U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 20-F





Amendment No. 1





o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934





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


For the Fiscal Period Ended December 31, 2011





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


For transition period from __________ to __________





o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.


Date of event requiring this shell company report __________





Commission File Number:  000-52311





PLAY LA INC.


(Exact name of Registrant as specified in its charter)





TORTOLA, BRITISH VIRGIN ISLANDS


(Jurisdiction of incorporation or organization)





Unit 92


171 Main Street, Road Town, Tortola, BVI VG1110


(Address of principal executive offices)




daveh@playlainc.com

David Hallonquist(Email address of Contact Person)

(Name of Contact Person)




Securities registered or to be registered pursuant to Section 12(b) of the Act:  None





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





Common Stock, No Par Value

OTC-BB(Title of Class)

(Exchange on which registered)





Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:  None





Number of outstanding shares of each of the Registrant’s classes of capital or common stock as of December 31, 2011:  11,751,912 Common Shares Without Par Value




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Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


o Yes                                x No





If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.


o Yes                                x No





Note:
Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.





Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:


x Yes                                o No





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


x Yes                                o No





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





Large accelerated filer r                                           Accelerated filer r                                Non-accelerated filer x





Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:




U.S. GAAP  x
International Financial Reporting Standards as issued
Other  oBy the International Accounting Standards Board  o





If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.





o Item 17                      o Item 18





If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


o Yes                                x No





(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)


Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by court.





o Yes                               o No





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NOTICE TO READER





The purpose for filing this Amended Form 20-F is to include additional information to support the operating results and financial review of the company as originally filed on April 4, 2012. Although additional information has been added, there has been no changes made to the original stated operating results and financial statements in the April 4, 2012 Form 20-F.





INFORMATION TO BE INCLUDED IN THE REPORT





Convention





In this Form 20-F all references to “Tortola” are references to Tortola, British Virgin Islands.  All references to the “Government” are references to the government of Tortola, British Virgin Islands.  Unless otherwise noted all references to “common shares”, “shares” or “common stock” are references to the common shares of the Registrant.  All references to “the Company”, “the Registrant” or “Play LA” are references to “Play LA Inc.”.





In this document, all references to “SEC” or “Commission” are reference to the United States Securities and Exchange Commission.  References to “$” are to the currency of the United States of America.





Forward Looking Statements





This Form 20-F includes "forward-looking statements".  A shareholder or prospective shareholder should bear this in mind when assessing the Registrant’s business.  All statements included in this registration statement, other than statements of historical facts, including, without limitation, the statements located elsewhere herein regarding industry prospects and the Registrant’s financial position, are forward-looking statements.  Although the Registrant believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.




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TABLE OF CONTENTS




Item 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
5Item 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
5Item 3.
KEY INFORMATION
5Item 4.
INFORMATION ON THE REGISTRANT
11Competition Overview
21Gaming in the European Union – An Overview
23Western Europe Market Overview
25Item 4A.
UNRESOLVED STAFF COMMENTS
27Item 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
28Item 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
33Item 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
39Item 8.
FINANCIAL INFORMATION
41Item 9.
THE OFFER AND LISTING
41Item 10.
ADDITIONAL INFORMATION
43Item 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
44Item 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
44Item 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
45Item 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
45Item 15.
CONTROLS AND PROCEDURES
45Item 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
45Item 16B.
CODE OF ETHICS
45Item 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
46Item 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
46Item 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
46Item 17.
FINANCIAL STATEMENTS
46Index to Financial Statements
46
  - 4 -


PART I





Item 1.                      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS





A.           Directors and Senior Management





Not applicable





B.           Advisers





Not applicable





C.           Auditors





Effective November 22, 2011, Play LA Inc. changed its principal independent accountants, RBSM LLP (“RBSM”).  On such date, RBSM was terminated from serving as the Company’s independent registered public accounting firm and the Registrant retained KR Margetson Ltd. (“Margetson”), as its principal independent accountants.  The decision to change accountants was approved by the Registrant’s Board of Directors.





RBSM was the independent registered public accounting firm for the Registrant from March 15, 2011 until November 22, 2011.  RBSM’s report on the Registrant’s financial statements for the fiscal year ended December 31, 2010 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principle, except that the report of RBSM on the Registrant’s financial statements for the fiscal year 2010 contained an explanatory paragraph which noted that there was substantial doubt about the Registrant’s ability to continue as a going concern.





During the fiscal year ended December 31, 2010, and the subsequent interim period through November 22, 2011, there were no disagreements between the Registrant and RBSM LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to RBSM LLP’s satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their reports on the financial statements of the Registrant for such years. During the year ended December 31, 2010 and through November 22, 2011, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.





The Registrant has provided RBSM LLP with a copy of the foregoing disclosures.  A copy of the letter from RBSM LLP, dated November 22, 2011, stating their agreement with such statements have been filed on Form 6-K filed on November 23, 2011 with the Security Exchange and Commission.





On November 22, 2011 (the “Engagement Date”), the Registrant engaged Margetson as its independent registered public accounting firm for the Registrant’s fiscal year ended December 31, 2011.  The engagement of Margetson as the Registrant’s independent registered public accounting firm was approved by the Audit Committee of the Registrant’s Board of Directors.





During the two most recent fiscal years and through the Engagement Date, the Registrant has not consulted with Margetson regarding either:





1.
the application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Registrant’s financial statements;





2.
neither a written report was provided to the Registrant nor oral advice was provided that Margetson  concluded was an important factor considered by the Registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or




- 5 -




3.
any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K).





The prior auditors for the Registrant were Peterson Sullivan, PLLC, of Suite 2300, 601 Union Street, Seattle, Washington, 98101, USA for the Registrant’s December 31, 2005, 2006 and 2007 year end.





Jewett Schwartz Wolfe and Associates of 200 South Park, Suite 150, Hollywood, Florida, 33021 USA were the Company’s auditors for the December 31, 2008 and 2009 year end.  On March 15, 2011, Jewett Schwartz Wolfe and Associates advised the Registrant that its audit practice was acquired by RBSM LLP.  RBSM LLP is located at 5 West 37th Street, 9th Floor, New York, NY 10018, and were the auditors for the Registrant’s December 31, 2010 year end.





The current auditor for the Registrant is K.R. Margetson Ltd. of 3rd Floor, 905 West Pender Street, Vancouver, BC, Canada, V6C 1L6, for our December 31, 2011 year end.




Item 2.                      OFFER STATISTICS AND EXPECTED TIMETABLE





Not Applicable





Item 3.                      KEY INFORMATION





A.           Selected Financial Data





The Registrant was incorporated as Argosy Enterprises Limited in Tortola, British Virgin Islands on September 27, 2005.  The Registrant changed its name to Play LA Inc. on October 20, 2005.  The Registrant has selected a December 31 year end.  The financial periods reported in this annual return are the periods from January 1, 2007 to December 31, 2007 (audited), January 1, 2008 to December 31, 2008 (audited),  January 1, 2009 to December 31, 2009 (audited), January 1, 2010 to December 31, 2010 (audited) and January 1, 2011 to December 31, 2011.





The selected financial data which is provided under this item is for the periods from inception on January 1, 2007 to December 31, 2007 (audited), January 1, 2008 to December 31, 2008 (audited), January 1, 2009 to December 31, 2009 (audited), January 1, 2010 to December 31, 2010 (audited) and January 1, 2011 to December 31, 2011 (audited).   This information should be read in conjunction with the Registrant’s financial statements and notes thereto.  The selected financial data provided below are not necessarily indicative of the future results of operations or financial performance of the Registrant.  The Registrant has not paid any dividends on its common shares and it does not expect to pay dividends in the foreseeable future.





The financial statements of the Registrant for the period from January 1, 2006 to December 31, 2006 and January 1, 2007 to December 31, 2007 have been audited by Peterson Sullivan PLLC, independent registered public accountants.  The financial statements for the period from January 1, 2008 to December 31, 2008, January 1, 2009 to December 31, 2009, have been audited by Jewett Schwartz Wolfe and Associates, independent registered public accountants. The financial statements for the period from January 1, 2010 to December 31, 2010 have been audited by RBSM LLP, independent registered public accountants. The financial statements for the period from January 1, 2011 to December 31, 2011 have been audited by K.R. Margetson Ltd., independent registered public accountants. They are maintained in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States.





- 6 -








Period from

Period from

Period from

Period from

Period fromJan 1, 2007 to

Jan 1, 2008 to

Jan 1, 2009 to

Jan 1, 2010 to

Jan 1, 2011 toDec 31, 2007

Dec 31, 2008

Dec 31, 2009

Dec 31, 2010

Dec 31, 2011Amounts in Accordance with US GAAP (presented in U.S. dollars):Total Assets
$778,861

$381,614

$330,552

$461,048

$331,606Net working capital
$397,487

$71,259

(240,544)

(760,901)

(615,521)Share capital
$1,186,150

$1,181,150

$1,217,207

$2,191,396

$2,095,771Shareholders’ Equity
$731,101

$326,795

$(22,919)

$(497,242)

$(396,301)Loss (from operations)
$381,546

$399,306

$363,030

$663,705

$(88,541)Loss per share (basic and diluted)
$0.03

$0.03

$0.06

$0.09

$(0.004)Weighted average number of common shares (basic and diluted)
11,438,384

11,761,803

11,527,534

11,886,718

11,719,912




B.           Capitalization and Indebtedness





Not applicable





C.           Reasons for the Offer and Use of Proceeds





Not applicable





D.           Risk Factors





The following risks relate specifically to the Registrant’s business and should be considered carefully.  The occurrence of any one or more of the events outlined under this section could have severe consequences on the Registrant's business, financial condition and results of operations and could result in the cessation of operations or bankruptcy.





The Company’s assets are websites and the goodwill associated with the websites, and accordingly the underlying value available to shareholders in the event of a bankruptcy or winding up may be substantially less than the reported book value.




In the event of a bankruptcy or winding up of our Company, the underlying value which could be realized by a third party sale of the websites could vary substantially from the reported book value of the assets, thereby reducing the funds that would be available to shareholders to offset the cost of their investment in the Company’s shares.




The Company’s independent auditors report expresses doubt about our Company’s ability to continue as a going concern, which highlights the likelihood that our business could fail and shareholders will lose their entire investment.




- 7 -




The report of our independent auditors on our financial statements for the year ended December 31, 2011 contained an explanatory paragraph indicating there is doubt about our ability to continue as a going concern.  This highlights the vulnerability for failure of early growth stage companies such as oursand stresses the likelihood that shareholders in our Company could lose their entire investment.




Our Company must raise additional capital through private placements to maintain operations and expand our business, there is no assurance that additional capital will be available and in the absence of such capital, our business will fail and shareholders will lose their entire investment.




Our Company requires additional capital to maintain its current operations and to implement its business plan.  The Company will seek investment through private placements however, the Company’s ability to attract such investment is completely uncertain and in the absence of additional financing, the Company will fail and shareholders will lose their entire investment.




Our Company has limited history as an internet advertising company.  This lack of experience may result in poor business decisions, failure of our business and a loss of investors’ entire investment.




Our Company is growing our operations in an emerging and rapidly evolving market.   With limited experience to draw on in internet advertising, management of the Company may make poor decisions or misjudge demand for the Company’s proposed services.  This lack of experience jeopardizes our Company’s chances for success and creates a substantial risk of our shareholders losing their entire investment.




We rely on a small number of key personnel, their departure may cause our Company to fail and result in the loss of your investment.




Our Company is highly dependent on the services of Mr. Hallonquist and Mr. Cole.  Mr. Hallonquist, in particular, is the driving force behind implementation of our plan of operation.  The loss of Mr. Hallonquist or Mr. Cole’s services for whatever reason could result in the Company ceasing operations and the loss of shareholders’ investment.




We rely on generating website traffic from the major search engines, such as Google, Bing, and Yahoo, and any changes to the way the search engines index, and display search results could negatively affect our business resulting in a loss of your investment




Our websites receive visitor traffic in large part due to ranking in search engines for keywords and articles that we publish. Any change to the treatment of our content by the search engines would seriously affect our traffic, thereby affecting our advertising revenues, which could result in the Company ceasing operations and shareholders losing their investment.




Competition in internet advertising is intense.  Our Company will be challenged to achieve market penetration and our failure to do so will cause us to cease operations resulting in a loss of your investment.




The market for Internet advertising technologies and services is intensely competitive.  The Company expects this competition to continue to increase because there are no significant barriers to entry into the market.  Our ability to survive in this competitive environment is uncertain.  If we do not compete effectively, our business will fail resulting in the loss of your investment.




Risks related to Internet advertising acquisition strategy




Our internet advertising acquisition strategy is unproven, our failure to acquire other established internet advertising businesses could cause our company to fail and you would lose your entire investment.




- 8 -





Our business plan assumes continued growth of internet advertising, if this growth is not achieved, our business will fail and you will lose your entire investment.




Management anticipates substantially all of the Company’s revenue will be derived from Internet advertising.  However, the market for Internet advertising may decrease in the future for a number of reasons, including the following:




§
the rate at which Internet users take action in response to an ad may decrease;




§
the popularity of the Internet as an advertising medium could decrease;




§
Internet users may install existing or to-be-developed software programs that allow them to prevent ads from appearing on their screens;




§
advertisers may prefer an alternative Internet advertising format, product or service which the Company might not offer; and




§
the Company may be unable to make the transition to new Internet advertising formats preferred by advertisers.




A downturn in Internet advertising for any of these reasons will result in the failure of the Company’s business and a loss of your investment.




Our business is vulnerable to changes in government regulation and industry standards applicable to the Internet and Internet advertising which could negatively impact the value of your investment.




Laws and regulations that apply to Internet communications, commerce and advertising are becoming more prevalent.  These regulations could affect the costs of communicating on the Internet and could decrease demand for the Company’s technologies and services or increase the Company’s costs.




If new, restrictive legislation is adopted, it could hinder growth in the use of the Internet generally, and decrease the acceptance of the Internet as a communications, commercial and advertising medium.  Our business would suffer as a result and your investment would lose value or be lost entirely.




Our business depends heavily on data collection and use from advertising campaigns, restrictions on our ability to collect and use this data will negatively impact our business and result in a decline or loss of your investment.




The Company may use technologies to collect information such as a user's IP address, ads delivered by the Company that have been previously viewed by the user and responses by the user to those ads. In order to determine the effectiveness of an advertising campaign by any one of the Company’s advertisers and to determine how to modify the campaign, the Company needs to access and analyze this information.  Interruptions, failures or defects in the Company’s data collection systems, as well as privacy concerns regarding the collection of user data, could limit our Company’s ability to analyze data from advertisers' advertising campaigns.  This would negatively impact the Company’s business and result in a decline or loss of your investment.




Changes or Increases in the Taxation of Internet Gaming may adversely affect the Company’s revenue and decrease the value of your investment.




- 9 -




The gaming industry is typically subject to significant taxation and fee assessment in addition to corporate income taxes generally assessed on business operations.  These additional taxes and fees are subject to increase at any time, and may be materially increased either prospectively or retroactively.  If, for example, the current Igaming corporate tax rate of 2.5% in the UK were to increase to 15%, which is a level currently being discussed, it could discourage existing gaming operators from targeting that country, or spending at the same levels of advertising as they are currently.  A reduction or retraction of advertising budgets targeting a country that the Company intends to focus its advertising activities to, would reduce the number and size of potential clients and advertising budgets each operator intends to spend.  Therefore, a material increase in internet gaming taxes could adversely affect the Company’s revenue and your investment.




Gambling debts are unenforceable which can affect Igaming revenues, advertising and our Company’s profitability resulting in a decrease in the value of your investment.




The laws of most countries stipulate that gambling debts are unenforceable.  If our Company’s clients sustain high operating losses due to uncollectible gambling debts, it would adversely impact their advertising budgets and result in a loss of revenue for our Company.  This would adversely affect our share price and the value of your investment.




The Introduction of Anti-Igaming Legislation in EU Countries could severely curtail the market for the Company’s services resulting in a decrease in the value of your investment.




A substantial portion of the Company’s planned business is anticipated to come from EU Countries.  Many EU Countries are considering legislation for gaming ownership and the provision of gaming services.  While some large countries like Germany are currently engaged in talks with the European Commission to liberalise their igaming markets, other countries such as the Netherlands are steadfastly opposed to opening up their government run monopolies to private operators. It is possible that some EU countries could prohibit Internet gaming.  Although there is a movement underway, headed by the European Commission, to open up government run monopolies to competition from the private sector, there is no certainty that all countries will move towards liberalization.  In this event, the demand for Igaming advertising would decrease substantially, negatively impacting our business and causing the value of your investment to decrease.





Our shares are considered Penny Stock and are subject to the Penny Stock rules, which may adversely affect your ability to sell your shares





Rules 15g-1 through 15g-9 promulgated under the Exchange Act impose sales practice and disclosure requirements on certain broker-dealers who engage in certain transactions involving Penny Stock.  Subject to certain exceptions, a Penny Stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share.  We anticipate that our shares are deemed to be Penny Stock for the purposes of the Exchange Act.  The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of our shares and impede the sale of our shares in the secondary market.





