##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-QSB/A
 Amendment No. 1
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the period ended: September 30, 2005
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 0-49649
 PLAYLOGIC ENTERTAINMENT, INC.
  Delaware
    
    23-3083371(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)Concertgebouwplein 13, 1071 LL Amsterdam, The Netherlands
    
    1071 LL(Address of principal executive offices)
    
    (Zip Code)
 (011) 31-20-676-0304
 þ o
 
 o o
   Class
    
    Outstanding at November 10,
2005Common Stock, par value $.001 per share
    
    23,099,994 shares
 o þ




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##### Table of Contents



EXPLANATORY NOTE
 RESTATEMENT OF FINANCIAL STATEMENTS
  Restatements
  Changes Reflected in this Form 10-QSB/A
  Part I Financial InformationItem 1  Financial StatementsUnaudited Consolidated Financial StatementsNote D Summary of Significant Accounting PoliciesNote E Correction of an ErrorNote H Common Stock TransactionsItem 2  Managements Discussion and Analysis or Plan of OperationsRestatementsResults of OperationsLiquidity and Capital ResourcesItem 3  Controls and ProceduresPart II Other InformationItem 6  ExhibitsCertifications




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##### 



PLAYLOGIC ENTERTAINMENT, INC.
FORM 10-QSB/A
CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
1Consolidated Balance Sheet at September 30, 2005 (unaudited)
1Consolidated Statements of Operations and Comprehensive Income (unaudited) for the nine months ended September 30, 2005 and September 30, 2004 and for three months ended September 30, 2005 and 2004
2Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2005 and 2004
3Notes to Consolidated Financial Statements
4Item 2. Managements Discussion and Analysis
13Item 3. Controls and Procedures
18PART II  OTHER INFORMATIONItem 6. Exhibits
19SignaturesExhibit IndexCertificationsEX-10.7: EXECUTIVE CONTRACTEX-31.1: CERTIFICATIONSEX-31.2: CERTIFICATIONSEX-32.1: CERTIFICATIONSEX-32.2: CERTIFICATIONS




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Playlogic International, Inc. and Subsidiaries
 
 Balance Sheet
 (Unaudited)
 (RESTATED)September 30,2005ASSETSCURRENT ASSETSCash on hand and in bank
    
    $
    143,108Accounts receivableTrade, net of allowance for doubtful accounts
    
    
    561,802Taxes
    
    
    551,570Affiliated entities
    
    
    361,817Prepaid expenses
    
    
    2,084,207Deferred tax asset
    
    
    584,740TOTAL CURRENT ASSETS
    
    
    4,287,154SOFTWARE DEVELOPMENT COSTS
    
    
    2,419,088PROPERTY AND EQUIPMENT  AT COST, NET OF ACCUMULATED DEPRECIATION
    
    
    516,117TOTAL ASSETS
    
    $
    7,222,359LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESBank overdraft
    
    $
    514,855Short term loans from third parties
    
    
    Software development financing
    
    
    241,280Accounts payable  trade
    
    
    3,043,282Accrued salaries, wages and related payroll taxes
    
    
    1,254,217Other accrued liabilities
    
    
    487,275Loans from shareholders for working capital
    
    
    1,249,437TOTAL CURRENT LIABILITIES
    
    
    6,790,346LONG-TERM LIABILITIESLong-term debt, net of current maturities
    
    
    262,392TOTAL LIABILITIES
    
    
    7,052,738COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITYPreferred
stock  $0.001 par value.
20,000,000 shares authorized. None issued and outstanding
    
    
    Common stock
 $0.001 par value.
100,000,000 shares authorized: 23,099,994 shares issued and outstanding
    
    
    23,100Additional paid-in capital
    
    
    33,473,136Currency translation adjustment
    
    
    1,153,458Accumulated deficit
    
    
    (34,450,729
    )198,965Stock subscription receivable
    
    
    (29,344
    )TOTAL SHAREHOLDERS EQUITY
    
    
    169,621TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    7,222,359
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
  1




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Playlogic International, Inc. and Subsidiaries
 
 Statements of Operations and Comprehensive Income
 (Unaudited)
 (RESTATED)
    
    
    
    
    
    
    (RESTATED)Nine months
    
    
    Nine months
    
    
    Three months
    
    
    Three monthsended
    
    
    ended
    
    
    ended
    
    
    endedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues
    
    $
    1,288,361
    
    
    $
    
    
    
