock of the Company. These
Options have a five (5) year term and are exercisable at a price of $.04 per
share. . The Black Scholes option pricing model was used to calculate the fair
value of the 500,000 options granted to Mr. Paparelli For accounting purposes,
the Company will recognize compensation expense of $36,113 related to these
stock options. The following assumptions were used in the fair value
calculations:
 
 Risk free
rate – 3.7%
 Expected
term – 5 years
 Expected
volatility of stock 51.8%
 Expected
dividend yield – 0%
 
 Outstanding
Equity Awards At December 31, 2009
 
 As of
March 3, 2008, the Company adopted an Equity Incentive plan for the grant of
options intended to qualify as “incentive stock options” among others. The total
number of shares of common stock reserved for issuance under the plan is
25,000,000 shares subject to adjustment in the event of stock split, dividend,
recapitalization or other similar capital change. The following sets forth
Options issued under the plan as of December 31, 2009. All of the Options set
forth below are fully vested and may be exercised at any time.
 
 #
      of Options
              Exercise
              
              Options
      ExercisedName
              Issued
              Price
              Expiration
              on
      or Before 12/31/09Jo
      Webber
              3,000,000
              $.04
      per share
              March
      2013Pradeep
      Pittycheria
              1,000,000
              $.04
      per share
              March
      2013Ernest
      Cimadamore
              500,000
              $.04
      per share
              March
      2013Michael
      Forte
              250,000
              $.04
      per share
              March
      2013Jacob
      Der Hagopian
              3,000,000
              $.04
      per share
              March
      2013Michele
      Wilde
              50,000
              $.04
      per share
              March
      2013Robert
      Sannelli
              500,000
              $.04
      per share
              March
      2013
              500,000Anthony
      Collura
              350,000
              $.04
      per share
              March
      2013Louis
      Cambria
              50,000
              $.04
      per share
              March
      2013Jeremy
      Zevin
              50,000
              $.04
      per share
              March
      2013Peter
      Pelullo
              2,750,000
              $.04
      per share
              March
      2013
              2,750,000Alfredo
      Villa
              1,000,000
              $.04
      per share
              March
      2013Mario
      Gabbrielli
              1,250,000
              $.04
      per share
              March
      2013
              1,250,000Fausto
      Paparelli
              500,000
              $.04
      per share
              March
      2013
              500,000Dott.
      Paulito Boaretto
              250,000
              $.75
      per share
              March
      2013William
      Tobia
              100,000
              $2.30
      per share
              August
      2014Danielle
      Bastian
              25,000
              $2.30
      per share
              August
      2014
 
 Options issued
to Messrs. Boaretto and Tobia and Ms. Bastian were in connection
with Consulting Agreements pursuant to which such individuals agreed
to serve as financial consultants to the Company.
 
 As at
December 31, 2009 , a total of 9,625,000 options were outstanding under the
Equity Incentive Plan. 5,000,000 previously issued Option have been exercised.
As of December 31, 2009 the balance of available options for further issuance
was 10,375,000. In March
2010 the Company issued options to purchase 2,000,000 shares of the Company’s
Common Stock to Arwed-Ralf Grenzbach pursuant to a consulting agreement. The
options expire in March 2015.
 
 44
 Table of Contents
  During
the  year ended December 31, 2009,  Peter Pelullo exercised
2,750,000 of his options (all of his options) at an exercise price of $.04
generating $110,000 in capital for the Company.
 
 
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND
DIRECTORS
 
 The
following table provides information concerning beneficial ownership of our
common stock as of March 30, 2010
 by:
 
 ·
              each
      stockholder, or group of affiliated stockholders, that we know owns more
      than 5% of our outstanding common
stock;
  ·
                each
      promoter
  ·
              each
      of our executive officers;
 
 ·
              each
      of our directors; and
 
 ·
              all
      of our executive officers and directors as a group;
  and
 
 
 The
following table lists the number of shares and percentage of shares beneficially
owned based on 46,711,561 shares of common stock outstanding as of March 30,
2010.
 
 Beneficial
ownership is determined in accordance with the rules of the SEC, and generally
includes voting power and/or investment power with respect to the securities
held. Shares of common stock subject to options and warrants currently
exercisable or exercisable within 60 days of March 30, 2010, are deemed
outstanding and beneficially owned by the person holding such options or
warrants for purposes of computing the number of shares and percentage
beneficially owned by such person, but are not deemed outstanding for purposes
of computing the percentage beneficially owned by any other person. Except as
indicated in the footnotes to this table, the persons or entities named have
sole voting and investment power with respect to all shares of our common stock
shown as beneficially owned by them.
 
 Unless
otherwise indicated, the principal address of each of the persons below is c/o
Moggle. Inc., 111 Presidential Boulevard, Suite 212,Bala Cynwyd,
Pennsylvania 19004.
  45
 Table of Contents
  Amount
      and
              
              Percentage
      ofNature
      of
              
              OutstandingName
      and Address of Beneficial Owner
              Beneficial
      Owner
              
              Common
      StockExecutive Officers and/or
      DirectorsAlfredo
      Villa (1)
              5,100,000
              
              10.4Peter
      Pelullo (2)
              9,385,715
              
              20.1Jo
      Webber (3)
              7,100,000
              
              13.7Ernest
      Cimadamore (4)
              500,000
              
              1.1Pradeep
      Ittycheria (5)14018
      Fallon Heights DriveCypress,
      TX 77429
              2,714,287
              
              5.6All
      Executive OfficersDirectors
      as a Group – 4 persons (6)
              15,414,287
              
              27.3
 
 Other
      5% Shareholders3D
      Financial Corp Limited (7)3/Floor 228
      Queen’s Road EastWanchai,
      Hong Kong
              2,500,000
              
              5.4Capital
      Growth Trust (8)29
      Otis StreetCambridge,
      MA 02141
              2,500,000
              
              5.2Jacob
      Der Hagopian (9)PO
      Box 354Moorestown,
      NJ 08057
              3,000,000
              
              6.0Square
      Investments, LLC(10)2016
      Waterloo RoadBerwyn,
      PA 19312
              3,000,000
              
              6.2Allevamento
      Cristal Sel (11)Via
      Novara 3120151
      Milano
              2,500,000
              
              5.4
 
  46
 Table of Contents
 
 (1)           Includes
3,000,000 shares of Common Stock, 1,000,000 shares underlying warrants
exercisable at $.04 per share, 100,000 shares underlying warrants exercisable at
$.75 per share and 1,000,000 shares underlying options exercisable at $.04 per
share. Does not reflect 2,500,000 shares owned by 3D.
 
 (2)           Includes
5,392,858 shares of Common Stock held in
the name of Mr. Pelullo, 3,750,000 shares held in the name of International
Corporate Management, Inc.,  an affiliate of Mr. Pelullo,
and 242,857 shares underlying warrants exercisable at $.75 per
share. Does not reflect 2,500,000 shares owned by 3D. Mr.
Pelullo is a former officer and director of the Company and may be deemed
a  promoter of the Company.
 
 (3)           Includes
2,000,000 shares of Common Stock, 2,000,000 shares underlying warrants
exercisable at $.04 per share, 100,000 shares underlying warrants exercisable at
$.75 per share and 3,000,000 shares underlying options exercisable at $.04 per
share.
 