Under the Penny Stock regulations, a broker-dealer selling Penny Stock to anyone other than an established customer or Accredited Investor (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.  In addition, the Penny Stock regulations require the broker-dealer to deliver, prior to any transaction involving a Penny Stock, a disclosure schedule prepared by the Commission relating to the Penny Stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the Penny Stock held in a customer's account and information with respect to the limited market in Penny Stocks.





- 10 -





The Financial Industry Regulatory Authority or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock





In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.  Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.





Our common shares trading on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.





Our common shares are currently listed for public trading on the OTC Bulletin Board.  The trading price of our common shares has been subject to fluctuations and trades sporadically.  Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control.  The stock market has generally experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the companies with no current business operation.  There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained.  These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.





We have not declared dividends and may never declare dividends, which may affect the value of your shares





We have never declared or paid any dividends on our common stock and do not expect to pay any dividends in the foreseeable future.  This may prove unattractive to certain purchasers of our shares making it difficult for you to sell your stock.





Economic conditions could adversely affect our prospects and our results of operations





Our business may be affected by the general global economic recession and other market or economic challenges experienced by the U.S. and world markets. Uncertainty about the current global economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values, which could have a material negative effect on the demand for our products and services. While the igaming industry has been relatively stable, the growth rate slowed during 2009 and we cannot predict whether the industry growth rate will continue to decline.





Foreign currency risk





Our clients are located in foreign countries.  As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Because our revenues are currently denominated in U.S. dollars, a strengthening or weakening of the dollar will affect our financial statements due to the fluctuating dollar.  Monetary assets and liabilities denominated in foreign currencies are affected by changes in the exchange rate between the US dollar and foreign currencies.  We have not hedged foreign currency exposures related to transactions denominated in currencies other than U.S. dollars. We do not engage in financial transactions for trading or speculative purposes.





- 11 -





Our objective in managing foreign currency risk is to minimize our net exposures to foreign currency cash flows by converting cash balances into foreign currencies to the extent practical to match other foreign currency obligations, and vice versa.





Interest Rate Risk





Interest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are classified as cash and cash equivalents have original maturities of three months or less. Our interest income is sensitive to changes in the general level of U.S. interest rates.  We do not have significant short-term investments, and due to the short-term nature of our investments, we believe that there is not a material risk exposure.





Credit Risk





Our accounts receivables are subject, in the normal course of business, to collection risks. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of collection risks. As a result we do not anticipate any material losses in this area.




Item 4.                      INFORMATION ON THE REGISTRANT





A.           History and Development of the Registrant





The Registrant was incorporated as Argosy Enterprises Limited in Tortola, British Virgin Islands on September 27, 2005.  The Registrant changed its name to Play LA Inc. on October 20, 2005.  The Registrant was incorporated under the British Virgin Islands International Business Companies Ordinance of 1984.  The Registrant’s office is located at 20 Mount Clapham, St. Michael, Barbados, BB14005. The telephone number is (246) 431-0493, the facsimile number is (246) 431-0078.





Since its incorporation, the Registrant has not undergone any material reclassification, merger or consolidation, and has no subsidiaries.  The Registrant has not completed any dispositions of material assets as well it has not undergone a material change in the types of products or services it renders, during this current financial period.  The Registrant has not been the subject of any bankruptcy, receivership or similar proceedings.





The Registrant commenced operations in May 2007, after the acquisition of two websites, and has continued operations through the current period. The acquisition costs of the two websites were $392,280 (£190,000).  At the beginning of 2010, the Registrant acquired two additional websites.  The acquisition costs of the additional two websites were $285,780. During the current financial period, the Registrant has not made any principal capital expenditures or divestitures.  The Registrant has not received nor made any public takeover offers.





On April 16, 2011, the Registrant entered into a General Security Agreement with a lender to the Company.  The agreement was registered on May 23, 2011 in favor of the lender to provide security for the outstanding loans made to the Company by the lender. The total aggregate principal amount of the loans was $646,960.   New terms for the loans were established. Currently, the Registrant is repaying the outstanding loans with a minimum monthly amount of $10,000.




- 12 -




B.           Business Overview





Company Overview





Play LA Inc. (the “Registrant”) is a Tortola, British Virgin Island holding company which was formed in 2005.  The principal business of the Registrant is to identify, acquire and grow businesses and assets relating to online content publishing and internet advertising solutions for online gaming operators.  Specifically, the Registrant’s  strategy will focus primarily on the United Kingdom (“UK”) and Western European markets to create a comprehensive, customized, and responsive advertising network of websites to service the advertising and promotional needs of online gaming operations.  The Registrant has acquired websites that target countries where online gaming is regulated. The Registrant’s first two acquired websites focus on the UK market. The Registrant subsequently developed eight more websites which target Spain, Italy, Germany and Sweden.  During 2010, the Registrant acquired two additional websites to expand its market, targeting audiences in the UK, as well as in Romania, Denmark, Norway and France.




Established online gaming operators maintain large advertising budgets.  The online gaming market is competitive and the Registrant believes there is a niche for a larger, multi-national and multi-lingual advertising company which can deliver results to a targeted demographic group.  The Registrant intends to capture this market opportunity by focusing on the following high level strategies:




Ø
Providing relevant, appealing, localized and up-to-date news in the sports and poker industry which appeals to gaming enthusiasts in each of the Registrant’s target markets.  Such content will draw interest to the Registrant’s sites and in turn drive traffic and incremental revenues to advertisers.




Ø
The Registrant’s sales activities will aggressively target established online and land based gaming operators, as well as other international Brands wishing to reach the same demographics as the Registrant’s audience, with the aim to establish the Registrant’s position as an internet-based, value-added advertising solutions provider.




Ø
Continuing to invest in advertising technology and technology platforms which are robust and scalable.




Ø
Partnering with online affiliate marketing networks to maximize delivery of new customers to advertisers




Ø
Implementing a sophisticated customer relationship management (“CRM”) application to track the most popular content, player preferences, demographic information and other valuable information that will allow the Registrant to provide completely tailored advertising programs for its customers.




Ø
Centralizing key administrative processes, such as data collection, accounting, site maintenance, etc. to capture the economies of scale derived from the Registrant’s acquisition strategy.




Corporate Mission





The Registrant’s mission is to be the premier network advertising and promotional company for the online gaming sector.  To do so, the Registrant’s management is committed to: (1) establish a portfolio of advertising and digital content delivery assets focused on serving the growing online gaming and entertainment markets; (2) design and offer tailored advertising programs customized for the unique requirements of gaming and entertainment companies in the UK and Western Europe; and (3) centralize administrative, development and content creation efforts by outsourcing services to specialized third parties.




As with the development of any business, our long term and medium term objectives are subject to the successful completion of our short term objectives.  Failure to execute our short term objectives will require us to revise our medium and long term objectives or to revise our business plan.  Our short term, medium term and longer term objectives are goals. They are not necessarily bench marks which have been achieved.  All of our objectives are susceptible to the risk factors which are summarized on pages 7 to 11 of this registration statement.




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Short-Term Objectives





The Registrant’s key objectives in the short-term are to update the existing websites with interactive features to build user loyalty, develop improvements to increase conversions, and expand the content, syndication and marketing strategies to increase website traffic. In particular, the Registrant is targeting the following critical strategic and tactical objectives over the next 12 months:




1.
Continue the Development of User Friendly Features into the redeveloped Websites– The newest development into website design includes interactive features and tools which engage the user and promote visitor frequency. The addition of features such as forums and blogs, streaming video, Live in play odds and events, and commenting all contribute to higher visitor usage and are the features that the Registrant plans to build into the new websites.




2.
Increase Individual Website Traffic –The Registrant plans to implement and test various traffic growth strategies for the websites, including Search Marketing, link-building, content syndication, PPC marketing, and Social Media Marketing in order to grow the traffic and reduce dependency on a single source of traffic.




3.
Develop Mobile-Ready Versions of existing Websites– In order to capture the rapidly emerging demand for website content formatted for mobile, smart phone and small screen users, the Registrant plans to modify the websites to appeal to this growing market segment. The Registrant also plans topromote advertisers mobile applications throughout the websites to attract mobile users.




4.
Integrate Social Media into Content Plan –The Registrant plans to build a branded presence with FaceBook and Twitter. The Registrant will develop branded sign-up and entry points for the social media sites on popular landing pages within their network, and encourage followers and friends through the offering of quality content, tips, and promotions exclusively for Facebook and Twitter users.




Medium-Term Objectives





In the medium-term, the Registrant’s key objectives are to continue to identify and acquire suitable targets, secure necessary funding to execute the acquisitions, and integrate acquired websites to form a cohesive advertising network.    The Registrant is targeting the following critical strategic and tactical objectives in 12 to 24 months:




1.
Continue with acquisition plans and continue to seek additional funding.  The Registrant will continue to seek acquisitions targets that add value to its strategy.  The Registrant will require additional financing from various sources to adequately fund any new websites which it may acquire.




2.
Begin targeting larger acquisitions.Management anticipates that as the Registrant makes a number of acquisitions to reach critical mass, the Registrant will target increasingly larger acquisition targets to accelerate its growth.




3.
Standardize branding and services across all operations.In order to increase the collective value of the Registrant’s acquired operations, the Registrant will standardize its branding across all operations.  This initiative will include standardizing the quality and types of content delivered to readers, the manner in which content and advertising is displayed to the visitors, all aspects of customer service, and ensuring all sites are capturing necessary visitor information.




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4.
Centralize key administrative processes.  Processes such as data collection, accounting, site maintenance, etc. will be centralized to capture the economies of scale derived from the Registrant’s acquisition strategy.




5.
Develop new websites targeting countries that are legalizing online gaming –The Registrant plans to      build new websites targeting Countries that are introducing legislation to regulate and legalize online gaming, such as South Africa.




Longer-Term Objectives





1.
Strengthen operational team for long-term growth.  With additional acquisitions, it is likely that an operational team with in depth knowledge and expertise in the local markets will be required in each major market to deal with specific local issues.




2.
Increase market share.  The Registrant will focus on increasing revenues and profitability.  The key to revenue and net income growth is working with acquired companies in the early stages to assist them in growing their own traffic in order to increase their value to the Registrant’s advertising network.  The Registrant will seek to become positioned as a market leader in the advertising segment targeted at the online gaming industry.




3.
Identify and evaluate other advertising networks as potential acquisition targets.  In an industry where size and scale of the network is a distinct competitive advantage, the Registrant may acquire existing advertising networks that also cater to the online gaming industry.




4.
Social responsibility.  The Registrant understands that gambling can be an addictive pursuit, and as such supports the work of government and social programs dealing with gambling addiction and may refer readers of the Registrant’s contents to such organizations for help.




Value Proposition





The Registrant’s service offering provides three essential values to advertisers:




1.
Reduced administration.  Instead of dealing with many small, low-traffic sites, advertisers can deal with one provider to place ads in multiple sites while receiving one consolidated report on the effectiveness of the campaign.




2.
Customized to their needs.  With a myriad of content covering all facets of sports and poker, advertisers can execute campaigns targeted specifically at a demographic group to increase their effectiveness.




3.
Increased return on advertising dollars.  Ultimately, the Registrant’s services allow advertisers to realize a higher return on their advertising dollars that will drive revenue growth while enhancing their profitability.




Captivating Content





In order for the Registrant’s advertising network to be successful, management is focused on building a system of content-driven websites to deliver traffic and sales to its advertisers.  The types of sites that will form part of the Registrant’s advertising network include:




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1.
Educational and news related sites where beginner and advanced players alike can gain in-depth knowledge about sports and poker, and stay up-to-date on the latest news.




2.
Comparison shopping sites and directories which list, compare, and review the number of online gaming operators available.




3.
Community sites including blogs by famous poker pros or celebrities and discussion forums where players from all walks of life can share (and brag about) their experiences.




Proposed Revenue Models





The Registrant will adopt a number of revenue models that have been proven in the online interactive advertising industry.  The specific revenue model used will depend on the acquired entities and the needs of the advertisers.




1.
Pay-per-Click-Advertisers pay based on how many users clicked on an online ad banner.




2.
Pay-per-Impression - Advertisers pay based on how many users were served their ads.




3.
Pay-per-Lead - Advertisers pay for each "sales lead" generated.  For example, an advertiser might pay for every visitor that clicked on an ad and successfully completed a form.




4.
Pay-per-Acquisition - Advertisers pay based on how many customers were generated as a direct result of the ad.




5.
Flat rate - Advertisers pay a monthly/annual fee for a set number of positions or ad placements.




6.
Sponsorship programs– Advertisers will become sponsors of a section of the website, providing news, live feeds, contests, surveys, live interaction, as well as banner and text links, all promoting the advertiser to the audience, for a fixed monthly/quarterly fee.




The Registrant may also design specialized packages to suit the needs and preferences of each customer.  For example, a combination of pay-per-impression and pay-per-real-money-player may be used to ensure that the advertisers receive a wide distribution of their ads while protecting their advertising budget by ensuring that a large portion of the fees is contingent upon the success of the campaign, as measured by the number of real money player sign-ups.




Outsourcing of Technical Services




The Registrant was party to an agreement dated February 1, 2007, as extended by an agreement dated February 18, 2008 and further extended to February 14, 2012, with On A Roll Media Inc. (“On A Roll”) under which On A Roll provides the Company with the following technical services:




-
Web site maintenance – HTML, Java, etc.




-
Software development




-
Sales, Marketing and Business Development activities




-
Search Engine Optimization




-
Financial modeling for all properties




-
Translation and local content provision




-
Creation and maintenance of forums, blogs, newsletters and communities




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-
Hosting and traffic management




-
Scientific research and development of properties




-
International expansion, new market development




In consideration for the provision of these technical services, the Registrant paid On A Roll all of its out of pocket expenses, an hourly rate of US$80 and a 10% commission on all paid advertising sold by the Registrant.  The initial On A Roll technical services agreement terminated on January 31, 2008, but was renewed by a renewal agreement dated February 18, 2008 and further extended to February 14, 2012, unless terminated earlier by mutual agreement of the parties.  In March, 2011, the Registrant gave notice to On A Roll Media Inc. that it would be substantially reducing the ongoing services provided by On A Roll Media to the Registrant, effective April, 2011. In September, 2011, all services covered under the Services Agreement ceased. The Registrant has brought the operations of the network in house while it considers new operational strategies.




Completed Acquisitions and Acquisition Criteria





Completed Acquisitions





On May 1, 2007, the Registrant completed the acquisition of two internet information portal sites,  www.bettingchoice.co.uk , and
  www.guidetopoker.com.  The portal sites operate in the English language, and attract English speaking sports and poker enthusiasts primarily throughout the UK and Western Europe. The acquired assets include all programming and source code of the websites, a custom built Client Management System, both URL’s, all archived news, content and articles spanning the past 3 years, a small subscriber database of approximately 10,000 emails, and all client advertising accounts.





Established in 2004, these sites have a following among British and European sports bettors and poker players.  In the three years since inception, the sites have become popular sources of information for their followers, who number approximately 100,000 per month.  Timely news stories and features are updated on these sites daily.  Valuable information about upcoming events such as major sporting events or million-dollar purse poker tournaments keep readers up to date on opportunities of interest to them.  Items like betting odds, favorites, player profiles, injuries, professional tips, handicaps, and other items, much like one might find on the daily sports pages, are continuously updated on the sites, utilizing the services of professional European freelance journalists.





Bettingchoice and Guidetopoker also serve another purpose to the new recreational bettor and poker player- reviewing and assessing the quality and ease of use of major online gaming sites.  Combined, the sites have reviews of nearly one hundred gaming sites, giving the novice player a greater level of comfort when he or she places a first bet or plays in a first poker tournament.  Further guidance is provided the novice player in areas such as poker rules, or a quick lesson on placing a sports bet.  Upcoming events are highlighted well in advance, for those who wish to take part in online tournaments, or who need reminders of the next important football match.  Readers can receive free bets or a cash gift that can be used to play with, by using the sites’ free bonus sections.





Revenues are derived from bookmakers and online poker companies who pay Bettingchoice and Guidetopoker to direct their readers to their online entertainment sites.  More than twenty online sportsbook and poker room operators, some of them the biggest names in the industry, are loyal advertisers on the two sites.





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The Registrant initially agreed to purchase Bettingchoice and Guidetopoker for approximately $515,256 (£250,000), with 70% paid upon closing and the balance being paid in three equal installments over a period of nine months from closing.    The holdback was intended to protect the purchaser in the event of diminution in the value of any assets valued at $4,875.00 or more. If this occurred, the purchase price of the assets can be re-calculated and the difference refunded to the purchaser from the holdback. As part of the agreement, the Registrant agreed to pay the vendor, Glen Etive Capital Limited, a UK company, an additional $20,000.00 for the programming and development of 8 new replicated websites.  The Vendor also agreed to provide the purchaser with ongoing training and support for the operation of the business, system training, introduction to clients, implementation and launch of the 8 new websites, familiarization with current marketing techniques and general transition assistance for the 9 months following closing.  The Registrant was to pay the vendor 30% of all net income earned by the 8 new foreign language versions of the sites, for the same nine month period from closing. Since the foreign language websites are new, 100% of the advertising revenues that they generate will constitute gross revenues for the purposes of calculating the Vendor’s 30% share of net revenues.  The Registrant subsequently determined that eleven (11) of the advertisers were not likely to continue generating the same level of revenues as they had previously generated in 2006, and the Registrant negotiated a reduction in the original purchase price with the vendor in the amount of $123,661 (£60,000).  Consequently, the net purchase price of the two (2) websites amounted to $392,280 (£190,000) which included the $20,000 (£10,000) for the development of the eight (8) new websites.  Direct costs of operating and marketing these new sites will be deducted from gross revenues to calculate net income.  These costs shall include hosting, programming, content, translations, search marketing and a portion of the company’s general and administrative expenses.  The 30% net income earn-out to the vendor was treated as part of the overall $392,280 (£190,000) purchase price of the acquisition. There were insufficient revenues generated by the eight new websites within the prescribed 9 month post acquisition period to pay any earn-out fees to the vendor, and as such, no payments for the 30% earn out to the vendor were made, and none are owing by the Registrant.