    $
    542,579
    
    
    $
    Cost of Sales
    
    
    351,827
    
    
    
    
    
    
    
    206,199
    
    
    
    Gross Profit
    
    
    936,534
    
    
    
    
    
    
    
    336,380ExpensesReorganization expenses
    
    
    912,681
    
    
    
    
    
    
    
    255,155
    
    
    
    Research and development costs
    
    
    474,323
    
    
    
    1,464,631
    
    
    
    (3,322
    )
    
    
    (340,474
    )Sales and marketing expenses
    
    
    758,742
    
    
    
    428,726
    
    
    
    263,623
    
    
    
    41,961General and administrative expenses
    
    
    2,894,518
    
    
    
    11,134,091
    
    
    
    1,034,985
    
    
    
    782,332Depreciation
    
    
    196,293
    
    
    
    237,248
    
    
    
    (5,033
    )
    
    
    82,897Total operating expenses
    
    
    5,236,557
    
    
    
    13,264,696
    
    
    
    1,545,408
    
    
    
    566,716Loss from operations
    
    
    (4,300,023
    )
    
    
    (12,710,611
    )
    
    
    (1,209,028
    )
    
    
    (566,716
    )Other Income (Expense)Impairment of capitalized software
development costs
    
    
    
    
    
    
    (367,389
    )
    
    
    
    
    
    
    (365,153
    )Interest expense
    
    
    (256,297
    )
    
    
    (1,603,002
    )
    
    
    (59,477
    )
    
    
    (846,421
    )Loss before Income Taxes
    
    
    (4,556,320
    )
    
    
    (15,235,087
    )
    
    
    (1,268,505
    )
    
    
    (1,778,290
    )Provision for Income Tax Benefit
    
    
    612,934
    
    
    
    
    
    
    
    
    
    
    
    Net Loss
    
    
    (3,943,386
    )
    
    
    (15,235,087
    )
    
    
    (1,268,505
    )
    
    
    (1,778,290
    )Other comprehensive incomeChange in foreign currency translation
    
    
    3,945,130
    
    
    
    (10,725
    )
    
    
    2,252,114
    
    
    
    198,138Comprehensive Income (Loss)
    
    $
    1,744
    
    
    $
    (15,224,362
    )
    
    $
    983,609
    
    
    $
    (1,580,152
    )Loss per weighted-average share of
common stock outstanding,
computed on Net Loss  basic
and fully diluted
    
    $
    (0.17
    )
    
    $
    (0.67
    )
    
    $
    (0.05
    )
    
    $
    (0.09
    )Weighted-average number of shares
of common stock outstanding
    
    
    22,914,595
    
    
    
    22,718,351
    
    
    
    23,098,429
    
    
    
    22,801,894
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
  2




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Playlogic International, Inc. and Subsidiaries
 
 Statements of Cash Flows
 (Unaudited)
 (RESTATED)Nine months
    
    
    Nine monthsended
    
    
    endedSeptember 30,
    
    
    September 30,2005
    
    
    2004Cash Flows from Operating ActivitiesNet Loss
    
    $
    (3,943,386
    )
    
    $
    (15,235,087
    )Adjustments to reconcile net income to net cash
provided by operating activitiesCurrency translation adjustment
    
    
    3,945,130
    
    
    
    (10,725
    )Depreciation
    
    
    196,293
    
    
    
    237,248Expenses paid by affiliated entity
    
    
    1,162,938
    
    
    
    Imputed expense related to common stock
issuances at less than fair value
    
    
    153,000
    
    
    
    Cash expenditures prior to reverse merger transaction
    
    
    (44,641
    )
    
    
    (Increase) Decrease inAccounts receivable  trade
    
    
    (561,802
    )
    
    
    178Value added taxes receivable
    
    
    (551,570
    )
    
    
    (371,629
    )Prepaid expenses
    
    
    (1,811,389
    )
    
    
    (597,545
    )Deferred tax asset
    
    
    (584,740
    )
    
    
    Increase (Decrease) inAccounts payable  trade
    
    
    (144,311
    )
    
    
    1,396,273Other current liabilities
    
    
    206,984
    
    
    
    1,399,832Net cash used in operating activities
    
    
    (1,977,494
    )
    
