UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


_______________________





FORM 10-K/A
(Amendment No. 3)


_______________________





(MARK ONE)





x           Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





For the fiscal year ended December 31, 2012





o           Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





For the transition period from ________ to ________





Commission file number: 000-27831










SUNGAME CORPORATION(Exact name of registrant as specified in its charter)Delaware

20-8017623(State or other jurisdiction of incorporation or organization)

(IRS Employee Identification No.)3091 West Tompkins Avenue, Las Vegas, NV

89103(Address of principal executive offices)

(Zip Code)Registrant's telephone number, including area code: (702) 789-0848Securities Registered pursuant to Section 12(b) of the Exchange Act:Title of each class

Name of each exchange on which registeredNone

NoneSecurities Registered pursuant to Section 12(g) of the Exchange Act:Common Stock, $0.001 Par Value(Title of class)





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





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





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x No  o





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b2 of the Exchange Act.





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





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





State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.






Table of Contents





As of December 31, 2012 the market value was approximately $1.6 billion based upon a close of $9.00 on 31 December 2012.  The Company would like to give fair disclosure in that the market capitalization may be overvalued due to certain factors, such as the Company, at this time, is thinly traded and we do not feel the market price has accurately reflected the merger. There are approximately 480,000 shares of our common voting stock held by non-affiliates.  This valuation is based upon the bid price of our common stock as quoted on the OTCBB on that date ($9.00).


APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY


PROCEEDINGS DURING THE PRECEDING 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 a court. Yes oNo o





(APPLICABLE ONLY TO CORPORATE REGISTRANTS)





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  The number of shares outstanding of the registrant's common stock as of December 31, 2012 is 177,575,014.





(DOCUMENTS INCORPORATED BY REFERENCE)


None














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SUNGAME CORPORATION


FORM 10-K





TABLE OF CONTENTS





PagePART I
2Item 1.               Business.
2Item 1A.            Risk Factors.
9Item 1B.            Unresolved Staff Comments.
9Item 2.               Properties.
9Item 3.               Legal Proceedings.
9Item 4.               (Removed and Reserved).
9PART II
10Item 5.               Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities.
10Item 6.               Selected Financial Data.
11Item 7.               Management’s Discussion And Analysis Of Financial Condition And Results Of Operations.
11Item 7A.            Quantitative And Qualitative Disclosures About Market Risk.
18Item 8.               Financial Statements And Supplementary Data.
19Item 9.               Changes In And Disagreements With Accountants On Accounting And Financial Disclosure.
30Item 9A.            Controls And Procedures.
30Item 9B.            Other Information
30PART III
31Item 10.             Directors, Executive Officers And Corporate Governance.
31Item 11.             Executive Compensation.
32Item 12.             Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters.
33Item 13.             Certain Relationships And Related Transactions, And Director Independence.
34Item 14.             Principal Accounting Fees And Services.
35PART IV
36Item 15.            Exhibits, Financial Statement Schedules.
36SIGNATURES
37












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PART I




This annual report on Form 10-K contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the Company, us, our future performance, our beliefs and our Management's assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or  variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict or assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the filing of this Form 10-K, whether as a result of new information, future events, changes in assumptions or otherwise.




Unless the context otherwise requires, throughout this Annual Report on Form 10-K the words “Company,” “we,” “us” and “our” refer to Sungame Corporation.




Item 1.  Business.




History




Sungame Corporation (“We,” “Us,” “Our”) was organized under the laws of the State of Delaware on November 14, 2006 as Sungame International, Inc.  On November 17, 2006, we changed our name to Sungame Corporation.  The Company merged with Freevi Corporation on April 15, 2011.




Overview




Background and History




We are an early development stage company.  Prior to the merger with Freevi Corporation, Sungame was in the process of establishing a 3D virtual world communities.Sungame (also known as the “Company”), trading under the symbol “SGMZ”, is the Company behind the Flightdeck.tv content management and discovery platform. Sungame also uses the brand “Freevi” from time to time as a d.b.a., as it acquired Freevi Corp. and the brand has retained its value sufficient to keep using the brand Freevi. Sungame’s mission is simple: to enrich people’s lives by becoming a leading social networking, content creation, content discovery and distribution platform. Integral to the site’s functionality is a central aggregation engine that excels at serving targeted, focused and high quality content and social media interactions based on the user’s specific interests and past usage history. Other tools available on the website are designed to simplify content creation and distribution for content producers, while providing these artists an engaged audience interested in consuming this content. Sungame is also the Company behind Vidirectory, a video based business directory that simplifies online marketing for small businesses.






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Sungame builds products that support its mission by creating utility for users, developers and advertisers:











FLIGHTDECK


The Flightdeck platform is designed to be a web-based homepage that is able to pull social media, news and content feeds from all over the web into one easy to manage central location.  This aggregation of feeds will allow Flightdeck members to integrate all their most important online activities into one completely customizable homepage. The platform’s chat functionality is designed to allow users to interact with their user’s Twitter and Facebook friends, as they use the platform. Flightdeck will allow users to post content and links to all their social media accounts through a central location inside the website. The platform will enhance user’s content consumption experience by layering in unique chat and sharing features, while they watch movies, listen to music or play games. Flightdeck is designed to be the ultimate content discovery, distribution and consumption platform. The platform’s main differentiation compared to competing platforms is likely to include the platform’s multi-medium focus on audio, video, text and social content. The Flightdeck recommendation engine learns from tens of millions of small user interactions which improves the platform’s ability to serve content that is relevant to the interest and taste of the user. Flightdeck’s mission therefore is to become the user’s central online homepage that they can use to access all their social media and content needs.









Figure 1: Flightdeck landing page










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VIDIRECTORY





Sungame will also offer Vidirectory a business directory service designed to help businesses attract customers to their online and physical by providing increased online visibility under the Company’s Vdirectory service offering, Sungame provides both free and paid products to local businesses. Vdirectory will allow businesses to create a free online business account and claim an individual page for each of their businesses locations. With their complimentary business accounts, businesses can view business trends1, message customers2, update information3 and update their product prices and inventory. Premium versions of this directory listing service allows local businesses to promote themselves as a sponsored search result on the shopping platform when users are searching for related product keywords or are visiting related business pages.







Figure 2: Vidirectory landing page







Platform Features




CENTRAL SOCIAL MEDIA HUB FUNCTIONALITY




Flightdeck’s social media aggregation bundles multiple social media accounts into one single channel for each user so everything from Instagram photos, Facebook status updates, tweets and Soundcloud tracks can be found in one easy to access place. The platform’s differentiation will lie in its unique user experience, which will allow users to chat, share and consume content at the same time.




1 e.g., statistics and charts reflecting the performance of a business’s page on the platform
 2 e.g., by replying to customer inquiries either publicly or privately
 3 e.g., address, hours of operation


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THE FD POST




The platform allows users to simultaneously broadcast updates to multiple social media websites without ever having to leave the platform. The feature will allow users to significantly streamline their sharing, communication and networking activity across social media platforms. This will allow user and content producers to post content to their Facebook, Twitter, LinkedIn and other social media accounts with a single click of the button.