 (4)           Reflects
500,000 shares underlying options exercisable at $.04 per share.
 
 (5)           Includes
571,429 shares of Common Stock, 1,142,858 shares underlying warrants exercisable
at $.04 per share and 1,000,000 shares underlying options exercisable at $.04
per share
 
 (6)           Includes
securities owned by Alfredo Villa, Jo Weber, Ernest Cimadamore and Pradeep
Ittycheeria. Does not reflect 2,500,000 shares owned by 3D.
 
 (7)           3D
Financial Corp Limited (“3D”) is owned Alfredo Villa and Peter Pelullo. Does not
reflect securities owned by Messrs. Villa and Pelullo individually.
 
 (8)           Includes
1,000,000 shares of Common Stock, 1,500,000 shares underlying warrants
exercisable at $.04 per share. The trustee of Capital Growth Trust is Vicki
Appel.
 
 (9)           Reflects
3,000,000 shares underlying options exercisable at $.04 per share.
 
 (10)         Includes
1,500,000 shares of Common Stock held in
the name of Square Investments LLC (“Square”) and 1,500,000 shares
underlying warrants exercisable at $.04 per share held in the name of EFM
Associates. EFM Associates and Square are controlled by Gary McCarthy, Herbert
Fineburg and Bernard Eizen.
 
 (11)         Allevamento
Cristal Sel is controlled by Cristina Uccelli. Mrs. Ucelli also controls NADAV
BV which owns 1,600,000 additional shares of common stock, which shares are not
included in the information set forth in the table above.
 
 2008
Equity Incentive Plan
 
 We
adopted our 2008 Stock Option Plan as of March 3, 2008. The 2008 plan
provides for the grant of options intended to qualify as “incentive stock
options,” and options that are not intended to so qualify or “nonstatutory stock
options”. The total number of shares of common stock reserved for issuance under
the 2008 plan is 25,000,000 shares, subject to adjustment in the event of stock
split, stock dividend, recapitalization or similar capital change. At December
31, 2009 and March 29, 2010 options to purchase 9,625,000 and
11,625,000 respectively shares of our common stock were outstanding under the
2008 plan.
 
 The plan
is administered by our Board of Directors, which selects the eligible persons to
whom options or stock awards shall be granted, determines the number of shares
subject to each option or stock award, the exercise price therefore and the
periods during which options are exercisable, interprets the provisions of the
2008 plan and, subject to certain limitations, may amend the 2008 plan. Each
option or stock award the grantee. Grants may be made under the 2008 plan to
employees (including officers) and directors of the Company as well as to
certain consultants and advisors.
 
 The
exercise price for incentive stock options granted under the 2008 plan is
required to be no less than the fair market value of the common stock on the
date the option is granted, except for options granted to 10% stockholders,
which are required to have an exercise price of not less than 110% of the fair
market value of the common stock on the date the option is granted. Incentive
stock options granted under the 2008 plan have a maximum term of 10 years,
except for option grants to 10% stockholders, which are subject to a maximum
term of 5 years. Non-statutory stock options granted under the 2008 plan have a
term determined by the Board of Directors.
 
  
 Reports
to Stockholders
 
 We intend
to furnish our stockholders with annual reports containing audited financial
statements as soon as practical after the end of each fiscal year. Our fiscal
year ends December 31.
 
 Transfer
Agent
 
 The
Company’s Transfer Agent is Island Stock Transfer and their address and phone
number are 100 Second Avenue South, Suite 7055, St. Petersburg, Florida 33701;
(727) 289-0010.
 
 47
 Table of Contents
 
 CERTAIN
RELATIONSHIPS AND INTERESTED TRANSACTIONS
 
 In
connection with the formation of the Company, 3D Financial Corporation, Ltd.
(“3D”) purchased 19,000,000 shares of the Company’s common stock for an
aggregate price of $19,000. 3D is a Hong Kong based company which is owned by
Alfredo Villa, the Company’s President, Chief Financial Officer and a Director
and Peter Pelullo, the Company’s former Corporate development
manager  and a former Board member. Subsequently 3D transferred a
total of 16,500,000 shares to other parties.
 
 During
the period from the Company’s formation through June 26, 2008 Alfredo Villa
individually purchased, for an aggregate purchase price of $70,000, 2,000,000
shares of the Company’s common stock , warrants to purchase 2,000,000 additional
shares of Common Stock exercisable at a price of $.04 per share and warrants to
purchase 100,000 shares at a price of $.75 per share. As of
March 29, 2010, Mr. Villa exercised 1,000,000 of his common stock purchase
warrants generating $40,000 in additional capital for the
Company.
 
 During
the period from the Company’s formation through June 26, 2008 Peter Pelullo
individually purchased, for an aggregate purchase price of $70,000, 2,000,000
shares of the Company’s common stock , warrants to purchase 2,000,000 additional
shares of Common Stock exercisable at a price of $.04 per share and warrants to
purchase 100,000 shares at a price of $.75 per share. During the period from
February 11, 2008 (inception) to December 31, 2008, Peter Pelullo advanced
expenses on behalf of the Company in connection with research of the Company’s
business plans and the implementation of the Company’s business plans totaling
$70,089. All of these expenses were reimbursed to Mr. Pelullo prior to December
31, 2008. In addition Mr. Pelullo advanced additional  expenses on
behalf of the Company  totaling $79,351 during the year ended December
31, 2009, which expenses were reimbursed to Mr. Pelullo. Mr. Pelullo has
exercised, as of March 29, 2010,  a total of 3,642,000 options and
warrants previously issued to him generating an aggregate of $305,714 in capital
for the Company. Since the Company’s formation, Peter Pelullo has allowed
the Company to operate from offices leased by an affiliate of Mr. Pelullo
without the payment of rent. In 2010,
Mr. Pelullo loaned the Company $20,000 for general working capital
purposes.
 
 In
addition to Mr. Pelullo's and Mr. Villa's option exercises as set forth above.
Mario Gabbrielli, a former director, exercised 1,250,000 options generating
$50,000  in capital for the Company  and Fausto Paparelli ,
a former director, exercised 500,000 options generating $20,000 in capital for
the Company
  During
the period from the Company’s formation through June 26, 2008 Jo Webber, the
Chairman of the Board of the Company and a consultant to the Company,
individually purchased, for an aggregate purchase price of $70,000, 2,000,000
shares of the Company’s common stock , warrants to purchase 2,000,000 additional
shares of Common Stock exercisable at a price of $.04 per share and warrants to
purchase 100,000 shares at a price of $.75 per share.
 
 Alfredo
Villa and  Ernest Cimadamore have entered into employment agreements
with the Company as the Company’s President and Chief Executive Officer and
Secretary and Chief Financial Officer respectively. The material terms of these
employment agreements are described in the Executive and Director Compensation
section of this Report. Jo Webber and Pradeep Ittycheria, directors of the
Company and Peter Pelullo, the Company's former Corporate Development Manager
and a former Director have consulting agreements with the Company, the material
terms of which are described in the Executive and Director Compensation section
of this Report.
 
 From
inception through the date of this Report, the Company has utilized offices
leased by affiliates of certain of the Company’s board members without
charge.
 
 
 Policies
and Procedures for Reviewing Related Party Transactions
 
 We have
not adopted any written policies or procedures governing the review, approval or
ratification of related party transactions. However, our Board of Directors
reviews, approves or ratifies, when necessary, all transactions with related
parties. We did not enter into any new related party transactions during
2008.
 
