UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





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




For the fiscal year ended December 31, 2013





OR





£   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 000-53502





GAMZIO MOBILE INC.(Name of registrant as specified in its charter)




Nevada

68-0676667(State or Other Jurisdiction of  Incorporation or Organization)

(I.R.S. Employer Identification Number)


123 West NYE Ln., Ste. 129, Carson City NV

89706(Address of Principal Executive Offices)

(Zip Code)


(415) 839-1055(Registrant’s telephone number)




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





None

None(Title of each class)

(Name of each exchange on which registered)





Securities registered pursuant to Section 12(g) of the 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  [  ]

NOx





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  [   ]

NOx








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.





YESx

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).





YES

NO  [  x]





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





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





Large oaccelerated filer  [  ]
Accelerated ofiler  [   ]Non-accelerated ofiler  (do not check if smaller reporting company) [   ]
Smaller reporting company  x





The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant was approximately $256,282 (based on 25,628,220 shares held by non-affiliates and closing market price of $0.01 per share as of June 30, 2013 (the last business day of the registrant’s most recently completed second quarter)), assuming solely for the purpose of this calculation that all directors, officers and greater than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).





YES [  ]

NOx








As of April 14, 2014, there were outstanding 55,658,220 shares of registrant’s common stock, par value $0.001 per share.





Documents Incorporated By Reference:  None


2


TABLE OF CONTENTS





PageITEM 1
BUSINESS
4ITEM 1A
RISK FACTORS
19ITEM 1B
UNRESOLVED STAFF COMMENTS
19ITEM 2
PROPERTIES
29ITEM 3
LEGAL PROCEEDINGS
29ITEM 4
RESERVED
29ITEM 5
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6
SELECTED FINANCIAL DATA
30ITEM 7
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
30ITEM 7A
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
34ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
34ITEM 9
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING   AND FINANCIAL DISCLOSURE
35ITEM 9A
CONTROLS AND PROCEDURES
35ITEM 9B
OTHER INFORMATION
36ITEM 10
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
36ITEM 11
EXECUTIVE COMPENSATION
38ITEM 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
40ITEM 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
41ITEM 14
PRINCIPAL ACCOUNTING FEES AND SERVICES
42ITEM 15
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
42SIGNATURES
43INDEX TO FINANCIAL STATEMENTS
34INDEX TO EXHIBITS
42








3


PART I





CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





Some discussions in this Annual Report on Form 10-K contain forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and relate to future events or future financial performance. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Form 10-K. Forward-looking statements are often identified by words such as “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project,” “plans,” “seek” and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology.





These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” below that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In addition, you are directed to factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section as well as those discussed elsewhere in this Form 10-K.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. However, readers should carefully review the risk factors set forth in other reports or documents the Company files from time to time with the Securities and Exchange Commission (the “SEC”), particularly the Company’s Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K. All written and oral forward-looking statements made subsequent to the date of this report and attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.




Unless otherwise indicated, references to “we,” “our,” “us,” “Gamzio,” “GAMZ,” the “Company” or the “Registrant” refer to Gamzio Mobile, Inc., a Nevada corporation, and its wholly owned subsidiary, Gamzio, Inc., a Nevada corporation.


4


ITEM1— BUSINESS





History





We were incorporated under the laws of the State of Nevada on January 18, 2007, under the name “Sona Resources, Inc.”, with authorized capital stock of 250,000,000 shares at $0.001 par value.  We were originally organized for the purpose of acquiring and developing mineral properties.





On June 6, 2011, we entered into the Exchange Agreement to acquire Marine Drive Technologies Inc., a corporation organized under the laws of Canada (“MDT”), a developer of scalable m-Commerce applications and services, and on July 6, 2011, we changed our name to “Marine Drive Mobile Corp.”  On August 26, 2011, we entered into a Membership Interests Purchase Agreement for the acquisition of the outstanding membership interests of I Like A Deal, LLC (“ILAD”), a developer of group buying web based software (the “ILAD Transaction”).  On September 12, 2011 we closed the Exchange Agreement with MDT and on October 3, 2011 we closed the Membership Interests Purchase Agreement with ILAD.





On September 11, 2013, we effected a one-for-one hundred reverse stock split of all of our issued and outstanding shares of common stock.





On October 23, 2013, we entered into and consummated a voluntary share exchange transaction with Gamzio, Inc., a Nevada corporation and the sole stockholder of Gamzio, Inc. (the “Selling Stockholder”), pursuant to a Share Exchange Agreement by and among us, Gamzio, Inc. and the Selling Stockholder (the “Exchange Agreement”).





In accordance with the terms of the Exchange Agreement, we issued 30,000,000 shares of our common stock, par value $0.001 to the Selling Stockholder in exchange for 100% of the issued and outstanding capital stock of Gamzio, Inc. (the “Exchange Transaction”). As a result of the Exchange Transaction, the Selling Stockholder acquired 54% of our issued and outstanding shares of common stock, Gamzio, Inc. became our wholly-owned subsidiary, and we acquired the business and operations of Gamzio.





On November 15, 2013, we changed our name from "Marine Drive Mobile Corp." to "Gamzio Mobile, Inc.”   On February 4, 2014, we changed our fiscal year to begin on January 1 and end on December 31.





Overview





We operate in two distinct business segments: (1) social casino gaming, and (2) customer loyalty technology.





Social Casino Gaming





Our strategy is to innovate Social Casino Games. Our mission is to create high quality social casino games with the intent to provide widespread appeal for consumers worldwide. We believe that our games are designed to provide unique social gaming experiences for players and drive optimized earnings for shareholders.





We market and distribute our flagship social casino game Slots-O-Luck Adventure HD for iPhone and iPad through Apple’s App Store.  We advertise on high volume acquisition channels including Facebook in order to grow our user-base.  In the future, we plan to distribute our games on other high volume distribution channels.


5
 Customer Loyalty Technology





We provide mobile rewards programs, digital coupons, promotions, and deal management solutions (DMS).  We enable our clients to manage sales through real-time transactions, end-user data, enhanced brand marketing strategies, and customer loyalty-reward programs.  Our loyalty engine works across all communication platforms and displays – mobile, tablet, & PC – putting real-time deals in the hands of today’s consumer.





Our goal is to provide businesses with a marketing platform that builds incremental business with their existing clients and introduces new customers to their products and services. We do this by providing merchants convenient access to our m-Commerce applications and services.





