UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark  One)  (X)  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE
SECURITIES EXCHANGE ACT OF 1934 For the period ended: September 30, 2005

( ) 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.
        (Exact name of small business issuer as specified in its charter)

                Delaware                                   23-3083371
    (State or other jurisdiction of                     (I.R.S. Employer
     incorporation 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
                           (Issuer's telephone number)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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. X Yes __No

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.__ Yes __No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date: Class  Outstanding at November 10,
2005 Common Stock, par value $.001 per share 23,099,994 shares

      Transitional Small Business Disclosure Format (check one): Yes__ No X


<PAGE>



                                           PLAYLOGIC ENTERTAINMENT, INC.
                                                    FORM 10-QSB
                                                     CONTENTS

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
PART I -- FINANCIAL INFORMATION                                                                            Page No.
                                                                                                         --------------

            Item 1.       Financial Statements                                                                 3

                          Consolidated Balance Sheets at September 30, 2005 (unaudited)                        3

                          Consolidated  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                                       4

                          Consolidated  Statements of Cash Flows  (unaudited) for the nine months ended
                          September 30, 2005 and 2004                                                          5

                          Notes to Consolidated Financial Statements                                           6

            Item 2.       Management's Discussion and Analysis                                                15

            Item 3.       Controls and Procedures                                                             21

PART II -- OTHER INFORMATION                                                                                  22

            Item 1.       Legal Proceedings                                                                   22

            Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds                         22

            Item 3.       Defaults Upon Senior Securities                                                     22

            Item 4.       Submission of Matters to a Vote of Security Holders                                 22

            Item 5.       Other Information                                                                   23

            Item 6.       Exhibits                                                                            23

            Signatures                                                                                        24

            Exhibit Index                                                                                     25

            Certifications                                                                                    27

</TABLE>

                                       2
<PAGE>

                                           PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

                                  Playlogic Entertainment, Inc. and Subsidiaries
                                                  Balance Sheets
                                                September 30, 2005
                                                    (Unaudited)
<TABLE>
<S>                                                                                                                <C>
                                                                                                         September 30,
                                                                                                              2005
                                                          ASSETS
Current Assets
    Cash on hand and in bank                                                                $     143,108
    Accounts Receivable
       Trade, net of allowance for doubtful accounts                                              561,802
       Taxes                                                                                      551,570
       Affiliated entities                                                                        361,817
    Prepaid expenses                                                                            2,084,207
    Deferred tax asset                                                                            584,740
       Total current assets                                                                     4,287,154

Software development costs                                                                      2,419,088

Property and equipment - at cost, net of accumulated depreciation                                 516,117

Total Assets                                                                                $   7,222,359

                                           LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
    Bank overdraft                                                                                514,855
    Short term loans from third parties                                                              -
    Software development financing                                                                241,280
    Accounts payable - trade                                                                    3,043,282
    Accrued salaries, wages and related payroll taxes                                           1,254,217
    Other accrued liabilities                                                                     487,275
    Loans from shareholders for working capital                                                   646,237
       Total current liabilities                                                                6,187,146

Long-Term Liabilities
    Long-term debt, net of current maturities                                                     262,392
       Total liabilities                                                                        6,449,538

Shareholders' Equity
    Preferred 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                    23,100
    Additional paid-in capital                                                                32,326,016
    Currency translation adjustment                                                            1,172,460
    Accumulated deficit                                                                     (32,719,411)
                                                                                                 802,165
    Stock subscription receivable                                                                (29,344)
Total shareholders' equity                                                                       772,821

    Total Liabilities and Shareholders' Equity                                                $7,222,359
 The financial information presented herein has been prepared by management without audit by independent certified
                                                public accountants.
===================================================================================================================
              The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                       3
<PAGE>




                 Playlogic Entertainment, Inc. and Subsidiaries
                Statements of Operations and Comprehensive Income
             Nine and Three months ended September 30, 2005 and 2004

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                    (Unaudited)

                                                   Nine months        Nine months         Three months         Three months
                                                      ended              ended               ended                ended
                                                  September 30,    September 30, 2004  September 30, 2005   September 30, 2004
                                                       2005

Revenues                                         $     1,288,361    $                   $      542,579   $              -

Cost of Sales                                            351,827                    -          206,199                   -

Gross Profit                                             936,534                    -          336,380                   -

Expenses
   Research and development costs                        474,323         1,464,631              (3,322)           (340,474)
   Sales and marketing expenses                          569,057           428,726              73,937              41,961
   General and administrative expenses                 2,112,566        11,134,091             803,832             782,332
   Depreciation                                          196,293           237,248              (5,033)             82,897
Compensation expense related to
   common stock issuances at less
   than "fair value"                                     153,000                    -           63,000                       -
   Total operating expenses                            3,505,239        13,264,696             932,414             566,716

Loss from operations                                  (2,568,705)      (12,710,611)           (596,034)           (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                              (2,825,002)      (15,235,087)              (655,511)       (1,778,290)