The Registrant plans to combine the amount of the initial purchase price with the net income earn out in its capital cost calculation and amortization of the assets.  Each of the 2 acquired websites have been replicated and translated into German, Italian, Spanish and Swedish, giving the Registrant 8 new foreign language websites.  The 8 new foreign language websites went live during early September 2007.  The sites are built on Internet technologies and programming languages, and are supported by a team of outsourced technology experts, who have been retained to continue managing technical operations into the future at competitive prices.  Revenues are earned in British Pounds and Euros, while most costs are incurred in United States and Canadian dollars.  To the extent that the currencies with which we incur costs falls or rises as against the currencies with which we generate revenue, our expenses as a percentage of revenues will be impacted upon accordingly.





The Registrant entered into a purchase agreement to acquire another website from the same UK Vendor that it acquired its first two websites from, on January 11, 2008. The purchase price was 10,000 pounds sterling, which the Registrant paid in cash.  That website (URL: www.snapsearch.com) was a price comparison search site, which operated from 2005 to 2007.  Snapsearch displayed eBay search results side by side with other internet search results on a split screen, allowing a user to easily compare different sets of product selling prices. It included individual country searches, and updates on the latest eBay results.  The site ceased operating in early 2007. The URL is currently offline.





During the year 2009, the Registrant developed and launched a new website,  www.guidetocasinos.co.uk. The new website advertises and publishes reviews, promotions and daily updates on the UK’s premier online casino’s, along with breaking reviews on the newest game releases. The website also reviews live dealer games at the top UK online casinos.





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On January 18, 2010, the Registrant completed the acquisition of another internet information portal site,www.pokernewsheadlines.com.  The portal site operates in the English, French, Romanian, and Danish languages, and attracts poker enthusiasts primarily throughout the UK and Western Europe. The acquired assets include all programming and source code of the websites, a custom built Client Management System, URL’s, all archived news, content and articles, and a small subscriber database.  The Registrant acquired Pokernewsheadlines for $30,000 payable in the capital stock of the Registrant.  The Registrant issued 58,824 common shares for the acquisition. Subsequent to the acquisition, in August, 2010, the Registrant amended the purchase agreement, reducing the purchase price to $7,500. The previously issued 58,824 common shares were cancelled, and the $7,500 was paid to the Vendor out of the operating capital. The Registrant ceased and closed operations of PokerNewsHeadlines in March 2011.





On February 24, 2010, the Registrant completed the acquisition of an internet information portal site, www.arsenal-mania.com and all of its business contents including but not limited to customer lists, records, agreements, contracts, licenses, patents, trademarks, URLs, content management systems, equipment, and other associated sources for a basic price of 180,000 pounds sterling.  The payment consists of issuing 45,000 pounds sterling in the capital stock of the Registrant, 20,000 pounds sterling in cash by 30 days after closing, 20,000 pounds sterling in cash by 60 days after closing, 20,000 pounds sterling in cash by 90 days after closing, 50,000 pounds sterling or 25% of the website’s net operating profits for the first year following the sale and transfer of the website, payable in cash within 30 days of the first anniversary date of the sale and transfer of the website, and 25,000 pounds sterling or 15% of the website’s net operating profits for the second year following the sale and transfer of the website, payable in cash within 30 days of the second anniversary date of the sale and transfer of the website.  The Registrant issued 139,412 common shares for the purchase of Arsenal-Mania.  The Registrant is currently in default of its payment of £50,000 due on April 10, 2011.  The payments of £50,000 (due April 10, 2011) and £25,000 (due April 10, 2012) due following the first and second year anniversary date following the sale and transfer per the Purchase Agreement was secured by an Escrow Agreement.  Mr. Hallonquist, President and CEO, put up his personal holdings of 487,500 shares of Play LA Inc. to secure these payments. The Registrant expects to default on the final payment of £25,000 (due April 10, 2012).





The URL’s of the foreign language websites are:


www.opciondeapuestas.com

www.guiaparaaprenderpoquer.comwww.vadslagningsguiden.com

www.guidedepoker.frwww.puntasulgioco.com

www.guida-al-poker.comwww.daswettangebot.com

www.anleitungzumpoker.comwww.ie.pokernewsheadlines.com

www.guidetillpoker.comwww.fr.pokernewsheadlines.com

www.ro.pokernewsheadlines.comwww.no.pokernewsheadlines.com

www.dk.pokernewsheadlines.comwww.es.pokernewsheadlines.com





The operation of the sites are handled in house by management and contract specialists. The Registrant has translated and launched Bettingchoice and Guidetopoker in four additional European languages, each with local, relevant, unique content.  This project effectively created the 8 sites already listed above, along with the original purchase of 2 websites, thus gave us 10 websites. With the additional purchase of Pokernewsheadlines and Arsenal-Mania, as well as others, the Registrant has a total of 20 websites in all.




Acquisition Criteria




In identifying and assessing potential acquisition targets, the Registrant will apply a thorough and vigorous due diligence process to discover the strengths and weaknesses of each entity.  Our due diligence procedures include verifying URL ownership and registration status, auditing the website programming and source code to ensure best development practices, analyzing web traffic reports to validate geographical and numerical site statistics, validating client accounts and advertising revenues by random reference calling and ad server testing, testing Search Engine page ranking for keywords against competitive websites, and confirming sources of content.  To locate potential acquisitions, the Registrant has contacted industry representatives familiar with these businesses, as well as advertised through a number of webmaster associations.  The industry representatives that we contacted were business development managers and affiliate advertising managers who are employed by gaming software and igaming operators.  These people interact on a daily basis with igaming webmasters and network publishers, who work for or own the type of websites that the company may be interested in acquiring.  The company believes that these people, when made aware of our interest to acquire such websites, would be a reliable conduit for introducing prospective sellers.  The webmaster associations have forums and newsletters that allow paid advertisements.  Although there is no formal brokerage or centralized service for connecting sellers and buyers of these types of websites, or determining the potential number of acquisition candidates.  There are numerous webmaster associations.  The most prominent associations is the Gambling Portal Webmasters Association ( www.gpwa.net ).




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In particular, the Registrant will be evaluating the following aspects of the target’s business:




Ø
Level of traffic.  The Registrant is interested in acquiring content providers that already have a well-established following of loyal visitors who visit the website regularly.  Ideally, the visitors would be gaming enthusiasts that match the targeted demographic groups specified by the advertisers.  The Registrant uses various tools to track repeat visitors to the website, such as IP address identification software, or website analytic tools, such as Webalizer, Webstats, Google Analytics.  The Registrant looks for a website where approximately 40% of the traffic is repeat visitors and 60% of the traffic is first time visitors.




Ø
Quality of content.  Having high quality content is the most critical element in ensuring a high level of repeat traffic.  Ideally, the Registrant would like to acquire content providers who have demonstrated the ability to issue relevant, intriguing and up-to-date content to minimize the costs associated with creating content.  Websites that simply reproduce news, articles and content found on many other websites do not achieve the index ranking by the search spiders.  Unique content that is not found on other sites delivers much higher search indexing and rankings, and draws users to the website on a regular basis.  Websites with paid or contract writers who provide regular, exclusive, tailored articles will be the ideal target acquisition of the Registrant.




Ø
Existing advertising revenues.  Websites that already have an established stream of advertising revenue are attractive to the Registrant for two reasons.  First, it confirms the quality of the acquisition target’s content and website and increases the probability that other advertisers will find the notion of advertising on this site attractive.  Second, the Registrant’s sales team can tap into the relationship already established between the acquisition target and its advertisers to up-sell them to a more comprehensive package.  The primary indicator that a website has established streams of revenue will be the number of long term advertising contracts it comes with, and the length of each contract.  Many advertising contracts are for a one month period.  Multiple month contracts will be evidence of committed advertisers.




Ø
Flexibility in the target’s cost structures.  Another key to the Registrant’s roll-up strategy is the ability to capitalize on operational synergies.  In many instances, it would require a certain amount of flexibility in the target’s cost structure.  For instance, month-to-month agreements with third-party service providers as opposed to long-term agreements would be preferred as they provide the Registrant with more options to reduce costs and capture economies of scale.  Some examples are: Buying web servers to host one or two websites may not be cost-effective, so higher cost leasing services are more common.  The Registrant can save money by buying servers when costs are spread over many websites.  Outsourcing web development, design, IT, and programming services are usually more expensive when evaluated by the hourly rates, but ideal when you require the service for one time or limited time projects.  Multiple sites create sufficient demand for full time resources and reduced overall costs.




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Ø
Solid financial standing.  It is expected that the acquisition target will be in solid financial standing with little or no debt, and that there are no liens or other claims against its assets.  Ideally, the acquisition target will help fund the Registrant’s growth.




Ø
Other value added to the Registrant and its family of sites.  Other aspects of the acquisition target will be assessed according to the value they add to the Registrant and its advertising network.  Examples of value-adding attributes include a database of registered users that could be cross-marketed to other websites in the Registrants network or directly for advertisers’ promotions, an exceptional management-team, the ability to secure financing and marketing expertise in the Western European or the Latin American region.




As of the date of this registration statement, management of the Company is actively pursuing additional acquisition targets, but there are not any new acquisition candidates identified at this time. The Company continues to build the profile and traffic for the foreign language websites.  The Company has not engaged in any discussions with any companies or individuals regarding a potential business combination outside the business of Internet gaming advertising.  No company which is affiliated with our Company’s officers or directors is currently being considered as an acquisition target by our Company.





Integrated Business Units





The ability to realize return from operational synergy will also be critical to the success of the Registrant’s roll-up strategy.  The Registrant’s management team, advertising industry contacts and operational structure will have capabilities in providing ancillary services to the acquisition targets.  These capabilities include:




Ø
Marketing support.Perhaps the most important ancillary service, and the main source of the Registrant’s value to its subsidiaries, is in the area of marketing.  With years of experience in marketing issues in the gaming industry, the Registrant’s management team will work with each acquisition target on how to increase traffic to its site(s) and generate higher campaign spending from advertisers.




Ø
Reporting.A centralized reporting server will monitor the effectiveness of the campaigns purchased by advertisers.  This will also serve as a performance monitoring tool for content providers within the advertising network.




Ø
Website and application hosting.Many of the Registrant’s operations will be bundled and hosted at a central location, thereby minimizing costs associated with hosting and support.  The hosting locations will feature ample bandwidth, sophisticated online security systems, load balancing capabilities and extensive disaster recovery mechanisms.  The Registrant will most likely identify “co-location” partners who have already established such a facility to store its servers.




Ø
Data Collection.The Registrant will implement a sophisticated CRM application to track the most popular gaming content, player preferences, demographic information and other valuable information that will allow the Registrant to provide completely tailored advertising programs for its customers.  The CRM system will collect data from within the advertising network.




Ø
Software development & enhancement.The Registrant will centralize software development and enhancement work relating to interactive advertising technologies such as in-context pop-ups and rich media capabilities.




Competition Overview





The Interactive Gambling Report from Isle of Man-based consultants Global Betting & Gaming Consultants, www.gbgc.com , released in February, 2011, shows that the international internet gambling market has grown by 12 percent in 2010, reaching US$ 29.32 billion in gross gaming yield. Although accurate statistics on the amount of money spent on advertising by gaming operators is extremely difficult to attain, a generally accepted industry metric is that between 5 – 15% of gross gaming revenues is spent on advertising.  In the online gaming sector, in excess of 75% of annual advertising budgets are spent on internet advertising.




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The Company competes for advertisers on the basis of a number of factors, including price, return on advertising expenditures, quality of product, volume and quality of website traffic, geographic location of website traffic, type of available advertising space and customer service.




The Company’s Competitive Strategies include:




-
Unique Information – the Company plans to set itself apart from other igaming web publishers by hiring writers to create articles, reviews and reports on sports and poker events that will be exclusive to the Company’s websites.  The Company believes that most of its competitors rely on syndicated news feeds and articles for their content, which means the information on their websites is also available across many other sites, and ultimately less desirable for advertisers to associate with.  The Company also notes that search engines like Google recognize when website content is not unique, and the result is lower rankings for sites using common or syndicated content.




-
Customized text links in content – The Company plans to have its writers incorporate references to advertisers’ websites and promotions within the body of the story or article, which can produce better results for advertisers over regular HTML banners.  The Company notes that advertisers are more receptive to subtle or advertorial types of advertising, and may pay a higher cost for this advertising space.




-
The Company plans to have its writers incorporate key search terms into the articles and reports so that they will be indexed and ranked as high as possible by search engines.  If titles, headings and body text of articles contain matching key search terms, the major search engines will index and rank them higher, producing better website traffic and results for advertisers.




-
The Company plans to incorporate primary and secondary sponsorship spots within the high traffic areas of the websites to maximize advertiser exposure and justify premium advertising rates collected by the Company




-
The Company plans to replicate and translate its English language websites into various other languages that are in demand by advertisers, allowing the Company to offer clients a broader range of advertising options, and garner a larger share of advertisers’ budgets.  The Company believes that advertisers will gravitate to a single media source that reduces time and effort to place a wide range of effective media buys.  The Company estimates that very few competitors offer multi-language media buys that utilize customized content.




The Company’s primary current and potential competitors include:




§
Internet advertising networks such as 24/7 Real Media, ValueClick, Ad Pepper, and Burst Media;




§
Internet advertising technology providers, including search engine optimization companies; and




§
other performance-based Internet marketers, including affiliate networks.  365 Media Group and Football Media are large competitors which service the UK and Western European markets.




The Company also competes with large Internet companies and traditional media for a share of advertisers' overall marketing budgets, including:




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§
website publishers with their own sales forces that sell their advertising space directly to advertisers;




§
major Internet portals and search engine companies with advertising networks such as Google and Yahoo!; and




§
direct marketing, television, radio, cable and print companies.




Competition for ads among websites, search engines, Internet service providers, or ISPs, as well as competition with traditional media companies, could result in significant price pressure, declining margins, reductions in advertising revenue and loss of the Company’s market share.  As the Company is a small supplier in this field, it has limited history, brand awareness, or distinct advantages over the existing, established marketers, and therefore may not be able to effectively compete against them.  In addition, as the Company continues to expand the scope of its services, it may compete with a greater number of websites, advertisers and traditional media companies across an increasing range of different services, including in vertical markets where competitors may have advantages in expertise, brand recognition and other areas.  Large websites with brand recognition, such as Yahoo!, Google and Bing, have direct sales personnel and substantial proprietary advertising space that provides a significant competitive advantage compared to the Company’s network of websites and has significant impact on pricing for Internet advertising.  Many of the Company’s current and potential competitors also enjoy other competitive advantages over it, such as longer operating histories, larger advertiser bases, greater access to advertising space on high-traffic websites, and significantly greater financial, technical and marketing resources.




Effects of U.S. Regulation on Online Gaming Markets




On October 13, 2006, U.S. President George W Bush signed the Unlawful Internet Gambling Enforcement Act that seeks to effectively ban most online gambling and criminalizes funds transfers in the U.S.  Many online gaming operators ceased operations in the U.S., and refocused their efforts on other markets, particularly the European market.




Recently, due in large part to the eroding tax base in many US States, a revival of legislative Bills to legalize sports betting and online gambling are being introduced in New Jersey, Washington, California and Iowa, while other cash-strapped states consider similar legislation. It is likely that a state-by-state approval of online gaming will occur over the next couple of years, creating an opportunity for the large, internationally licensed gaming operators to return to the market, thus providing additional markets for the Registrant to enter.




Gaming in the European Union – An Overview




The U.K. began licensing private Internet gaming sites in September, 2007.  Italy and Spain opted to regulate Internet gambling and open their markets to private operators, rather than outlaw it in 2009.  Italy has licensed private companies to offer online lotteries, bingo and betting on sports or games of skill. France introduced and passed legislation legalizing online gambling for private operators in 2010. The European Union is pushing countries to scrap measures which protect domestic companies when those nations open their markets to Internet gaming.




Overall, demand for gaming services in the European Union has been increasing.  A recent independent report highlighted some of the key reasons for increased gaming demand.1







1 Data from EU Study Provided – did not have the name




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§
Increases in discretionary income of the population and a growing portion of the discretionary income being allocated to leisure and entertainment activities.


§
Governments at the local and national level have shown a willingness to authorize gaming due to increased social acceptance of gaming, to reduce illegal and unregulated gaming activities and as a means of increasing tax bases and economic activity in the region.




§
A shift in society’s attitude towards gaming and the associated mainstream acceptance.




§
Increased penetration of computers, broadband Internet, and mobile and wireless communications making gaming opportunities available to a wider audience.