SOCIAL CASINO GAMING





Gamzio recently “soft” launched its first Social Casino Game title, Slots-O-Luck Adventure HD for iPad and iPhone in the Apple iTunes Store.  Gamzio spent approximately over $197,000 in 2012 and over $127,000 in 2013 to develop and optimize the game.  At present the company’s management has spent minimal money on advertising and marketing Slots-O-Luck Adventure, choosing instead to optimize the game revenue.





Objectives





Gamzio’s current focus is to grow market share, including the following key objectives:





·
Procure necessary funding for further advertising and marketing;


·
Acquire customers based on CPI (Cost Per Install) advertising campaigns;


·
Execute the CPI advertising plan to acquire an initial 100,000 users for Slots-O-Luck Adventure HD;


·
Expand to new markets internationally for real money gaming; and


·
Expand to new platforms to capture more market share.





Description of Products/Services





Gamzio creates innovative social games and applications (“apps”) for mobile devices.  With distribution channels, key strategic partnerships, and a proprietary sharing system to increase game virality, Gamzio hopes to acquire players (customers) and convert those players into revenues greater than the cost of acquiring them.  With its in-house data tracking systems, Gamzio is able to optimize player experience, monetization, and virality of its games and apps.





Gamzio’s newest title Slots-O-Luck Adventure was recently released for iPad and iPhone on the Apple App Store.  Slots-O-Luck is a social slots game where players can play Las Vegas style slot machines for virtual currency.





Future Products and Services





Real Money Wagering





Gamzio is currently using its experience and talent to position itself in future markets such as real money wagering and will continue to develop enhancements, as well as create new services to keep expanding its position.  In the future, Gamzio plans on partnering with a real money gaming licensor.





Gamzio creates and builds the front end of its games. If we successfully partner with a real money gaming licensor, such licensor’s servers would handle the back-end processing. Users would see the front end, such as the Slots-O-Luck Adventure slot machine and bet real money while playing the slot machine. The game would then turn this information over to a licensor, which then calculates the result. If the player wins, the licensor credits the account. If he loses, the licensor deducts money from the account. The licensor handles the payment processing on its own.





The licensor’s platform would be universal. Any Gamzio game can be plugged into its applications programming interface and be converted into a real-money gambling game.





The partnership with such a licensor would be a part of a campaign to break down barriers between real-money online gambling and social-mobile games.


6
 Blackjack Tournament Game





Gamzio is also in the process of developing a Blackjack tournament game under the Slots-O-Luck name.  We believe that this title will add users and revenue to the current portfolio, and can be cross-promoted to the current user base, reducing the cost of player acquisition.





In addition, Gamzio is currently in preliminary planning to add an Android version of Slots-O-Luck Adventure to the marketplace.  Development is estimated to take 5 weeks.  We believe this will allow Gamzio to capture more market share in the Mobile Social Casino Game industry.


SCREEN PICTURE








7





Competition





The total social games industry was estimated at $3.65 billion and the online gambling industry was measured at $30.3 billion in 2010. Both social games and online gaming are healthy markets, and together they have the potential to accelerate each other’s growth: Online gambling monetizes very well on a per-player basis, and social games have a huge reach.





Together, the top five Facebook casino games – Texas HoldEm Poke (developed by Zynga), Slotomania (Playtika), DoubleDown Casino (Double Down Interactive), Bingo Blitz (Buffalo Studios) and Best Casino (diwip) – attract 49,800,000 monthly active users and 11,240,000 daily active users.





The following highlights our direct and indirect competitors:





Slotomania- Social Slot machine game acquired by Caesars Entertainment for $81 million.  Dec 2012 estimated Rev: $10.72 million.  Slotomania  serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 35 million registered users;





Double Down Casino - a social casino game offered on Facebook and mobile devices.  Monthly active users (MAU) is approximately 4.68 million players.  Recently acquired by International Gaming Technologies for $500 million.  Dec 2012 estimated Rev: $11.85 million;





Jackpot Party Casino - a social casino game offered on Facebook and mobile devices.  Monthly active users (MAU) is approximately 1.69 million players.   Dec 2012 estimated Rev: $3.29 million;





Further differentiating itself from the competition, Gamzio has enlisted the talents of high-level designers from the land-based slot machine industry to consult on gameplay.  Slot machines have been historically used offline.  The ability to draw from the knowledge of people who have experience  in the offline industry is invaluable.





Order Fulfillment





Gamzio holds no inventory and has programmed the completion of fulfillment requirements via digital in app purchases of virtual casino currency. Management has determined that when necessary, state of the art software and appropriate hardware will be implemented to assist in gaining maximum product sales productivity. Gamzio utilizes accounting procedures offline and online to monitor daily, weekly, monthly, quarterly and annual results of all aspects of its operations.


8


Advertising





Using realtime bidding (RTB) advertising platforms like AppFlood, Flurry, and Facebook; Gamzio can closely monitor acquisition costs, and divert ad-spend to the platforms providing downloads from players with the highest revenue per user.





With newly installed predictive analytics tracking, Gamzio can estimate the lifetime value (LTV) of a user within days as opposed to months as was the case previously.  In doing so, Gamzio is able to pinpoint the most profitable acquisition channels and scale up ad-spend.





Social Gaming Market


CHART GLOBAL GAMES MARKET PER REGION







9


A social network game is a type of online game that is played through social networks, and typically features multiplayer and asynchronous gameplay mechanics.  Social network games are most often implemented as games played on internet browsers but can also be implemented on other platforms such as mobile devices. Our focus initially is on mobile devices.
 
 They are amongst the most popular games played in the world, with several products with hundreds of millions of players.  FrontierVille, CityVille, Gardens of Time and The Sims Social are more recent examples of very popular social network games.
  Social Gamingrefers to the virality of playing socially integrated games of chance or skill for money by using a remote device such as a tablet computer, smartphone or a mobile phone with a wireless internet connection.
 
 According to a Juniper Research report released in September 2010, the total sum wagered on mobile casino games is expected to surpass $48 billion US dollars by 2015.
 
 The report bases this prediction on:
 
 (1) the high growth rates of mobile casinos, lotteries and sports betting providers in major emerging markets and China;
 (2) liberalization of mobile gambling legislation in Europe;
 (3) United States repealing the Unlawful Internet Gambling Enforcement Act of 2006, permitting people in the US to legally gamble online again.


Gamzio strives to target the digital media segment of the market that is in the ideal position to need its service, afford its service, and be in a position to act on purchasing premium content immediately.  The primary demographic for social slots games like Slots-O-Luck Adventure is females age 45-65.  As of January, 2013, the Social Casino Gaming segment shows an addressable market of 20.67 million users for the slots segment.