USER PROFILING AND CONTENT DISCOVERY




The Flightdeck system has been built to offer users seamless content discovery through automatic interest and past usage analysis and profiling.  The Flightdeck user profiling system allows the end-user experience to transition from having to search for the content they are looking for to a more organic and natural “curated content” strategy, where the user is exposed to relevant content and social media interactions automatically.










Figure 3: Social network feeds


VILLAGES




Flightdeck will feature a community discussion board or a villages feature designed to discuss, collaborate and fund creative projects together. All users are able to apply to become members of different villages or creative projects, where they can contribute by either funding or volunteering for projects. This will allow users and content producers to connect and make creative projects happen.






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SHARED ECONOMY




The Company will actively incentivize user engagement, usage and referrals through the use of its virtual currency system. Users will be able to either redeem these points for cash, through licensed debt cards, or use it to purchase the different content as well as fund other user’s creative projects. This virtual system will also provide independent artists a way to monetize the content they produce.







Figure 4: Shared Economy Wallet




Business Model





Flightdeck will generate revenue by monetizing both individual users and businesses. In regard to individuals, revenue will be generated through banner and video advertising, as well as the profit share deriving from our apps store.  In regard to businesses, Sungame offers the possibility of inclusion in its database and platforms with both Free and Premium offerings.









Figure 5: Sungame’s business model








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Sungame will also offer businesses several versions of a premium Vdirectory service offering complete with varying features at a variety of different price points. Fees for businesses looking to create a customized video listing for their business will be required to choose between silver, gold and platinum packages.









Figure 6: Vidirectory Business Membership Offering




Value Proposition












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Future developments








Although a growing number of users is without question the most relevant Company goal in 2013, Sungame’s team and its endless desire to grow and expand has already set up a few more objectives for the near term.





The first would be to make Sungame’s service available on mobile and tablet devices. The incredible growth in these segments of the market speaks for itself and Sungame wants to take advantage of a large potential adoption in that market.










In addition, the team is investigating the feasibility of releasing an innovative Sungame -branded tablet, The team has been working on licensing the business line of the device and recently could appreciate the output of the hard work with a prototype device that exceeded any expectation. The tablet has not officially been presented, but it is thinner than any other 7” tablet on the market and allows for 3D vision without the use of any kind of glasses.





Upon further understanding of the economics of these new products and services, as well of its distribution strategy, the Sungame team will promptly take action to present and exploit these new opportunities.

















Number Of Persons Employed





As of December 31, 2012, we have 5 full-time employees.  Mr. Robert works up to 40 hours per week and other Directors work on an as needed basis up to 40 hours per week.













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Item 1A.  Risk Factors.





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.





Item 1B.  Unresolved Staff Comments.





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.





Item 2. Properties.





We do not own any property, real or otherwise.  Our operations are principally located at 3091 West Tompkins Avenue, Las Vegas, NV 89103.  We pay market price in rent.





Item 3.  Legal Proceedings.





The Company was involved in a litigation in Colorado.  Broadway Holdings, Inc. (Broadway) vs. Sungame Corporation.  The suit was a breach of contract by Broadway Holdings, Inc. filed on or about August 2, 2011, in the District Court, Denver County, Colorado.  The case was settled on December 24, 2012.  All claims and counterclaims were dismissed in the confidential settlement.  All Sungame shares held by the Broadway Plaintiffs Shareholders are to be cancelled in 2013.





Item 4.  (Removed and Reserved).











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PART II





Item 5.  Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities.





Our common stock is quoted on the OTC Bulletin Board (the "OTCBB:).





Quotations on the OTCBB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions.  Our common stock will be subject to certain rules adopted by the SEC that regulate broker-dealer practices in connection with transactions in “penny stocks.”  Penny stocks generally are securities with a price of less than $5.00, other than securities registered on certain national exchanges or quoted on the system, provided that the exchange or system provides current price and volume information with respect to transaction in such securities. The additional sales practice and disclosure requirements imposed upon broker-dealers are and may discourage broker-dealers from effecting transactions in our shares which could severely limit the market liquidity of the shares and impede the sale of shares in the secondary market.





The penny stock rules require broker-dealers, prior to a transaction in a penny stock not otherwise exempt from the rules, to make a special suitability determination for the purchaser to receive the purchaser's written consent to the transaction prior to sale, to deliver standardized risk disclosure documents prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock.  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 SEC 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.





As of December 31, 2012, we have 61 shareholders of record of our common stock pursuant to transfer agent records.





We have not paid any dividends to shareholders.  There are no restrictions which would limit our ability to pay dividends on common equity or that are likely to do so in the future.  The Delaware Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend; we would not be able to pay our debts as they become due in the usual course of business; or our total assets would be less than the sum of the total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.





We have sold securities within the past three years without registering the securities under the Securities Act of 1933 as shown in the following table:





Name

Equity

Paid per Security

Date of

Purchase

Accredited or

SophisticatedAdversor, Inc.

1500 common shares

$1500 services  -formation of company

2006

AccreditedAdversor, Inc.

4,125,500 common shares

$775,000 debt relief

2008

AccreditedFriedland Capital

902,000 common shares

$50,000 corporate advisory finance services

2008

AccreditedRanulf Jose Goss

1,375,000 common shares

$137,500 development services

2008

AccreditedMindzeye Consulting Pte. Ltd

500,000 common shares

$125,000 cash

2008

AccreditedMindzeye Consulting Pte. Ltd

500,000 warrant

$125,000 cash

2008

AccreditedDiamond Star Exports Ltd.

1,600,000 common shares

$400,000  in programming services

2008

AccreditedMindzeye Consulting Pte. Ltd

500,000 common shares

$125,000 cash

2009

AccreditedMindzeye Consulting Pte. Ltd

100,000 common shares

$25,000 in development services

2009

AccreditedDiamond Star Exports Ltd.

900,000 common shares

Payment of services under agreement

2009

Accredited










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However, it should be noted Sungame Corp. and Freevi Corp. successfully engaged in a business combination, with Sungame being the surviving entity, and there was a 177,000,000 share exchange where Freevi shares were exchanged for Sungame shares, pursuant to the terms and conditions of the combination (See 8K dated April 15, 2011).  On May 2, 2011, the Board of Directors authorized 25,000 shares for Mundial Financial Group, LLC for investment banking services, and authorized the issuance of 300,000 shares to Marshal Shichtman and Associates, PC as a gratuity for services rendered.





Exemptions From Registration For Unregistered Sales





All of the sales by the Company of the unregistered securities listed immediately above were made by the Company in reliance upon Section 4(2) of the Act. All of the individuals and/or entities listed above that purchased the unregistered securities were all known to the Company and its management, through pre-existing business relationships, as long standing business associates, friends, and employees. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.





Item 6. Selected Financial Data.





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.





Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations.





THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR AUDITED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. FORWARD-LOOKING STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS. FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE. THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS.





Overview





Sungame Corporation (“We,” “Us,” “Our”) was organized under the laws of the State of Delaware on November 14, 2006 as Sungame International, Inc. On November 17, 2006, we changed our name to Sungame Corporation.  The Company merged with Freevi Corporation on April 15, 2011.





We are an early development stage company.  Prior to the merger with Freevi Corporation, Sungame was in the process of establishing a 3D virtual world communities.