The five largest markets (UK, France, Germany, Spain and Italy) account for about 75% of the EU’s gaming expenditures. 2




UK Gaming Regulation





The regulatory body governing gaming in the UK is the UK Gambling Commission www.gamblingcommission.gov.uk.  Internet or remote betting is legal in the UK under the Betting, Gaming and Lotteries Act of 1968. It is also legal to advertise those betting services whether on the Internet or in a newspaper etc.  Under the Betting and Gaming Duties Act of 1981, only advertising UK Bookmakers was allowed until 2005.  The 1981 Act was repealed by the 2005 Act, becoming effective August 2007, which allows foreign bookmakers and Igaming operators to advertise in the UK.  The 2005 Act allows advertising of gaming and betting companies within the UK as long as they are based in a European Economic Area or Gibraltar.  The EEA consists of the 27 countries in the European Union ("EU") together with Norway, Liechtenstein and Iceland.  This positive regulatory environment makes the UK the Registrant’s primary focus for pursuing its business strategy.





The Company’s operations will not fall under the regulatory auspices of many of the EU countries.  The Company plans to pursue a strategy of replicating and translating the sites it acquires into other foreign languages.  The Company believes that people of German, Italian, Spanish and Swedish origins would be interested in the same type of information that attracts UK visitors.  Many of the European sports that the Company publishes information about, as well as the growing popularity of poker games, are highly searched for topics through internet search engines, such as Google, Yahoo, Bing, etc.  The Company will host these foreign language websites in a country and location where bandwidth, technology and network access provide people anywhere in the world direct and reliable access to these information websites.  The Company will not host these websites in Spain, Germany, Italy or Sweden.  The Company will not be proactively engaged in outbound marketing to these specific countries.  We will rely on the relevance of our published material which will be indexed and ranked by international search engines and sought out by interested people conducting online searches in their native language, from anywhere in the world.  Depending on the success of our initial foreign language sites, the Company will determine what other languages and cultures may be interested in the information that we publish.




Demographics




The population of the United Kingdom in 2010 was 62,348,000 according to the US Census Bureau.







2 The Case for State Lotteries – A Report for the European Lotteries and Toto Association – London Economics September 2006




- 24 -




Internet Penetration




Measured as a percentage of the total population, there is widespread internet usage in the UK.  In fact, as shown by the table below, the number of internet users in the UK has been steadily rising.  This is encouraging as a large base of internet users represents a solid audience base for the Company’s advertising services.




Year

Internet Users

% of Population2000

15,400,000

26.2%2005

35,807,929

59.8%2006

37,800,000

62.9%2009

48,755,000

79.8%2010-June

51,442,000

82.5% Source: ITU.int




Gaming Operators




According to the UK Gambling Commission Report for 2008/2009, the turnover for the gambling industry during the period 2006/2007 was £84 Billion. Gross gambling yield for 2009/2010 was £5.7 Billion. During 2010, a survey conducted by UK Gambling Commission indicated that 73% of the population had participated in some form of gambling, equating to 35.5 million adults. This is up from 68% recorded in 2007.




According to Hitwise3, the largest UK online gaming and lottery sites include:




Site

URL

%The National Lottery

www.national-lottery.co.uk

32.0%Betfair

www.betfair.com

4.8%Ladbrokes

www.ladbrokes.com

3.6%Racing Post

www.racingpost.co.uk

3.2%Bet365

www.bet365.com

3.2%William Hill

www.willhill.com

3.1%Jackpotjoy

www.jackpotjoy.com

2.8%Paddy Power

www.paddypower.com

2.4%King.com

www.midasplayer.com

1.9%AtTheRaces

www.attheraces.co.uk

1.8% Source: www.hitwise.com




Western Europe Market Overview




European Union Gaming Regulation





The European Union is currently made up of 27 member countries.  At the highest level, all EU member countries answer to the European Commission, which is controlled by the European Court of Justice.








3 http://www.hitwise.com





- 25 -




Within each country, there are multiple and sometimes complicated regulatory bodies that cooperatively legislate gaming law.  As an example, Denmark’s gaming market is supervised by four ministries: Ministry of Taxation, Ministry of Justice, Ministry of Finance and Ministry of Consumer Affairs.  The Danish Gaming Authority supervises the gaming market.





Most EU countries distinguish their gaming laws by sectors: sports betting, horse track wagering, bingo, lotteries, casino and games of chance, and games of skill.  In most countries there exists some form of internet gaming or wagering. In the majority of cases, the gaming is operated and controlled by the government, and competing private enterprises are not allowed.  There is a movement underway, headed by the European Commission, to open up government monopolies to competition from the private sector.  The countries that our Company is interested in are Germany, France, Italy, Spain and Sweden.  Currently, all internet gaming in Germany is government controlled.  There are ongoing discussions through the European Commission directed at permitting private sector involvement.  Currently, Italy, France and Spain have legalized private igaming operations, and these countries are accepting license applications from the private sector.  In Sweden, internet gaming is government controlled.  The Company believes that over time, the private sector will be allowed to operate licensed igaming businesses in most of these countries, thereby providing competition and greater advertising opportunities and potential revenues for the Company.  For this reason, the Company plans to be an early entrant into the market, to establish a presence and position itself for private sector involvement.  In the short term, due to the limitation on private sector igaming, there is very limited potential for advertising revenue.  If the EU markets targeted by our Company do not open to the private sector in the next two to three years, our Company may not be able to achieve enough revenue to continue operating in the EU market.





Our Company’s operations will not fall under the regulatory auspices of many of the EU countries.  Many EU countries do not yet have laws pertaining to advertising on the internet, or to advertising internet gaming online. These laws will follow after regulations defining internet gaming have been established.  A number of EU countries have been ordered by the European Commission to open up cross border internet wagering, eliminating monopolies and creating new business opportunities for the private sector.  Those EU countries with legislation regarding advertising of internet gaming are very vague, and pertain mostly to print, TV and radio.  Advertising on websites that do not engage in outbound marketing to residents of specific countries is subject only to the laws of the country that the website operates in.  The Company plans to pursue a strategy of replicating and translating the sites it acquires into other foreign languages.  The Company believes that people of German, Italian, Spanish and Swedish origins would be interested in the same type of information that attracts UK visitors.  Many of the European sports that the Company publishes information about, as well as the growing popularity of poker games, are highly searched for topics through internet search engines, such as Google, Yahoo, Bing, etc.  The Company will host these foreign language websites in a country and location where bandwidth, technology and network access provide people anywhere in the world direct and reliable access to these information websites.  The Company will not host these websites in Spain, Germany, Italy or Sweden.  The Company will not be proactively engaged in outbound marketing to these specific countries.  We will rely on the relevance of our published material which will be indexed and ranked by international search engines and sought out by interested people conducting online searches in their native language, from anywhere in the world.  Depending on the success of our initial foreign language sites, the Company will determine what other languages and cultures may be interested in the information that we publish.





Demographics




Western Europe is also a geographic sub region of Europe.  As defined by the United Nations, Western Europe comprises Austria, Belgium, France, Germany, Liechtenstein, Luxembourg, Monaco, Netherlands and Switzerland .  According to the UN, Western Europe is home to approximately 186 million people, with a very modest 1.5% population growth projected for over the next five years.  Sixty-one per cent of the population is between the age of 16 and 60.




- 26 -





One of the more intriguing elements of Western Europe is the distinct language and cultural differences within the different regions of Western Europe.  Therefore, to be able to fully capture the Western European market, an advertiser must effectively adapt its message to the local culture of each of these distinct regions.




Company management also intends to target Italy, Spain, Portugal, and Scandinavian Countries such as Denmark, Norway, Sweden and Finland.




Internet Penetration




Similar to the statistics for the United Kingdom, Western European countries also show significant growth in internet penetration amongst the population:




Population

Internet Users,

Penetration(2010 Est. )

Latest Data

(% Population)

)Denmark

5,515,575

4,750,500

86.1%Finland

5,255,695

4,480,900

85.3%France

64,768,389

44,625,300

68.9%Germany

82,282,988

65,123,800

79.1%Ireland

4,622,917

3,042,600

65.8%Italy

58,090,681

30,026,400

51.7%Netherlands

16,783,092

14,872,200

88.6%Portugal

10,501,051

7,782,760

74.1%Spain

46,505,963

29,093,984

62.6%Sweden

9,076,757

8,397,900

92.5%





Source: www.InternetWorldStats.com





Rising broadband penetration and an interest in using the Internet for personal connections have been driving growth in Internet usage across Western Europe, according to a survey by the European Interactive Advertising Association (“EIAA”) and Synovate.




Gaming Statistics




Since not all countries within Western Europe publish statistics, the statistics for online gaming in the European Union (“EU”) is a good proxy for the size and scope of the online gaming market in Western Europe.  According to a report conducted by H2 Gambling Capital Consultants ( www.h2gc.com ), the European gambling industry was worth €82 Billion in 2009 and is expected to reach €90 Billion in 2010.




Country Specific industry statistics are becoming more available as each country regulates online gambling. In France, during 2009, average gambling spend per adult was€171. Gross Gaming Yield ( GGY ) in France was €666.6m in 2009, and it’s expected to grow to €1,243.2m in 2012, an increase of 86%.


Data source: H2 Gambling Capital Consultants.





- 27 -




In respect of Germany’s gambling Industry, Gold Media-provided data shows that €7.3bn of the €7.8bn staked in Germany in 2009 was unregulated remote gambling, representing 94% of the total.




Italy meanwhile, is now the largest egaming market in Europe with an approximate gross win of €19bn (£16bn), according to H2 Gambling Capital data, and has shown the highest global poker growth by market share of 0.89% between 2009 and 2010 according to Pokertrafficindex.com.




C.           Organizational Structure





The Registrant is not part of a corporate group.  The Registrant has no subsidiaries and no corporate controlling shareholder.





D.           Property, Plants and Equipment





The Registrant has no material tangible fixed assets at this time.





Item 4A.                   UNRESOLVED STAFF COMMENTS





Not applicable





Item 5.                      OPERATING AND FINANCIAL REVIEW AND PROSPECTS





The company was formed in September 27, 2005.   The following discussion is management’s assessment of factors and trends which are anticipated to have a material effect on our company’s financial condition and results of operations in future periods.





A.           Operating Results




The following discussion and analysis of the Registrant’s financial condition and results of operations for the fiscal years ended December 31, 2011, and 2010 should be read in conjunction with the Registrant’s financial statements and related notes included in this registration statement in accordance with “Item 8 – Financial Information”. The Registrant’s financial statements included in this registration statement were prepared in accordance with United States generally accepted accounting principles.




All statements other than statements of historical facts included in this Report and located elsewhere herein regarding industry prospects and the Registrant's financial position are forward-looking statements.  Although the Registrant believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Registrant's expectations ("Cautionary Statements") are disclosed in this Report, including, without limitation, in conjunction with the forward-looking statements included in this Report under "Risk Factors."  All subsequent written and oral forward-looking statements attributed to the Registrant or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statement. The financial statements have been conformed to reflect the change in the presentation.





The Registrant’s Balance Sheet, Statement of Operations and Statement of Cash Flows for the year ended December 31, 2009 have been restated to correct the accounting treatment in connection with the convertible notes payable in 2009.  These changes correct the change in the treatment from a recorded asset to a debt discount shown with the notes payable





- 28 -





For the years ended, December 31,





2011


2010


2009


2008


2007(Restated)REVENUESales

$
640,634


$
709,484


$
521,418


$
543,696


$
208,606Cost of sales


(335,725
)


(763,671
)


(656,122
)


(635,457
)


-Gross Profit


304,909



(54,187
)


(134,704
)


(91,761
)


208,606EXPENSESAmortization


45,098



84,282



39,709



84,067



59,104Editorial fees


-



-



-



-



43,546Management fees


35,500



24,000



36,000



35,500



-Professional fees


27,055



56,487



28,868



82,387



370,148Investor relations fees


-



87,065



36,085



-



-Goodwill impairment


-



39,403



-



-



-Asset acquisition expense


-



118,280



-



-



-General and administration fees


108,745



200,055



87,734



85,958



127,236216,398



609,572



228,396



287,912



600,034Income/(loss) before other items


88,511



(663,759
)


(363,100
)


(379,673
)


(391,428
)Other Items:Interest on loans


(44,549
)


(31,885
)


(18,137
)


-



-Foreign exchange gain/(loss)


6,312



(10,337
)


(4,604
)


(22,302
)


(2,089
)Amortization of debt discount


-



(350,000
)


(296,960
)


-



-Interest income


30



54



70



2,669



11,971Net profit/loss

$
50,304


$
(1,055,927
)

$
(682,731
)

$
(399,306
)

$
(381,546
)




Year Ended December 31, 2011 Compared to Year Ended December 31, 2010





Revenues




Revenue for the fiscal year ended December 31, 2011 was $640,664 compared to revenue of $709,484 for the fiscal year ended December 31, 2010.  The decrease of $68,820 in revenue for the fiscal year ended December 31, 2011 was attributable to decrease in traffic generated by our websites and the advertising revenue they generated. Our website traffic was negatively impacted by the Google Panda search results ranking algorithm that was initially released in February, 2011. The Panda Update aimed to change the search rankings of websites that had lower quality content, and increase the search rankings of websites that had higher quality content. Websites that had a large amount of advertising were also negatively affected. The Panda Update reportedly affected 12% of all search results. Although our websites contained quality content, we also carried substantial advertising. We relied on Google search results to deliver our website traffic, and as our rankings for certain keywords dropped, so did our website traffic. The overall result during 2011 was a 42% drop in traffic, which resulted in a 9.7% drop in revenues. The revenues did not drop equally with the drop in traffic due primarily to two factors: 1) our CPM rate charged to advertisers increased from 2010 to 2011 because the quality of our traffic was improving from our higher quality content we were producing and 2) our trailing performance based advertising revenues from late 2010 delivered above average results into 2011.




- 29 -




Cost of Sales




The cost of sales for the fiscal year ended December 31, 2011 was $335,725 compared to cost of sales of $763,671 for the fiscal year ended December 31, 2010.  The decrease of $427,946 for the fiscal year ended December 31, 2011 was due to the fact that the Companycancelled the services it outsourced to On A Roll Media Inc. as of June 1st, 2011. The services cancelled included General Operations Management, website development, website marketing, system administration, CMS programming, search marketing, content production and translation services. The company made the decision to drastically cut these services after experiencing the severe downturn in website traffic resulting from the Google Panda Update. The Company subsequently contracted limited content writing, translation and web development from independent writers and translators found through online contractor websites, for the remainder of the year. The Company brought the administration of the websites in house as of June 1, 2011. The cancellation of services resulted in a decrease in our Cost of Sales of approximately $61,000 per month from June through to December.




Operating Expenses




The Registrant’s operating expenses for the year ended December 31, 2011 were $216,398, compared to $609,518 for the year ended December 31, 2010.  The decrease in operating expenses of $393,120 for the year ended December 31, 2011 was primarily due to the decrease in professional fees, investor relations fees, impairment of goodwill and general and administrative fees.




The Registrant’s professional fees for the year ended December 31, 2011 were $27,055, compared to $56,487 for the year ended December 31, 2010.  The decrease in professional fees was $29,432 for the year ended December 31, 2011 as the Registrant did not have any new acquisitions that occurred in 2011.




The Registrant’s general and administrative expenses for the year ended December 31, 2011 were $108,745, compared to $318,281 for the year ended December 31, 2010. The decrease in general and administrative expenses of $209,536 for the year ended December 31, 2011 was due to a smaller amount of the stock based compensation expensed and the Registrant had less travelling expenses.




Net Profit/Loss




The Registrant’s net income for the year ended December 31, 2011 was $50,304, compared to a net loss of $1,055,927 for the year ended December 31, 2010.  The increase was primarily due to the decrease in professional fees, decrease in interest on loans, decrease in investor relations fees, decrease in asset acquisition expense, decrease in stock based compensation expense, decrease in foreign exchange loss and the decrease in amortization of debt discount.




Year Ended December 31, 2010 Compared to Year Ended December 31, 2009




Revenues




- 30 -




Revenue for the fiscal year ended December 31, 2010 was $709,484 compared to revenue of $521,418 for the fiscal year ended December 31, 2009.  The increase of $188,066 in revenue for the fiscal year ended December 31, 2010 was attributable to the increase in traffic generated by our websites and the advertising revenue they generated.Our websites generated more traffic due primarily to concerted efforts to write and post more frequent high quality content on our websites. We diversified the sports we wrote content for, timed the articles closer to the actual events we were covering, and we focused on keywords and content that were becoming increasingly popular through Google search. The result was a 63% increase in traffic year over year, and a 28.5% increase in advertising revenues.




Cost of Sales




The cost of sales for the fiscal year ended December 31, 2010 was $763,671 compared to cost of sales of $656,122 for the fiscal year ended December 31, 2009.  The increase of $107,549 for the fiscal year ended December 31, 2010 was attributable to the redevelopment of three of our twelve websites.  In addition, the Company hired a fulltime on page marketing resource.