    
    (13,181,455
    )Cash Flows from Investing ActivitiesCash paid for software development
    
    
    (1,244,691
    )
    
    
    (1,165,411
    )Cash advanced to affiliated entities
    
    
    (639,043
    )
    
    
    (157,226
    )Cash paid to acquire property and equipment
    
    
    
    
    
    
    (341,910
    )Cash received from disposition of property and equipment
    
    
    9,062
    
    
    
    Net cash used in investing activities
    
    
    (1,874,672
    )
    
    
    (1,664,547
    )Cash Flows from Financing ActivitiesIncrease in cash overdraft
    
    
    (418,162
    )
    
    
    736,126Principal payments on short term notes to third parties
    
    
    (65,328
    )
    
    
    Principal payments on long-term debt
    
    
    (213,018
    )
    
    
    (23,558
    )Cash advanced or repaid to shareholder
    
    
    (5,981,705
    )
    
    
    4,685,516Proceeds from sales of common stock
    
    
    10,625,148
    
    
    
    9,414,969Cash contributed by shareholder to support operations
    
    
    45,341
    
    
    
    Cash aid to acquire capital
    
    
    (19,318
    )
    
    
    Net cash provided by financing activities
    
    
    3,972,958
    
    
    
    14,813,053Increase (Decrease) in Cash and Cash Equivalents
    
    
    120,792
    
    
    
    (32,949
    )Cash and cash equivalents at beginning of period
    
    
    22,226
    
    
    
    81,711Cash and cash equivalents at end of period
    
    $
    143,018
    
    
    $
    48,762Supplemental Disclosures of Interest and Income Taxes PaidInterest paid during the period
    
    $
    256,297
    
    
    $
    1,603,002Income taxes paid (refunded)
    
    $
    
    
    
    $
    
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
  3




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Playlogic International, Inc. and Subsidiaries
 
 Notes to Restated Consolidated Financial Statements
 Note A  Organization and Description of Business
        Note B  Preparation of Financial Statements
    The financial information presented herein has been prepared by management
without audit by independent certified public accountants
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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note B  Preparation of Financial Statements  Continued
      Note C  Going Concern Contingency
  Note D  Summary of Significant Accounting Policies
 1.
    
    Currency translationThe Company incurs expenses in both US Dollar and Euro transaction accounts. The Euro is the
functional currency of the Companys operating subsidiaries domiciled in The Netherlands. All
transactions reflected in the accompanying financial statements have been converted into US
Dollar equivalents.
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note D  Summary of Significant Accounting Policies  Continued
 1.
    
    Currency translation  continuedFor balance sheet purposes, at the end of any accounting cycle, the exchange rate at the balance
sheet is used for all assets and liabilities. The utilized conversion rates are:
 September 30, 2004:
    
    $
    1.23800December 31, 2004:
    
    $
    1.36450June 30, 2005:
    
    $
    1.20640
 For revenues, expenses, gains and losses during a respective reporting period, an weighted
average exchange rate for the respective reporting period is used to translate those elements.
The Companys management considers the Euro to be a stable currency. Accordingly, the Company
calculates the weighted average exchange rate using the first day of the period being converted,
the 15th of each respective month and the last day of each respective month in the reporting
period. The exchange rates used for all revenues, expenses, gains and losses during the
year-to-date periods ended, as noted, are:
 September 30, 2004:
    
    $
    1.22463December 31, 2004:
    
    $
    1.24829September 30, 2005:
    
    $
    1.26457
 2.
    
    Cash and cash equivalentsThe Company considers all cash on hand and in banks, certificates of deposit and other
highly-liquid investments with maturities of three months or less, when purchased, to be cash
and cash equivalents.Cash overdrafts may occur from time-to-time depending upon managements cash management
policies.
 3.
    
    Accounts receivable  tradeThe Companys current customers are located principally within Europe. The Company typically
makes sales to most of its retailers and some distributors on unsecured credit, with terms that
vary depending upon the customers credit history, solvency, credit limits and sales history.
From time to time, distributors and retailers in the interactive entertainment software industry
have experienced significant fluctuations in their business operations and a number of them have
failed. The insolvency or business failure of any significant Company customer could have a
material negative impact on the Companys business and financial results.Because of the credit risk involved, management has provided an allowance for doubtful accounts
which reflects its opinion of amounts which will eventually become uncollectible. In the event
of complete non-performance, the maximum exposure to the Company is the recorded amount of trade
accounts receivable shown on the balance sheet at the date of non-performance.
 4.
    