Provision for Income Tax Benefit                         612,934                    -                   -                    -

Net Loss                                              (2,212,068)      (15,235,087)           (655,511)         (1,778,290)

Other comprehensive income/(loss)
   Change in foreign currency translation              3,964,132           (10,725)              5,945            (477,461)

Comprehensive Income/(Loss)                           $1,752,064      $(15,245,812)          $(649,566)         $(2,255751)

Loss per weighted-average share of
   common stock outstanding,
   computed on Net Loss - basic
   and fully diluted                                    $(0.07)              $(0.67)             $(0.03)              $(0.10)

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.
              The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                       4
<PAGE>



                              Playlogic Entertainment, Inc. and Subsidiaries
                                         Statements of Cash Flows
                               Nine months ended September 30, 2005 and 2004

                                                    (Unaudited)

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                                    Nine months           Nine months
                                                                       ended                 ended
                                                                 September 30, 2005    September 30, 2004
Cash Flows from Operating Activities
   Net Loss                                                         $(2,212,068)         $(15,235,087)
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Currency translation adjustment                                3,964,132               (10,275)
       Depreciation                                                      196,293              237,248
       Compensation expense related to common stock
         issuances at less than "fair value"                            153,000                     -
Cash expenditures prior to reverse merger transaction                   (44,641)
       (Increase) Decrease in
       Accounts receivable - trade                                     (561,802)                   178
       Value added taxes receivable                                    (551,570)             (371,629)
       Prepaid expenses                                              (1,811,389)             (597,545)
       Deferred tax asset                                              (584,837)                    -
     Increase (Decrease) in
       Accounts payable - trade                                        (144,311)            1,396,273
       Other current liabilities                                        206,984             1,399,832
Net cash provided by (used in) operating activities                  (1,390,112)          (13,181,455)
Cash Flows from Investing Activities
   Cash 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 Activities
   Increase in cash overdraft                                          (418,162)              736,126
   Principal 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                            (6,584,905)            4,685,516
   Proceeds from sales of common stock                               10,625,148             9,414,969
   Cash contributed by shareholder to support operations                  45,341                    -
   Cash paid to acquire capital                                          (3,500)                    -
Net cash provided by (used in) financing activities                   3,383,576            14,813,053

Increase (Decrease) in Cash and Cash Equivalents                        120,792               (32,949)
Cash and cash equivalents at beginning of period                         22,226                81,711
Cash and cash equivalents at end of period                      $        143,018      $        48,762

Supplemental Disclosures of Interest and Income
  Taxes Paid
   Interest paid during the period                              $        256,297       $     1,603,002
                                                                $                     $
   Income taxes paid (refunded)                                               -                     -
 The financial information presented herein has been prepared by management without audit by independent certified
                                                public accountants.
===================================================================================================================

              The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                       5
<PAGE>

                                  Playlogic Entertainment, Inc. and Subsidiaries

                                     Notes to Consolidated Financial Statements

Note A - Organization and Description of Business

Playlogic  Entertainment,  Inc.  (PEI)  was  incorporated  on May  25,  2001  in
accordance with the Laws of the State of Delaware as Donar Enterprises, Inc.

PEI's initial  business plan was to provide the conversion and filing of various
documents  prepared in  accordance  with either the  Securities  Act of 1933, as
amended,  or the  Securities  Exchange  Act of 1934,  as  amended,  for small to
mid-sized  public  companies with the U.S.  Securities  and Exchange  Commission
(SEC)  electronically  through  EDGAR,  the  SEC's  Electronic  Data  Gathering,
Analysis,  and Retrieval system.  The Company has never been affiliated with the
SEC in any manner.

On February 27, 2002,  PEI's  Registration  Statement on Form SB-2 (SEC File No.
333-68702), registering 2,000,000 pre-reverse split shares to be sold at a price
of $0.05 per share, was declared effective.  Between July and December 2002, PEI
sold  an  aggregate  656,000  pre-reverse  split  shares  of  stock  under  this
Registration Statement.

In June 2004 and December 2004,  respectively,  PEI experienced separate changes
in control and  abandoned  its business  plan  related to  providing  electronic
filing  services for small to mid-sized  public  companies and began a search to
seek a suitable reverse  acquisition  candidate through  acquisition,  merger or
other suitable business combination method.

On  June  30,  2005,  pursuant  to a  Securities  Exchange  Agreement  (Exchange
Agreement)  by and  among  the  Company  and  Playlogic  International  N.V.,  a
corporation  formed  under  the  laws of The  Netherlands  (Playlogic),  and the
shareholders of Playlogic (Playlogic  Shareholders);  the Playlogic Shareholders
exchanged  100.0% of the issued and  outstanding  ordinary  shares and preferred
shares of Playlogic for an aggregate  21,836,924  shares of the Company's common
stock.  As  a  result  of  this  transaction,  Playlogic  became  the  Company's
wholly-owned  subsidiary,   now  represents  all  of  the  Company's  commercial
operations,  and the Playlogic  Shareholders control  approximately 91.0% of the
outstanding common stock of the Company, post-transaction.