Operating Expenses




The Registrant’s operating expenses for the year ended December 31, 2010 were $609,572, compared to $228,396 for the year ended December 31, 2009.  The increase in operating expenses of $381,176 was primarily due to a increase in investor relation fees, increase in depreciation and amortization, increased in professional fees, goodwill impairment and increased in asset acquisition expense and  increased in our general and administration fees which consisted mainly of stock based compensation expenses for the year ended December 31, 2010.




The Registrant’s professional fees for the year ended December 31, 2010 were $56,487, compared to $28,868 for the year ended December 31, 2009.  The increase in professional fees was $27,619 for the year ended December 31, 2010 was attributed to the new acquisitions that occurred in 2010.




The Registrant’s general and administrative expenses for the year ended December 31, 2010 were $318,281, compared to $87,664 for the year ended December 31, 2009. The increase in general and administrative expenses of $230,617 for the year ended December 31, 2010 was primarily due to the increase in stock based compensation expense.




Net Loss




The Registrant’s net loss for the year ended December 31, 2010 was $1,055,927, compared to $682,731 for the year ended December 31, 2009.  The increase was primarily due to the increase in professional fees, increase in interest on loans, increase in investor relations fees, increase in asset acquisition expense, increase in stock based compensation expense, increase in foreign exchange loss and the increase in amortization of debt discount.




Year Ended December 31, 2009 Compared to Year Ended December 31, 2008




Revenues




Revenue for the fiscal year ended December 31, 2009 was $521,418 compared to revenue of $543,696 for the fiscal year ended December 31, 2008.  The decrease of $22,278 in revenue for the fiscal year ended December 31, 2009 was attributable to the decrease in traffic generated by our websites and the advertising revenue they generated.




- 31 -




Cost of Sales




The cost of sales for the fiscal year ended December 31, 2009 was $656,122 compared to cost of sales of $635,457 for the fiscal year ended December 31, 2008.  The increase of $20,665 for the fiscal year ended December 31, 2009 was attributable to redeveloping of our websites.





Operating Expenses




The Registrant’s operating expenses for the year ended December 31, 2009 were $228,326, compared to $287,912 for the year ended December 31, 2008.  The decrease in operating expenses of $59,586 was primarily due to a decrease in professional fees expenses for the year ended December 31, 2009.




The Registrant’s professional fees for the year ended December 31, 2009 were $28,868, compared to $82,387 for the year ended December 31, 2008.  The decrease in professional fees was $53,519 for the year ended December 31, 2009.




The Registrant’s general and administrative expenses for the year ended December 31, 2009 were $87,734, compared to $85,958 for the year ended December 31, 2008. The increase in general and administrative expenses of $1,776 for the year ended December 31, 2009 was primarily due to the increase in promotion and media related activities.




Net Loss




The Registrant’s net loss for the year ended December 31, 2009 was $682,731, compared to $399,306 for the year ended December 31, 2008.  The increase was primarily due to the increase in amortization of debt discount.




Year Ended December 31, 2008 Compared to Year Ended December 31, 2007




Revenues




Revenue for the fiscal year ended December 31, 2008 was $543,696 compared to revenue of $208,606 for the fiscal year ended December 31, 2007.  The increase of $335,090 in revenue for the fiscal year ended December 31, 2008 was attributable to the increase in traffic generated by our websites and the advertising revenue they generated. As at December 31, 2008 advertising revenues from the websites was our sole source of revenue.




Cost of Sales




The cost of sales for the fiscal year ended December 31, 2008 was $635,457 compared to cost of sales of $Nil for the fiscal year ended December 31, 2007.  The increase of $635,457 for the fiscal year ended December 31, 2008 was attributable to the start up of our operations.




Operating Expenses




- 32 -




The Registrant’s operating expenses for the year ended December 31, 2008 were $287,912, compared to $600,034 for the year ended December 31, 2007.  The decrease in operating expenses of $312,122 for the year ended December 31, 2008 was primarily due to a decrease in professional fees and general and administrative expenses. Of the $370,148 in professional fees for the year ended December 31, 2007, $191,161 may be reclassified to cost of sales.




The Registrant’s editorial fees for the year ended December 31, 2008 were $Nil, compared to$43,546 for the year ended December 31, 2007.  The decrease in editorial fees of $43,546 for the year ended December 31, 2008 was due to the Registrant reclassifying this item to the cost of sales.




The Registrant’s professional fees for the year ended December 31, 2008 were $82,387, compared to $370,148 for the year ended December 31, 2007.  The decrease in professional fees was primarily due to the costs associated with the preparation of the registration statement. Of the $370,148 in professional fees for the year ended December 31, 2007, $191,161 may be reclassified to cost of sales.




The Registrant’s general and administrative expenses for the year ended December 31, 2008 were $85,958, compared to $127,236 for the year ended December 31, 2007. The decrease in general and administrative expenses of $41,278 for the year ended December 31, 2008 was primarily due to consolidation of the operational costs associated with the websites.




Net Loss




The Registrant’s net loss for the year ended December 31, 2008 was $399,306, compared to $381,546 for the year ended December 31, 2007.  The increase was primarily due to the increase in the cost of the development of the websites.




B.           Liquidity and Capital Resources





As at December 31, 2011, the Registrant had cash and cash equivalents in the amount of $34,276.





The Registrant had $615,521 in working capital deficit at December 31, 2011.





During the year ended December 31, 2010, the Registrant entered into a convertible promissory note payable.  The note was for $350,000 with a shareholder of the Registrant.  The note is unsecured and due on demand.  The note bears an interest rate of 7% per annum.  The note has an option for the holder to convert all or part of the principal and accrued interest thereon into common stock of the Company at $0.25 per share. The Company accrued interest expenses of $8,189 for the year ended December 31, 2010 and $24,500 for the year ended December 31, 2011





During the year ended December 31, 2009, the Registrant entered into two convertible promissory notes payable.  One note was for $96,000 and the other note was for $200,000 with a shareholder of the Registrant.  Both of the notes are unsecured and due on demand. The $96,000 note bears an interest rate of 10% per annum while the other note of $200,000 bears an interest rate of 7% per annum. The notes have an option for the holder to convert all or part of the principal and accrued interest thereon into common stock of the Company at $0.25 per share. The Company accrued interest expenses of $20,049 and $23,696 for the years ended December 31, 2011 and 2010, respectively. As at December 31, 2011, the Registrant has repaid the lender an aggregate of principal and interest totaling $190,000.





The Company estimates its operating costs for the next 12 months will include $85,000 for SEO and SEM services, hosting and technical services, $78,000 for content, web development and IT services, and $65,000 for office, administrative, business development, marketing and promotional services.  There is no assurance that the Company will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to the Company.





- 33 -





Failure to obtain additional funding will result in delay or indefinite postponement of some or all of the Registrant's products and/or services to the market place.  Any funds raised by the Registrant through the issuance of equity or convertible debt securities will cause the Registrant's current stockholders to experience dilution.  Such securities may grant rights, preferences or privileges senior to those of the Registrant's common stockholders.





There is no assurance that the Registrant will earn revenue, operate profitably or provide a return on investment to its security holders.





To date, all funding for the Registrant's business and ongoing operations has come from common share issuances.  In the three month period from September to December 2005, the Registrant raised $103,000 in equity.  In the next nine months of operation (Jan to Sept 2006), the Registrant raised $59,650 in equity.  In January, 2007, the Registrant raised $26,000 in equity.  In April, 2007, the Company raised $1,000,000 in equity.





During the year ended December 31, 2011, the CFO received $10,500 for compensation.  The CEO received $25,000 for compensation.  The other directors of the Registrant have agreed to wait before establishing compensation.  Office equipment and rent is being provided to the Registrant by management at a nominal rate of $200 per month.





As of the date of this Form 20-F, the Registrant has 11,751,912 issued and outstanding common shares.





C.           Research and Development, Patents and Licenses, Etc.





The Registrant has not developed a research and development policy.  The Registrant holds no patents or licenses including technology licenses.





D.           Trend Information





The Registrant is generating revenue from sales.





E.           Off-Balance Sheet Arrangements





The Registrant has no off-balance sheet arrangements.





F.           Tabular Disclosure of Contractual Obligations





The Registrant currently has no contractual obligations in the nature of long term debt obligations, capital finance lease obligations, operating lease obligations or purchase obligations.





G.           Safe Harbor





Not applicable.





Item 6.                      DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A.           Directors and Senior Management





- 34 -





Name
Age
Position
Other Reporting Companies

In Canada or the United StatesCompany
PositionDavid Hallonquist
55
President, Chief Executive Officer and Director
Nil
N/ASteve W. Latham
49
Director
Nil
N/ARoger R. Matthews
64
Director
Nil
N/AH. Brian Cole
55
Director and C.F.O.
Nil
N/AJamie Lidstone
41
Director
Nil
N/A





The following sets out the principal occupations and related experience for the directors and senior officers of the Registrant over the past five years.  None of the Registrant’s officers or directors are related by blood or marriage.  There is no arrangement or understanding among major shareholders, customers or suppliers of the Registrant pursuant to which any officer or director of our company was selected to that position.





DAVID HALLONQUIST – President, Chief Executive Officer and Director





Mr. Hallonquist is the Founder of Play LA.  He is an accomplished management professional with experience in Retail, Distribution, Marketing, and E-Business.  His expertise is in planning and implementing new developments and strategies, particularly in a start-up environment.  David is the founder and President of Spotted Dog Media Inc., a private North Vancouver, BC based company that sells marketing, advertising and consulting services to the gaming industry.





Prior to founding Spotted Dog Media, Mr. Hallonquist held executive positions with two start-up companies focused on e-commerce in the health and gaming sectors.  His roles in business development dealt with the creation, strategy, and implementation of each company’s business models, as well as evaluating and penetrating new market sectors.  His career includes a seven year stint as founder, President and Director of Renaissance Golf Canada Inc., a golf products importer and distributor, which went public in 1996 on Canada’s CDNX Exchange.





Throughout most of the 1980s, Mr. Hallonquist was executive vice-president and general manager of Vancouver-based Video Only, a chain of retail consumer electronics stores operating throughout Western Canada.  In this role he oversaw the entire operating functions of the company, including budgeting, advertising, merchandise buying, inventory management, hiring and training and administration.





Mr. Hallonquist will provide strategic direction to the Registrant.  He will spend 70% of his available time on the operations of the Registrant.





STEVE W. LATHAM - Director





Mr. Latham has a 20 year entrepreneurial career in the field of high technology and the e-Commerce.  His past experience included successfully building Multi-Image Productions, the Fifth Dimension Group of Companies and Gateway Technology Inc.  He also headed up Corel Corporation’s international sales efforts in video conferencing technologies.





Mr. Latham served as a Director of Chartwell Technology Inc., a leading online gaming software developer whose shares are publicly traded on the TSX Exchange under the symbol “CWH”, after Chartwell acquired Gateway Technology Inc.  During his tenure with Chartwell Technology Inc. until May 2005, Mr. Latham assisted in raising financing.





- 35 -





ROGER R. MATTHEWS - Director





Mr Matthews is the Founder and Managing Director of the Obelisk International Trust Group, a group of private companies based in the Channel Islands who specialise in corporate, trust and collective investment plans including consulting, management and administration services.





After studying at New College, Oxford and Aston Universities and then training as an accountant, he left England in 1971 and has worked in the offshore banking, finance and trust industry for 34 years.  He has held various executive roles with major international banks including the Bank of Bermuda and the Royal Bank of Canada and also one of Jersey’s leading law firms Michael Voisin and Co. He has worked in Bermuda, Hong Kong, Luxembourg, Guernsey and Jersey.  He serves as a director of several international investment management groups’ offshore structures and offshore mutual funds.  He has for several years worked closely with the Imara Group of Companies based in Botswana and South Africa, and is a Director of Obelisk and Chairman of the Group Audit Committee.





He was Vice-Chairman of the Society of Trust and Estate Practitioners in the Channel Islands for eight years and is the liaison officer between Guernsey and Jersey. He was the inaugural Chairman of the Guernsey Fund Managers Association.





H. BRIAN COLE – Director and Chief Financial Officer





Mr. Cole has 30 years of finance and accounting experience in a variety of industries in Barbados, St. Lucia, Jamaica, St. Vincent Guyana, Suriname, Martinique, Guadeloupe, Grenada and Antigua.  He is a member of the Registrant’s audit committee.  Mr. Cole has seven years experience as an internal auditor for Higgs & Hill Overseas Limited.  For the past 12 years, Mr. Cole has been serving as an independent consultant to various international enterprises.  Mr. Cole is a member of the Rotary Club of Barbados, having served as a Director in 1993 and Treasurer in 2002.





JAMIE LIDSTONE - Director





Mr. Lidstone is the Managing Director of Lotoshow, a Latin American online gaming company.  Mr. Lidstone’s responsibilities include overall business strategy, marketing, business development and operations.  Prior to Lotoshow Mr. Lidstone held senior marketing and business development positions within the online gaming industry. He was Marketing Director for the Casino Rewards Group, responsible for the overall marketing and business development of 8 online casinos and 2 online poker rooms. During his tenure he oversaw significant growth of the group to become one of the worlds leading online gaming companies.





Mr. Lidstone has also consulted to a number of online gaming companies within the industry.  In this capacity, he assisted in developing and executing marketing and business strategies.  Prior to online gaming Mr. Lidstone was the Australian Marketing and Business Development director for online Auction site BidorBuy.





Mr. Lidstone has attended the University of New England and University of Sydney where he is on leave from his Masters in Marketing.





B.           Compensation





There are presently two Executive Officers of the Registrant, President and Chief Executive Officer, Mr. David Hallonquist and Chief Financial Officer, Mr. Brian Cole.  “Executive Officer” means the President, any Vice-President in charge of a principal business unit such as sales, finance or production and any officer of the Registrant or a subsidiary who performs a policy-making function for the Registrant whether or not that person is also a director of the Registrant or the subsidiary, and the Chairman and any Vice-Chairman of the board of directors of the Registrant if that person performs the functions of that office on a full-time basis.





- 36 -





Set out below is a summary of compensation paid during the Registrant’s most recently completed financial years to the Registrant’s Executive Officers:





Name

And

Principal

Position
Year
Annual Compensation
Long Term Compensation
All

Other

Compen-

sation

($)Salary

($)
Bonus

($)
Other Annual

Compen-sation

($)
Awards
PayoutsSecurities

Under

Options/

SARs

Granted

(#)
Restricted

Shares or

Restricted

Share

Units

($)
Long

Term

Incentive

Plan

Payouts

($)David Hallonquist
2011

2010

2009

2008

2007
$25,000

Nil

Nil

Nil

Nil
Nil
Nil
25,000

50,000

25,000

Nil
Nil
Nil
NilBrian Cole
2011

2010

2009

2008

2007
$10,500

$24,000

$36,000

$32,500

$20,000
Nil
Nil
25,000

50,000

25,000

Nil
Nil
Nil
Nil




Options and Stock Appreciate Rights (SARs)





On April 17, 2009, the Board of Directors of the Registrant established a 2009 Restricted Stock/Option Plan to provide for the issuance of stock options to acquire an aggregate of up to 2,200,000 shares of its common stock.  On May 15, 2009, the Board of Directors of the Registrant granted 1,200,000 stock options.  These stock options have vested periods of 6 months over a two year period, with an exercise price of $0.40 per share and expires May 15, 2014.   As of December 31, 2011, 830,000 stock options were exercisable and 370,000 stock options were cancelled. None of these stock options were exercised as of the year ended December 31, 2011.





On March 31, 2010, the Board of Directors of the Registrant granted 100,000 stock options.  These stock options have vested periods of 6 months over a two year period, with an exercise price of $0.51 per share and expires March 30, 2015.  As of December 31, 2011, 75,000 stock options were exercisable and 25,000 were not exercisable.  None of these stock options were exercised as of the year ended December 31, 2011.





On May 03, 2010, the Board of Directors of the Registrant granted 150,000 stock options.  These stock options have vested periods of 6 months over a two year period, with an exercise price of $0.51 per share and expires May 03, 2015.  As of December 31, 2011, 18,750 stock options were exercisable and 6,250 were not exercisable.  125,000 stock options were cancelled.  None of these stock options were exercised as of the year ended December 31, 2010.





On September 01, 2010, the Board of Directors of the Registrant granted 70,000 stock options.  These stock options have vested periods of 6 months over a two year period, with an exercise price of $1.01 per share and expires September 01, 2015.  As of December 31, 2011, all of the 70,000 were cancelled.





- 37 -





On October 01, 2010, the Board of Directors of the Registrant granted 10,000 stock options.  These stock options have vested periods of 6 months over a two year period, with an exercise price of $1.01 per share and expires October 01, 2015.  As of December 31, 2011, all of the 5,000 stock options were exercisable and 5,000 stock options were not exercisable.  None of these stock options were exercised as of the year ended December 31, 2011.





Our stock option plan allows the board of directors to grant directors, officers, employees and consultants of the Registrant options to acquire shares of the company.  The purpose of the stock option plan are to attract, retain and motivate key members of our team to align incentives with the results realized by shareholders, and to provide competitive compensation arrangements that reward the creation of shareholder value over the long term.