    Property and equipmentProperty and equipment is recorded at cost and is depreciated on a straight-line basis, over the
estimated useful lives (generally 3 to 10 years) of the respective asset. Major additions and
betterments are capitalized and depreciated over the estimated useful lives of the related
assets. Maintenance, repairs, and minor improvements are charged to expense as incurred.
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 6




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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note D  Summary of Significant Accounting Policies  Continued
 5.
    
    Software development costsCapitalized software development costs include payments made to independent software developers
under development agreements, as well as direct costs incurred for internally developed
products. The Company accounts for software development costs in accordance with Statement of
Financial Accounting Standards No. 86  Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed. Software development costs are capitalized once
technological feasibility of a product is established and such costs are determined to be
recoverable. The Company utilizes both internal development teams and third-party software
developers to develop its products. The Company also capitalizes internal software development
costs and other content costs subsequent to establishing technological feasibility of a title.
Amortization of such costs as a component of cost of sales is recorded on a title-by-title basis
based on the greater of the proportion of current year sales to the total of current and
estimated future sales for the title or the straight-line method over the remaining estimated
useful life of the title. At each balance sheet date, the company evaluates the recoverability
of capitalized software costs based on undiscounted future cash flows and charge to cost of
sales any amounts that are deemed unrecoverable. The Companys agreements with third-party
developers generally provide it with exclusive publishing and distribution rights and require it
to make advance payments that are recouped against royalties due to the developer based on the
contractual amounts of product sales, adjusted for certain costs.6.
    
    Prepaid royaltiesThe Company capitalizes external software development costs (prepaid royalties) and other
content costs subsequent to establishing technological feasibility of a title. Advance payments
are amortized as royalties in cost of sales on a title-by-title basis based on the greater of
the proportion of current year sales to the total of current and estimated future sales for that
title or the contractual royalty rate based on actual net product sales as defined in the
respective agreements. At each balance sheet date, the company evaluates the recoverability of
advanced development payments and unrecognized minimum commitments not yet paid to determine the
amounts unlikely to be realized through product sales. Advance payments are charged to cost of
sales in the amount that management determines is unrecoverable in the period in which such
determination is made or if management determines that it will cancel a development project.7.
    
    Organization and reorganization costsThe Company has adopted the provisions of AICPA Statement of Position 98-5, Reporting on the
Costs of Start-Up Activities whereby all organizational and reorganizational costs incurred
with either the initial formation and capitalization of the Company or the reorganization of the
Company pursuant to the June 2005 Share Exchange Agreement were charged to operations as
incurred.8.
    
    Research and development expensesResearch and development expenses are charged to operations as incurred.9.
    
    Advertising expensesThe Company does not utilize direct solicitation advertising. All other advertising and
marketing expenses are charged to operations as incurred.
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note D  Summary of Significant Accounting Policies  Continued
 10.
    
    Income TaxesThe Company utilizes the asset and liability method of accounting for income taxes. At
September 30, 2005 and 2004, the deferred tax asset and deferred tax liability accounts, as
recorded when material, are entirely the result of temporary differences. Temporary
differences represent differences in the recognition of assets and liabilities for tax and
financial reporting purposes, primarily accumulated depreciation and amortization and the
anticipated utilization of net operating loss carryforwards to offset current taxable income..11.
    
    Share-Based PaymentsThe Company utilizes the fair-value method of accounting for the payment for goods and/or
services with the issuance of equity shares in lieu of cash.12.
    
    Earnings (loss) per shareBasic earnings (loss) per share is computed by dividing the net income (loss) available to
common shareholders by the weighted-average number of common shares outstanding during the
respective period presented in our accompanying financial statements.Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share
except that the denominator is increased to include the number of common stock equivalents
(primarily outstanding options and warrants).Common stock equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options and warrants, using the treasury stock method, at either the beginning
of the respective period presented or the date of issuance, whichever is later, and only if the
common stock equivalents are considered dilutive based upon the Companys net income (loss)
position at the calculation date.As of September 30, 2005 and 2004, the Company has no outstanding stock options and the
Companys outstanding stock warrants are anti-dilutive due to the Companys net operating loss
position.13.
    