Playlogic  International  N.V. was  incorporated in the Netherlands in May 2002.
Playlogic publishes interactive  entertainment software for video game consoles,
personal computers (PCs) and handheld and mobile electronic devices developed by
its internal studio and by third parties.

In subsequent notes, the consolidated entity is referred to as "Company".


                                       6
<PAGE>

Note B - Preparation of Financial Statements

The acquisition of Playlogic  International N. V. on June 30, 2005, by Playlogic
Entertainment,  Inc.  (formerly  Donar  Enterprises,  Inc.) effected a change in
control and was accounted for as a "reverse acquisition" whereby Playlogic N. V.
is the accounting acquiror for financial statement  purposes.  Accordingly,  for
all periods  subsequent to the June 30, 2005,  the  financial  statements of the
Company reflect the historical financial statements of Playlogic N. V. since its
inception  and  the  operations  of  Playlogic  Entertainment  (formerly  Donar)
subsequent to the June 30, 2005.

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America 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 those estimates.

Management  acknowledges  that  it is  solely  responsible  for  adopting  sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

For  segment  reporting  purposes,  the Company  operated  in only one  industry
segment during the periods represented in the accompanying  financial statements
and makes all  operating  decisions and  allocates  resources  based on the best
benefit to the Company as a whole.

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange  Commission on its Current Report on Form 8-K as filed on July 15, 2005
containing  the  Playlogic  financial  statements  as of and for the year  ended
December 31, 2004.  The  information  presented  within these interim  financial
statements  may not  include all  disclosures  required  by  generally  accepted
accounting  principles  and the  users of  financial  information  provided  for
interim periods should refer to the annual  financial  information and footnotes
when reviewing the interim financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2005.

                                       7
<PAGE>

These  financial   statements   reflect  the  books  and  records  of  Playlogic
Entertainment,  Inc. (formerly Donar Enterprises, Inc.), Playlogic International
N.V.  (a  corporation  domiciled  in The  Netherlands)  and its  100%-subsidiary
Playlogic Game Factory B.V. All significant intercompany  transactions have been
eliminated in combination. The consolidated entities are referred to as Company.


Note C - Going Concern Contingency

     The  Company's  management  believes  that in order to  cover  its  working
     capital  requirements  through  the fourth  quarter of 2005 it will need to
     obtain  additional  financing from third  parties.  If the Company does not
     obtain  any  necessary  financing  in the  future,  it may  need  to  cease
     operations.


Note D - Summary of Significant Accounting Policies

1.   Currency translation

     The  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.  For  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:                                 $1.23800
         December 31, 2004:                                  $1.36450
         September 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:                                $1.22463
         December 31, 2004:                                 $1.24829
         September 30, 2005:                                $1.26457

                                       8
<PAGE>

2.   Cash and cash equivalents

     The  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 - trade

     The 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 equipment


     Property  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.

5.   Software development costs

     Capitalized 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.

                                       9
<PAGE>

6.   Prepaid royalties

     The  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 costs

     The Company has adopted the provisions of AICPA Statement of Position 98-5,
     "Reporting on the Costs of Start-Up  Activities" whereby all organizational
     and   initial   costs   incurred   with  the   incorporation   and  initial
     capitalization of the Company were charged to operations as incurred.

8.   Research and development expenses

     Research and development expenses are charged to operations as incurred.

9.   Advertising expenses

     The Company does not utilize  direct  solicitation  advertising.  All other
     advertising and marketing expenses are charged to operations as incurred.

10.  Income Taxes

     The 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.

                                       10
<PAGE>

11.  Share-Based Payments

     The 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 share

     Basic  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 recognition

     The 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).

                                       11
<PAGE>

14.  New accounting pronouncements

     In 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 - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.


Note F - Concentrations of Credit Risk

The Company  maintains its cash accounts in a financial  institution  subject to
insurance coverage issued by the Federal Deposit Insurance  Corporation  (FDIC).
Under FDIC rules, the Company is entitled to aggregate  coverage of $100,000 per
account  type per  separate  legal  entity per  financial  institution.  Through
September  30,  2005,  the  Company  maintained  deposits  in various  financial
institutions  with credit risk  exposures in excess of statutory  FDIC coverage.
The Company has incurred no losses during 2004 or 2003,  or subsequent  thereto,
as a result of any unsecured bank balance.