KEY PRODUCTS




Gamzio and its marketing team evaluates the market primarily from the standpoint of what the needs are of the individual consumer. We believe that players are rapidly moving from traditional console-based games that can cost $50 or more upfront, to all the free game content available for download on their mobile devices.  Gamzio is hoping to capitalize on this ideal timing by continuously creating high-quality content offered for free, with proven monetization strategies, and recurring revenue models in place to maximize player values.





By utilizing Gamzio’s proprietary technology, players are able to experience a distinctive social casino gaming experience. With Gamzio’s integration of social networks, we can identify trends of players that have the ability to link with and share game experiences with friends, family and other game enthusiasts.  With this unique integration, player acquisition cost is greatly reduced, which has the potential to result in increased revenues for the company.


10


Social Casino Industry





According to a Juniper Research report1 released in September 2010 the total sum wagered on mobile casino games is expected to surpass $48 billion US dollars by 2015, and could exceed $100 billion by 2017.  The report bases this prediction on (1) the high growth rates of mobile casinos, lotteries and sports betting providers in major emerging markets and China; (2) liberalization of mobile gambling legislation in Europe; and (3) repeal of the Unlawful Internet Gambling Enforcement Act of 2006, permitting people in the US to gamble legally online again.





However, the ’Social Casino Gaming’ market for the mobile gaming industry is fragmented and offers few well-known name brand competitors. Together, the top five Facebook casino games – Texas HoldEm Poke (developed by Zynga), Slotomania (Playtika), DoubleDown Casino (Double Down Interactive), Bingo Blitz (Buffalo Studios) and Best Casino (diwip) – attract 49,800,000 monthly active users and 11,240,000 daily active users.









Gamzio’s apps fall under 2 models - Premium and Freemium.  Slots-O-Luck Adventures HD is a Freemium app.





●
Premium apps generate revenue upfront with users paying a fee between $0.99 and $2.99 to initially download the app. Revenues for Premium title revenues are supplemented with in-app purchases ranging from $0.99 to $99.99.





●
Freemium apps, which is the model for Gamzio’s title - Slots-of-Luck Adventure - are high-quality free apps for the user to download and play.  Freemium apps work on an in-game virtual currency monetization system.  Users can unlock enhanced items and features within the app using the game’s virtual currency to enhance their experience with the games.  This virtual in-app currency can be earned though playing the base version of the game, or purchased with real money via in-app purchases ranging from $.99 to $199.99.  Freemium title revenues are also supplemented with ads shown in-game which users can opt to remove for a fee.





11


Lifetime customer value of social casino games has been shown to be $1-$3 per player.  For Real-Money games, player value can equal up to $1,800 (Source: Betable.com).  Player acquisition costs are significantly lower than lifetime player values.  Gamzio expects player acquisition costs to be approximately $1.00 to $2.50 per player.





By using analytics to analyze all aspects of player activity, player data, and virtual currency performance, Gamzio has the ability to create more efficient advertising campaigns with industry related advertisers, with the ultimate goal of maximizing revenues and decreasing player acquisition costs.  Gamzio has also developed a proprietary system within its games, to reward users for sharing Gamzio’s apps and games with friends.  Traditional “passive” methods of in-game sharing techniques have shown to be only mildly effective.  However Gamzio’s “active” incentivized in-game sharing system helps promote sharing of the games with other potential users.  We believe this not only reduces the cost of user acquisition, but could potentially increase revenues for the company.





Market Segmentation





We believe the industry presents an ever increasing market, a healthy bottom line, and excellent opportunities for growth. According to Morgan Stanley, in an optimistic scenario the social casino industry is on target to reach $7 billion by 2015. Born from the depths of SmartPhones and Facebook, the Social Gaming industry has experienced extremely fast growth in the five years prior to 2013, with IBISWorld estimating revenue to rise at an annualized rate of 304.2% to $2.8 billion. Industry operators have benefited from a customer base which possesses the ability to play and interact with their products, right in the palm of their hand. Social Gaming companies have also taken advantage of the increasingly connected population, with the number of mobile internet connections growing 57.6% in the five years prior to 2012. Industry revenue is expected to grow to $2.8 billion this year [in 2013]. In the five years prior to 2013, IBISWorld estimates that the number of industry firms will increase at an average of 175.3% annually to 632. However, the industry has already started to experience consolidation.





Digital Media - According to a new research report from Gartner, consumers are on track to spend a record $2.1 trillion on digital information and entertainment products this year. That figure is expected to hit $2.8 trillion by 2015. $1.2 trillion (62%) is spent on subscription-based communication services such as mobile, voice, and data services, broadband packages, video services, online gaming, and cable TV subscriptions. $600 billion, 28% of the total $2.1 trillion, is spent on devices themselves, and 10% is spent on content such as computer software, video on-demand, and pay-per-view services. Of the $2 trillion consumers spent globally on digital information and entertainment products and services, the largest spending segment was for communications subscription-based access and usage services. The $1.2 trillion included mobile and wired voice services; mobile data services, such as SMS/TXT and broadband; fixed broadband services; video services, such as subscriptions to pay TV; and the overall online gaming market.


12


The second-largest spending segment (28%) was for devices. The $600 billion is made up of consumer electronic devices, such as mobile/handheld devices, PCs and related devices, and stationary entertainment equipment. The smallest spending segment (10%) was for content and software for a total of $200 billion. Video content that has been purchased/rented/streamed/downloaded, as well as premium channel/pay per view (PPV)/video on demand (VOD), and that portion of pay TV subscriptions allocated to licensing fees made up half of this segment, while the other half was for PC and gaming software, digital music and books, and overall purchases from mobile apps stores.





Online Advertising Market - U.S. online advertising spending is expected to grow 23.3% to $39.5 billion this year, pushing it ahead of total advertising spending in print newspapers and magazines, according to an eMarketer report. Meanwhile, print advertising spending is expected to fall to $33.8 billion in 2012 from $36 billion last year, the market research company said. The 2012 estimates come after a robust year for United States advertising in 2011. eMarketer said online ad spending grew 23% to $32.03 billion last year while total ad spending rose 3.4% to $158.9 billion. Overall, total media ad spending in the United States is expected to grow an estimated 6.7% to $169.48 billion.