 48
 Table of Contents
  Director
Independence Statement
 
 None of
our current Directors are “independent,” as defined in rules promulgated by
the Securities & Exchange Commission, NASDAQ, or various stock
exchanges.
 
 
 ITEM
14.   PRINCIPAL ACCOUNTING FEES AND DISCLOSURES
 
 Audit Fees
 
 The
aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements for the year ended
December 31, 2009 and the fees billed for the 2009 quarterly review was
$23,200.
 
 Audit-Related
Fees
 
 During
the fiscal year ended December 31, 2009, the aggregate fees billed for
the review of our Form S-1 registration statement was
$1,700.
 
 Tax
Fees
 
 During
the fiscal year ended December 31, 2009, there were $0 in fees billed for tax
compliance, tax advice and/or tax planning by our principal
accountants.
 
 All
Other Fees
 
 During
the for the year ended December 31, 2009, there were $ 0 in
additional  fees billed for products and services provided by the
principal accountant other than those set forth above.
 
 Audit
Committee Approval
 
 We
currently do not have an audit committee.  However, our board of directors
has pre-approved the services described above.
 
 
 PART IV
 
 
 ITEM
15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
 (a) The
following documents are filed as part of this Report:
 
 1.
Index to Financial
Statements. Our financial statements and the Report of Morison Cogen
LLP., Independent Registered Public Accounting Firm are included in Part IV
of this Report on the pages indicated:
 
 PageReport of Independent Registered Public Accounting
      Firm
              
              F-2Balance Sheets as of December 31, 2008 and
      2009
              
              F-3Statement of Operations for the years ended December 31,
      2008 and 2009
              
              F-4Statement of Stockholders’ Equity for the years ended
      December 31, 2008 and 2009
              
              F-5Statement of Cash Flows for the years ended December 31,
      2008 and 2009
              
              F-6Notes to Financial Statements
              
              F-7
 
 2.
Financial Statement
Schedule Covered by the Foregoing Report of Independent Registered Public
Accounting Firm.
 
 All other
schedules are omitted because they are not applicable or the required
information is shown in the financial statements or the notes
thereto.
 
 49
 Table of Contents
  3.
Exhibits
 
 Exhibit
      Number
              
              Description3.1
              
              Certificate
      of Incorporation.*3.2
              
              By-laws*4.1
              
              Specimen
      Common Stock Certificate *4.2
              
              2008
       Equity Incentive Plan*10.1
              
              Employment
      Agreement between the Company  and Alfredo
  Villa*10.2
              
              Employment
      Agreement between the Company and Ernest Cimadamore*10.3
              
              Employment
      Agreement between the company and Peter Pelullo*31.1
              
              Certification
      of the principal executive officer of the Registrant, pursuant to
      Securities Exchange Act Rule 13a-14(a)31.2
              
              Certification
      of the principal financial officer of the Registrant, pursuant to
      Securities Exchange Act Rule 13a-14(a)32.1
              
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      The Sarbanes-Oxley Act of 2002, signed by the chief executive
      officer of the Registrant32.2
              
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      The Sarbanes-Oxley Act of 2002, signed by the chief financial officer
      of the Registrant* Document
       included in our Form S-1 Registration Statement File # 333-
      152050 filed with the Securities and Exchange Commission on July 1,
      2008
 
 
 SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized, on this 31st day of
March 2010.
 
 MOGGLE,
      Inc.By:
              /s/ Alfredo
      VillaAlfredo
      Villa President and Chief
                Executive
      Officer and Principal Executive
                Officer/s/
      Ernest CimadamoreErnest
      Cimadamore Secretary, Chief
                Financial
      Officer and Principal
                Accounting
      Officer
 
 50
 Table of Contents
 
 POWER
OF ATTORNEY
 
 KNOW
ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Ernest Cimadamore, his or her attorney-in-fact,
with full power of substitution, for him in any and all capacities, to sign any
and all amendments to this Report on Form 10-K, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute or substitutes, may do or cause to be
done by virtue hereof.
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report on Form
10-K has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:
 Signature
              
              Title
              
              Date/s/
      Alfredo Villa
              
              President,
      Chief Executive Officer
              
              March 31,
      2010Alfredo
      Villa
              
              (Principal
      Executive Officer)/s/
      Ernest Cimadamore
              
              Secretary,
      Principal Accounting Officer and
              
              March 31,
      2010Ernest
      Cimadamore
              
              Chief  Financial
      Officer/s/
      Jo Webber
              
              Director
              
              March 31,
      2010Jo
      Webber/s/
      Pradeep Ittycheria
              
              Director
              
              March 31,
      2010Pradeep
      Ittycheria


51
 Table of Contents
 Moggle,
Inc.
 (A
Development Stage Company)
 
 Financial
Statements
 
 December
31, 2009
 
 
 
   
 
 Table of Contents
 
 Moggle,
Inc.
 (A
Development Stage Company)
 
 
 CONTENTS
 
 
 PAGEREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM
                  
                  
                  F-2BALANCE SHEETS
                  
                  
                  F-3STATEMENTS OF OPERATIONS
                  
                  
                  F-4STATEMENT OF STOCKHOLDERS' EQUITY
                  
                  
                  F-5STATEMENTS OF CASH FLOWS
                  
                  
                  F-6NOTES TO FINANCIAL STATEMENTS
                  
                  
                  F-7
      to F-16
 
 F-1
 Table of Contents
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Board of Directors
 Moggle,
Inc.
 (A
Development Stage Company)
 Philadelphia,
Pennsylvania
 
 
 We have
audited the accompanying balance sheets of Moggle, Inc. (a development
stage company) as of December 31, 2009 and 2008, and the related statements of
operations, changes in stockholders' equity and cash flows for the period
February 11, 2008 (date of inception) through December 31, 2009, for the year
ended December 31, 2009, and for the period from February 11, 2008 (date of
inception) to December 31, 2008. 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
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 is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audits 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 includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Moggle, Inc. (a development stage
company) as of December 31, 2009 and 2008 and the results of its operations and
its cash flows for the period February 11, 2008 (date of inception) through
December 31, 2009, for the year ended December 31, 2009, and for the period
February 11, 2008 (date of inception) to December 31, 2008, in conformity with
accounting principles generally accepted in the United States.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company's losses from development stage activities
raise substantial doubt about its ability to continue as a going
concern.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
 
 
 
 /s/
MORISON COGEN LLP
 
 Bala
Cynwyd, Pennsylvania
 
 March 31,
2010
 
  
 F-2
 Table of Contents
  Moggle, Inc.
 (A
Development Stage Company)
 Balance
Sheets
  
 December
      31, 2009
                  
                  
                  December
      31, 2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                  
                  $
                  44,710
                  
                  
                  $
                  128,359Other
      receivable
                  
                  
                  42,768
                  
                  
                  
                  -TOTAL
      CURRENT ASSETS
                  
                  
                  87,478
                  
                  
                  
                  128,359PROPERTY
      AND EQUIPMENTComputer
      equipment
                  
                  
                  5,582
                  
                  
                  
                  5,582Less:  accumulated
      depreciation
                  
                  
                  1,814
                  
                  
                  
                  6983,768
                  
                  
                  