    Revenue recognitionThe Company evaluates the recognition of revenue based on the criteria set forth in SOP 97-2,
Software Revenue Recognition, as amended by SOP 98-9, Modification of SOP 97-2, Software
Revenue Recognition, With Respect to Certain Transactions and Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition in Financial Statements, as revised by SAB 104, Revenue
Recognition. The Company evaluates revenue recognition using the following basic criteria:
 *
    
    Evidence of an arrangement: The Company recognizes revenue when it has evidence of
an agreement with the customer reflecting the terms and conditions to deliver products.*
    
    Delivery: Delivery is considered to occur when the products are shipped and risk of
loss has been transferred to the customer.*
    
    Fixed or determinable fee: If a portion of the arrangement fee is not fixed or
determinable, the Company recognizes that amount as revenue when the amount becomes fixed
or determinable.*
    
    Collection is deemed probable: At the time of the transaction, the Company conducts
a credit review of each customer involved in a significant transaction to determine the
creditworthiness of the customer. Collection is deemed probable if the Company expects
the customer to be able to pay amounts under the arrangement as those amounts become due.
If the Company determines that collection is not probable, it recognizes revenue when
collection becomes probable (generally upon cash collection).
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 8




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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note D  Summary of Significant Accounting Policies  Continued
 14.
    
    New accounting pronouncementsIn December 2004, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment which revised
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation.
This statement supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The
revised statement addresses the accounting for share-based payment transactions with employees
and other third parties, eliminates the ability to account for share-based compensation
transactions using APB 25 and requires that the compensation costs relating to such transactions
be recognized in the condensed consolidated statement of operations. The revised statement is
effective as of the first fiscal year beginning after June 15, 2005. Although the Company is
currently analyzing the method of adoption and impact of the adoption of this standard,
effective January 1, 2006, it is expected to have an impact on the Companys consolidated
financial statements similar to the pro forma disclosure under Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123).
 Note E  Correction of an Error
  Nine monthsendedSeptember 30,2005Net Loss, as previously reported
    
    $
    (2,212,068
    )Effect of the correction of an error(Increase) Decrease in Net Loss
by financial statement line item:Operating expenses:Recognition of previously unrecorded reorganization expenses
    
    
    (912,681
    )Recognition of previously unrecorded selling expenses
    
    
    (189,685
    )Recognition of previously unrecorded
general and administrative expenses
    
    
    (628,952
    )Total effect of changes on
Loss from Operations and Net Loss
    
    
    (1,731,318
    )Net Loss, as restated
    
    $
    (3,943,386
    )Earnings per share, as previously reported
    
    $
    (0.10
    )Total effect of changes
    
    
    (0.08
    )Earnings per share, as restated
    
    $
    (0.18
    )
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 9




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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note E  Correction of an Error  Continued
  Note F  Fair Value of Financial Instruments
    Note G  Concentrations of Credit Risk
    The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 10




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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note H  Common Stock Transactions
        WeightedAverageNumber of
    
    
    ExerciseShares
    
    
    PriceBalance at December 31, 2004
    
    
    100,000
    
    
    $
    0.60Issued
    
    
    Exercised
    
    
    (100,000
    )Balance at June 30, 2005
    
    
    
 The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 11




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Playlogic International, Inc. and Subsidiaries
Notes to Restated Consolidated Financial Statements  Continued
 Note H  Common Stock Transactions  Continued
   Note I  Commitments and Contingencies
 Security agreement
  Transactions with related parties
 
   The financial information presented herein has been prepared by management
without audit by independent certified public accountants
 12




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Item 2. Managements Discussion and Analysis
 Forward-Looking Statements
   Managements Overview of Historical and Prospective Business Trends
 Increased Console Installed Base
 Software Prices
 Increasing Cost of Titles
 13




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Critical Accounting Policies
 General
  Estimates
  Accounts receivable
  Software Development Costs
    Prepaid royalties
   14




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Revenue Recognition
  
    
    Evidence of an arrangement: We recognize revenue when we have evidence of an agreement
with the customer reflecting the terms and conditions to deliver products.
    
    Delivery: Delivery is considered to occur when the products are shipped and risk of loss
has been transferred to the customer.
    
    Fixed or determinable fee: If a portion of the arrangement fee is not fixed or
determinable, we recognize that amount as revenue when the amount becomes fixed or
determinable.
    