                                       12
<PAGE>

The Company is exposed to currency risks. The Company is particularly exposed to
fluctuations  in the exchange  rate between the U.S.  Dollar and the Euro, as it
incurs  manufacturing  costs and prices its products in the Euro (the  Company's
operating  subsidiary's  functional  currency) while a portion of its revenue is
denominated  in U.S.  Dollars.  A substantial  portion of the company's  assets,
liabilities and operating  results are denominated in Euros, and a minor portion
of its assets,  liabilities and operating  results are denominated in currencies
other  than the  Euro.  The  Company's  consolidated  financial  statements  are
expressed in US Dollars.  Accordingly,  its results of operations are exposed to
fluctuations  in various  exchange  rates.  As of the  applicable  balance sheet
dates, the exposure was very limited,  hence, no hedging  activities were deemed
necessary by  management.  In the Company's  exchange rate  agreements,  it uses
fixed interest rates.

Note G - Common Stock Transactions

On  February  21,  2005,  by written  consent in lieu of  meeting,  stockholders
representing  78.9% of the issued  and  outstanding  shares of our common  stock
approved a  recommendation  of our Board of  Directors to effect a one share for
ten shares  reverse stock split of our common stock,  par value $.001 per share,
with all fractional  shares rounded down to the nearest whole share. The reverse
split became  effective on April 15, 2005. As a result of the reverse split, the
total number of issued and outstanding shares of our common stock decreased from
9,289,647  shares  to  928,964  shares,  after  giving  effect to  rounding  for
fractional shares. In the reverse split calculation,  all fractional shares were
rounded down to the nearest whole share.  Holders of less than ten shares, prior
to the reverse split, shall receive $0.30 per share as compensation.  The effect
of this action is  reflected in the  Company's  financial  statements  as of the
first day of the first period.

In  conjunction  with  the  above  discussed  reverse  stock  split,  all  share
references in the following  paragraphs  reflect the post-April 15, 2005 reverse
split action.

On  June  30,  2005,  pursuant  to a  Securities  Exchange  Agreement  (Exchange
Agreement)  by and  among  the  Company  and  Playlogic  International  N.V.,  a
corporation  formed  under  the  laws of The  Netherlands  (Playlogic),  and the
shareholders of Playlogic (Playlogic  Shareholders);  the Playlogic Shareholders
exchanged  100.0% of the issued and  outstanding  ordinary  shares and preferred
shares of Playlogic for an aggregate  21,836,924  shares of the Company's common
stock.  As  a  result  of  this  transaction,  Playlogic  became  the  Company's
wholly-owned  subsidiary,   now  represents  all  of  the  Company's  commercial
operations,  and the Playlogic  Shareholders control  approximately 91.0% of the
outstanding common stock of the Company, post-transaction.

On March 10, 2004, the Company issued 32,080 shares of restricted,  unregistered
common stock to Michael Tay, son of then-President and controlling  shareholder,
William Tay, as compensation for various services provided to the Company.  This
transaction  was valued at  approximately  $16,040 (or $0.50 per  reverse  split
share).  The Company relied upon the exemptions  provided by Section 4(2) of the
Securities Act of 1933, as amended, for this transaction.

                                       13
<PAGE>

On April 22,  2004,  the Company  issued an aggregate  184,618  shares of common
stock to William Tay as consideration of approximately  $85,000 in accrued,  but
unpaid,  officer  compensation,  reimbursement of trade accounts payable paid by
Mr. Tay on behalf of the Company and in  repayment  of  approximately  $7,000 in
unsecured  advances made to the Company for working capital.  The Company relied
upon the  exemptions  provided by Section 4(2) of the Securities Act of 1933, as
amended, for this transaction.

As a result of the December 15, 2004 change in control and in consideration  for
agreeing to serve as an officer and director of the  Company,  Timothy P. Halter
was granted a stock warrant to purchase up to 100,000  post-reverse split shares
of the Company's restricted,  unregistered common stock at an effective price of
$0.60 per share, in reliance upon the exemption from  registration  set forth in
Section 4(2) of the Securities Act of 1933, as amended.  Mr. Halter may exercise
the  warrants,  in whole  or in part,  at any time  after  the  issuance  of the
warrants and prior to the  expiration  of the warrants on December 15, 2007.  On
June 1, 2005, Mr. Halter  exercised all of the outstanding  warrants for $60,000
cash.

The following table presents warrant activity through September 30, 2005:

                                                                 Weighted
                                                                  Average
                                            Number of            Exercise
                                             Shares                Price
       Balance at December 31, 2004       100,000                   $0.60
         Issued                              -
         Exercised                        (100,000)
       Balance at September 30, 2005          -


On June 28,  2005,  the  Company  sold  162,100  shares of its  common  stock to
Johannes  Wilhelmus  Kluijtmans  for  aggregate  consideration  of $608,000,  or
approximately  $3.75 per  share.  The sale was made  pursuant  to the terms of a
Subscription  Agreement,  dated as of June 28, 2005,  which agreement  contained
confidentiality  and  non-disclosure  agreements and covenants.  The shares sold
were  offered for resale under  registration  statement  SB2 becoming  effective
September 26, 2005. The Company never utilized an underwriter  for this offering
of its  securities  and no sales  commissions  were paid to any  third  party in
connection with the above-referenced sale.