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Our services





Since the merger we are offering three services:





1.   www.Flightdeck.tv –A forum for social interaction in the genre of Facebook, Myspace, and Google Circles, but with the unique aspect of a) being neutral so that the forum is able to show content and comments from all major social networks which makes it possible for the users to “get all information and share all information” from one place and b) the focus on Video content makes the forum more attractive for users to be on and stay online a longer period of time also.





2.   www.Vidirectory.com – A business directory service designed to help businesses attract customers to their online and physical locality by providing increased online visibility under the Company’s Vidirectory service offering.  The Company provides both free and paid products to local businesses.  Premium versions of this directory listing service allows local businesses to promote themselves as a  sponsored search result on the shopping platform when users are searching for related product keywords or are visiting related business pages.





3.   Sungame Casual Game Development – Proprietary Casual Game development is in partnership with Game Aggregators.  Since 2010, we have been developing our proprietary casual game engine with the following unique features: a) allowing ourselves as well as the players to upload game assets and create their own missions, b) making it simple to change the theme and artwork to create new games for new audiences c) becoming fully compliant to Facebook game API so that it will run properly on Facebook’s social network.  During 2012, game development has been ongoing with prototyping tools to create missions in a simple way.  The launch date of our first game (called Spion) is not decided at this point since further development is needed.





Our Revenue streams





The following revenue streams are defined for each service group:





www.Flightdeck.tv





1.
Advertisement revenues





2.
Sales of Virtual goods, for example music, books, applications





3.
Casual Games revenues for example buying game improving assets such as ammunition, weapons, energy.





4.
Revenues from physical goods, any product where we partner up with a distributor of products we decide to sell.





www.Vidirectory.com





1.
Subscription fees for Social Media services for clients advertising on the site.





2.
Setup fees. For all our services in addition to the above subscription fees, we charge a setup fee.





3.
Video Production fees









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Sungame Casual Game Development





1.     Shared revenues fromProprietary Casual Game development in partnership with Game Aggregators. Game aggregators are internet portals that normally have exclusive rights to market a number of games within one or many countries. The Game Aggregator has a large number of registered and active players and they are attractive for Game Developers based on the fact that they can speed up the time from launch of a new game to high usage and revenue generation.











As shown in the image above, Sungame’s Business Units are closely related to each other.











The image above shows how both our Social Advertising platform (Vidirectory) and Social Media Game Development platform (Sungame) are feeding our Social Media Platform (Flightdeck) with content.









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Our marketing, sales and target customers





For www.Flightdeck.tv, the service is in Open Beta version and we are running our initial Social Media Marketing campaigns. In the beginning of 2013, we expect to begin marketing to our target demographics.





For www.Vidirectory.com, sales have just begun.





Based on our market studies, we have identified four general types of users that we will be our focus on during 2013-2016:





1.
Social Media e-commerce consumers





2.
Smartphone and Tablet users





3.
Online Video consumers





4.
The North American market








More specifically, for our market campaigns, we will prioritize the following target customers during 2013-2014:





1.
The 10 largest cities in USA





2.
The age group 18 – 30 years of age





3.
Users of at least one social network (e.g. Facebook)





4.
Users that are online in average not less than 1 hour/day





5.
Users that spend in average not less than $20/month online





All our marketing activities will be focusing on consumers meeting one or more of the above definitions.









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Critical Accounting Policies and Estimates





The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses and related disclosure of contingent assets and liabilities.  On an ongoing basis, we evaluate our estimates.  We based our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances.  These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.





Risks And Uncertainties





We operate in an emerging industry that is subject to market acceptance and technological change. Our operations are subject to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating an emerging business, including the potential risk of business failure.





Software Costs





The costs for internal use software, whether developed or obtained, are assessed to determine whether they should be capitalized or expensed in accordance with American Institute of Certified Public Accountants' Statement (“SOP”) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Capitalized software costs are reflected as property and equipment on the balance sheet and are to be depreciated when we begin recording revenue the deemed date that the software is placed in service.





Start-Up Costs





Start-up costs that would commonly be capitalized as Other Assets to be amortized over a period of five years have also been deemed to be impaired for the same reasons stated in the paragraph on “Software Costs”. Based on these circumstances, management has elected to expense these start-up costs as well.





“Long-lived assets” are reviewed for impairment of value whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable or at least at the end of each reporting period. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying value of an asset is not recoverable. For Long-lived assets to be held and used, management measures fair value based on quoted market prices or based on discounted estimates of future cash flows.





Income Taxes





We have effectively provided a full valuation allowance for the tax effects of our net operating losses during the years ended December 31, 2012 and December 31, 2011 and for the period from inception (October 21, 2010) to December 31, 2012 to offset the deferred tax asset that might otherwise have been recognized as a result of operating losses in the current period and prior periods since, because of our history of operating losses, management is unable to conclude at this time that realization of such benefit is currently more likely than not.





Recent Accounting Pronouncements





There were no recent accounting pronouncements that would have a significant effect on our future financial position, results of operations, and operating cash flows.












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RESULTS OF OPERATIONS


FOR THE YEAR ENDED DECEMBER 31, 2012


COMPARED TO THE YEAR ENDED DECEMBER 31, 2011




Revenues




For the year ended December 31, 2012 we generated revenue of $22,504 compared to $4,569 for the year ended December 31, 2011. The increase of $17,935 is due to the product launch of Vidirectory.com.




Operating Expense




Operating expenses for the year ended December 31, 2012 was $710,856 compared to $731,068 for the year ended December 31, 2011.  This net decrease of $20,212 was the result of an increase of $39,825 in software development costs and a decrease in salaries and wages of $55,452 as we added four administrative people due to the merger and had a staff reduction during the year ended December 31, 2012.




Net Loss




The net loss for the year ended December 31, 2012 was $691,181 compared to a net loss of $727,294 for the year ended December 31, 2011. The decrease in net loss of $36,113 is directly attributable to the increase in revenue and decrease in operating expenses described above.  As of December 31, 2012, we have an accumulated deficit of $1,709,128.




Net Loss Applicable to Common Stock




Net income applicable to common stock was $0.00 for the years ended December 31, 2012 and December 31, 2011.




LIQUIDITY AND CAPITAL RESOURCES




Outlook




The United States has been experiencing a widespread and severe economic recession that, among other things, has reduced availability of credit and capital financing and heightened economic risks.  We have been grossly undercapitalized in 2012 and unable to raise a significant amount of capital, other than receiving $653,593 in advances from our majority shareholder.





The continuing effects and duration of these developments and related uncertainties on the Company’s future operations and cash flows cannot be estimated at this time but likely will be significant, and in its audit report on our consolidated financial statements, our independent registered accounting firm has expressed substantial doubt as to our ability to continue as a going concern (see Note 2 to our consolidated financial statements).





We presently are unable to satisfy our obligations as they come due and do not have enough cash to sustain our anticipated working capital requirements and our business expansion plans for the remainder of 2013.  Subject to unforeseen effects of the economic risks and uncertainties discussed in the foregoing paragraph and to our ability to raise working capital, we expect to continue for the remainder of the calendar year 2013 to incur expenses related to software development.  The further delay of the rollout of our virtual world products, will have material adverse effects on our cash flow, results of operations and financial condition including significant uncertainty as to our ability to continue as a going concern.  No assurance can be given that we will be able to secure any third party financing or that such financing will be available to us on acceptable terms.