The stock option plan provides that the options will expire no later than 5 years from the grant date and such option are not transferable or subject to assignment or lien for security purposes except to the Holder’s legal representative, his estate, a family corporation or personal holding corporation or in such other circumstance as the Board may approve in its sole discretion.   If the Option Holder’s employment or consultancy with the Registrant is terminated within the Option Period because of the Option Holder’s death or disability, the Option will remain exercisable, to the extent that it was vested and exercisable on the date of the Option Holder’s death or disability, for a period of one year after such date; provided, however, that in no event may the Option be exercised after the expiration of the Option Period.  If the Option Holder’s employment or consultancy with the Registrant is terminated within the Option Period, the option will be void for all purposes immediately upon notice of termination or resignation, then the option shall be exercisable, as to the vested portion only for a period of 30 days after such termination or resignation.




The particulars of the stock option grants are set out in the following table as of December 31, 2011:





Options





Exercise



UnexercisedGranted

Date



Price

Vested

Options

Cancelled500,000

May 15, 2009

Directors

$0.40

500,000200,000

May 15, 2009

Officers

$0.40

200,000500,000

May 15, 2009

Consultants

$0.40

130,000



370,00050,000

Jan 19, 2010

Consultants

$0.51





50,000100,000

Mar 31, 2010

Consultants

$0.51

75,000

25,000150,000

May 03, 2010

Consultants

$0.51

18,750

6,250

125,00070,000

Sep 01, 2010

Consultants

$1.01





70,00010,000

Oct 01, 2010

Consultants

$1.01

5,000

5,000TOTAL
1,580,000







928,750

36,250

615,000




The particulars of unexercised options, stock that has not vested and equity incentive plan awards for our named executive officers and directors are set out in the following table:




- 38 -




Options Awards

Stock AwardsName

Numberof

Securities

Underlying

Unexercised

Options

(#)

Exercisable

Numberof

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

Equity Incentive

Plan Awards:

Numberof

Securities

Underlying

Unexercised

Unearned Options

(#)

Option

Exercise

Price

($)

Option

Expiration

Date

Numberof

Sharesor

Unitsof

StockThat

Have

Not Vested (#)

Market Value

ofShares

orUnits

ofStock

That Have Not Vested

($)

Equity Incentive

PlanAwards:

Number of

Unearned Shares,

Units or Other Rights That Have Not Vested

(#)

Equity Incentive

Plan Awards:

Market or

Payout Value of Unearned

Shares, Units

or Other Rights That Have Not Vested ($)David Hallonquist

200,000

Nil

Nil

$0.40

May 15, 2014

Nil

N/A

Nil

NilBrian Cole

200,000

Nil

Nil

$0.40

May 15, 2014

Nil

N/A

Nil

NilJamie Lidstone

100,000

Nil

Nil

$0.40

May 15, 2014

Nil

N/A

Nil

NilRoger Matthews

100,000

Nil

Nil

$0.40

May 15, 2014

Nil

N/A

Nil

NilSteve Latham

100,000

Nil

Nil

$0.40

May 15, 2014

Nil

N/A

Nil

NilTOTAL

700,000




Compensation of Directors





The Registrant has no arrangements, standard or otherwise, pursuant to which directors are compensated by the Registrant for their services in their capacity as directors, or for committee participation, involvement in special assignments or for services as consultant or expert during the most recently completed financial year.





None of the Registrant’s directors have received any manner of compensation for services provided in their capacity as directors during the Registrant’s most recently completed financial year except the awards of stock options.




Long Term Incentive Plan (LTIP) Awards





The Registrant has no LTIP awards authorized or issued.





C.           Board Practices





- 39 -





The board of directors of the Registrant is currently comprised of David Hallonquist, Steve W. Latham, Roger R. Matthews, H. Brian Cole and Jamie Lidstone.  Each director of the Registrant is elected and holds office until his successor takes office or until his earlier death, resignation or removal.  The board of directors currently has established no committees other than the audit committee.  The members of the Registrant’s audit committee are Mr. Steve Latham, Mr. Roger Matthews and Mr. Brian Cole.  There are no directors’ service contracts with the Registrant providing for benefits upon termination of employment.





D.           Employees





As of December 31, 2011, the Registrant had two part-time staff, its C.E.O., David Hallonquist and its C.F.O., Brian Cole.





E.           Share Ownership





The following table lists as of December 31, 2011, the share ownership of all of the Registrant’s directors and members of its administrative, supervisory and management bodies.  The Registrant has only one class of shares issued and outstanding being, common shares, without par value, and all of the common shares have the same voting rights.  The Registrant has 965,000 incentive stock options outstanding.  None of the persons named in the following table hold any warrants to purchase shares of the Registrant.





Name and Position

Number of

Shares Held

Percentage of

Shares Held (%) (1)David Hallonquist (2)


2,931,500



24.35
%Steve W. Latham (3)


87,500



0.68
%Roger R. Matthews (4)


87,500



0.68
%H. Brian Cole (5)


412,500



3.23
%Jamie Lidstone (6)


317,500



2.48
%





(1)
The percentage ownership positions are based on 11,751,912 shares outstanding plus 965,000 incentive stock options for a total of 12,761,912 as of December 31, 2011.


(2)
David Halloquist has 2,510,500 shares outstanding plus 200,000 stock options


(3)
Steve Latham has 100,000 stock options


(4)
Roger Matthews has 100,000 stock options


(5)
Brian Cole has 250,000 shares outstanding plus 200,000 stock options


(6)
Jamie Lidstone has 230,000 shares outstanding plus 100,000 stock options




Item 7.                      MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A.           Major Shareholders





The Registrant is a privately owned Tortola, British Virgin Islands company, the shares of which are owned by Canadian residents, U.S. residents and residents of other countries.  As of December 31, 2011, the following parties had ownership of 5% or greater of the Registrant’s common shares, all of which have the same voting rights attached thereto as all other common shares of the Registrant (based on 11,751,912 shares outstanding plus 965,000 incentive stock option for a total of 12,761,912 in calculating the percentage held.)




- 40 -




Name

Number of Common

Shares Held

Percentage of

Common Shares HeldDavid Hallonquist (2)

2,510,500

19.67%Chelten Ltd. (1)

6,380,000

49.99%





(1)
The shareholder of Chelten Ltd. is The Ringwood Trust. Beresford Trust & Corporate Services Limited  is the Trustee of The Ringwood Trust.  Each person who is a member of the following classes of persons and who is a non-resident of Canada for purposes of the Income Tax Act (Canada) is a Beneficiary of the Ringwood Trust:




(a)
the lineal descendants of every degree of consanguinity of Grace Mary Goddard Hallonquist;(b)
the legal spouses of the persons described in (a);(c)
the estates of the persons described in (a) and (b);(d)
the following charity:  World Wildlife Fund.





(2)
David Hallonquist is a member of the family class of the Ringwood Trust but has no direct or indirect interest as any and all distributions from the Ringwood Trust are totally discretionary.  Also as a resident of Canada for tax purposes David Hallonquist is an excluded beneficiary and not eligible to receive any distributions from the trust.





As of December 31, 2011, the Registrant had 24 shareholders of record holding 11,751,912 shares.  The number of record holders in the United States is 6, the portion of outstanding securities held in the United States is 2,635,500 shares or approximately 22.42%.





Other than as disclosed above, the Registrant is not aware of any other company, any foreign government or any other person, jointly or severally, that directly or indirectly controls the Registrant.  The Registrant is not aware of any arrangements, the operation of which, may at a future date result in a change of control of the Registrant.





B.           Related Party Transactions





During the year ended December 31, 2011, the Company paid rent of $2,400 (2010: $2,400, 2009: $2,400) for its office in Barbados to a company with a director in common.





Convertible Promissory Notes Payable




In 2009, the Company issued two convertible promissory notes totalling $296,960.  One note at 10% interest rate per annum and the other note at 7% interest per annum with one of its shareholder.  Each promissory note was convertible into shares of the Company’s common stock at a conversion rate equal to $0.25 per share at the option of the holder.  The Company recognized and measured an aggregate of $296,960 of the proceeds which is equal to the intrinsic value of the imbedded amended beneficial conversion feature, to additional paid in capital and a discount against the note issued.  The promissory notes are due on demand and unsecured. The Company accrued interest expenses of $20,049 and $23,696 for the years ended December 31, 2011 and 2010, respectively.





In 2010, the Company issued an additional convertible promissory note of $350,000 at 7% interest rate per annum to the same shareholder.  The promissory note was convertible into shares of the Company’s common stock at a conversion rate equal to $0.25 per share at the option of the holder.  The Company recognized and measured an aggregate of $350,000 of the proceeds, which is equal to the intrinsic value of the imbedded amended beneficial conversion feature, to additional paid in capital and a discount against the note issued.  The promissory note is due on demand and unsecured.  The Company accrued interest expenses of $24,500 and $8,189 for the year ended December 31, 2011 and 2010, respectively.





Amortization of the debt discount expenses of $350,000 and $296,960 were recorded during the years ended December 31, 2010 and 2009, respectively.




- 41 -




General Security Agreement





On April 16, 2011, the Company entered into a General Security Agreement with a lender of the Company.  The agreement was registered on May 23, 2011 in favor of the lender to provide security for the outstanding notes payable made to the Company by the lender.  New terms for the loans were established whereby the repayable amounts are set out as follows:





a.  Monthly interest and principal minimum payment of $10,000 shall commence beginning June 1, 2011 and shall be paid monthly thereafter


b.  The entire loan amount outstanding shall be repaid on the earlier of


i)  At the option of the Company, at any time after November 2011


ii)  36 months from the date of April 16, 2011


iii)  The date of demand by the shareholder in the event of the occurrence of an event of default under this agreement or change in the business of the Company





As at December 31, 2011, the Company has repaid the lender an aggregate of principal and interest totaling $190,000.




C.           Interests of Experts and Counsel





Not applicable




- 42 -





Item 8.                      FINANCIAL INFORMATION





A.           Financial Statements and Other Financial Information




Financial Statements filed as part of this registration statement:




Financial Statements of Play LA, Inc. for the years ended December 31, 2011, 2010 and 2009




Auditor’s Report of KR Margetson Ltd. dated March 29, 2012




Auditor’s Report of RBSM LLP dated July 14, 2011




Auditor’s Report of Jewett Schwartz Wolfe & Associates dated July 14, 2011




Balance Sheets as at December 31, 2011 and 2010




Statements of Operations for the years ended December 31, 2011, 2010 and 2009




Statement of Stockholders’ Equity for the years ended December 31, 2011, 2010 and 2009




Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009





Note to Financial Statements





B.           Significant Changes





Since the date of the audited financial statements for the period ended December 31, 2010, there have been no significant changes in the Registrant’s operations.





Please refer to Item 4 for a discussion of the Company’s acquisition of the two internet information portal sites.




Item 9.                      THE OFFER AND LISTING





A.           Offer and Listing Details





The Registrant was listed December 18, 2008.  The Registrant’s common stock is traded in the Over-the-Counter Bulletin Board market under the ticker symbol, “PLLAF”.





The following table sets forth for each quarter, for the last 2 years, the high and low bid prices per share of the Registrant’s common stock:


Quarter Ended

High

LowMarch 31, 2009

0.40

0.25Jun 30, 2009

0.40

0.40Sep 30, 2009

0.42

0.31Dec 31, 2009

0.51

0.40Quarter Ended

High

LowMarch 31, 2010

0.54

0.42Jun 30, 2010

1.05

0.50Sep 30, 2010

1.05

0.85Dec 31, 2010

1.01

1.01Quarter Ended

High

LowMarch 31, 2011

1.01

1.00Jun 30, 2011

1.00

1.00Sep 30, 2011

1.00

1.00Dec 31, 2011

0.90

0.25
  - 43 -





B.           Plan of Distribution





Not applicable.





C.           Markets





The common shares of the Registrant are quoted on FINRA’s Over the Counter Bulletin Board under the symbol “PLLAF”.





The Registrant’s common stock is subject to the regulations on penny stocks; consequently, the market liquidity for the common stock may be adversely affected by such regulations limiting the ability of broker/dealers to sell the Registrant’s common stock and the ability of shareholders to sell their securities in the secondary market in the United States.





Rules 15g-1 through 15g-9 promulgated under the Exchange Act impose sales practice and disclosure requirements on certain brokers-dealers who engage in certain transactions involving Penny Stock.  Subject to certain exceptions, a Penny Stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share.  The additional sales practice and disclosure requirements imposed upon brokers-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of our shares and impede the sale of our shares in the secondary market.





Under the Penny Stock regulations, a broker-dealer selling Penny Stock to anyone other than an established customer or Accredited Investor (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.  In addition, the Penny Stock regulations require the broker-dealer to deliver, prior to any transaction involving a Penny Stock, a disclosure schedule prepared by the Commission relating to the Penny Stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the Penny Stock held in a customer's account and information with respect to the limited market in Penny Stocks.





Nevada Agency & Trust Company, located at Suite 880, 50 West Liberty Street, Reno, Nevada  89501, will be the registrar and transfer agent for the Registrant’s common shares.





D.           Selling Shareholders





Not applicable





- 44 -





E.            Dilution





Not applicable





F.            Expenses of the Issue





Not applicable.





Item 10.                    ADDITIONAL INFORMATION





A.           Share Capital





Not applicable





B.           Memorandum and Articles of Association





Previously filed with the Securities and Exchange Commission on the Registrant’s form 20-F dated July 22, 2008.





C.           Material Contracts





On April 15, 2010, the Registrant entered into a consulting agreement with Thorsten Koster to provide financial advice, and investor and public relations strategies.  The term of the agreement is for a period of one year or until terminated by the sole discretion of the Registrant.  The agreement was amended on February 21, 2011.  The Registrant agreed to pay Mr. Koster in four phases as follows:


Phase 1

62,500 common shares and EUR 30,000Phase 2

62,500 common shares and EUR 20,000Phase 3

62,500 common sharesPhase 4

62,500 common shares





The Registrant has terminated its consulting agreement with Thorsten Koster effective June 7, 2011 for non-performance.  Only Phase 1 of the agreement was paid.  In accordance to the amended agreement, Mr. Koster was required to reimburse the Registrant 70,000 EUR upon receipt of the termination notice. 187,500 common shares issued to Mr. Koster was cancelled and returned to treasury.





D.           Exchange Controls





There are no foreign exchange controls in BVI and funds can be moved easily. There is no restriction in this regard.





E.           Taxation





International Business Companies established in BVI are exempt from the payment of Income Tax and Stamp Duty.





Non-residents of BVI are exempt from the income tax payable on dividends, interest, rents, royalties, compensations and other amounts which are paid to the person by the IBC.





There are no capital gains taxes, inheritance taxes and death duties.




- 45 -




Double Taxation Agreements between the United Kingdom and Japan and Switzerland extend to the British Virgin Islands but do not generally apply to IBC's.





F.            Dividends and Paying Agents





Not applicable





G.           Statement by Experts





Not applicable





H.           Documents on Display





The documents concerning the Registrant which are referred to in this Form 20-F are either annexed hereto as exhibits (see Item 19) or may be inspected at the principal offices of the Registrant.





I.             Subsidiary Information





The Registrant has no subsidiaries.





Item 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





A.           Quantitative Information about Market Risk





Currency Exchange Rate Sensitivity





The results of the Registrant’s operations are subject to currency transaction risk.  Regarding currency transactional risk, the operating results and financial position of the Registrant are reported in U.S. dollars in the Registrant’s financial statements.  The fluctuation of the U.S. dollar in relation to other currencies will therefore have an impact upon the profitability of the Registrant and may also affect the value of the Registrant’s assets and the amount of shareholders’ equity.





In regards to transaction risk, the Registrant’s functional currency is the U.S. dollar and its activities are predominantly executed using the U.S. dollar.  The Registrant incurs a relatively small portion of its expenses in U.S. dollars.  The Registrant has not entered into any agreements or purchased any instruments to hedge any possible currency risks at this time.





Interest Rate Sensitivity





As of December 31, 2010, the Registrant has three promissory notes requiring interest payments.  The Registrant has not entered into any agreement or purchased any instrument to hedge against possible interest rate risks at this time.




Item 12.                    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





A.           Debt Securities





Not applicable.





B.           Warrants and Rights




- 46 -




Not applicable.





C.           Other Securities





Not applicable.





D.           American Depository Shares





Not applicable.





PART II





Item 13.                    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





Not applicable.





Item 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS





Not applicable.





Item 15.                    CONTROLS AND PROCEDURES





The Registrant's Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Form 20-F, have concluded that, as of such date, the Company’s disclosure controls and procedures were effective.




Report of the Registrant on Internal Control Over Financial Reporting: The Registrant's Board of Directors and management are responsible for establishing and maintaining adequate internal control over financial reporting. The Registrant’s internal control system was designed to provide reasonable assurance to management and Board of Directors regarding the reliability of financial reporting and the preparation and fair presentation of its published financial statements.




All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.




Management assessed the effectiveness of the Registrant's internal control over financial reporting as of December 31, 2011.In making this assessment, it used the criteria established inInternal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the Registrant’s assessment, management has concluded that as ofDecember 31, 2011,the Registrant's internal control over financial reporting is effective based on those criteria.




There were no changes to the Registrant’s internal control over financial reporting that occurred during the period covered by this Annual Report on Form 20F that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.




Item 16A.                 AUDIT COMMITTEE FINANCIAL EXPERT




- 47 -




The Registrant’s audit committee financial expert is Mr. Brian Cole.  Mr. Cole is the company CFO.  Mr. Cole’s qualifications are set out in Item 6 of Part I of this Form 20-F.