                  4,884OTHER
      ASSETSDeposit
                  
                  
                  2,667
                  
                  
                  
                  -TOTAL
      ASSETS
                  
                  $
                  93,913
                  
                  
                  $
                  133,243LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                  
                  $
                  63,115
                  
                  
                  $
                  -TOTAL
      CURRENT LIABILITIES
                  
                  
                  63,115
                  
                  
                  
                  -STOCKHOLDERS'
      EQUITYPreferred
      stock, $.0001 par value; 2,000,000 shares authorized;none
      issued and outstanding at December 31, 2009 and 2008
                  
                  
                  -
                  
                  
                  
                  -Common
      stock, $ .0001 par value; 150,000,000 shares authorized;43,818,703
      and 35,288,276 shares issued and outstandingat
      December 31, 2009 and December 31, 2008
                  
                  
                  4,382
                  
                  
                  
                  3,529Additional
      paid in capital
                  
                  
                  3,246,778
                  
                  
                  
                  1,113,600Deficit
      accumulated during the development stage
                  
                  
                  (3,220,362
                  )
                  
                  
                  (983,886
                  )STOCKHOLDERS'
      EQUITY
                  
                  
                  30,798
                  
                  
                  
                  133,243TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  
                  $
                  93,913
                  
                  
                  $
                  133,243
 The
accompanying notes are an integral part of these financial
statements.
 
 F-3
 Table of Contents
 
 Moggle, Inc.
 (A
Development Stage Company)
 Statements
of Operations
 For the
period February 11, 2008 (Date of Inception) to December 31, 2009,
 For the
Year Ended December 31, 2009 and
 For the
Period February 11, 2008 (Date of Inception) to December 31, 2008
 
 Year
                  
                  
                  From
      InceptionCumulative
                  
                  
                  Ended
                  
                  
                  February
      11, 2008 toSince
                  
                  
                  December
      31,
                  
                  
                  December
      31,Inception
                  
                  
                  2009
                  
                  
                  2008SALES
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -OPERATING
      EXPENSESGeneral
      and administrative
                  
                  
                  174,759
                  
                  
                  
                  115,840
                  
                  
                  
                  58,919Consulting
      (a)
                  
                  
                  1,627,122
                  
                  
                  
                  1,483,528
                  
                  
                  
                  143,594Payroll
      (b)
                  
                  
                  404,292
                  
                  
                  
                  -
                  
                  
                  
                  404,292Professional
      fees
                  
                  
                  373,428
                  
                  
                  
                  182,496
                  
                  
                  
                  190,932Research
      and development
                  
                  
                  113,269
                  
                  
                  
                  102,570
                  
                  
                  
                  10,699Travel
                  
                  
                  528,324
                  
                  
                  
                  352,485
                  
                  
                  
                  175,839Total
      operating expenses
                  
                  
                  3,221,194
                  
                  
                  
                  2,236,919
                  
                  
                  
                  984,275OTHER
      INCOMEInterest
      income
                  
                  
                  832
                  
                  
                  
                  443
                  
                  
                  
                  389NET
      LOSS
                  
                  $
                  (3,220,362
                  )
                  
                  $
                  (2,236,476
                  )
                  
                  $
                  (983,886
                  )BASIC
      AND DILUTED NET LOSS PERCOMMON
      SHARE
                  
                  
                  
                  
                  
                  $
                  (0.06
                  )
                  
                  $
                  (0.03
                  )BASIC
      AND DILUTED WEIGHTED AVERAGECOMMON
      SHARES OUTSTANDING
                  
                  
                  
                  
                  
                  
                  38,121,640
                  
                  
                  
                  29,968,489
 (a)
                –
      includes share-based compensation of $1,437,808 cumulative, and $1,329,031
      for the year ended December 31, 2009 and $108,777 for the period from
      February 11, 2008 (Date of Inception) to December 31,
  2008.
 (b)
                –
      includes share-based compensation of $404,292 cumulative, and $404,292 for
      the period from February 11, 2008 (Date of Inception) to December 31,
      2008.
  The
accompanying notes are an integral part of these financial
statements.
  F-4
 Table of Contents
  Moggle, Inc.
 (A
Development Stage Company)
 Statement
of Changes in Stockholders’ Equity
 For the
Period February 11, 2008 (Date of Inception) to December 31, 2009
 
 DeficitCommon
                  
                  
                  
                  
                  
                  AccumulatedStock
                  
                  
                  Additional
                  
                  
                  During
      theNumber
      of
                  
                  
                  
                  
                  
                  Paid-In
                  
                  
                  DevelopmentShares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Stage
                  
                  
                  TotalIssuance
      of initial 19,000,000 shares on February 11, 2008
                  
                  
                  19,000,000
                  
                  
                  $
                  1,900
                  
                  
                  $
                  17,100
                  
                  
                  $
                  -
                  
                  
                  $
                  19,000Issuance
      of shares of common stock
                  
                  
                  13,788,276
                  
                  
                  
                  1,379
                  
                  
                  
                  483,681
                  
                  
                  
                  -
                  
                  
                  
                  485,060Exercise
      of options
                  
                  
                  2,250,000
                  
                  
                  
                  225
                  
                  
                  
                  89,775
                  
                  
                  
                  -
                  
                  
                  
                  90,000Exercise
      of warrants
                  
                  
                  250,000
                  
                  
                  
                  25
                  
                  
                  
                  9,975
                  
                  
                  
                  -
                  
                  
                  
                  10,000Fair
      value of employee stock option grants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  404,292
                  
                  
                  
                  -
                  
                  
                  
                  404,292Fair
      value of non-employee stock option/warrant grants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  108,777
                  
                  
                  
                  -
                  
                  
                  
                  108,777Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (983,886
                  )
                  
                  
                  (983,886
                  )Balance,
      December 31, 2008
                  
                  
                  35,288,276
                  
                  
                  
                  3,529
                  
                  
                  
                  1,113,600
                  
                  
                  
                  (983,886
                  )
                  
                  
                  133,243Exercise
      of warrants
                  
                  
                  4,000,000
                  
                  
                  
                  400
                  
                  
                  
                  159,600
                  
                  
                  
                  -
                  
                  
                  
                  160,000Exercise
      of options
                  
                  
                  2,750,000
                  
                  
                  
                  275
                  
                  
                  
                  109,725
                  
                  
                  
                  
                  
                  
                  
                  110,000Issuance
      of shares of common stock
                  
                  
                  600,000
                  
                  
                  
                  60
                  
                  
                  
                  599,940
                  
                  
                  
                  -
                  
                  
                  
                  600,000Stock
      issuance costs
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (65,000
                  )
                  
                  
                  -
                  
                  
                  
                  (65,000
                  )Fair
      value of common stock issued for services
                  
                  
                  1,180,427
                  
                  
                  
                  118
                  
                  
                  
                  1,280,309
                  
                  
                  
                  
                  
                  
                  
                  1,280,427Fair
      value of non-employee stock option/warrant grants
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  48,604
                  
                  
                  
                  -
                  
                  
                  
                  48,604Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,236,476
                  )
                  
                  
                  (2,236,476
                  )Balance,
      December 31, 2009
                  
                  
                  43,818,703
                  
                  
                  $
                  4,382
                  
                  
                  $
                  3,246,778
                  
                  
                  $
                  (3,220,362
                  )
                  