    Collection is deemed probable: At the time of the transaction, we conduct a credit
review of each customer involved in a significant transaction to determine the
creditworthiness of the customer.
    
    Collection is deemed probable if we expect the customer to be able to pay amounts under
the arrangement as those amounts become due. If we determine that collection is not
probable, we recognize revenue when collection becomes probable (generally upon cash
collection).
 Product Revenue
  New Accounting Pronouncements
   Restatements
  15




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Results of Operations
 Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004.
 Net sales.
 Gross Profit.
 Reorganization expenses.
 Research and development Expenses.
 Selling, Marketing, General and Administrative Expenses.
 Depreciation.
 Impairment of capitalized software development costs.
 Interest Expense.
 Net Loss.
 Other comprehensive income.
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Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004.
 Net sales.
 Gross Profit.
 Reorganization expenses.
 Selling, Marketing, General and Administrative Expenses.
 Research and development Expenses.
 Depreciation.
 Impairment of capitalized software development costs.
 Interest Expense.
 Benefit from income taxes.
 Net Loss.
 Other comprehensive income.
 17




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Liquidity and Capital Resources
     Off Balance Sheet Arrangements
  
 Item 3. Controls and Procedures
    
  18




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19




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SIGNATURES
  Playlogic Entertainment, Inc.
 Date: December 21, 2006
    By:
    /s/ Willem M. SmitWillem M. SmitChief Executive Officer Date: December 21, 2006
    By:
    /s/ Wilbert KnolWilbert KnolInterim Chief Financial Officer

(Principal Financial and
Accounting Officer)




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PLAYLOGIC ENTERTAINMENT, INC.
 
 EXHIBIT INDEX
 Exhibit Number
    
    Description2.1
    
    Share Exchange Agreement, dated June 30, 2005 between the Registrant and the Shareholders
of Playlogic International N.V. (incorporated by reference to the Registrants Form 8-K
filed July 1, 2005)3.1
    
    Certificate of Incorporation of the Registrant, as filed with the Secretary of State of
the State of Delaware (incorporated by reference to the Registrants form SB-2/A filed
September 5, 2001)3.2
    
    Amendment to the Certificate of Incorporation of the Registrant, as filed with the
Secretary of State of the State of Delaware (incorporated by reference to the Registrants
Form 8-K dated April 15, 2005)3.3
    
    Bylaws of the Registrant (incorporated by reference to the Registrants form SB-2/A filed
September 5, 2001)10.1
    
    Lease for Office Space between Kantoren Fonds Nederland B.V., as the Lessor, and Playlogic
Game Factory B.V. as the Lessee dated March 11, 2002 (incorporated by reference from the
Registrants Registration Statement on Form SB-2 previously filed with the Commission on
July 20, 2005)10.2
    
    Lease for Office Accommodation between Fortis Vastgoed B.V., as the Landlord, and
Playlogic International N.V. as the Tenant dated April 25, 2005 (incorporated by reference
from the Registrants Registration Statement on Form SB-2 previously filed with the
Commission on July 20, 2005)10.3
    
    Lease for Office Space between Pr. Dr. D. Valerio, as the Lessor, and Mr. W.M. Smit
company director, handling in the function of president of the company Playlogic
International N.V., as the Lessee dated March 12, 2002 (incorporated by reference from the
Registrants Registration Statement on Form SB-2 previously filed with the Commission on
July 20, 2005)10.4
    
    Lease for Office Space between Neglinge B.V., as the Lessor, and Playlogic Game Factory
B.V. as the Lessee dated April 23, 2003 (incorporated by reference from the Registrants
Registration Statement on Form SB-2 previously filed with the Commission on July 20, 2005)10.5
    
    Employment Contract between Playlogic International, N.V. and Stefan Layer dated January
12, 2005 (incorporated by reference from the Registrants Registration Statement on Form
SB-2 previously filed with the Commission on July 20, 2005)10.6
    
    Employment Contract between Playlogic International, N.V. and Rogier Smit dated July 1,
2005 (incorporated by reference from the Registrants Registration Statement on Form SB-2
previously filed with the Commission on July 20, 2005)




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Exhibit Number
    
    Description10.7
    
    Employment Contract between Playlogic International, N.V. and Jan Willem Kohne dated
September 29, 200531.1
    
    Certifications of the Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certifications of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002