Item 16B.                 CODE OF ETHICS





The Registrant has not adopted a formal written Code of Business Conduct.  Management is considering various draft codes of business conduct and expects that one will be adopted by the Registrant during its fiscal year ended December 31, 2012.





Item 16C.                 PRINCIPAL ACCOUNTANT FEES AND SERVICES





The Registrant’s audit fee for the year ended 2011 was $10,000 and for the year ended 2010 was $14,500.





Item 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





Not applicable.





Item 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS





Not applicable.




PART III





Item 17.                    FINANCIAL STATEMENTS





The Registrant’s financial statements have been prepared on the basis of US GAAP.  Copies of the financial statements specified in Regulation 228.210 (Item 310) are filed with this Form 20-F.





Index to Financial Statements




Financial Statements of Play LA, Inc. for the years ended December 31, 2011, 2010 and 2009




Auditor’s Report of KR Margetson Ltd. dated March 29, 2012




Auditor’s Report of RBSM LLP dated July 14, 2011




Auditor’s Report of Jewett Schwartz Wolfe & Associates dated July 14, 2011




Balance Sheets as at December 31, 2011 and 2010




Statements of Operations for the years ended December 31, 2011, 2010 and 2009




Statement of Stockholders’ Equity for the years ended December 31, 2011, 2010 and 2009




Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009





Note to Financial Statements





- 48 -




PLAY  LA  INC.





FINANCIAL STATEMENTS





December 31, 2011




- 49 -




K. R. MARGETSON LTD.
Chartered Accountants331 East 5th Street
Tel 604.929.0819North Vancouver BC
Fax: 1.877.874.9583V7L 1M1Canada




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Stockholders of


Play LA Inc.:





We have audited the balance sheet of Play LA Inc. as of December 31, 2011 and the related statement of operations, equity and cash flows for the year then ended.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, based on our audit, these financial statements referred to above present fairly, in all material respects, the financial position of Play LA Inc. as of December 31, 2011 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has an accumulated deficit of $2,503,377 and is dependent on its future profitability and the ongoing support of its stockholders, affiliates and creditors.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.Management’s plans as to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ K. R. MARGETSON LTD.North Vancouver BC

Chartered AccountantsMarch 29, 2012


- 50 -





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and Shareholders of


PLAY LA Inc.


PO Box 3136, 24 De Castro Street


Wickhams Cay 1


Road Town, Tortola, BVI




We have audited the accompanying balance sheet of PLAY LA Inc. (the "Company") as of December 31, 2010, and the related statements of operations, shareholders' equity (deficit) and cash flows for the year ended December 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, based on our audit, the financial statements referred to above present fairly, in all material respects, the financial position of PLAY LA Inc. as of December 31, 2010, and the results of its operations and its cash flows for the year ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred a net loss of $1,045,590 for the year ended December 31, 2010 and has accumulated deficit of $2,553,681 at its year end. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ RBSM LLPNew York, New YorkJuly 14, 2011


- 51 -


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and Stockholders of


PLAY LA Inc.


PO Box 3136, 24 De Castro Street


Wickhams Cay 1


Road Town, Tortola, BVI





We have audited the accompanying balance sheet of PLAY LA Inc.  (the “Company”) as of December 31, 2009, and the related statements of operations, stockholders’ equity(deficit) and cash flows for the year ended December  31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.





We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PLAY LA Inc. as of December 31, 2009, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.





As described in Note 4 to the financial statements, the Company restated its financial statements for the above periods primarily for correcting the application of accounting principles in the recognition of debt discounts attributable to beneficial conversion of certain debt.





The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the accompanying financial statements, the Company has suffered recurring losses and is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Jewett, Schwartz, Wolfe & Associates


Jewett, Schwartz, Wolfe & Associates


Hollywood, Florida


March 24, 2010 except for Note 4, which is July 14, 2011


- 52 -


Play LA Inc.


Balance Sheets


December 31, 2011 and 2010





December 31,


December 31,2011


2010ASSETSCurrent assetsCash and cash equivalents

$
34,276


$
106,673Accounts receivable


78,110



90,716Total current assets


112,386



197,389Equipment, net (Note 5)


356



711Other assetsGoodwill (Note 4)


119,009



119,009Other intangible assets, net (Note 4)


99,854



143,939218,863



262,948TOTAL ASSETS

$
331,606


$
461,048LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilitiesAccounts payable & accrued liabilities (Note 6)

$
209,163


$
311,330Convertible notes payable - related party (Note 8)


518,744



646,960Total liabilities


727,907



958,290STOCKHOLDERS' EQUITY (Note 7)Common stock, no par value, 50,000,000 shares authorized, 11,751,912 and 11,939,412 issued and outstanding (as of December 31, 2011 and 2010, respectively)


1,293,875



1,389,500Additional paid in capital


852,533



801,896Accumulated deficit


(2,503,377
)


(2,533,681
)Other comprehensive loss


(39,332
)


(39,332
)Treasury stock


-



(95,625
)(396,301
)


(497,242
)TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$
331,606


$
461,048





The accompanying notes are an integral of these financial statements


- 53 -


Play LA Inc.


Statements of Operations


For the Three Years Ended December 31, 2011, 2010 and 2009





December


December


December2011


2010


2009(Restated)REVENUESales

$
640,664


$
709,484


$
521,418Cost of sales


(335,725
)


(763,671
)


(656,122
)Gross Profit


304,939



(54,187
)


(134,704
)EXPENSESDepreciation and Amortization


45,098



84,282



39,709Management fees


35,500



24,000



36,000Professional fees


27,055



56,487



28,868Investor relations fees


-



87,065



36,085Goodwill impairment


-



39,403



-General and administration fees


108,745



318,281



87,664216,398



609,518



228,326Gain/(Loss) from operations


88,541



(663,705
)


(363,030
)OTHER EXPENSES:Interest on loans


(44,549
)


(31,885
)


(18,137
)Amortization of debt discount


-



(350,000
)


(296,960
)Foreign currency translation loss/gain


6,312



-



-Net income loss


50,304



(1,045,590
)


(678,127
)Other comprehensive itemForeign currency translation loss


-



(10,337
)


(4,604
)Net income (loss) and comprehensive income (loss) for the year

$
50,304


$
(1,055,927
)

$
(682,731
)Basic earnings (loss) per share

$
0.004


$
(0.09
)

$
(0.06
)Diluted earnings (|loss) per share

$
0.003


$
(0.09
)

$
(0.06
)Weighted average number of shares outstanding


11,719,912



11,886,718Basic










11,527,534Diluted


16,153,032



-





The accompanying notes are an integral of these financial statements


- 54 -


Play LA Inc.


Statements of Stockholder’s Equity


For the Years Ended December 31, 2011, 2010 and 2009





AccumulatedCommon Stock


Additional


Accumulated


Comprehensive


TreasuryShares


Amount


Paid In


Deficit


Loss


Stock


TotalBalance, December 31, 2008


11,520,000


$
1,181,150


$
-


$
(829,964
)

$
(24,391
)

$
-


$
326,795Foreign currency translation adjustment


















(4,604
)






(4,604
)Fair value of vested options issued










26,307















26,307Common stock issued for services at $0.325


30,000



9,750



















9,750Beneficial conversion feature










296,960















296,960Net loss for the year














(678,127
)










(678,127
)Balance, December 31, 2009


11,550,000


$
1,190,900


$
323,267


$
(1,508,091
)

$
(28,995
)

$
-


$
(22,919
)Fair value of vested options issued


-



-



128,629



-



-



-



128,629Common stock issued for services at $0.51


139,412



71,100



-



-



-



-



71,100Common stock issued for services at $0.51


250,000



127,500



-



-



-



(95,625
)


31,875Beneficial conversion feature


-



-



350,000



-



-



-



350,000Net comprehensive loss for the year


-



-



-



(1,045,590
)


(10,337
)


-



(1,055,927
)Balance, December 31, 2010


11,939,412


$
1,389,500


$
801,896


$
(2,553,681
)


(39,332
)

$
(95,625
)

$
(497,242
)Fair value of vested options issued


-



-



50,637



-



-



-



50,637Common stock cancelled


(187,500
)


(95,625
)


-



-



-



95,625



-Net loss for the year


-



-



-



50,304



-



-



50,304Balance, December 31, 2011


11,751,912


$
1,293,875


$
852,533


$
(2,503,377
)


(39,332
)

$
-


$
(396,301
)





The accompanying notes are an integral of these financial statements


- 55 -


Play LA Inc.


Statements of Cash Flows


For the Three Years Ended December 31, 2011, 2010 and 2009


December 31,


December 31,


December 31,2011


2010


2009(Restated)Cash flows from operating activitiesNet income/(loss)

$
50,304


$
(1,045,590
)

$
(678,127
)Adjustments to reconcile net cash flows from operating activitiesDepreciation and amortization


45,098



84,282



39,709Impairment of goodwill


-



39,403



-Shares issued for services


-



31,875



9,750Amortization of debt discount


-



350,000



296,960Stock options expense


50,637



128,629



26,307Changes in operating assets and liabilitiesAccounts receivable


12,606



(46,380
)


8,068Accounts payable


(102,168
)


158,766



1,693Net cash flows used in operating activities


56,477



(299,015
)


(295,640
)Cash flows from investing activitiesCapital assets - computers


-



(1,066
)


-Payment for intangible assets


(658
)


(1,500
)


(1,799
)Net cash flows used in investing activities


(658
)


(2,566
)


(1,799
)Cash flows from financing activitiesRepayment of notes payable


(128,216
)


-



-Proceeds from notes payable


-



350,000



296,960Net cash flows used in financing activities


(128,216
)


350,000



296,960Effect of translation on cash


-



(10,337
)


(4,604
)Net increase (decrease) in cash


(72,397
)


38,082



(5,083
)Cash and cash equivalents, beginning of period


106,673



68,591



73,674Cash and cash equivalents, end of period

$
34,276


$
106,673


$
68,591Supplemental disclosure:Interest paid on notes

$
44,549


$
31,885


$
18,137Interest tax paid


-



-Non-cash financing and investing activities:Common stock issued for purchase of assets

$
-


$
71,100


$
-Beneficial conversion feature on convertible promissory notes

$
-


$
350,000


$
296,960




The accompanying notes are an integral part of these financial statements




- 56 -





Play LA Inc.


Notes to the Financial Statements


December 31, 2011 and 2010





Note 1 - Organization





Play LA Inc. ("the Company"), a Tortola, British Virgin Island holding company, was incorporated under the International Business Companies Act on September 27, 2005.  The principal business of the Company was to identify and acquire businesses and assets relating to online content publishing and internet advertising solutions for online gaming operators. Specifically, the Company’s roll-up strategy has focused primarily on the United Kingdom (“UK”) and Western European based online gaming content websites to create a comprehensive, customized, and responsive advertising network to service the advertising and promotional needs of online gaming operations. Substantially all of the Company's efforts have been directed towards raising capital and developing a corporate structure. Effective May 1st, 2007, the Company acquired two online advertising websites.  These websites were the Company’s first acquisitions.  Advertising revenues are generated through these websites. Since the revenue generated is consistent, the Company is deemed to have emerged from the development stage as of the acquisition date.  The Company’s common shares are publicly traded on the OTC Bulletin Board under the ticker symbol, “PLLAF.”




Note 2 - Going Concern Uncertainties





The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern.  However, the Company has limited operations and has sustained operating losses in recent years resulting in an accumulated deficit.  In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon the continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements, and the success of its future operations.





The Company has incurred net income from operations of $50,304 for the year ended December 31, 2011 but has an accumulated deficit of $2,503,377 as at December 31, 2011. The Company's ability to continue as a going concern is in substantial doubt and is dependent upon obtaining additional financing and/or achieving a sustainable profitable level of operations.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  The Company may seek additional funding in the form of equity financing from the sale of common stock and/or seek to obtain short-term loans in order to support existing operations and expand the range of its business.  There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all. The issuances of additional equity securities by the Company would result in a dilution in the equity interests of its current stockholders.  There are no current arrangements in place for equity funding or short term loans.




Note 3 - Significant Accounting Policies





A summary of the significant accounting policies applied in the presentation of the accompanying financial statements follows:


(a) Principles of Accounting




- 57 -




These financial statements are stated in U.S. Dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America.  The functional currency of the Company is U.S. Dollars.





(b) Use of 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared.  Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.





(c) Cash and Cash Equivalents





The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.  The Company occasionally has cash deposits in excess of insured limits provided by the financial institutions. The Company places its cash and cash equivalents with high credit quality financial institutions.





(d) Accounts receivable and allowance for doubtful accounts





Accounts receivable are recorded net of allowances for doubtful accounts and reserves for returns.  In the normal course of business, the Company extends credit to customers that satisfy predefined credit criteria.  The Company is required to estimate the collectability of its receivables.  Allowances for doubtful accounts are established through the evaluation of accounts receivable aging and prior collection experience to estimate the ultimate realization of these receivables.  At December 31, 2011 and 2010, management determined that no allowance was necessary.





(e) Equipment





Equipment is capitalized and amortized over its estimated useful  life of 3 years  on a straight line basis.




(f) Intangible Assets





Intangible assets with indefinite lives are not amortized but rather are tested at least annually for impairment.  Intangible assets with definite lives are amortized over their estimated useful life as follows:





Source code

2 yearsURL

10 yearsWeb-site contents

5 yearsSubscribers list

1 yearClient accounts

2 yearsTrade name

2 years





- 58 -





(g) Goodwill




Goodwill represents the excess of the cost of a business combination over the fair value of the net assets acquired. We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate the fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or sub-segment to which goodwill is assigned when initially recorded. At present, we only have one reporting unit.  We assign goodwill to reporting units based on our integration plans.





We perform our annualgoodwillimpairment test as at year end and monitor for interim triggering events on an ongoing basis.Goodwillis reviewed for impairment utilizing a two-step process.  The first step requires us to compare the fair value of each reporting unit, which we primarily determine using an income approach based onthe net present value of discounted cash flows, to the respective carrying value, which includes goodwill. In our December 31, 2010 assumptions, we A) used a 15% Stabilized period EBITDA annual growth rate, which is based upon management's expectations, historical data and industry expertise B) used a 2.5X Cash flow multiple for terminal value, which has been based upon the multiple the Company was valued at for December 2009 and C) used a 20% Discount rate for NPV of cash flows, that has been based upon the weighted average cost of capital. In our December 31, 2011 assumptions, we used a 10% Stabilized period EBITDA annual growth rate to reflect Management’s estimation of a slight reduction in annual growth rate. Our cash flow multiple and discount rate remained the same as in our 2010 calculations.  If thefair value of the reporting unit exceeds its carrying value, thegoodwillis not considered impaired. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is required.  In step two, the implied fair value ofgoodwillis calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities.  If the implied fair value of goodwill is less than the carrying value of the reporting unit, then impairmentexists.   At December 31, 2011, management has determined that there was no impairment. At December 31, 2010, there was an impairment of $39,403.The circumstances leading up to the impairment at December 31, 2010 originated from an internal review of our impairment test, and the ensuing reduction in the 3.5X multiple of cash flows used in the calculation of terminal value, to a 2.5X multiple. We changed the 3.5X multiple used in our annual impairment testing performed in March 2010, down to a 2.5X multiple when we reviewed our impairment testing in September, 2010, due to an overall review of the company’s operations in a changing business climate. This caused us to not only thoroughly review our goodwill impairment process again, but to take a more conservative approach to valuing the goodwill.  The actual goodwill impairment of $39,403 was $5,472 higher than the $33,931 estimated in the 3rdquarter of 2010 due to net cash flows coming in $6,848 less than estimated in the 3rdquarter.





(h) Long-Lived Assets Impairment Other Than Goodwill





Long-term assets of the Company are reviewed when changes in circumstances suggest their carrying value has become impaired, pursuant to guidance established Accounting Standard Update (“ASU”) 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges).





- 59 -





(i) Fair Value of Financial Instruments





Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments.  Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision.  Changes in assumptions can significantly affect estimated fair values.





The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and short term note - related party, approximate their carrying values since they are short term in nature and they are receivable or payable on demand.





Management is of the opinion that the Company is exposed to significant interest or credit risks arising from the bank-held assets.  The Company is operating outside the United States of America and has significant exposure to foreign currency risk due to the fluctuation of the currency in which the Company operates and the U.S. dollar.





The Company currently has no assets and liabilities that it values at fair value on a periodic basis.





(j) Comprehensive Income





The Company has adopted Accounting Standards Codification 220 “Reporting Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances.  The Company is disclosing this information on its Statement of Stockholders' Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners.





(k) Income Taxes





The company is registered in the British Virgin Islands and will not be conducting business in the United States.  It is therefore not subject to or liable for any United States income taxes.  Currently there is no income tax in the British Virgin Islands.





(l) Revenue Recognition





The Company recognizes revenue in accordance with Accounting Standard Codifications subtopic 605-10, Revenue Recognition(“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured.  Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts.