On July 5, 2005,  the Company sold 36,000 shares of its common stock to C.J.W.A.
Komen for total consideration of $135,000, or approximately $3.75 per share. The
sale was made  pursuant to the terms of a  Subscription  Agreement,  dated as of
July 5, 2005,  which  agreement  contained  confidentiality  and  non-disclosure
agreements and  covenants.  The sale was made without  registration  in reliance
upon the exemption  afforded by Section 4(2) of the  Securities  Act of 1933, as
amended.  The shares are "restricted  securities" in that they are legended with
reference  to Rule 144.  The  Company  never  utilized an  underwriter  for this
offering of its securities and no sales commissions were paid to any third party
in  connection  with  the  above-referenced  sale.  As of  September  30,  2005,
approximately $29,344 of the subscription remains unpaid.


                                       14
<PAGE>

Note H - Commitments and Contingencies

Security agreement

Playlogic Game Factory B.V., on August 31, 2004, signed a security  agreement in
favor of the Dutch Tax  Authorities  for the amount  $98,394  concerning  Engine
Software B.V.

Transactions with related parties

In 2004,  Sloterhof  Investments N.V. and Castilla  Investments  B.V.,  entities
owned and  controlled  by  members  of the  Company's  current  management  were
previously  granted a stock  option  right to acquire up to a total of 8,609,189
shares in Playlogic  International  N. V. with an exercise price at par value of
EURO 0.05.  The  intrinsic  value of this option right was charged to operations
upon it's grant during 2004.

Sloterhof  Investments N.V. agreed with the company to reimburse the company for
certain  expenses  incurred  in  connection  with  the  reverse-share   exchange
transaction with Playlogic Entertainment, Inc., previously discussed.



                                       15
<PAGE>



 Item 2. Management's Discussion and Analysis

Forward-Looking Statements

     The Information in this  registration  statement  contains  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995.  This Act  provides a "safe  harbor"  for  forward-looking  statements  to
encourage companies to provide prospective  information about themselves so long
as they  identify  these  statements as forward  looking and provide  meaningful
cautionary  statements  identifying  important  factors  that could cause actual
results  to differ  from the  projected  results.  All  statements,  other  than
statements of historical fact, made in this  registration  statement are forward
looking.  In particular,  the statements herein regarding industry prospects and
future  results  of  operations  or  financial   position  are   forward-looking
statements. Forward-looking statements reflect management's current expectations
and are inherently  uncertain.  Our actual results may differ significantly from
management's expectations.

     The following  discussion and analysis  should be read in conjunction  with
our  financial  statements  included  herewith.  This  discussion  should not be
construed to imply that the results  discussed herein will necessarily  continue
into the future,  or that any  conclusion  reached  herein will  necessarily  be
indicative of actual operating results in the future. Such discussion represents
only the best present assessment of our management.

Management's Overview of Historical and Prospective Business Trends

     Increased  Console  Installed  Base.  As  consumers  purchase  the  current
generation  of  consoles,  either as first time  buyers or by  upgrading  from a
previous generation, the console installed base increases. As the installed base
for a  particular  console  increases,  we believe we will  generally be able to
increase our unit volume.  However, as consumers  anticipate the next generation
of consoles,  unit volumes often decrease.  In March 2004, Microsoft reduced the
retail price of its Xbox consoles in the US, and in May and December 2004,  Sony
did the same with its PlayStation2  consoles. As price reductions drive sales of
consoles and the related  installed  base of these current  generation  consoles
increases  during  fiscal  2005,  we  believe  that  our unit  sales of  current
generation titles are likely to be increased.

     Software Prices. As current generation  console prices decrease,  we expect
more  value-oriented  consumers to become part of the interactive  entertainment
software  market.  We believe  that hit titles  will  continue to be launched at
premium  price points and will  maintain  those premium price points longer than
less popular games. However, as a result of a more value-oriented consumer base,
and a greater  number of software  titles  being  published,  we expect  average
software prices to gradually come down, which we expect to negatively impact our
gross margin.  To offset this, as the installed base increases,  total volume of
software sales are expected to increase,  compensating  for the lower margins on
software sales.

     Increasing  Cost of Titles.  Game  titles  have  become  increasingly  more
expensive  to  produce  and  market as the  platforms  on which  they are played
continue to advance  technologically and consumers demand continual improvements
in the  overall  game play  experience.  We expect  this trend to continue as we
require larger  production teams to create our titles and the technology  needed
to develop  titles  becomes  more  complex.  With the  recent  hiring of several
industry  experts with large  networks,  we have access to quality  titles for a
competitive price and are therefore capable to cope with this trend. We continue
to develop and expand the online  gaming  capabilities  included in our products
and we develop new methods to  distribute  our  content  via the  Internet.  Any
increase in the cost of licensing third-party  intellectual property used in our
products would also make these products more expensive to publish.