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Given the current financial market disruptions, credit crisis and economic recession, it is difficult at this time to obtain any third-party financing on acceptable terms, whether public or private equity or debt, strategic relationships, capital leases or other arrangements.  Furthermore, any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restricting covenants.  Strategic arrangements, if necessary to raise additional funds, may require that we relinquish rights to certain of our technologies or products or agree to other material obligations and covenants.





So far though, we cannot provide assurance that the market will ever accept our products.  Any failure by us to sell our products within our expected schedule or on terms acceptable to us will likely have a material adverse impact on our cash flow, results of operations and financial condition.  In addition, we expect to face competition from larger, more formidable competitors.  A lack of market acceptance of our products, failure to obtain additional financing, or unforeseen adverse competitive, economic, or other factors may adversely impact our cash position, and thereby materially adversely affect our financial condition and business operations.





Cash Flows





Cash used in operating activities increased by $23,445 for the year ended December 31, 2012, versus the year ended December 31, 2011 primarily because of our decrease in net loss of $36,113. Our cash outflows from investing activities amounted to $59,975 for capitalized software.  Our inflows from financing activities of $653,593 in the year ended December 31, 2012, consisted of $653,593 in advances from our majority shareholder.





Sources of Capital





We anticipate funding operations through private investments and loans made by our current shareholders.  However, we have no commitments for such funding as of the date of this report.  In addition, we anticipate generating revenue in the near future, however, we have no current commitments or contracts that could result in such revenue.  Management will have complete discretionary control over the actual utilization of said funds and there can be no assurance as to the manner or time in which said funds will be utilized.





We foresee that we will need a minimum of $1,500,000 to fund our operations for the next 12 months as follows:




System Development and Integration

$
700,000Professional Fees

$
100,000Sales, Marketing, Strategic Partnerships

$
100,000General & Administrative

$
500,000Working Capital

$
100,000Total

$
1,500,000





We will need substantial additional capital to support our proposed future operations.  We have no significant revenues from operations.  We have no committed source for any funds as of the date hereof.  No representation is made that any funds will be available when needed.  In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties.





Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations.  Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the virtual world industry and therefore increase the risks associated with our operations due to lack of diversification.





We anticipate generating the vast majority of our revenues from our advertisers. Advertisers can generally terminate their contracts, at any time.  Advertisers could decide to not do business with us if their investment in advertising with us does not generate sales leads, and ultimately customers, or if we do not deliver their advertisements in an appropriate and effective manner.  If we are unable to remain competitive and provide value to advertisers, they may stop placing ads with us, which would negatively harm future revenues and business.  In addition, expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns.  Any decreases in or delays in advertising spending due to general economic conditions could delay or reduce our revenues or negatively impact our ability to grow our revenues.









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Going Concern





The independent registered public accounting firm's report on our financial statements as of December 31, 2012 and 2011 includes a “going concern” explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.





We are dependent on raising additional equity and/or, debt to fund any negotiated settlements with our outstanding creditors and meet our ongoing operating expenses. There is no assurance that we will be able to raise the necessary equity and/or debt that we will need to be able to negotiate acceptable settlements with our outstanding creditors or fund our ongoing operating expenses. We cannot make any assurances that we will be able to raise funds through such activities.





Need For Additional Financing





We do not have capital sufficient to meet our cash needs. We have not generated revenue and have minimal resources to conduct planned operations. We estimate that our monthly expenses to commence planned operations within the next 12 months are approximately $125,000 (approximately $1,500,000 per year). Thus, using currently available capital resources (the primary source of which is non-binding commitments and expectations from management and current shareholders), we expect to be able to conduct planned operations for a minimum period of 3 to 4 months. We are currently relying solely on current shareholders and management to provide the necessary funds to continue operations. We do not have any commitments for such funding from shareholders or management.





At the present time, we have not made any arrangements to raise additional cash. Management and current shareholders are expected, but have not committed, to provide the necessary working capital so as to permit us to conduct planned operations until such time as we have begun to generate revenue and/or have become sufficiently funded.  However, if we do not begin to generate revenue or cannot raise additional needed funds, we will either have to suspend development operations until we do raise the funds, or cease operations entirely.





In addition, the United States and the global business community is experiencing severe instability in the commercial and investment banking systems which is likely to continue to have far-reaching effects on the economic activity in the country for an indeterminable period. The long-term impact on the United States economy and our operating activities and ability to raise capital cannot be predicted at this time, but may be substantial.





Off-Balance Sheet Arrangements and Contractual Obligations





As of December 31, 2012, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, that had been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we were engaged in such relationships.





We presently do not use any derivative financial instruments to hedge our exposure to adverse fluctuations in interest rates, foreign exchange rates, fluctuations in commodity prices, or other market risks, nor do we invest in speculative financial instruments.




Less thanType of Obligation

Total


one year

1-3 years

3-5 years

LongerLoans payable majorityshareholder

$
1,503,447


$
1,503,447Loans payable minorityshareholder

$
162,372


$
162,372Operating Lease Obligation:Real Estate


13,864



13,864OtherTotal

$
1,679,683


$
1,679,683






Item 7A. Quantitative And Qualitative Disclosures About Market Risk.





We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.








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Item 8.   Financial Statements And Supplementary Data








RONALD R. CHADWICK, P.C.


Certified Public Accountant


2851 South Parker Road, Suite 720


Aurora, Colorado  80014


Telephone (303)306-1967


Fax (303)306-1944








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Board of Directors


Sungame Corporation


Las Vegas, Nevada





I have audited the accompanying balance sheets of Sungame Corporation (a development  stage company) as of December 31, 2012 and 2011, and the related statements of operations, stockholders' equity and cash flows for the years then ended and for the period from October 21, 2010 (inception of the development stage) through December 31, 2011. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.





I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit 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.  I believe that my audit provides a reasonable basis for my opinion.





In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sungame Corporation as of December 31, 2011 and 2010, and the  results of its operations and its cash flows for the years then ended and for the period from October 21, 2010 (inception of the development stage) through December 31, 2011 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 3 to the financial statements, the Company has suffered recurring losses from operations and has a working capital deficit and stockholders' deficit. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.








Aurora, Colorado                                        /s/Ronald R. Chadwick, P.C.


March 29, 2012                                                   RONALD R. CHADWICK, P.C.