The primary driver of the change in projected spending is greater ad spending on Facebook, by far the biggest player in the space. eMarketer predicts ad spending on the world’s top social network will reach $2.19 billion in the U.S. this year and just over $4 billion worldwide; both more than double last year’s figure. United States advertisers are expected to spend $12.33 billion on online display ads this year, a gain of nearly 25% from a year earlier. These projected gains in display ad spending are narrowing the traditional gap between these types of ads and those placed next to Internet search results. Spending on search ads will reach $14.38 billion this year, up 20% from a year ago. In 2015, there will be over 285 million U.S. Internet users and over 2.6 billion global Internet users. The amount of time Internet users spend online per week has also increased. U.S. Internet users spent 15.3 hours a week online last year.





Mobile Advertising Market – According to eMarketer, the U.S. mobile ad market is expected to generate $2.61 billion. eMarketer predicts that spend in mobile search will double in 2012, with $1.28 billion spent in the medium compared to $652.5 million in 2011. Higher-value display and rich-media ads will see less investment, which could either be a sign that mobile is still working to earn its stripes as a credible medium with big brands, or a tacit belief that these formats simply are not working as effectively as search at the moment. Display will be worth $861.7 million, a rise of 93.5% on 2011; video will be worth $151.5 million, a very respectable rise of 122%.





Market Overview for Ad Audience Mobile and Online:


United States
WorldwideIn 2015 - over 285 million Internet users

In 2015 - over 335 million PCs in use

Over 80% of office workers use PCs

Over 95% of households will have PCs

There will be over 340 million cell phones in use

There will be 195 million wireless Internet users
In 2015 - over 2.6 billion Internet users

In 2015 - over 1.9 billion PCs in use

Over 65% of office workers use PCs

Over 50% of households will have PCs

There will be over 5 billion cell phones in use

There will be 2 billion wireless Internet users





Distribution





Gamzio believes that the best places to promote its services are through online exposure such as the Apple iTunes Store, and high-volume distribution networks. Creative campaigns will be developed to engage prospective clients through CPI, banner advertising, Pre-Roll ads, Mobile Install Ads with Facebook, as well as strategic partnerships with download networks offering a near unlimited amount of players for acquisition. Gamzio is excited about its position in relationship to its competition. Management has discovered innovative and creative ways of acquiring components that may translate into maximization of userbase monetization.





The need for a low-based cost that transcends to a lower net cost prior to sale and therefore transcends into a greater profit is what keeps Gamzio on the cutting edge and potentially allows it to compete with its peers on a favorable basis.





Marketing Strategy




Sales, Marketing and Distribution




We market, sell and distribute our games primarily through direct-to-consumer digital storefronts, such as Apple’s App Store. In the future we may also sell and distribute on Facebook, Mac App Store, Google Chrome, the Google Play Store, Amazon’s Appstore, Microsoft’s Xbox Live Marketplace and the Samsung App Store.


13


We also intend to work with third parties, including Facebook, to recruit new players. As part of our efforts to successfully market our games on the direct-to-consumer digital storefronts, we intend to educate the storefront owners about our games. We believe that the featuring or prominent placement of our games facilitates organic user discovery and has the potential to result in our games achieving a greater degree of commercial success.





Pricing Strategy





Gamzio has, after careful consideration, decided to align its game pricing at a freemium model (free to download with in app purchases) level in comparison to some of its competitors. This fits in perfectly with where we see ourself positioned in the total marketplace and from communication with our customer base, as far as getting appropriate value and still maintaining sufficient motivation for high volume. Gamzio looks to create a universal, cross-platform social casino gaming environment for players worldwide. We anticipate that players will also share Gamzio games with their contacts, propagating more viral sales.





Promotion Strategy





The management of Gamzio believes strongly in press releases to promote the value of its services. This will always be a focus of its promotion efforts. However, though this is a crucial part, this is only one part of its promotion strategy. The Company will be promoting what it does through paid downloads (CPIs), partnerships, online activity, email, word of mouth and referrals from other customers. This along with all the individual selling efforts of its staff demonstrates a dynamic way for it to infiltrate the marketplace.





In addition to our efforts to secure prominent featuring or placement for our games, we have also undertaken a number of marketing initiatives designed to acquire customers and increase downloads of our games and increase sales of virtual currency, including:




•
Undertaking extensive outreach efforts with video game websites and related media outlets, such as providing reviewers with access to our games prior to launch;




•
Paying third parties, such as Tapjoy, AdMob, iAd or Flurry, to advertise to targeted consumers to download our games through offers or recommendations;


•
Using “push” notifications to alert users of sales on virtual currency or items in our games;





•
Cross-promoting our games through banner advertisements in our other games, as well as advertising our games in our competitors’ games; and




•
Using social networking websites, such as Facebook and Twitter, to build a base of fans and followers to whom we can quickly and easily provide information about our games.





The main challenge of today’s game companies is App Store discoverability.  Gamzio realizes that in creating strategic partnerships with companies with massive distribution channels, and sources of new players, the discoverability issue may be ameliorated.





Gamzio has teamed up with a number of industry veterans and strategic partners who specialize in app discoverability and distribution.  In doing so, Gamzio hopes to expand the distribution of its games and apps worldwide.





Government Regulation





We are subject to a number of domestic and foreign laws and regulations that affect our business. Not only are these laws constantly evolving, which could result in their being interpreted in ways that could harm our business, but legislation is also continually being introduced that may affect both the content of our products and their distribution. In the United States, for example, numerous federal and state laws have been introduced which attempt to restrict the content or distribution of games. Legislation has been adopted in several states, and proposed at the federal level, that prohibits the sale of certain games to minors. In order to address concerns relating to these new laws, we explicitly include in our download page in the Apple iTunes Store the following disclaimer: “This game is for entertainment purposes only, and is not intended for those under 18 year of age, and in some cases, 21 years of age.”


14


We may also be required to modify certain games or alter our marketing strategies to comply with new and possibly inconsistent regulations, which could be costly or delay the release of our games. For example, the United Kingdom’s Office of Fair Trading issued proposed principles in September 2013 relating to in-app purchases in free-to-play games that are directed towards children 16 and under, which principles are expected to become effective in the first quarter of 2014. The Federal Trade Commission has also indicated that it intends to review issues related to in-app purchases, particularly with respect to games that are marketed primarily to minors. In addition, two self-regulatory bodies in the United States (the Entertainment Software Rating Board) and the European Union ( Pan European Game Information) provide consumers with rating information on various products such as entertainment software similar to our products based on the content (for example, violence, sexually explicit content, language). Furthermore, the Chinese government has adopted measures designed to eliminate violent or obscene content in games. In response to these measures, some Chinese telecommunications operators have suspended billing their customers for certain mobile gaming platform services, including those services that do not contain offensive or unauthorized content, which could negatively impact our revenues in China.