                                       16
<PAGE>

Critical Accounting Policies

General

     The unaudited condensed  consolidated  financial  statements of the company
have been  prepared in  accordance  with the  instructions  to  Regulation  S-B.
Accordingly,  the  financial  statements  do not  include  all  information  and
disclosures  necessary for a presentation of the company's  financial  position,
results of  operations  and cash flows in  conformity  with  generally  accepted
accounting  principles  in the  United  States of  America.  In the  opinion  of
management, the financial statements reflect all adjustments (consisting only of
normal recurring  accruals)  necessary for a fair  presentation of the company's
financial  position,  results  of  operations  and cash  flows.  The  results of
operations for any interim periods are not necessarily indicative of the results
for  the  full  year.  The  unaudited  financial  statements  should  be read in
conjunction with the audited financial statements and notes thereto contained in
this prospectus.

Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of contingent  assets and  liabilities  at the dates of the financial
statements  and the  reported  amounts  of net sales  and  expenses  during  the
reporting periods. The most significant  estimates and assumptions relate to the
recoverability of prepaid royalties,  capitalized software development costs and
intangibles,  inventories, realization of deferred income taxes and the adequacy
of allowances for doubtful accounts.  Actual amounts could differ  significantly
from these estimates.

Accounts receivable

     Accounts  receivable  are shown after  deduction of a provision for bad and
doubtful debts where appropriate.

Software Development Costs

     Capitalized software development costs include payments made to independent
software  developers  under  development  agreements,  as well as  direct  costs
incurred for internally developed products.  We account for software development
costs in  accordance  with SFAS 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.

     We  utilize  both  internal  development  teams  and  third-party  software
developers to develop our products.

                                       17
<PAGE>

     We capitalize  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, we evaluate the  recoverability  of  capitalized  software  costs based on
undiscounted  future cash flows and charge to cost of sales any amounts that are
deemed  unrecoverable.  Our agreements  with  third-party  developers  generally
provide us with the  intellectual  property rights and exclusive  publishing and
distribution  rights and require us 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.

Prepaid royalties

     We capitalize  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,   we  evaluate  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.

Revenue Recognition

     We evaluate 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".  We evaluate revenue
recognition using the following basic criteria:

     o    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.

     o    Delivery:  Delivery  is  considered  to occur  when the  products  are
          shipped and risk of loss has been transferred to the customer.

     o    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.

     o    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.

     o    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).

                                       18
<PAGE>

Product Revenue

     Product  revenue,  including  sales  to  resellers  and  distributors,   is
recognized  when the above  criteria  are met.  We reduce  product  revenue  for
estimated  customer  returns by distributing  our products  through  experienced
distributors with whom we had previously worked.

New Accounting Pronouncements

     In December 2004, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123 (R),  "Share-Based  Payment"
which  revised  Statement  of  Financial   Accounting  Standards  No.  123  (R),
"Accounting for Stock-Based Compensation". This statement supercedes 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 we are  currently  analyzing  the method of adoption and impact of
the adoption of this standard, effective January 1, 2006, we expect it will have
an impact on our condensed  consolidated financial statements similar to the pro
forma disclosure under Statement of Financial  Accounting Standards No. 123 (R),
"Accounting for Stock-Based Compensation" ("SFAS 123 (R)").

Results of Operations

Three Months Ended  September 30, 2005 Compared to Three Months Ended  September
30, 2004.

     Net sales.  Net sales for the three  months ended  September  30, 2005 were
$542,579,  as compared to $0 for the three months ended September 30, 2004. This
increase in revenue is  primarily  the result of starting  sales of  Playlogic's
games in the fourth  quarter of 2004.  $542,579  of the  revenues  for the three
months ended  September 30, 2005 were from Europe,  and $0 were from the US. All
of these revenues were derived from Playlogic's game distributors.

     Gross Profit.  Gross profit  totaled  approximately  $336,380 for the three
months ended  September 30, 2005. For the three months ended September 30, 2004,
gross profit  totaled $0. This  increase in gross profit is primarily the result
of an increase in net sales.

     Selling,   Marketing,   General  and  Administrative   Expenses.   Selling,
marketing,  general and administrative  expenses totaled $877,769, for the three
months ended  September 30, 2005. For the three months ended September 30, 2004,
selling,  general and administrative  expenses totaled $824,923. This represents
an increase of $53,476, or 6.5%.

     Research and development.  Research and development expenses totaled $3,322
for the three  months  ended  September  30,  2005.  For the three  months ended
September 30, 2004, research and development  totaled $340,474.  This represents
an increase of $337,152,  of 99%. This increase was due to a lower amount of our
research and development expenses being capitalized.

                                       19
<PAGE>

     Depreciation.  Depreciation  expenses  totaled  $5,033 for the three months
ended  September 30, 2005.  For the three months ended  September 30, 2004,  the
depreciation  expense  totaled  $82,897.  The  decrease of $87,930 or 106.1% was
caused by  adjustments  on items carrying a negative book value and fixed assets
being fully depreciated that were not yet replaced.