The Company’s revenues for the year ended December 31, 2011 consisted of revenues from advertisement services.  The company currently utilizes various types of advertising models to generate revenue as follows: 1) flat rate paid advertising campaigns; 2) paid Sponsorship campaigns;  3) CPA (performance based) campaigns and 4) CPM (cost per thousand viewers) . The company enters into short term paid and sponsorship advertising contracts, for periods of one to three months.  The company collects the payments for flat rate and sponsorship campaigns in advance of running the campaigns and revenue is recognized ratably over the campaign period.  The Company collects the payments for CPA and CPM campaigns within 30 days after each month-end results.  Revenue is recognized for CPA and CPM campaigns when a contract has been signed, the fee is fixed and determinable, delivery of the service has occurred, and the collection is probable.





- 60 -





(m) Advertising Expenses





The Company expenses advertising costs as incurred.  The Company incurred no advertising expenses as of December 31, 2011 and 2010.





(n) Net Loss per Share





Basic net loss per share (“EPS”) is based on the weighted average number of common shares outstanding and diluted EPS is based on the weighted average number of common shares outstanding and dilutive common stock equivalents.  Basic EPS is computed by dividing net loss (numerator) applicable to common stockholders by the weighted average number of common shares outstanding (denominator) for the period. All EPS presented in the financial statements are basic EPS as defined by Accounting Standards Codification 260, "Earnings Per Share". No diluted earnings per share are disclosed when the effect would be anti-diluted.





In 2011 there are 4,431,120 potentially dilutive securities outstanding in the form of options outstanding and convertible promissory notes (Nil in 2010).





All per share and per share information are adjusted retroactively to reflect stock splits and changes in par value.  Fully diluted shares outstanding were 16,153,032 and 11,886,718 for the years ended December 31, 2011 and 2010, respectively.





(o) Concentration of Credit Risk





The Company places its cash and cash equivalents with a high credit quality financial institution.  The Company maintains United States Dollars, Pound Sterling and European Euros at a bank in the Caribbean that are not insured.  Revenue is derived in geographic locations outside the United States.  The advertising business in Europe accounts for all of the revenue of the Company to date.





The Company is subject to risk arising from foreign currency exchange fluctuations. The Company’s clients are located in foreign countries.  The Company’s financial results may be affected by factors such as foreign exchange rates or economic conditions in foreign markets. Since the functional currency is denominated in U.S. dollars, a strengthening or weakening of the dollar will affect the Company’s financial statements due to the fluctuating dollar. Monetary assets and liabilities denominated in foreign currencies are affected by changes in the exchange rate between the U.S. dollar and foreign currencies.





The Company’s revenues earned from advertising for the year ended December 31, 2011includes 21%,  19% and 14% of the Company’s total revenues from three customers. Two of thesethree customers represent 18% and 16% of Company’s accounts receivable. For the year ended December 31, 2010, 25% and 12% of the Company’s total revenues were earned from two customers.  These two customers represented 18% and 9% of the Company’s accounts receivable for the year ended December 31, 2010.





- 61 -





(p) Foreign Currency Conversion





The Company is located and operating outside of the United States of America.  The functional currency of the Company is the U.S. Dollar. At the transaction date, each asset, liability, revenue and expense is converted into U.S. dollars by the use of the exchange rate in effect at that date.   At the period end, monetary and non-monetary assets and liabilities are re-measured by using the exchange rate in effect at that date.  The resulting foreign exchange gains and losses are included in operations.





(q) Related Parties





Related partiesare affiliates of the enterprise; entities for which investments are accounted for by the equity method by the enterprise; trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; principal owners of the enterprise; its management; members of the immediate families of principal owners of the enterprise and its management; and other parties with which the enterprise may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.  Another party also is a related party if it can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.  A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.





(r)  Stock Based Compensation





The Company follows the guideline under Accounting Standards Codification subtopic 718-10 Compensation (“ASC 718-10”) for all stock based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.





As at December 31, 2011, there were outstanding stock options to purchase 965,000 shares of common stock, of which 928,750 shares were vested.  As at December 31, 2010, there were outstanding stock options to purchase 1,260,000 shares of common stock, of which 822,500 shares were vested.





(s)New Accounting Pronouncements




- 62 -




In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06 which is intended to improve disclosures about fair value measurements. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels, the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3).  Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). The Company has applied the new disclosure requirements as of January 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective for interim and annual periods beginning after December 15, 2010.  The adoption of this guidance has not had and is not expected to have a material impact on the Company’s financial statements





In February 2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. The adoption of this guidance on January 1, 2010 did not have a material effect on the Company’s financial statements.





Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.


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Note 4– Intangible Assets





Intangible assets consist of the following:





December 31, 2011AccumulatedCost


Amortization


NetSource code

$
19,615


$
19,615


$
-URL


50,573



17,549



33,024Web-site content


178,456



111,626



66,830Subscribers list


56,845



56,845



-Client accounts


98,070



98,070



-Trade name


7,846



7,846



-$
411,405


$
311,551


$
99,854Cost


Impairment


NetGoodwill


158,412



39,403



119,009$
569,817


$
350,954


$
128,863




December 31, 2010AccumulatedCost


Amortization


NetSource code

$
19,615


$
19,615


$
-URL


49,915



12,497



37,417Web-site content


178,456



75,934



102,522Subscribers list


56,845



52,845



4,000Client accounts


98,070



98,070



-Trade name


7,846



7,846



-$
410,747


$
266,808


$
143,939Cost


Impairment


NetGoodwill


156,912



39,403



119,009$
569,159


$
306,211


$
262,948




During the years ended December 31, 2011 and 2010, amortization expenses charged to operations was $44,743 and $84,282, respectively.




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The estimated amortization expense is as follows for each of the years ending December 31:





2012

$
30,2882013


25,0572014


25,0572015


6,6572016


5,057Thereafter


7,738Total

$
99,854




Note 5 - Equipment





Equipment consists of the following:





December 31, 2011AccumulatedCost


Depreciation


NetComputer

$
1,066


$
710


$
356




December 31, 2010AccumulatedCost


Depreciation


NetComputer

$
1,066


$
355


$
711





During the years ended December 31, 2011 and 2010, depreciation expenses charged to operations was $355 and $355, respectively.




Note 6 – Accounts payable and accrued expenses





Accounts payable and accrued expenses consist of the following:





December 31,2011


2010Accounts payable

$
10,618


$
116,137Payable for assets acquired


115,875



116,025Accrued Interest


32,786



50,021Deferred revenue


39,884



15,647Accrued liabilities


10,000



13,500Total

$
209,163


$
311,330





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Note 7 - Common Stock





During the year ended December 31, 2011, the Company cancelled 187,500 common shares issued for services rendered at $0.51 per share for the total amount of $95,625, and returned the shares back to treasury.





During the year ended December 31, 2010, the Company issued 250,000 common shares for services rendered at $0.51 per share.  From this, $95,625 has been shown under treasury stock as the shares were issued but not released to the consultant.  During the year ended December 31, 2010, the Company issued 139,412 common shares for purchase of assets.  The fair market value of the shares issued was at $0.51 per share for a total value of $71,100.




Note 8 - Related Party Transactions





During the twelve months ended December 31, 2011 and 2010, the Company paid rent of $2,400 and $2,400, respectively, for its office in Barbados to a company with a director in common.





During the twelve months ended December 31, 2011 and 2010, the company paid $35,500 and $24,000, in management fees respectively to officers of the company.





Convertible Promissory Notes Payable


In 2009, the Company issued two convertible promissory notes totalling $296,960.  One note at 10% interest rate per annum and the other note at 7% interest per annum with one of its shareholder.  Each promissory note was convertible into shares of the Company’s common stock at a conversion rate equal to $0.25 per share at the option of the holder.  The Company recognized and measured an aggregate of $296,960 of the proceeds which is equal to the intrinsic value of the imbedded amended beneficial conversion feature, to additional paid in capital and a discount against the note issued.  The promissory notes are due on demand and unsecured. The Company accrued interest expenses of $20,048and $18,137 for the years ended December 31, 2011 and 2010, respectively.  At December 31, 2011, one of convertible promissory notes totalling $96,960 has been repaid. The other convertible promissory note has a remaining principal balance of $168,744 at December 31, 2011.





In 2010, the Company issued an additional convertible promissory note of $350,000 at 7% interest rate per annum to the same shareholder.  The promissory note was convertible into shares of the Company’s common stock at a conversion rate equal to $0.25 per share at the option of the holder.  The Company recognized and measured an aggregate of $350,000 of the proceeds, which is equal to the intrinsic value of the imbedded amended beneficial conversion feature, to additional paid in capital and a discount against the note issued.  The promissory note is due on demand and unsecured. The Company accrued interest expenses of $24,500 and $8,189 for the year ended December 31, 2011 and 2010, respectively.





Amortization of the debt discount expenses of $350,000 and $296,960 were recorded during the years ended December 31, 2010 and 2009, respectively.





Summary of notes payable




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AccruedLoan

Loan


Interest





AmountDate

Amount


to date


Total


Paid


OutstandingJan 26 09


96,960



24,793



121,753



121,753



-May 08 09


200,000



37,088



237,088



68,247



168,841Aug 31 10


350,000



32,689



382,689



-



382,689$
646,960


$
94,570


$
741,530


$
190,000


$
551,530




General Security Agreement





On April 16, 2011, the Company entered into a General Security Agreement with a lender of the Company.  The agreement was registered on May 23, 2011 in favor of the lender to provide security for the outstanding notes payable made to the Company by the lender.  New terms for the loans were established whereby the repayable amounts are set out as follows:





c.  Monthly interest and principal minimum payment of $10,000 shall commence beginning June 1, 2011 and shall be paid monthly thereafter


d.  The entire loan amount outstanding shall be repaid on the earlier of


iv)  At the option of the Company, at any time after November 2011


v)  36 months from the date of April 16, 2011


vi)  The date of demand by the shareholder in the event of the occurrence of an event of default under this agreement or change in the business of the Company





As at December 31, 2011, the Company has repaid the lender an aggregate of principal and interest totaling $190,000.




Note 9 - StockOptions





The following table summarizes the options outstanding and the related prices for the shares of the Company’s common stock issued as at December 31, 2011:





Options Outstanding

Options ExercisableWeightedAverage

Weighted



WeightedRemaining

Average



AverageExercise
Number

Contractual

Exercise

Number

ExercisePrices
Outstanding

Life (years)

Price

Exercisable

Price$0.40 - $1.01
965,000

2.47

$0.41

928,750

$0.41





Transactions involving stock options issued are summarized as follows:


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Number of


Weighted AverageOptions


Exercise PriceOutstanding at December 31, 2009:


1,200,000



0.40Granted


380,000



0.62Exercised


-



-Expired


(320,000
)


0.42Outstanding at December 31, 2010:


1,260,000


$
0.46Granted


-



-Exercised


-



-Expired


(295,000
)


0.59Outstanding at December 31, 2011


965,000


$
0.42





On May 15, 2009, the Board of Directors of the Company granted an aggregate of 1,200,000 stock options to directors, officers and consultants.  The underlying stock options are exercisable at $0.40 per share and shall expire the earlier of May 15, 2014 or on the Optionee’s termination date with the Company plus 30 days, as to the vested portion only on the date of termination.





The stock options granted to the directors become exercisable on the following basis:


Date

AmountMay 15, 2009

50% of the granted amountNovember 15, 2009

12.5% of the granted amountMay 15, 2010

12.5% of the granted amountNovember 15, 2010

12.5% of the granted amountMay 15, 2011

12.5% of the granted amount





The stock options granted to the officers and consultants become exercisable on the following basis:


Date

AmountNovember 15, 2009

25% of the granted amountMay 15, 2010

25% of the granted amountNovember 15, 2010

25% of the granted amountMay 15, 2011

25% of the granted amount





The fair value of the stock options granted was determined using the Black-Scholes option value model with the following assumptions:





2010

2009Expected dividend yield
0.00%

0.00%Risk-free interest rate
1.41% to 2.55%

2.01%Expected volatility
45.75% - 64.14%

44.20%Expected option life (in years)
5 yrs

5 yrs




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Expected volatility was based on the Company’s historical share price.





For the 2009 stock options, the Company recognized $19,688 in compensation expense associated with the stock options as of December 31, 2011 and $99,972 in compensation expense for the period ended December 31, 2010.





During the year ended December 31, 2010, the Board of Directors of the Company granted an aggregate of 380,000 stock options to consultants.  The underlying stock options expire in 5 years or on the Optionee’s termination date with the Company plus 30 days, as to the vested portion only on the date of termination as follows.  The stock options are vested every 6 months starting from the grant date for a period of 2 years.  After the 2 years, the stock options are fully vested.  The Company recognized $28,657 in compensation expense associated with the stock options granted during the year ended December 31, 2010 and recognized $30,970 in compensation expense for the period ended December 31, 2011.





In accordance to the Company’s stock option plan, an optionee may exercise his options at anytime within 30 days following the termination of the optionee’s relationship with the Company.  An aggregate of 295,000 and 320,000 unexercised stock options from consultants that no longer provide services to the Company were forfeited during the year ended December 31, 2011 and 2010, respectively.




Note 10 – Commitments and Contingencies





Service Agreement





Play LA Inc. has a service agreement with On a Roll Media Inc. to have On A Roll Media supply website development, maintenance, content, translation, marketing and technical support services for Play LA Inc.  The companies do not share common officers or directors nor do they hold shares of the other.  As of December 31, 2010, the Company owed On A Roll Media $Nil (2010- $109,720). The initial On A Roll Media services agreement would have ended on January 31, 2008, but has been renewed by a renewal agreement dated February 18, 2008.





The renewal agreement has been extended to February 14, 2012, unless terminated earlier by mutual agreement of the parties. During the years ended December 31, 2011 and 2010, Play LA Inc. paid On A Roll Media Inc. $300,148 and $751,156, respectively for these services.





Purchase of Assets





On February 24, 2010, the Company entered into an agreement with Chongster Ltd. to acquire www.arsenal-mania.com, a leading UK football fan website.  The purchase price comprise of the following:





a.
Issuance of 139,412 shares in the capital stock of the Company to the value of $71,100 (£45,000)


b.
Payment of £20,000 30 days after the closing


c.
Payment of £20,000 60 days after the closing


d.
Payment of £20,000 90 days after the closing


e.
Payment of £50,000 or 25% of the website net operating profits for the 1st year period following closing, whichever is greater, within 45 days of the 1st anniversary of the closing


f.
Payment of £25,000 or 15% of the website net operating profits for the 2nd year period following closing, whichever is greater, within 45 days of the 2nd anniversary of the closing




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Payment of the balance of the purchase price was secured by an escrow agreement.  During the year ended December 31, 2011, the Company is in default of its payment of $77,250 (£50,000) to Chongster Ltd. which was due April 10, 2011.  The Company is subject to a penalty interest rate of 4% above the Bank of London prime rate of 0.5%.  The interests are accrued.  During the year ended December 31, 2010, the Company paid $92,816 (£60,000) in respect to the cash portion of the agreement and has issued 139,412 common shares of the Company which was valued at $71,100.   Items a, b, c, and d were satisfied and completed.  The balance of $115,875 (£75,000) of which $77,250 (£50,000) was due April 10, 2011 and a further $38,650 (£25,000) is due April 10, 2012 is shown in the accounts payable and accrued liabilities.  Total interest accrued on loan balance at year end is $3,472 which is also included in accounts payables.




Note 11 -Subsequent Events





The Company evaluated subsequent events and there were none to report.




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Item 18.                   FINANCIAL STATEMENTS





The Registrant has elected to report under Item 17.





Item 19.                    EXHIBITS





Copies of the following documents are filed with this Form 20-F as exhibits:





Index of Exhibits


1.1
Articles of Association filed on Form 20-F March 27, 20074.1
Agreement with On A Roll Media Inc. dated February 1, 2007 filed on Form 20-F August 24, 20074.2
Agreement with Glen Etive Capital dated May 1, 2007 filed on Form 20-F August 24, 20074.3
Agreement with Glen Etive Capital dated January 11, 2008 filed on Form 20-F May 21, 20084.4
Agreement with On A Roll Media Inc. dated February 18, 2008 filed on Form 20-F July 1, 20084.5
Play LA 2009 Restricted Stock/Option Plan dated April 27, 2009 filed on Form S-8 April 28, 20094.6
Agreement with On A Roll Media Inc. dated February 15, 2010 filed on Form 20-F April 20, 20104.7
Agreement with Thorsten Koster dated April 15, 2010 filed on Form 20-F April 20, 20104.8
Amended Agreement with Thorsten Koster dated February 21, 2011 Form 20-F July 14, 201110.1
Purchase Agreement with Paul Sandells dated January 18, 2010 filed on Form 6K January 18, 201010.4
Purchase Agreement with Chongster Ltd. Dated February 24, 2010 filed on Form 6K February 24, 201010.5
Amended Purchase Agreement with Paul Sandells dated August 25, 2010 filed on Form 20-F July 14, 201110.6
GSA with Chelten Limited dated April 16, 2011 filed on Form 20-F July 14 201112.1
Section 302 Certification of CEO*12.2
Section 302 Certification of CFO*13.1
Section 906 Certification of CEO*13.2
Section 906 Certification of CFO*





*Filed herewith


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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




PLAY LA INC.Dated:           October 16, 2012

Per:/s/ David HallonquistDavid Hallonquist,President and Chief Executive Officer




Per:/s/ Brian ColeBrian Cole,Chief Financial Officer





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