Furthermore, the growth and development of free-to-play gaming and the sale of virtual goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours. We anticipate that scrutiny and regulation of our industry will increase and that we will be required to devote legal and other resources to addressing such regulation. For example, existing laws or new laws regarding the regulation of currency and banking institutions may be interpreted to cover virtual currency or goods. If that were to occur we may be required to seek licenses, authorizations or approvals from relevant regulators, the granting of which may depend on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs.





We are also subject to federal, state and foreign laws regarding privacy and the protection of the information that we collect regarding our users, which laws are currently in a state of flux and likely to remain so for the foreseeable future. The U.S. government, including the Federal Trade Commission and the Department of Commerce, is continuing to review the need for greater regulation over collecting information concerning consumer behavior on the Internet and on mobile devices. For example, in December 2012, the Federal Trade Commission adopted amendments to the Children’s Online Privacy Protection Act to strengthen privacy protections for children under age 13, which amendments became effective on July 1, 2013. In addition, the European Union has proposed reforms to its existing data protection legal framework. Various government and consumer agencies have also called for new regulation and changes in industry practices. For example, in February 2012, the California Attorney General announced a deal with Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion to strengthen privacy protection for users that download third-party apps to smartphones and tablet devices. In response to developments in the interpretation and understanding of regulations such as these and guidance we make our privacy policy readily accessible to players of our games as required by the California Online Privacy Protection Act.





In the area of information security and data protection, we are subject to state laws requiring notification to users when there is a security breach for personal data, such as the 2002 amendment to California’s Information Practices Act, or requiring the adoption of minimum information security standards.





CUSTOMER LOYALTY TECHNOLOGY





We have developed a proprietary technology platform designed to provide merchants with a new method of marketing to existing and loyal customers.  We generate revenue primarily through transaction fees associated with the use of our deal management software (“DMS”).   The deal management software provides companies of all sizes the ability to create their own electronic discount offers (coupons), make those offers available to targeted customer groups, and send them out through their own distribution channels.





We generate revenues by collecting a small transaction fee for the use of the DMS.  Consumers purchase “deal offers” from Gamzio for $1, locking in the merchant’s future discounted deal. When the purchased deal offer is redeemed, the consumer then pays the merchant directly for full cost of the deal.  The platform is provided at no cost to the merchant, with the merchant’s customer paying us a $1 fee for the right to the merchant’s deal at a future time.





Our DMS was officially introduced to the golf industry in January 2012 at the PGA Merchandise Show through the website eTeeoff.com, an easy-to-use platform to connect golf merchants to consumers. We signed a Memorandum of Agreement with TapIn Solutions, LLC to make eTeeoff and DMS available to their network of 3,400 golf courses and 450 product distributors across the country.


15


Operations





To date we have not generated any revenue through this business segment.





Since the acquisition of MDT, we have had significant on-going operations, developed proprietary software to use in our products, developed and launched a product, eTeeoff.com, created a marketing plan and sales team, hired contract employees and management and have been actively seeking potential acquisition or development targets, and negotiating and closing transactions with such targets.





Our current and future operations are and will be focused on continuing to carry out our business plan through the marketing and continued development of our deal management software, and our future products, continued software development efforts, the integration of the intellectual property we have acquired through MDT, and the continued evaluation of potential strategic acquisitions and/or partnerships.





Products





Our deal management software (DMS) provides companies of all sizes with the ability to not only enter the e-commerce space, but a clear path of adoption to fast growing mobile-commerce transactions. With this significant cultural and technological shift taking place, we use flexible design to integrate our platform with iPhone, android and even javascript enabled blackberry devices.





Our innovative model involves an intuitive and integrated interface for both web and mobile platforms, and has been designed for the needs of merchants and consumers.  Along with high quality professional support, creating and promoting deal offers through our platform is as easy as sending an email. Redeeming a deal is simply a matter of hitting a button on a phone, scanning a QR code, or entering a deal ID.





Strategy





Our customer loyalty technology segment will be an m-Commerce transaction-supported business. We plan to derive most of our revenue in this segment from fees levied on transactions conducted through any one of our m-Commerce platforms. Initially, revenues will be generated from the purchase of a “deal coupon” which guarantees to the consumer a special discount on goods and services from a specific merchant. Deals can be purchased through our mobile applications, as well as through our web-based e-Commerce sites. E-commerce, or electronic commerce, is also known as eCommerce or e-comm. It refers to the buying and selling of products or services over electronic systems such as the Internet.





Pricing





Our strategy will be to derive revenue primarily from a small fee levied on all transactions conducted on any one of our m-Commerce platforms. This transaction fee is based on a sliding scale and varies depending on the full cost of the merchant’s offer, the discounted price of the offer, and the relationship of both of these to the percentage discount being offered. We have established an optimal minimum price of $1 per coupon transaction to cover servicing costs such as: deal assemblage, advertising and promotional costs, platform support, and other related expenses. The intent of this pricing model is to offer excellent deals to customers with as little cost as possible passed onto the merchants, allowing merchants to offer bigger and better deals as often as they wish without sacrificing profits.





Marketing





We develop web and mobile-based e-coupon websites catering to targeted lifestyle demographics. These sites are designed to attract merchants to use our transaction engine. Our management team is particularly experienced in developing joint promotions and partnerships with the dual purpose of expanding both our merchant base and the number of consumers who purchase merchant offers.





Our primary goal is to match merchants and consumers through our transactional m-Commerce applications and software. The Company intends to develop targeted geographic and vertical-specific promotions that appeal to global, national and regional audiences. These promotions will be rolled out strategically to coincide with the growth of each of the Company’s lifestyle vertical properties.





To further grow merchants’ market potential, we intend to allow merchants to easily enter the m-Commerce space by offering easy-to-use coupon apps, or application software, designed specifically for smartphones. To that end, we intend to develop mobile apps for the Apple iPhone, as well as for the Android, RIM and other mobile phone operating systems.


16


Technology





We continue to develop proprietary transactional m-Commerce applications that allow merchants to participate in the online customer loyalty and daily deal promotional market. Designed as a SaaS-based platform, it will allow merchants to easily launch and integrate a daily deal/coupon system into their electronic marketing program.





Smartphones are increasingly being used as a transactional tool and mobile wallet. We intend for our products and services to be at the forefront of this growth. Utilizing our existing in-house expertise we intend to release new versions of our technology platform over the next 12 months to incorporate many of the following tools and applications:





·
m-Commerce transactional engine;·
m-Commerce platform to enable merchants to create electronic coupons, promotions and daily deals;





·
Mobile applications to integrate e-coupon applications to the mobile platform;·
Social media tools and applications; and





·
Detailed reporting and analytics.