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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


Balance Sheets








December 31,


December 31,2012


2011ASSETS:Current Assets:Cash

$
2,604


$
13,338Prepaid Expenses


-



1,250Total Current Assets


2,604



14,588Fixed AssetsOffice Equipment


2,140



2,140Accumulated Depreciation


(1,528
)


(1,100
)612



1,040Capitalized SoftwareCapitalized Software


183,419



123,444Accumulated Depreciation


(62,376
)


(8,468
)121,043



114,976TOTAL ASSETS

$
124,259


$
130,604LIABILITIES AND STOCKHOLDERS' DEFICIENCY:Current Liabilities:Accounts Payable

$
267,079


$
236,726Related party advances


1,665,819



1,012,226Other liabilities


5,209



4,319Total Current Liabilities


1,938,107



1,253,271Stockholders' Deficiency:Preferred stock, $.001 par value;5,000,000 shares authorizednone issued or outstandingCommon stock, $.001 par value;300,000,000 authorized with:177,575,014shares issued and outstanding


177,575



177,575Additional paid in capital


(282,295
)


(282,295
)Deficit accumulated during the dev. stage


(1,709,128
)


(1,017,947
)Total Stockholders' Deficiency


(1,813,848
)


(1,122,667
)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

$
124,259


$
130,604





The accompanying notes are an integral part of these financial statements










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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


Statements of Operations








October 21, 2010(Inception ofDev. Stage)Year ended


ThroughDecember 31,


Dec 31 20122012


2011


2012Revenues

$
22,504


$
4,569


$
27,073Costs and Expenses:Depreciation & amortization


54,336



8,789



63,125General & administrative


656,520



722,279



1,669,452Total Expenses


710,856



731,068



1,732,577Loss From Operations


(688,352
)


(726,499
)

$
(1,705,504
)Other Income and (Expenses):Interest income


-



10



10Interest expense


(2,829
)


(805
)

$
(3,634
)(2,829
)


(795
)


(3,624
)Net Loss

$
(691,181
)

$
(727,294
)

$
(1,709,128
)Per Share InformationLoss per common share

$
(0.00
)

$
(0.00
)Weighted average numberof shares outstanding


177,575,014



177,181,255




















The accompanying notes are an integral part of these financial statements








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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


Statements of Cash Flows









October 21, 2010(Inception ofDev. Stage)Year ended


ThroughDecember 31,


Dec 31 20122012


2011


2012Cash Flows from Operating Activities

$
(691,181
)

$
(727,294
)

$
(1,709,128
)Net Income (Loss)Adjustments to reconcile net loss tonet cash provided by (used for)operating activities:Depreciation and amortization


54,336



8,789



63,125Stock issued for licensing agreement










165,000Compensatory stock issuances


-



325



12,325Prepaid expenses


1,250



(1,025
)


-Accounts payable


30,353



89,172



146,361Other liabilities


890



2,236



5,209Net cash (used for)










(316
)operating activities


(604,352
)


(627,797
)


(1,317,424
)Cash Flows from Investing ActivitiesInvestment in capitalizedsoftware


(59,975
)


(123,444
)


(183,419
)Net cash (used for)investing activities


(59,975
)


(123,444
)


(183,419
)Cash Flows from Financing ActivitiesRelated party advances


653,593



753,929



1,503,447Net cash provided byfinancing activities


653,593



753,929



1,503,447Net Increase (Decrease) In Cash


(10,734
)


2,688



2,604Cash At The Beginning Of The Period


13,338



10,650



-Cash At The End Of The Period

$
2,604


$
13,338


$
2,604SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid for interest expense

$
2,829



805



3,634Cash paid for income taxes

$
-


$
-


$
-NON-CASH TRANSACTIONSStock issued for merger and consulting services





$
177,325


$
177,325Net liabilities assumed in the merger





$
282,045


$
282,045





The accompanying notes are an integral part of these financial statements












- 22 -
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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


Statements of Stockholders Equity (Deficit)










Common





DeficitStock





AccumulatedCommon


Amount





During The


StockholdersStock


$
(0.001


Paid in


Development


EquityShares (1)


Par)


Capital


Stage


(Deficit)Balances at December 31, 2009




$
-


$
-


$
-


$
-Issuance of founders’ stock for services


12,000,000



12,000











12,000Shares issued for licensing agreement


165,000,000



165,000











165,000Net loss for year














(290,653
)


(290,653
)Balances at December 31, 2010


177,000,000


$
177,000






$
(290,653
)

$
(113,653
)Shares issued for reverse merger


250,000



250



(282,295
)






(282,045
)Shares issued for services


325,014



325











325Net loss for the year














(727,294
)


(727,294
)Balances at December 31, 2011


177,575,014


$
177,575


$
(282,295
)


(1,017,947
)

$
(1,122,667
)Net loss for the year














(691,181
)


(691,181
)Balances at December 31, 2012


177,575,014


$
177,575


$
(282,295
)

$
(1,709,128
)

$
(1,813,848
)

















The accompanying notes are an integral part of these financial statements










- 23 -
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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011








1.            Business and Summary of Significant Accounting Policies





Business





The accompanying financial statements include the accounts of Sungame Corporation (“the Company”), a Delaware corporation.  The Company is an early development stage company.





The Company, trading under the symbol “SGMZ”, is the Company behind the Flighteck.tv content management and discovery platform.  Sungame also uses the brand “Freevi” as a d.b.a., as it acquired Freevi Corp. and the brand has retained its value sufficient to keep using the brand Freevi.  Sungame’s mission is simple:  to enrich people’s lives by becoming a leading social networking, content creation, content discovery and distribution platform.  Integral to the site’s functionality is a central aggregation engine that excels at servicing targeted, focused and high quality content and social media interactions based on the user’s specific interests and past usage history.  Other tools available on the website are designed to simplify content creation and distribution for content producers, while providing these artists an engaged audience interested in consuming this content.  Sungame is also the Company behind Vidirectory, a video based business directory that simplifies online marketing for small businesses.





Sungame builds products that support its mission by creating utility for users, developers and advertisers as follows:





1.
Flight deck enables people to stay connected, access and discover new content as well as socialize with their friends and family across different social media platforms.  The platform allows its users to create, discover, share, and fund content they care about.





2.
Flightdeck allows developers to use the Flightdeck Platform to create audio, video, editorial content and applications (apps) tat they can market and distribute to the platform’s global network of users.





3.
Sungame enables advertisers to engage subsets of users based on information the users have chosen to share with the platform such as their age, location, gender or interests.  Flightdeck’s content focused strategy gives advertisers a unique combination of reach, relevance, social context, and engagement to enhance the value of their ads.








The Company merged with Freevi Corporation on April 15, 2011.  Freevi brings a rich media platform to the Company revolving around its core product the “Freevi Flightdeck” TM, a graphical user interface that allows users to consume video and audio content, network with other Freevi users, engage in e-commerce transactions, and access games and other applications.  Freevi’s proprietary technologies were licensed from Chandran Holding Media, Inc., its majority shareholder at the time of its acquisition by the Company.





The Company was incorporated in Delaware on November 14, 2006. The Company’s fiscal year end is December 31st.













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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


(continued)





Summary of Significant Accounting Policies





Development Stage Company





The Company is a development stage company as defined by Accounting Standards Codified No. 915. The Company is devoting substantially all of its present efforts to establish a new business. All losses accumulated since inception, have been considered as part of the Company’s development stage activities.





Risks and Uncertainties





Our business is rapidly evolving and intensely competitive, and is subject to changing technology, shifting user needs and frequent introductions of new products and services.  We have many competitors in different industries, including traditional search engines, vertical search engines, e-commerce sites, social networking sites, traditional media companies, and providers of online products and services.  Our current and potential competitors range from large and established companies to emerging startups.  Established companies have longer operating histories and more established relationships with customers and end users, and they can use their experience and resources against us in a variety of competitive ways, including by making acquisitions, investing aggressively in research and development, and competing aggressively for advertisers and websites.  Emerging startups may be able to innovate and provide products and services faster than we can.  If our competitors are more successful than we are in developing competing products or in attracting and retaining users, advertisers, and content providers, our revenues and growth rates could decline.





Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenue and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and assumptions are based on management’s future expectations for the Company’s operations. The Company’s actual results could vary materially from management’s estimates and assumptions





Cash and Cash Equivalents





The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. Included in cash of $2,064 at December 31, 2012 is $1,986 held in reserve by the Company’s sales processing agency.





Property and Equipment





Property and equipment, when acquired, will be stated at cost. Depreciation will be computed using the straight-line method to allocate the cost of depreciable assets over the estimated useful lives of the assets.










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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


(continued)








Software Costs





The costs for internal use software, whether developed or obtained, are assessed to determine whether they should be capitalized or expensed in accordance with American Institute of Certified Public Accountants’ Statement (“SOP”) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”.  Capitalized software costs are reflected as property and equipment on the balance sheet and are to be depreciated when functional.





Long Lived Assets





“Long-lived assets” are reviewed for impairment of value whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable or at least at the end of each reporting period. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying value of an asset is not recoverable. For long-lived assets to be held and used, management measures fair value based on quoted market prices or based on discounted estimates of future cash flows.





Concentration of Credit Risk





The Company’s financial instruments that are exposed to concentrations and credit risk primarily consist of amounts due to related parties. (see Note 5) The Company presently uses one vendor for all of its software development.





Income Taxes





Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered.





At December 31, 2012 and 2011, the Company had net operating loss carry-forwards of approximately $1,709,000 and $1,018,000, which begin to expire in 2026.  At December 31, 2012 and 2011 the Company had deferred tax assets of approximately $598,000 and $356,000 in 2012 and 2011 created by the net operating losses, which have been offset by a 100% valuation allowance.























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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


(continued)








2.           REVERSE MERGER





Effective April 15, 2011 Sungame Corporation entered into a merger agreement (the "Agreement") with Freevi Corporation, acquiring 100% of the outstanding common stock of Freevi Corporation through the issuance of 177,000,000 shares of its common stock with no readily available market price. Freevi Corporation was incorporated in Nevada on October 21, 2010. The transaction was accounted for as a reverse merger as the shareholders of Freevi Corporation retained the majority of the outstanding common stock of Sungame Corporation after the share exchange. Effective with the Agreement, the Company's stockholders' equity was recapitalized as that of Freevi Corporation, while 100% of the assets and liabilities of Sungame Corporation valued at $(282,045), consisting of cash $231, net fixed assets $1,361, accounts payable $121,265, and related party advances $162,372, were recorded as being acquired in the reverse merger for its outstanding common shares (250,000) on the merger date. Subsequent to the April 15, 2011 recapitalization Freevi Corporation ceased to exist, with Sungame Corporation as the sole surviving entity. The accompanying financial statements exclude the financial position, results of operations and cash flows of Sungame Corporation prior to the April 15, 2011 merger.





If Sungame Corporation's operating activity for the year ended 2011 is combined with Freevi Corporation’s activity for the same periods, the pro forma results are as follows:





2011Pro forma revenue

$
31,150Pro forma net loss

$
(746,409
)Pro forma loss per share

$
(0.00
)Pro forma weighted average common shares outstanding


177,575,014





3.           Going Concern Uncertainty and Managements’ Plans





In the Company’s audited financial statements for the fiscal year ended December 31, 2012, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern.  The Company’s financial statements for the year ended December 31, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company reported a net loss of $691,181 and $724,294 for the years ended December 31, 2012 and 2011, respectively, and an accumulated deficit of $1,709,128 as of December 31, 2012. As of December 31, 2011 the accumulated deficit was $1,017,947. At December 31, 2012, the Company’s total current liabilities exceed total current assets by $1,935,503.  At December 31, 2011 this amount was $1,238,693.















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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


(continued)








The future success of the Company is likely dependent on its ability to attain additional capital, or to find an acquisition to add value to its present shareholders and ultimately, upon its ability to attain future profitable operations.   There can be no assurance that the Company will  be successful in obtaining such


financing, or that it will attain positive cash flow from operations.  Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.





4.           Property and Equipment





The Company has incurred software costs in the development of its virtual world in the amount of $57,283 and $97,114 in 2012 and 2011 respectively, which has been expensed.    Capitalized software costs were $183,419 for two products that have proven technologically feasible.





5.           Advance Payable, Related Party





At December 31, 2012 the Company had working capital advances due to a related party shareholder, Adversor, Inc. (“Adversor”) of $162,372.  These funds are non-interest bearing and are due on demand.  Included in the Company’s accounts payable at December 31, 2012 and 2011 was $238,013 and $182,513 owed to Adversor.  Due to the merger with Freevi Corporation on April 15, 2011, Adversor is now a minority shareholder.





During 2012 and 2011, the Company’s majority shareholder, Chandran Holding Media, Inc. (Chandran) advanced funds to the Company for operations.  The Company and Chandran also share certain members of executive management and certain employees.  At December 31, 2012 and 2011, the Company owed Chandran $1,503,447 and $849,854.  These funds are non-interest bearing and due on demand.

















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SUNGAME CORPORATION


(A DEVELOPMENT STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS


FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011


(continued)








6.             Lease Commitment





The Company has an operating lease for building space with monthly payments of $3,466, which expires in April, 2013.  Details of the lease commitment and future payments in 2013 are as follows:





Rental


Future









TotalExpense


Expenses







After

Future2012


2013

2014

2015

2016

2017

ExpensesBuilding LeaseLessor: TechspaceLessee: Sungame CorporationProp Address: 1100 Glendon Ave  Ste 1713Los Angeles, CA  90024Type: OperatingRenewal Option: NoneNoncancellable08/10/2012, 9 Months, Exp 4/30/13$3,466/month including services


16392



13864










13864TOTAL


16392



13864

0

0

0

0


13864





7.             Legal Matters





The Company was involved in a litigation in Colorado.  Broadway Holdings, Inc. (Broadway) vs. Sungame Corporation.  The suit was a breach of contract by Broadway Holdings, Inc. filed on or about August 2, 2011, in the District Court, Denver County, Colorado.  The case was settled on December 24, 2012.  All claims and counterclaims were dismissed in the confidential settlement.  All Sungame shares held by the Broadway Plaintiffs Shareholders are to be cancelled in 2013.














- 29 -
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Item 9.        Changes In And Disagreements With Accountants On Accounting And Financial Disclosure.





None





Item 9A.     Controls And Procedures.





Evaluation of Disclosure Controls and Procedures





Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this annual report on Form 10-K.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of such date, at a reasonable level of assurance, in ensuring that the information required to be disclosed by our company in the reports we file or submit under the Exchange Act is: (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.





Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).  Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on our evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2012.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting pursuant to temporary rules of the Securities and Exchange Commission.





Changes in Internal Control Over Financial Reporting





There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





Item 9B.     Other Information





None












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PART III





Item 10.   Directors, Executive Officers And Corporate Governance.