     Impairment of capitalized  software  development  costs.  Impairment  costs
totaled $0 for the three months ended  September 30, 2005.  For the three months
ended September 30, 2004,  impairment costs totaled  $365,153.  This decrease in
impairment costs is due to less  capitalized  software  development  costs being
impaired.

     Interest  Expense.  Interest  expense  totaled $59,477 for the three months
ended  September  30,  2005.  For the three  months  ended  September  30, 2004,
interest expense totaled  $846,421.  This represents a decrease of $786,944,  or
92.9%.  This decrease in interest expense is primarily the result of Playlogic's
debt holders converting their loans into ordinary shares of Playlogic.

     Net Loss.  Our net loss was $655,511  for the three months ended  September
30,  2005.  For the three  months ended  September  30,  2004,  net loss totaled
$1,788,290.  The  decrease  of the net loss is  primarily  the  result  of lower
interest  expenses and starting sales of Playlogic's games in the fourth quarter
of 2004 and related increased gross profit.

     Other  comprehensive  income.  Other  comprehensive  income  represents the
change of the Currency  Translation  Adjustments  balance  during the  reporting
period.  The  Currency  Translation  Adjustments  balance  that  appears  in the
stockholders'  equity section is cumulative in nature and is a consequence  from
translating all assets and liabilities at current rate whereas the stockholders'
equity accounts are translated at the  appropriate  historical rate and revenues
and expenses  being  translated at the  weighted-average  rate for the reporting
period. The Change in currency translation  adjustments was $5,945 for the three
months  ended  September  30, 2005 and  $(477,461)  for the three  months  ended
September 30, 2004.


Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30,
2004.

     Net sales.  Net sales for the nine  months  ended  September  30, 2005 were
$1,288,361, as compared to $0 for the nine months ended September 30, 2004. This
increase in revenue is  primarily  the result of  increased  sales of our games.
$946,270 of the revenues for the nine months ended  September 30, 2005 were from
Europe and $342,091  were from the US. All of these  revenues  were derived from
our game distributors.

     Gross  Profit.  Gross  profit  totaled  $936,534  for the nine months ended
September 30, 2005. For the nine months ended  September 30, 2004,  gross profit
totaled $0. This increase in gross profit is primarily the result of an increase
in net sales.

     Selling,   Marketing,   General  and  Administrative   Expenses.   Selling,
marketing,  general and administrative  expenses totaled $2,681,623 for the nine
months ended  September 30, 2005. For the nine months ended  September 30, 3004,
selling,   general  and  administrative   expenses  totaled  $11,562,817.   This
represents a decrease of $8,881,194  or 77%.  This decrease in selling,  general
and  administrative  expenses is  primarily  the result of a one-time  charge of
granted options to certain stock holders in 2004.

                                       20
<PAGE>

     Research  and  development.   Research  and  development  expenses  totaled
$474,323 for the nine months ended September 30, 2005. For the nine months ended
September 30, 2004, research and development  expenses totaled $1,464,631.  This
represents a decrease of $990,308 or 68%.  This decrease is due to less research
and development expenses being capitalized.

     Depreciation.  Depreciation  expense  totaled  $196,293 for the nine months
ended  September  30,  2005.  For the nine  months  ended  September  30,  2004,
depreciation  expense  totaled  $237,248.  The  decrease of $40,955,  or 17% was
caused by  adjustments  on items carrying a negative book value and fixed assets
being fully depreciated that were not yet replaced.

     Impairment of capitalized  software  development  costs.  Impairment  costs
totaled $0 for the nine months ended  September  30,  2005.  For the nine months
ended September 30, 2004,  impairment costs totaled  $367,389.  This decrease in
impairment costs is due to less  capitalized  software  development  costs being
impaired.

     Interest  Expense.  Interest  expense totaled  $256,297 for the nine months
ended September 30, 2005. For the nine months ended September 30, 2004, interest
expense totaled  $1,603,002.  This represents a decrease of $1,346,705,  or 84%.
This  decrease in interest  expense is primarily  the result of our debt holders
converting their loans into ordinary shares of Playlogic.

     Benefit from income taxes.  Benefit from income taxes totaled  $612,934 for
the nine months ended  September 30, 2005.  For the nine months ended  September
30, 2004,  benefit from income taxes totaled $0. This increase was caused by our
entering into contracts to purchase  finished  products and for  distribution of
these games; therefore deferred tax income has been recognized.

     Net Loss. Our net loss was  $2,212,068 for the nine months ended  September
30,  2005.  For the nine months  ended  September  30,  2004,  net loss  totaled
$15,235,087. This was primarily due to a one-time charge related to the grant of
stock  options to certain  stockholders  in 2004,  recognition  of benefits from
income taxes, increased gross profit, lower interest expenses and lower research
and development costs.