Industry





Online Commerce





According to eMarketer, in 2011, approximately 179 million consumers ages 14 and older in the United States will research products online and 83% of them will make an online purchase. With the rise of online commerce, the user experience has improved with easy-to-use interfaces, broad selection, enhanced search, rich media and streamlined payment options. Additionally, improved capabilities of inventory management systems, logistics infrastructure and ground and air transportation have provided fast and affordable delivery


of consumer products.





Mobile Commerce





Within the online commerce industry, m-Commerce activity is growing quickly and is predicted to reach $119 billion by 2015. The primary medium for m-Commerce is the smartphone, a device that had garnered 312 million subscribers worldwide by the end of 2010. That number is expected to top 500 million by the end of 2011.





Smartphone owners are increasingly using their phones to shop, browse and research for products. Over a quarter of users now use their smartphone to find product information on a regular basis. Of even greater significance is the fact that half of all smartphone owners have completed a purchase on their phones, while 11% now use it to make a purchase on a weekly basis. The smartphone easily carries coupons, handles a variety of rewards cards and tools and can be used to pay during the check-out process.





In addition to the use of m-Commerce as a retail point of sale, companies have found diverse ways to broaden the use of m-Commerce. Many businesses have developed mobile applications that not only allow customers to purchase products with their mobile device but also spark interest that can generate foot traffic to traditional brick and mortar stores. Other companies use mobile applications not simply to attract customers, but to enhance existing customers’ overall experience or to present unique advertising campaigns.





Top m-Commerce retailers globally include: Taobao, Amazon and eBay. On eBay alone, consumers bought and sold over $2 billion worth of merchandise via mobile in 2010. It is estimated that the US m-Commerce market will be approximately $31 billion by 2016.


17


Competition





Competitors in the online couponing space include Groupon, Living Social and, more recently, Google Offers. These services have increased rapidly of late partly due to the economic downturn; consumers are more interested in searching out the best deals on products. Groupon now has over 50 million subscribers in 35 countries, and the company claims it has saved consumers over a billion dollars and generated hundreds of millions of dollars for businesses.





Most e-couponing services sell a “Deal of the Day”, offering significant savings for local restaurants, service providers, activities and memberships, and generate revenue by taking a commission from the merchant. Often this commission is large and merchants break even at best. For example, Groupon’s revenue is the purchase price paid by the customer for the Groupon. Their gross profit is the amount Groupon retains after paying an agreed-upon percentage of the purchase price to the featured merchant.





Sites like Groupon require a certain number of buy-ins before the deal becomes active. This creates the incentive to share the deal with friends and family, until “the deal is on.” By combining the viral nature of the social web with hard-to-replicate deals, Groupon has created a network-effects business for commerce that makes its model highly attractive. Living Social does not require a minimum number of buy-ins, but strongly encourages customers to share the deal and is extremely active on Facebook and Twitter, engaging customers in an ongoing conversation.





All competitors generally follow the same methods of deal delivery – a daily email, a website, and a mobile site. Email subscribers are offered discounts for goods and services that are targeted to their location and personal preferences. A typical deal might offer a $20 coupon that can be redeemed for $40 in value at a restaurant, spa, yoga studio, car wash or other local merchant.





Government Regulations





Our business will be subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet, many of which are still evolving and could be interpreted in ways that could harm our business. These regulations and laws may involve taxation, tariffs, subscriber privacy, data protection, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce.





In addition, it is possible that governments of one or more countries may seek to censor content available on our websites or may even attempt to completely block access to our websites. Accordingly, adverse legal or regulatory developments could substantially harm our business.





Our e-coupons may be considered gift cards, gift certificates, stored value cards or prepaid cards and therefore governed by, among other laws, the CARD Act and state laws governing gift cards, stored value cards and coupons. Many of these laws contain provisions governing the use of gift cards, gift certificates, stored value cards or prepaid cards, including specific disclosure requirements and prohibitions or limitations on the use of expiration dates and the imposition of certain fees.





In addition, certain states and foreign jurisdictions have requirements for disclosure and product terms and conditions, including expiration dates and permissible fees, which might apply to us. Some states and foreign jurisdictions also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations.





Many states have passed laws requiring notification to subscribers when there is a security breach of personal data. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection laws in Europe and other jurisdictions outside the United States may be more restrictive, and the interpretation and application of these laws are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. Furthermore, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for linking to third-party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business


18


Employees





Currently, we have five three time contracted employees which includes our CEO.  We have also hired part-time employees to assist in the on-going operations of the Company.  Other work, including work relating to our sales efforts, is subcontracted to consultants on an as-needed basis.  We intend to grow our employee base based on the demands and requirements of the business.




ITEM1A— RISK FACTORS





You should carefully consider the risks described below together with all of the other information included in our public filings before making an investment decision with regard to our securities. If any of the following events described in these risk factors actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.





Risks Relating to Our Business and Industry





We have no revenues and have incurred and expect to continue to incur substantial losses.





Since inception through December 31, 2013, we have not generated any revenues and we have generated significant operating losses since our formation and given our recent shift in business focus we expect to incur substantial losses and negative operating cash flows for the foreseeable future.  For the year ended December 31, 2013, our net loss was $135,435 and as of December 31, 2013our accumulated deficit, was $332,467.  We anticipate that our existing cash and cash equivalents will not be sufficient to fund our short term business needs, and we will need to generate revenue or receive additional investment in the Company to continue operations.  In addition, our business operations may prove more expensive than we currently anticipate and we may incur significant additional costs and expenses.  We expect that capital outlays and operating expenditures will continue to increase as we attempt to expand our infrastructure and development activities, and we will require significant additional capital in order to implement our business plan and continue our operations.





Our auditors have expressed uncertainty as to our ability to continue as a going concern.





Primarily as a result of our recurring losses and our lack of liquidity, we received a report from our independent auditors that includes an explanatory paragraph describing the substantial uncertainty as to our ability to continue as a going concern as of our fiscal year ended December 31, 2013.





We have a relatively new and evolving business model with a short operating history.