The following individuals were serving as our executive officers and directors on December 31, 2012:





Name
Age
PositionGuy M. Robert
49
Chief Development Officer and DirectorNeil Chandran
41
President, CEO, and CFORaj Ponniah
37
Secretary and Director





Guy M. Robert -  Mr. Robert served as the President, Chief Executive Officer, Chief Financial Officer and a Director of Sungame until the Company’s merger with Freevi Corporation. He also serves as President of Adversor, Inc., a beneficial owner of Sungame Corporation, since incorporation. After a career in IT consulting and Global Product Management for Ericsson 1989-1992 and Vodafone from 1992-1995, Mr. Robert has focused his entrepreneurial spirit and management capabilities within the international IT community. He established and was a Director or CEO of companies such as XPonCard Thailand Ltd.1999-2004, MobylNet SL, Spain, 2002-2005 and Communication Information Services 2000-2004 which was acquired by a publicly listed group. Mr. Robert is a Market Economist, graduated from the Stockholm Market Institute.





Neil Chandran–President, CEO and CFO. For the past 20 years, Mr. Chandran has been involved in the interactive media industry. In 1990, Neil founded Intent Communications, a telecommunications firm that specialized in Interactive Voice Response (IVR) programs for 800 and 900 numbers – the predecessor to the modern day Internet. In 1995, he co-founded IEM, Interactive Electronic Media Inc., which developed video-streaming technology long before the feature was commonplace throughout the web. His experience with video led to the launch of Energy TV in 2006, his first broadcast television program and the flagship media property of CHMI. Also formed in 2006, CHMI was the holding company and licensor of Chandran’s concepts. Since then CHMI has raised and generated almost $40 Million through its various media properties. Mr. Chandran lives in Las Vegas with his wife and two children. Mr. Chandran holds a Bachelor of Management Degree from the University of Lethbridge, Alberta, Canada.





Raj Ponniah–Director. Started his education in electronic engineering and transferred into the business division at Fullerton College. Founded his first company in 1994 servicing local attorneys and paralegals in Southern California area and grew to one of the most trusted servers in the special needs division. In 1998, Raj went on into the auto industry where he opened up the first Daewoo car dealerships in Toronto, Canada. After selling the dealership Raj spent the next decade in finance, starting from running a small savings and loan in Southern California to running and owning a call center in the subprime mortgage industry servicing loans in over 40 states in the Union. Once the industry took a turn, Raj consulted for a few start up broker companies until he found himself recreated by CHMI to open up the retail division of CHMI in the US market which eventually morphed into the vidirectory, an online geotargeted video directory system for local business and the LOFT, a retail co-working space for local production and development teams.  Mr. Ponniah started his education in Electronical Engineering from DeVry Institute and made his way over to Business Management at Fullerton College. Mr. Ponniah resigned as our Chief Operating Officer in 2012.





Compliance With Section 16(a) Of The Exchange Act





Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the registrant's officers and directors, and persons who own more than 10% of a registered class of the registrant's equity securities, to file reports of ownership and changes in ownership of equity securities of the Registrant with the Securities and Exchange Commission. Officers, directors and greater-than 10% shareholders are required by the Securities and Exchange Commission regulation to furnish the registrant with copies of all Section 16(a) forms that they file.












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Item 11.      Executive Compensation.





Compensation.





The following table sets forth compensation awarded to, earned by or paid to our Chief Executive Officer and the four other most highly compensated executive officers for the years ended December 31, 2012 and 2011 (collectively, the “Named Executive Officers”).





SUMMARY COMPENSATION TABLENon-QualifiedNon-Equity
DeferredName & Principal



Stock
Option
Incentive Plan
Compensation
All OtherPosition
Year
Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
TotalNeil Chandran
2012
$19,240
0
0
0
0
0
0
02011
$23,720
0
0
0
0
0
0
0Guy Robert
2012
120,000
0
0
0
0
0
0
02011
$60,000
0
0
0
0
0
0
0Raj Ponniah
2012
34,750
0
0
0
0
0
0
02011
38,559
0
0
0
0
0
0
0








OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2012OPTION AWARDS
STOCK AWARDSName
Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable
Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable
Equity

Incentive

Plan Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)
Option

Exercise

Price

($)
Option

Expiration

Date
Number of

Shares or

Units of

Stock

That Have

Not Vested

(#)
Market

Value of

Shares or

Units of

Stock

That

Have Not

Vested

($)
Equity

Incentive

Plan

Awards:

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

(#)Neil Chandran
0
0
0
0
0
0
0
0
0Guy Robert
0
0
0
0
0
0
0
0
0Raj Ponniah
0
0
0
0
0
0
0
0
0





Employment Contracts





We do not have an employment contract with any executive officer.





We have made no Long Term Compensation payouts.







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Director Compensation





DIRECTOR COMPENSATIONName
Fees

Earned or

Paid in

Cash
Stock

Awards
Option

Awards
Non-Equity

Incentive

Plan

Compensation
Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings
All

Other

Compensation
TotalGuy Robert
0
0
0
0
0
0
0Neil Chandran
0
0
0
0
0
0
0Raj Ponniah
0
0
0
0
0
0
0





Our directors do not receive compensation for their attendance at meetings of the board of directors.





All of our officers and/or directors will continue to be active in other companies. All officers and directors have retained the right to conduct their own independent business interests.





It is possible that situations may arise in the future where the personal interests of the officers and directors may conflict with our interests. Such conflicts could include determining what portion of their working time will be spent on our business and what portion on other business interest. To the best ability and in the best judgment of our officers and directors, any conflicts of interest between us and the personal interests of our officers and directors will be resolved in a fair manner which will protect our interests. Any transactions between us and entities affiliated with our officers and directors will be on terms which are fair and equitable to us. Our Board of Directors intends to continually review all corporate opportunities to further attempt to safeguard against conflicts of interest between their business interests and our interests.





We have no intention of merging with or acquiring an affiliate, associated person or business opportunity from any affiliate or any client of any such person.





Item 12. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters.





The following table and the notes thereto set forth information, as of December 31, 2012 (except as otherwise set forth herein), concerning beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of common stock by: (i) each director of the Company, (ii) each executive officer (iii) all executive officers and directors as a group, and (iv) each holder of 5% or more of the Company’s outstanding shares of common stock.








Name and Address of Beneficial Owner(1)

Number of

Shares of

common stock

Beneficially

Owned(2)

Percentage

of

common

stock

Outstanding (3)Chandran Media Holdings Inc.

165,000,000


92.92
%Neil Chandran, President, CEO, CFO (voting power only)

165,000,000


92.92
%Raj Ponniah, Secretary and Director

2,000,000


1.1263
%Guy M. Robert(4), Chief Development Officer and Director

95,000


.01
%Michael Segal

2,513


.01
%Ranulf Jose Goss

9,325


.01
%Sudhir Shah

25,000


.01
%Diamond Star Exports Ltd.(5)

62,500


.01
%Mindzye Consulting Pte. Ltd.