                  $
                  30,798
 The
accompanying notes are an integral part of these financial
statements.
  F-5
 Table of Contents
  Moggle, Inc.
 (A
Development Stage Company)
 Statements
of Cash Flows
 For the
Period February 11, 2008 (Date of Inception) to December 31, 2009,
 For the
Year Ended December 31, 2009 and
 For the
Period February 11, 2008 (Date of Inception) to December 31, 2008
 
 
 Year
                  
                  
                  From
      InceptionCumulative
                  
                  
                  Ended
                  
                  
                  February
      11, 2008 toSince
                  
                  
                  December
      31,
                  
                  
                  December
      31,Inception
                  
                  
                  2009
                  
                  
                  2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                  
                  $
                  (3,220,362
                  )
                  
                  $
                  (2,236,476
                  )
                  
                  $
                  (983,886
                  )Adjustments
      to reconcile net loss to net cashused
      in operating activitiesFair
      value of options issued in exchange for services
                  
                  
                  561,673
                  
                  
                  
                  48,604
                  
                  
                  
                  513,069Fair
      value of stock issued in exchange for services
                  
                  
                  1,280,427
                  
                  
                  
                  1,280,427
                  
                  
                  
                  -Depreciation
                  
                  
                  1,814
                  
                  
                  
                  1,116
                  
                  
                  
                  698Increase
      in assetsOther
      receivable
                  
                  
                  (42,768
                  )
                  
                  
                  (42,768
                  )Deposits
                  
                  
                  (2,667
                  )
                  
                  
                  (2,667
                  )
                  
                  
                  -Increase
      in liabilitiesAccounts
      payable
                  
                  
                  63,115
                  
                  
                  
                  63,115
                  
                  
                  
                  -Net
      cash used in operating activities
                  
                  
                  (1,358,768
                  )
                  
                  
                  (888,649
                  )
                  
                  
                  (470,119
                  )CASH
      FLOWS FROM INVESTING ACTIVITIESPuchase
      of equipment
                  
                  
                  (5,582
                  )
                  
                  
                  -
                  
                  
                  
                  (5,582
                  )Net
      cash used  in investing activities
                  
                  
                  (5,582
                  )
                  
                  
                  -
                  
                  
                  
                  (5,582
                  )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of common stock
                  
                  
                  1,104,060
                  
                  
                  
                  600,000
                  
                  
                  
                  504,060Proceeds
      from exercise of options
                  
                  
                  200,000
                  
                  
                  
                  110,000
                  
                  
                  
                  90,000Proceeds
      from exercise of warrants
                  
                  
                  170,000
                  
                  
                  
                  160,000
                  
                  
                  
                  10,000Stock
      issuance costs
                  
                  
                  (65,000
                  )
                  
                  
                  (65,000
                  )
                  
                  
                  -Net
      cash provided by financing activities
                  
                  
                  1,409,060
                  
                  
                  
                  805,000
                  
                  
                  
                  604,060NET
      INCREASE IN CASH ANDCASH
      EQUIVALENTS
                  
                  
                  44,710
                  
                  
                  
                  (83,649
                  )
                  
                  
                  128,359CASH
      AND CASH EQUIVALENTS - BEGINNING OF PERIOD
                  
                  
                  -
                  
                  
                  
                  128,359
                  
                  
                  
                  -CASH
      AND CASH EQUIVALENTS - END OF PERIOD
                  
                  $
                  44,710
                  
                  
                  $
                  44,710
                  
                  
                  $
                  128,359
 The
accompanying notes are an integral part of these financial
statements.
 
 F-6
 Table of Contents
  Moggle, Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of the
Business
 The
Company is a development stage enterprise incorporated in the state of Delaware
on February 11, 2008.  Since inception, substantially all of the
efforts of the Company have been developing technologies for multiplayer online
role playing games.  The Company is in the development stage of
raising capital, financial planning, establishing sources of supply, and
acquiring property and equipment.  The Company anticipates
establishing global markets for its technologies.
 
 Basis of
Presentation
 The
financial statements are presented in accordance with Financial Accounting
Standards Board Accounting Standards Codification (“FASB ASC”) 915 for
development stage entities.
  Use of
Estimates
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from these
estimates.
 
 Comprehensive
Income
 The
Company follows FASB ASC 220 in reporting comprehensive
income.  Comprehensive income is a more inclusive financial reporting
methodology that includes disclosure of certain financial information that
historically has not been recognized in the calculation of net
income.  Since the Company has no items of other comprehensive income,
comprehensive income (loss) is equal to net income (loss).
 
 Fair Value of Financial
Instruments
 The
Company’s financial instruments consist of cash, other receivable and accounts
payable.  The carrying value of cash, other receivable and accounts
payable approximate fair value, because of their short maturity.
 
 Concentration of Credit Risk
Involving Cash
 The
Company has deposits with a financial institution which at times exceed Federal
Depository Insurance coverage of $250,000.
  Cash and Cash
Equivalents
 For
purposes of reporting cash flows, the Company considers all cash accounts, which
are not subject to withdrawal restrictions or penalties, and certificates of
deposit and commercial paper with original maturities of 90 days or less to be
cash or cash equivalents.
 
 Revenue
Recognition
 In
accordance with Securities and Exchange Commission (“SEC”) Staff Accounting
Bulletin (“SAB”) No. 104, Revenue Recognition, the
Company will recognize revenue when (i) persuasive evidence of a customer or
distributor arrangement exists or acceptance occurs, (ii) a retailer,
distributor or wholesaler receives the goods, (iii) the price is fixed or
determinable, and (iv) collectibility of the sales revenues is reasonably
assured. Subject to these criteria, the Company will generally recognize revenue
from the sale of role playing games when shipped.
 
 F-7
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
 Income
Taxes
 The
Company follows FASB ASC 740 when accounting for income taxes, which requires an
asset and liability approach to financial accounting and reporting for income
taxes.  Deferred income tax assets and liabilities are computed
annually for temporary differences between the financial statements and tax
bases of assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable
income.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.  Income tax
expense is the tax payable or refundable for the period plus or minus the change
during the period in deferred tax assets and liabilities.
 
 Loss Per
Share
 The
Company follows FASB ASC 260 when reporting Earnings Per Share resulting in the
presentation of basic and diluted earnings per share.  Because the
Company reported a net loss for the year ended December 31, 2009 and for the
period from February 11, 2008 (inception) to December 31, 2008, common stock
equivalents, including stock options and warrants were anti-dilutive; therefore,
the amounts reported for basic and dilutive loss per share were the
same.
 
 Start-up
Costs
 In
accordance with FASB ASC 720,start-up costs are expensed as incurred.
 
 Research
and  Development Costs
 In
accordance with FASB ASC 730, research and development costs are expensed when
incurred.
  Recently Adopted Accounting
Pronouncements
 
 FASB ASC
820-10 establishes a framework for measuring fair value and expands disclosures
about fair value measurements. The changes to current practice resulting from
the application of this standard relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. This standard is effective for fiscal years beginning after
November 15, 2007; however, it provides a one-year deferral of the effective
date for non-financial assets and non-financial liabilities, except those that
are recognized or disclosed in the financial statements at fair value at least
annually. The Company adopted this standard for financial assets and financial
liabilities and nonfinancial assets and nonfinancial liabilities disclosed or
recognized at fair value on a recurring basis (at least annually) as of January
1, 2008. The Company adopted the standard for nonfinancial assets and
nonfinancial liabilities on January 1, 2009. The adoption of this standard in
each period did not have a material impact on its financial
statements.
 