•
we may have difficulty optimizing the monetization of our games due to our relatively limited experience creating games that include micro-transaction capabilities, advertising and offers, as well as our limited experience in offering the features that are often associated with free-to-play games published by games-as-a-service companies, such as tournaments, live events and more frequent content updates;•
we intend to develop our games based upon our own intellectual property, rather than well-known licensed brands, and we may encounter difficulties in generating sufficient consumer interest in and downloads of our games;•
many well-funded public and private companies have released, or plan to release, free-to-play games,, and this competition will make it more difficult for us to differentiate our games and derive significant revenues from them;•
free-to-play games, have a relatively limited history, and it is unclear how popular this style of game will become or remain or its revenue potential;•
our free-to-play strategy assumes that a large number of players will download our games because they are free and that we will then be able to effectively monetize the games; however, players may not widely download our games for a variety of reasons, including poor consumer reviews or other negative publicity, ineffective or insufficient marketing efforts, lack of sufficient community features, lack of prominent storefront featuring and the relatively large file size of some of our games—our thick-client games may utilize a significant amount of the available memory on a user’s device, and due to the inherent limitations of the smartphone platforms and telecommunications networks, which only allow applications that are less than 100 megabytes to be downloaded over a carrier’s wireless network, players must download one of our thick-client games either via a wireless Internet (wifi) connection or initially to their computer and then side-loaded to their device;•
even if our games are widely downloaded, we may fail to retain users or optimize the monetization of these games for a variety of reasons, including poor game design or quality, lack of community features, gameplay issues such as game unavailability, long load times or an unexpected termination of the game due to data server or other technical issues, or our failure to effectively respond and adapt to changing user preferences through game updates;•
we may have difficulty hiring the additional monetization, live operations, server technology, user experience and product management personnel that we require to support our games  and incorporating our products;•
we will depend on the proper and continued functioning of our own servers and third-party infrastructure to operate;•
the billing and provisioning capabilities of some smartphones and tablets are currently not optimized to enable users to purchase games or make in-app purchases, which make it difficult for users of these smartphones and tablets to purchase our games or make in-app purchases and could reduce our addressable market, at least in the short term; and•
the Federal Trade Commission has indicated that it intends to review issues related to in-app purchases, particularly with respect to games that are marketed primarily to minors, and the commission might issue rules significantly restricting or even prohibiting in-app purchases or name us as a defendant in a future class-action lawsuit.





If we do not achieve a sufficient return on our investment with respect to our free-to-play business model, it will negatively affect our operating results and may require us to formulate a new business strategy.




19


We will derive our revenues from Apple’s App Store, and if we are unable to maintain a good relationship with each of Apple or if the storefront was unavailable for any prolonged period of time, our business will suffer.




The majority of our smartphone revenues will be derived from Apple’s iOS platform. We will generatethe majorityof these iOS-related revenues from in-app purchases made through the Apple App Store.  We believe that we have good relationships with Apple.  Accordingly, any change or deterioration in our relationship with Apple could materially harm our business and likely cause our stock price to decline.  We also rely on the continued functioning of the Apple App Store. In the past the digital storefront has been unavailable for short periods of time or experienced issues with their in-app purchasing functionality. If either of these events recurs on a prolonged basis or other similar issues arise that impact our ability to generate revenues from these storefronts, it would have a material adverse effect on our revenues and operating results. In addition, if the storefront operators fail to provide high levels of service, our end users’ ability to access our games may be interrupted or end users may not receive the virtual currency or goods for which they have paid, which may adversely affect our brand.




The operators of digital storefronts on which we publish our free-to-play games in many cases have the unilateral ability to change and interpret the terms of our contract with them.




The distribution terms and conditions are often “click through” agreements that we are not able to negotiate with the storefront operator. For example, we are subject to each of Apple’s standard click-through terms and conditions for application developers, which govern the promotion, distribution and operation of applications, including our games, on their storefronts. Apple can unilaterally change their standard terms and conditions with no prior notice to us. In addition, the agreement terms can be vague and subject to changing interpretations by the storefront operator. For example, in the second quarter of 2011, Apple began prohibiting certain types of virtual currency-incented advertising offers in games sold on the Apple App Store.Most recently, Apple informed us early in the fourth quarter of 2012 that we could no longer include links to Tapjoy’s HTML5 website in our games, which has since negatively impacted our ability to generate revenue through incented offers and will likely continue to negatively impact our revenues in future periods. Any similar changes in the future that impact our revenues could materially harm our business, and we may not receive significant or any advance warning of such change. In addition, Apple has the right to prohibit a developer from distributing its applications on its storefront if the developer violates its standard terms and conditions. If Apple or any other storefront operator determines that we are violating its standard terms and conditions, by a new interpretation or otherwise or prohibits us from distributing our games on its storefront, it would materially harm our business and likely cause our stock price to significantly decline.




The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.




Developing, distributing and selling mobile games is a highly competitive business, characterized by frequent product introductions and rapidly emerging new platforms, technologies and storefronts. For end users, we compete primarily on the basis of game quality, brand and customer reviews. We compete for promotional and storefront placement based on these factors, as well as our relationship with the digital storefront owner, historical performance, perception of sales potential and relationships with licensors of brands and other intellectual property. For content and brand licensors, we compete based on royalty and other economic terms, perceptions of development quality, porting abilities, speed of execution, distribution breadth and relationships with storefront owners or carriers. We also compete for experienced and talented employees.


20


We compete with a continually increasing number of companies, including Gluu Mobile Inc., Zynga, DeNA, Gree, Nexon and many well-funded private companies, including Kabam, King, Rovio, Storm 8/Team Lava and Supercell. We also compete for consumer spending with large companies, such as Activision, Electronic Arts (EA Mobile), Gameloft and Take-Two Interactive, whose games for smartphones and tablets are primarily premium rather than free-to-play. In addition, given the open nature of the development and distribution for smartphones and tablets, we also compete or will compete with a vast number of small companies and individuals who are able to create and launch games and other content for these devices using relatively limited resources and with relatively limited start-up time or expertise. As an example of the competition that we face, it has been estimated that more than 170,000 active games were available on Apple’s App Store as of October 31, 2013. The proliferation of titles in these open developer channels makes it difficult for us to differentiate ourselves from other developers and to compete for end users without substantially increasing our marketing expenses and development costs.




•
significantly greater financial resources;•
greater experience with the free-to-play games and games-as-a-service business model and more effective game monetization;•
stronger brand and consumer recognition regionally or worldwide;•
greater experience integrating community features into their games, operating as a games-as-a-service company and increasing the revenues derived from their users;•
the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products;•
larger installed customer bases from related platforms, such as console gaming or social networking websites, to which they can market and sell mobile games;•
more substantial intellectual property of their own from which they can develop games without having to pay royalties;•
lower labor and development costs and better overall economies of scale;•
greater platform-specific focus, experience and expertise; and•
broader global distribution and presence.