2,500


.01
%Jessey Njau, Director of Internet Technology

1,000,000


0.5631
%Owen Cran, Comptroller

1,000,000


0.5631
%Paul Vastakis, Manager

500,000


0.28155
%Officers and Directors as a group

169,595,000


95.51
%


__________________


(1). Unless otherwise stated above, the address of beneficial owner is c/o Sungame Corporation, 3091 West Tompkins Avenue, Las Vegas, Nevada 89103.


(2). Beneficial ownership of each person is shown as calculated in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, which includes all securities that the person, directly, or indirectly through an contract, arrangement, understanding, relationship or otherwise has or shares voting power which includes the power to vote or direct the voting of a security, or investment power, which includes the power to dispose, or direct the disposition of such security.


(3). Based on 177,575,014 shares of common stock outstanding as of December 31, 2012.


(4). Guy Robert is the beneficiary of 62,500 shares indirectly through Adversor, Inc., as president thereof.


(5). Shah holds the voting and dispositive powers for Diamond Star Exports, Ltd.












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Item 13.   Certain Relationships And Related Transactions, And Director Independence.




Other than the stock transactions discussed below, we have not entered into any transaction nor are there any proposed transactions in which any of our founders, directors, executive officers, shareholders or any members of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.





On Wednesday, 3 November 2010, Michael Segal resigned from SGMZ’s Board of Directors. Mr. Segal’s resignation came from a difference of opinion with the other Directors of the business model of Freevi, Inc. and SGMZ future in respect with the merger. Mr. Segal was the Secretary and Treasurer of SGMZ, but was not on any committees of the Board of Directors and was not an Officer of SGMZ.





In October 2008, Diamond Star Export, Ltd. and Adversor, Inc., greater than 10% shareholders of our Company, entered into Lock Up Agreements with us whereby they agreed to that, until the earlier of: (1) 90 days after the shareholder's stock has been registered under an effective Registration Statement with the SEC, (2) the second anniversary of the date of the agreement or  (3) 90 days after Change in Control (as defined in the Securities Exchange Act of 1934), that they will not make or cause any sale more than 5% of shares outstanding per quarter, irrespective of whether their shares are subsequently registered. In exchange each received $100.





In October 2008, Mr. Ranulf Goss, our director, entered into a Lock-Up Agreement with us whereby they agreed to that, until the earlier of: (1) 90 days after the shareholder's stock has been registered under an effective Registration Statement with the SEC, (2) the second anniversary of the date of the agreement or (3) 90 days after Change in Control (as defined in the Securities Exchange Act of 1934), that they will not make or cause any sale more than 5% of shares outstanding per quarter, irrespective of whether their shares are subsequently registered. In exchange he received $100.





In March 2009, per the Security Purchase Agreement (dated October 2008), with Mindzeye Consulting Pte, Ltd., we received cash of $125,000 in exchange for 125,000 shares of restricted common stock. The shares were sold at a price of $0.25 per share.





During the year ended December 31, 2008, our majority shareholder, Adversor, paid $20,000 for services on our behalf. In addition, during the year ended December 31, 2008, Adversor forgave $87,109 in debt owed to them. We have treated such amounts as capital contributions and as such have increased Additional Paid in Capital by $107,109.





In October 2008, we issued 103,075 shares of our restricted common stock to our majority shareholder, Adversor, in exchange for their efforts in the settlement of $775,000 of outstanding accounts payable owed to an unrelated third party vendor. The shares were issued at a price of $0.188 per share.





In September 2008, we issued 34,325 shares of our restricted common stock to our director, Mr. Goss, as payment for services totaling $137,300.  The shares were issued at a price of $0.10 per share.





During the year ended December 31, 2008, we entered into a Corporate Finance Advisory Services Agreement with Friedland Global Capital Markets, LLC ("Friedland"). The Agreement provides that we will pay a remaining total of $65,000 for services as set forth in the Agreement and $140,000 upon the commencement of the trading of our stock. These funds payable are non-interest bearing and due on demand.





In June 2008, we issued 22,500 shares of our restricted common stock to Friedland, in exchange for services totaling $50,000 provided under the Finance Advisory Services Agreement. The shares were issued at a price of $0.055 per share.





During the year ended December 31, 2008, Adversor advanced $107,109 to support operations. Adversor forgave the total $107,109 and the Company has treated it as capital contribution and an increase the Additional Paid In Capital.





During the year ended December 31, 2007, our majority shareholder, Adversor, Inc. (Adversor) advanced funds of $118,369 to us for operations. During the year ended December 31, 2008, we repaid $8,369 of the outstanding amount. At December 31, 2008, Adversor is owed $110,000. These funds are non-interest bearing and due on demand. During the nine months ended September 30, 2009, Adversor advanced funds of $7,470 to us for operations. At September 30, 2009, Adversor is owed $117,470.








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Item 14.    Principal Accounting Fees And Services.





Audit Fees





We were billed $12,992 and $9.220 for the fiscal years ended December 31, 2012 and 2011, respectively, for professional services rendered by the principal accountant for the audit of our annual financial statements, the review of our quarterly financial statements, and other services performed in connection with our statutory and regulatory filings.





Audit Related Fees





There were $0 in audit related fees for the fiscal years ended December 31, 2012 and 2011. Audit related fees include fees for assurance and related services rendered by the principal accountant related to the audit or review of our financial statements, not included in the foregoing paragraph.





Tax Fees





Tax fees were $750 for the fiscal years ended December 31, 2012 and 2011.


All Other Fees





There were no other professional services rendered by our principal accountant during the last two fiscal years that were not included in the above paragraphs.





Preapproval Policy





Our Board of Directors’ current policy is to pre-approve all audit and non-audit services that are to be performed and fees to be charged by our independent auditor to assure that the provision of these services does not impair the independence of the auditor.  Our board pre-approved all audit and non-audit services rendered by our principal accountant in 2012 and 2011.










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PART IV


Item 15. Exhibits, Financial Statement Schedules.





(a) Financial Statements and Schedules. The following financial statements and schedules for the Company as of December 31, 2012 are filed as part of this report.





(1)   Financial statements of the Company and its subsidiaries.





(2)   Financial Statement Schedules:





All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.





(A) EXHIBITS.





The following Exhibits are incorporated herein by reference or are filed with this report as indicated below.





Exhibit No.

Description of Exhibits3.01

Certificate of Incorporation (1)3.01(a)

Certificate of Amendment of Certificate of Incorporation (2)3.02

By-laws (1)3.02(a)

Certificate of Amendment of Bylaws (3)21.1

Subsidiaries (2)31.1

Certification pursuant to Sarbanes-Oxley Section 30232.1

Certification pursuant to 18 U.S.C. Section 1350





(1) Incorporated by reference to our Registration Statement on Form S-1 filed with the SEC on May 1, 2009.


(2) Incorporated by reference to our Registration Statement on Form S-1/A filed with the SEC on August 7, 2009.


(3) Incorporated by reference to our Registration Statement on Form S-1/A filed with the SEC on January 19, 2010.












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SIGNATURES





In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





Sungame Corporation:





In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:





By:
/s/ Neil ChandranName:
Neil ChandranTitle:
President, Chief Executive Officer, Principal Accounting Officer,

Chief Accounting Officer, DirectorDate:
October 17, 2013By:
/s/ Raj PonniahName:
Raj PonniahTitle:
DirectorDate:
October 17, 2013

















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