 FASB ASC
260-10 provides that 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. This standard is effective
for financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. The Company does not
currently have any share-based awards that would qualify as participating
securities. Therefore, application of this standard is not expected to have an
effect on the Company's financial reporting.
 
 F-8
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 FASB ASC
815-10 and 815-40 are effective for financial statements for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. The standard addresses the determination of whether an instrument (or an
embedded feature) is indexed to an entity’s own stock, which is the first part
of the scope exception for the purpose of determining whether the instrument is
classified as an equity instrument or accounted for as a derivative instrument
which would be recognized either as an asset or liability and measured at fair
value. The standard shall be applied to outstanding instruments as of the
beginning of the fiscal year in which this standard is initially applied. Any
debt discount that was recognized when the conversion option was initially
bifurcated from the convertible debt instrument shall continue to be amortized.
The cumulative effect of the change in accounting principles shall be recognized
as an adjustment to the opening balance of retained earnings. The Company
adopted this standard as of January 1, 2009, and was not required to reclassify
any of its warrants as liabilities.
 
 FASB ASC
825-10 requires disclosures about the fair value of financial instruments for
interim reporting periods. This standard is effective for interim reporting
periods ending after June 15, 2009. The adoption of this standard did not have a
material impact on the Company’s financial statements.
 
 FASB ASC
820-10 provides additional guidance for Fair Value Measurements when
the volume and level of activity for the asset or liability has significantly
decreased. This standard is effective for interim and annual reporting periods
ending after June 15, 2009. The adoption of this standard did not have a
material effect on its financial statements.
 
 FASB ASC
320-10 amends the other-than-temporary impairment guidance for debt and equity
securities. This standard is effective for interim and annual reporting periods
ending after June 15, 2009. The adoption of this standard did not have a
material effect on its financial statements.
 
 FASB ASC
855-10 is effective for interim or annual financial periods ending after June
15, 2009 and establishes general standards of accounting and disclosure of
events that occur after the balance sheet but before financial statements are
issued or are available to be issued.
 
 However,
since the Company is a public entity, management is required to evaluate
subsequent events through the date that financial statements are issued and
disclose the date through which subsequent events have been evaluated, as well
as the date the financial statements were issued. This standard was adopted for
its interim period ending September 30, 2009. Subsequent events have been
evaluated through the date the financial statements were issued.
 
 In June
2009, the FASB issued Accounting Standards Update No. 2009-01, The FASB Accounting Standards
Codification, which establishes the Codification as the source of
authoritative GAAP recognized by the FASB to be applied by nongovernmental
entities.  This standard is effective for financial statements issued
for interim and annual periods ending after September 15, 2009.  The
adoption of the standard did not have an effect on the Company’s financial
reporting.
 
 As of
December 31, 2009, the FASB has issued Accounting Standards Updates (ASU)
through No. 2009-12.  None of the ASUs have had an impact on the
Company’s financial statements.
 
 Recently Issued Accounting
Pronouncements Not Yet Adopted
 
 As of
December 31, 2009, there are no recently issued accounting standards not yet
adopted which would have a material effect on the Company’s financial
statements.
 
 Reclassifications
 Certain
amounts in the 2008 financial statements have been reclassified in order for
them to be in conformity with the 2009 presentation.
  F-9
 Table of Contents
 
 Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
2 – GOING CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  The Company has incurred
significant losses and experienced negative cash flow from operations during the
development stage.  These conditions raise substantial doubt about the
Company’s ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 The
Company is in the development stage at December 31, 2009.  Successful
completion of the Company’s development program and, ultimately the attainment
of profitable operations is dependent upon future events, including obtaining
adequate financing to fulfill its development activities and achieving a level
of sales adequate to support the Company’s cost structure.  However,
there can be no assurances that the Company will be able to secure additional
equity investment or achieve an adequate sales level.
 
 NOTE
3 – OTHER RECEIVABLE
 
 During
the year ended December 31, 2009, the Company entered into an agreement and
purchased an option to buy convertible notes of a third party company for
€30,000 ($42,768).  This option has been terminated and the third
party company has agreed to refund the €30,000 ($42,768).
 
 NOTE
4 - INCOME TAXES
 
 The
Company follows FASB ASC 740-10-10 whereby an entity recognizes deferred tax
assets and liabilities for future tax consequences or events that have been
previously recognized in the Company’s financial statements or tax
returns.  The measurement of deferred tax assets and liabilities is
based on provisions of the enacted tax law.  The effects of future
changes in tax laws or rates are not anticipated.
 
 At
December 31, 2009, the Company has a net operating loss (“NOL”) that
approximates $5,298,000.  Consequently, the Company may have NOL
carryforwards available for federal income tax purposes, which would begin to
expire in 2028.  Deferred tax assets would arise from the recognition
of anticipated utilization of these net operating losses to offset future
taxable income.
 
 The
income tax benefit (provision) consists of the following:
 
 Year
                  
                  
                  February
      11, 2008Ended
                  
                  
                  (Inception)
      toDecember
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008Current
                  
                  $
                  (1,979,000
                  )
                  
                  $
                  (193,000
                  )Deferred
                  
                  
                  61,000
                  
                  
                  
                  (155,000
                  )Change
      in valuation allowance
                  
                  
                  1,918,000
                  
                  
                  
                  348,000$
                  -
                  
                  
                  $
                  -
 
 F-10
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 
 The
following is a reconciliation of the tax derived by applying the U.S. Federal
Statutory Rate of 35% to the earnings before income taxes and comparing that to
the recorded tax provisions:
 
 December
      31, 2009
                  
                  
                  December
      31, 2008Amount
                  
                  
                  %
                  
                  
                  Amount
                  
                  
                  %U.S
      federal income tax benefit atFederal
      statutory rate
                  
                  $
                  (783,000
                  )
                  
                  
                  (35
                  )
                  
                  $
                  (334,000
                  )
                  
                  
                  (34
                  )State
      tax, net of federal tax effect
                  
                  
                  (131,000
                  )
                  
                  
                  (6
                  )
                  
                  
                  (58,000
                  )
                  
                  
                  (6
                  )Non-deductible
      share-based compensation
                  
                  
                  (1,004,000
                  )
                  
                  
                  (45
                  )
                  
                  
                  44,000
                  
                  
                  
                  4Change
      in valuation allowance
                  
                  
                  1,918,000
                  
                  
                  
                  86
                  
                  
                  
                  348,000
                  
                  
                  
                  35$
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  -
 The
primary components of the Company’s December 31, 2009 and 2008 deferred tax
assets, liabilities and the related valuation allowances are as
follows:
 
 December
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008Deferred
      tax asset for NOL carryforwards
                  
                  $
                  2,172,000
                  
                  
                  $
                  193,000Deferred
      tax asset for stock based compensation
                  
                  
                  94,000
                  
                  
                  $
                  155,000Valuation
      allowance
                  
                  
                  (2,266,000
                  )
                  
                  
                  (348,000
                  )$
                  -
                  
                  
                  $
                  -
 Management
has determined that the realization of the net deferred tax asset is not assured
and has created a valuation allowance for the entire amount of such
benefits.
 