     Other  comprehensive  income.  Other  comprehensive  income  represents the
change of the Currency  Translation  Adjustments  balance  during the  reporting
period.  The  Currency  Translation  Adjustments  balance  that  appears  in the
stockholders'  equity section is cumulative in nature and is a consequence  from
translating all assets and liabilities at current rate whereas the stockholders'
equity accounts are translated at the  appropriate  historical rate and revenues
and expenses  being  translated at the  weighted-average  rate for the reporting
period.  The Change in currency  translation  adjustments was $3,964,132 for the
nine months ended  September  30, 2005 and  $(10,725)  for the nine months ended
September  30,  2004.  This  increase  is  due  to the  $/(euro)  exchange  rate
decreasing  from 1,3655 per end of December  2004 to 1.2064 per end of September
2005.




                                       21
<PAGE>



Liquidity And Capital Resources

September 30, 2005

     As of September 30, 2005, we had $143,108 of cash on hand.

     The  Company's  management  believes  that it will not yet be profitable by
year end 2005. In order to cover its working  capital  requirements  through the
fourth  quarter of 2005 it will need to obtain  additional  financing from third
parties.  The Company is currently in negotiation  with several  parties in this
respect.  If the Company does not obtain any necessary  financing in the future,
it may need to cease operations.

     We expect our capital  requirements to increase over the next several years
as we  continue  to  develop  new  products  both  internally  and  through  our
third-party  developers,  increase marketing and administration  infrastructure,
and  embark  on  in-house  business  capabilities  and  facilities.  Our  future
liquidity  and capital  funding  requirements  will depend on numerous  factors,
including,  but not limited to, the cash generation from the released games, the
cost of hiring and training  production  personnel  who will produce our titles,
the cost of hiring and  training  additional  sales and  marketing  personnel to
promote our products,  and the cost of hiring and training  administrative staff
to support current management.


Off Balance Sheet Arrangements

     We do not have  any off  balance  sheet  arrangements  that are  reasonably
likely to have a current or future effect on our financial condition,  revenues,
results of operations, liquidity or capital expenditures.


Item 3. Controls and Procedures.

     As of the end of the period covered by this report,  the Company  conducted
an evaluation, under the supervision and with the participation of our principal
executive officer and principal  financial officer,  of the effectiveness of the
Company's  disclosure  controls and  procedures  (as defined in Rules 13a-15 and
15d-15 of the Exchange Act). Based on this evaluation,  our principal  executive
officer and principal  financial officer concluded that our disclosure  controls
and procedures are effective to ensure that information required to be disclosed
by the Company in reports  that it files or submits  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange  Commission  rules and forms.  It should be noted
that the  design  of any  system  of  controls  is based  in part  upon  certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future conditions, regardless of how remote.

     There  was no change  in the  Company's  internal  control  over  financial
reporting  during the Company's most recently  completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal controls over financial reporting.





                                       22
<PAGE>



                                            PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

         None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

     On July 5, 2005,  the  Company  sold 36,000  shares of its common  stock to
C.J.W.A.  Komen for total consideration of $135,000,  or approximately $3.75 per
share.  The sale was made  pursuant  to the terms of a  Subscription  Agreement,
dated  as of  July  5,  2005,  which  agreement  contained  confidentiality  and
non-disclosure  agreements and covenants. The sale was made without registration
in reliance upon the exemption afforded by Section 4(2) of the Securities Act of
1933,  as  amended.  The shares  are  "restricted  securities"  in that they are
legended with  reference to Rule 144. The Company never  utilized an underwriter
for this offering of its  securities and no sales  commissions  were paid to any
third party in connection  with the  above-referenced  sale. As of September 30,
2005, approximately $29,344 of the subscription remains unpaid.


Item 3. Defaults Upon Senior Securities.

         None.

Item 4. Submission of Matters to a Vote of Security Holders.

         None.

Item 5. Other Information.

         None.

Item 6. Exhibits.

     The exhibits are listed in the Exhibit Index appearing at page 26 herein.



                                       23
<PAGE>



SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                             Playlogic Entertainment, Inc.
                                             (Registrant)

Date: November 10, 2005             By:      /s/ Willem M. Smit
                                             Willem M. Smit
                                             Chief Executive Officer


Date: November 10, 2005             By:      /s/ Jan Willem Kohne
                                             Jan Willem Kohne
                                             Chief Financial Officer
                                             (Principal Financial and
                                              Accounting Officer)




                                       24
<PAGE>



                          PLAYLOGIC ENTERTAINMENT, INC.
                                  EXHIBIT INDEX

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Exhibit Number            Description
2.1                       Share Exchange Agreement,  dated June 30, 20005 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)

                                       25
<PAGE>

10.7                      Employment  Contract  between  Playlogic  International,  N.V.  and Jan Willem  Kohne dated
                          September 29, 2005

31.1                      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 2002

32.1                      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 2002

32.2                      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

</TABLE>

                                       26
<PAGE>