 The
Company follows FASB ASC 740-10, which provides guidance for the recognition and
measurement of certain tax positions in an enterprise’s financial
statements.  Recognition involves a determination whether it is more
likely than not that a tax position will be sustained upon examination with the
presumption that the tax position will be examined by the appropriate taxing
authority having full knowledge of all relevant
information.
  The
Company’s policy is to record interest and penalties associated with
unrecognized tax benefits as additional income taxes in the statement of
operations.  As of December 31, 2009, the Company had no unrecognized
tax benefits.  There were no changes in the Company’s unrecognized tax
benefits during the year ended December 31, 2009.  The Company did not
recognize any interest or penalties during 2009 related to unrecognized tax
benefits.
 
 The U.S.
and state income tax returns filed for the tax years ending on December 31, 2009
and 2008 will be subject to examination by the relevant taxing
authorities.
 
 NOTE
5 – STOCKHOLDERS’ EQUITY
 
 In
February 2008, the Company issued 19,000,000 founders shares at $.001 per share
or $19,000.
 
 In
February 2008, the Company commenced a private placement of up to 7 million
units at a price of $.035 per unit to accredited investors.  One unit
consists of one share of the Company’s common stock and two
warrants.  Each warrant entitles the holder to purchase one additional
share of common stock at a price of $.04 per share and is exercisable for a
three year period.  From February through June 2008, 7,142,858 units
were sold, raising $250,000 in proceeds and resulting in 14,285,716 warrants
being issued.
 
 F-11
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
5 – STOCKHOLDERS’ EQUITY (Continued)
 
 On May 8,
2008, 500,000 options were exercised, which raised proceeds
$20,000.  During the three months ended September 30, 2008, 1,750,000
options were exercised, which raised proceeds of $70,000.
 
 On May
27, 2008, the Company commenced a private placement of up to 6 million units at
a price of $.035 per unit to accredited investors.  One unit consists
of one share of the Company’s common stock and one warrant. Ten of these
warrants entitle the holder to purchase one additional share of common stock at
a price of $.75 per share and is exercisable for a three year
period.  During the three months ended June 30, 2008, 6,142,858 units
were sold with warrants at a price of $.75 per share, raising $215,000 in
proceeds and resulting in 614,286 warrants being issued.  During the
three months ended September 30, 2008 500,000 units were sold with warrants at a
price of $.75, raising $17,500 and resulting in 50,000 warrants being
issued.
 
 On May
31, 2008, the Form D, Notice
of Sale of securities Pursuant to Regulation D, Section 4(6) and/or Uniform Limited Offering
Exemption, was amended to resolve over subscriptions in the private
placements.
 
 During
the three months ended September 30, 2008, the Company sold 2,560 shares, which
raised proceeds of $2,560.  The Company filed a registration statement
to register 2,560 shares of the Company, which became effective on September 3,
2008.
 
 During
the three months ended September 30, 2008, 250,000 warrants were exercised,
which raised proceeds of $10,000.
 
 During
the three months ended March 31, 2009, 1 million options were exercised, which
raised proceeds of $40,000.
 
 During
the three months ended March 31, 2009, the Company issued 100,000 shares, which
were valued at the fair market value of $200,000 for consulting
services.
 
 During
the three months ended June 30, 2009, the Company sold 400,000 shares, which
raised proceeds of $348,000, net of commissions of $52,000.
 
 During
the three months ended September 30, 2009, 1 million warrants and 1.5 million
options were exercised, which raised proceeds of $100,000.  In
addition, the Company sold 100,000 shares, which raised proceeds of $87,000, net
of commissions of $13,000.
 
 On
October 9, 2009, the Company was listed on the German stock
exchange.  As a result the Company was required to issue 1,080,427
shares of common stock under a consulting agreement.  These shares
were valued at the fair market value of $1,080,427.
 
 On
October 21, 2009, the Company sold 100,000 shares to an investor, which raised
proceeds of $100,000.
 
 On
October 22, 2009, an investor exercised 1,000,000 warrants which raised proceeds
of $40,000.
 
 On
December 2, 2009, two investors exercised 500,000 warrants each (total of
1,000,000 warrants), which raised total proceeds of $40,000.
 
 On
December 10, 2009 and December 31, 2009 an investor exercised 250,000 options
and 1,000,000 warrants respectively, which raised total proceeds of
$50,000.
 
 F-12
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
6 – STOCK OPTIONS AND WARRANTS
 
 During
2008, the Board of Directors (“Board”) of the Company adopted an Equity
Incentive Plan (“Plan”).  Under the Plan, the Company is authorized to
grant options to purchase up to 25,000,000 shares of common stock to any
officer, other employee or director of, or any consultant or other independent
contractor who provides services to the Company.  The Plan is intended
to permit stock options granted to employees under the Plan to qualify as
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended (“Incentive Stock Options”).  All options granted under the
Plan, which are not intended to qualify as Incentive Stock Options are deemed to
be non-qualified options (“Non-Statutory Stock Options”).  As of
December 31, 2009, 9,625,000 options have been issued and are unexercised, and
10,375,000 options that are available to be issued under the Plan.  Of
the 8,625,000 options that have been issued and are unexercised, 1,500,000
options were granted to employees and 8,125,000 options were granted to non
employees.
 
 The Plan
is administered by the Board, which determines the persons to whom awards will
be granted, the number of awards to be granted and the specific terms of each
grant, including the vesting thereof, subject to the terms of the
Plan.
 
 In
connection with Incentive Stock Options, the exercise price of each option may
not be less than 100% of the fair market value of the common stock on the date
of the grant (or 110% of the fair market value in the case of a grantee holding
more than 10% of the outstanding stock of the Company).
 
 The
Company uses the Black-Scholes option pricing model to calculate the grant-date
fair value of the options, with the following assumptions: no dividend yield,
expected volatility of 51.8%, risk free interest rate of between 2.5% and 3.7%
and expected option life of 5 years.  For the year ended December 31,
2009 and for the period from February 11, 2008 (Date of Inception) through
December 31, 2008, the Company expensed $0 and $404,292 relative to employee
options granted.  As of December 31, 2009, there was no unrecognized
compensation expense related to non-vested market-based share
awards.
  During
2008, the Company issued the Secretary of the Company 500,000 options, which
were valued at $8,825 and expensed immediately.  The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield, expected volatility
of 51.8%, risk free interest rate of 2.5% and expected option life of 5
years.  The options expire five years from the date of
issuance.
  During
2008, the Company entered into an employment agreement with its President and
Chief Executive Officer,  whereby, the President and Chief Executive
Officer was issued 1,000,000 options, which were valued at $71,871 and expensed
immediately.  The Company uses the Black-Scholes option pricing model
to calculate the grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 51.8%, risk free interest
rate of 3.3% and expected option life of 5 years.  The options expire
five years from the date of issuance.
  During
2008, the Company entered into an employment agreement with its Director of
Corporate Development whereby, the Director of Corporate Development was issued
2,750,000 options, which were valued at $197,645 and expensed
immediately.  The Company uses the Black-Scholes option pricing model
to calculate the grant-date fair value of the options, with the following
assumptions: no dividend yield, expected volatility of 51.8%, risk free interest
rate of 3.3% and expected option life of 5 years.  The options expire
five years from the date of issuance.
  During
2008, the Company entered into an agreement with a member of the Company’s Board
of Directors whereby, the member of the Board of Directors was issued 1,250,000
options, which were valued at $89,838 and expensed immediately.  The
Company uses the Black-Scholes option pricing model to calculate the grant-date
fair value of the options, with the following assumptions: no dividend yield,
expected volatility of 51.8%, risk free interest rate of 3.3% and expected
option life of 5 years.  The options expire five years from the date
of issuance.
  F-13
 Table of Contents
 
 Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
6 – STOCK OPTIONS AND WARRANTS (Continued)
  On June
23, 2008, 500,000 options were issued to a member of the Board of Directors,
which were valued at $36,113 and expensed immediately.  The Company
uses the Black-Scholes option pricing model to calculate the grant-date fair
value of the options, with the following assumptions: no dividend yield,
expected volatility of 51.8%, risk free interest rate of 3.7% and expected
option life of 5 years.  The options expire five years from the date
of issuance.
  A summary
of incentive stock option transactions for employees from February 11, 2008
(date of inception) to December 31, 2009 is as follows:
 
 Weighted
      AverageOption
                  
                  
                  Exercise
                  
                  
                  ExerciseShares
                  
                  
                  Price
                  
                  
                  PriceOutstanding,
      February 11, 2008 (Date of Inception)
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Granted
                  
                  
                  6,000,000
                  
                  
                  
                  0.04
                  
                  
                  
                  0.04Exercised
                  
                  
                  (1,750,000
                  )
                  
                  
                  0.04
                  
                  
                  
                  0.04Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      December 31, 2008
                  
                  
                  4,250,000
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.04Granted
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  (2,750,000
                  )
                  
                  
                  0.04
                  
                  
                  
                  0.04Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      December 31, 2009
                  
                  
                  1,500,000
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.04Exercisable,
      December 31, 2009
                  
                  
                  1,500,000
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.04Weighted
      Average Remaining Life,Exercisable,
      December 31, 2009 (years)
                  
                  
                  3.3
 
 The
Company issued 14,950,002 warrants as part of the units included in the private
placements, which expire three years from the date of issuance.
 
 The
Company issued non-statutory stock options to non-employees.  The
Company in 2008 used the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following assumptions: no
dividend yield, expected volatility of 51.8%, risk free interest rate between
2.5% and 3.7%, and expected option life of 5 years.  The options
expire five years from the date of issuance.
 
 On August
18, 2009, 100,000 options were issued to a consultant, which were valued at
$30,689.  Another consultant also received 25,000 options on August
18, 2009, which were valued at $7,672.  The Company uses the
Black-Scholes option pricing model to calculate the grant-date fair value of the
options, with the following assumptions: no dividend yield, expected volatility
of 58.3%, risk free interest rate of 2.4% and expected option life of 5
years.  The options expire five years from the date of
issuance.  Options granted under the agreements are expensed when the
related service or product is provided.
 
 For the
year ended December 31, 2009 and for the period from February 11, 2008 (Date of
Inception) to December 31, 2008, the Company expensed $48,604 and $108,777
relative to 14,625,000 non-employee options granted.  As of December
31, 2009, there was $27,899 of unrecognized expense related to options of
non-employees which will be recognized over the terms of the agreements through
December 31, 2010.
  F-14
 Table of Contents
 
 Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
 
 NOTE
6 – STOCK OPTIONS AND WARRANTS (Continued)
 
 The
following table summarizes non-employee stock option/warrant of the Company from
February 11, 2008 (date of inception) to December 31, 2009 is as
follows:
 
 Weighted
      AverageOption/Warrant
                  
                  
                  Exercise
                  
                  
                  ExerciseShares
                  
                  
                  Price
                  
                  
                  PriceOutstanding,
      February 11, 2008 (Date of Inception
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Granted
                  
                  
                  23,450,002
                  
                  
                  .04
      to .75
                  
                  
                  .04
      to .75Exercised
                  
                  
                  (750,000
                  )
                  
                  
                  0.04
                  
                  
                  
                  0.04Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      December 31, 2008
                  
                  
                  22,700,002
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.04Granted
                  
                  
                  125,000
                  
                  
                  
                  2.30
                  
                  
                  
                  2.30Exercised
                  
                  
                  (4,000,000
                  )
                  
                  
                  0.04
                  
                  
                  
                  0.04Expired
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      December 31, 2009
                  
                  
                  18,825,002
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.09Exercisable,
      December 31, 2009
                  
                  
                  18,825,002
                  
                  
                  $
                  0.04
                  
                  
                  $
                  0.09Weighted
      Average Remaining Life,Exercisable,
      December 31, 2009 (years)
                  
                  
                  2.1
  NOTE
7 – OPERATING LEASES
   For the
year ended December 31, 2009 and for the period from February 11, 2008
(inception) through total rent expense under leases amounted to $25,836 and
$0.  At December 31, 2009, the Company was obligated under various
non-cancelable operating lease arrangements for offices as follows:
  2009
                  
                  $
                  8,3852010
                  
                  
                  33,5402011
                  
                  
                  11,180$
                  53,105
   F-15
 Table of Contents
  Moggle,
Inc.
 (A
Development Stage Company)
 Notes to
Financial Statements
  
  NOTE
8 – RELATED PARTY TRANSACTIONS
  From
inception, the Company has utilized offices leased by affiliates of certain of
the Company’s board members without charge.
  During
the year ended December 31, 2009 and for the period from February 11, 2008
(inception) to December 31, 2008, the manager of corporate development of the
Company advanced expenses on behalf of the Company in connection with research
of the Company’s business plans and the implementation of the Company’s business
plans.  Expenses totaling $117,219 and $70,089 were incurred was
reimbursed during the year ended December 31, 2009 and for  the period
from February 11, 2008 (inception) through December 31, 2008.
  
 NOTE
9 – SUBSEQUENT EVENTS
 
 The
Company has evaluated subsequent events through the date the financial
statements were issued.
 
 On
January 5, 2010 an investor exercised 1,000,000 options, which raised proceeds
of $40,000.
 On
February 3, 2010 the former manager of corporate development loaned the Company
$20,000 in return for a promissory note with an interest rate of 4.5% in the
same amount. The promissory note will be payable upon demand after February 3,
2010.
 On
February 3, 2010 an investor exercised 500,000 warrants, which raised proceeds
of $20,000.
 
 On
February 22, 2010 an investor exercised 892,858 warrants, which raised proceeds
of $35,714.
 
 On March
5, 2010 an investor exercised 500,000 warrants, which raised proceeds of
$20,000.
 
 On March
8, 2010 an investor exercised 500,000 warrants, which raised proceeds of
$20,000.
  On March
12, 2010 the Company entered into a three year employment agreement with the
Senior Vice President of Marketing and Licensing for €150,000 annually. The
agreement also includes an option to purchase 2 million shares of the Company’s
common stock at $1.00 per share. These options have been valued at $1,829,756.
The Company uses the Black-Scholes option pricing model to calculate the
grant-date fair value of the options, with the following assumptions: no
dividend yield, expected volatility of 41.6%, risk free interest rate of 2.4%
and expected option life of five years. The options expire five years
from the date of issuance. Options granted under the agreements are expensed
when the related service is provided.