If we are unable to compete effectively or we are not as successful as our competitors in our target markets, our sales could decline, our margins could decline and we could lose market share, any of which would materially harm our business, operating results and financial condition.




Consumer tastes are continually changing and are often unpredictable, and we compete for consumer discretionary spending against other forms of entertainment; if we fail to develop and publish new mobile games that achieve market acceptance, our sales would suffer.




Our business depends on developing and publishing mobile games that consumers will want to download and spend time and money playing. We must continue to invest significant resources in research and development, analytics and marketing to introduce new games and continue to update our successful free-to-play games, and we often must make decisions about these matters well in advance of product release to timely implement them. Our success depends, in part, on unpredictable and volatile factors beyond our control, including consumer preferences, competing games, new mobile platforms and the availability of other entertainment activities. If our games and related applications do not meet consumer expectations, or they are not brought to market in a timely and effective manner, our business, operating results and financial condition would be harmed. Even if our games are successfully introduced and initially adopted, a failure to continue to update them with compelling content or a subsequent shift in the entertainment preferences of consumers could cause a decline in our games’ popularity that could materially reduce our revenues and harm our business, operating results and financial condition. Furthermore, we compete for the discretionary spending of consumers, who face a vast array of entertainment choices, including games played on personal computers and consoles, television, movies, sports and the Internet. If we are unable to sustain sufficient interest in our games compared to other forms of entertainment, our business and financial results would be seriously harmed.


21


If we do not successfully establish and maintain awareness of our brand and games, if we incur excessive expenses promoting and maintaining our brand or our games or if our games contains defects or objectionable content, our operating results and financial condition could be harmed.




We believe that establishing and maintaining our brand is critical to establishing a direct relationship with end users who purchase our products from direct-to-consumer channels and to maintaining our existing relationships with distributors and content licensors, as well as potentially developing new such relationships. Increasing awareness of our brand and recognition of our games is particularly important in connection with our strategic focus of developing games based on our own intellectual property. Our ability to promote the Gamzio brand and increase recognition of our games depends on our ability to develop high-quality, engaging games. If consumers, Digital Storefront owners and branded content owners do not perceive our existing games as high-quality or if we introduce new games that are not favorably received by them, then we may not succeed in building brand recognition and brand loyalty in the marketplace. In addition, globalizing and extending our brand and recognition of our games is costly and involves extensive management time to execute successfully, particularly as we expand our efforts to increase awareness of our brand and games among international consumers. Even if we significantly increased our sales and marketing expenditures in connection with the launch of our games, these efforts may not succeed in increasing awareness of our brand or the new games. If we fail to increase and maintain brand awareness and consumer recognition of our games, our potential revenues could be limited, our costs could increase and our business, operating results and financial condition could suffer.




In addition, if a game contains objectionable content, we could experience damage to our reputation and brand. In addition, one of our employees or an employee of an outside developer could include hidden features in one of our games without our knowledge, which might contain profanity, graphic violence, sexually explicit or otherwise objectionable material. If consumers believe that a game we published contains objectionable content, it could harm our brand, consumers could refuse to buy it or demand a refund, and could pressure the digital platform operators to no longer allow us to publish the game on their platforms. Similarly, if one of our games is introduced with defects or has playability issues, it could results in negative user reviews and damage our brand. These issues could be exacerbated if we do not timely and adequately address issues that our users have encountered with our games.




Wewill dependon only one game for a significant portion of our revenuesin the near futureandifthe game does not succeed or we do not releasenew games that aresuccessful, our business will fail.




In the mobile gaming industry, new games are frequently introduced, but a relatively small number of games account for a significant portion of industry sales. Similarly,wehavereleasedjust one game,  Slots-O-Luck Adventure HD. Ourgrowth depends on our ability to consistently launch new games that generate significant revenues. Developing and launching our games and providing future content updates requires us to invest significant time and resources with no guarantee that our efforts will result in significant revenues. If our new games are not successful or if we are not able to cost-effectively extend the lives of our successful games, our revenues could be limited and our business and operating results would suffer.




We rely on a combination of our own servers and technology and third party infrastructure to operate our games. If we experience any system or network failures, cyber-attacks or any other interruption to our games, it could reduce our sales, increase costs or result in a loss of revenues or end users of our games.




We rely on Digital Storefronts and other third-party networks to deliver games to our customers and on their or other third parties’ billing systems to track and account for our game downloads. Wealso rely on our own servers and third-party infrastructure to operate, however, we could experience unexpected technical problems. Any technical problem with, cyber-attack on, or loss of access to these third parties’ or our systems, servers or other technologies, could result in the inability of end users to download or play our games, cause interruption to gameplay, prevent the completion of billing for a game or result in the loss of users’ virtual currency or other in-app purchases, interfere with access to some aspects of our games or result in the theft of end-user personal information. In addition, if virtual assets are lost, or if users do not receive their purchased virtual currency, we may be required to issue refunds, we may receive negative publicity and game ratings, we may lose users of our games, and we may become subject to regulatory investigation or class action litigation, any of which would negatively affect our business. Any of these problems could harm our reputation or cause us to lose end users or revenues or incur substantial repair costs and distract management from operating our business.


22
 If we fail to maintain and enhance our capabilities for porting games to a broad array of mobile devices, particularly those utilizing the Android operating system, our revenues and financial results could suffer.




We derive all of our revenues from the sale of Slots-O-Luck Adventure HD which is available for smartphones and tablets that utilize Apple’s iOS operating systems. Unlike the Apple ecosystem in which Apple controls both the device (iPhone, iPod Touch and iPad) and the storefront (Apple’s App Store), the Android ecosystem is highly fragmented since a large number of OEMs manufacture and sell Android-based devices that run a variety of versions of the Android operating system, and there are many Android-based storefronts in addition to the Google Play Store. For us to sell our games to the widest possible audience of Android users, we must port our games to a significant portion of the more than 700 Android-based devices that are commercially available, many of which have different technical requirements. Since the number of Android-based smartphones and tablets shipped worldwide is growing significantly, it is important that we maintain and enhance our porting capabilities, which could require us to invest considerable resources in this area. These additional costs could harm our business, operating results and financial condition. In addition, we must continue to increase the efficiency of our porting processes or it may take us longer to port games to an equivalent number of devices, which would negatively impact our margins. If we fail to maintain or enhance our porting capabilities, our revenues and financial results could suffer.





We may need to raise additional capital or borrow funds to grow our business, and we may not be able to raise capital or borrow funds on terms acceptable to us or at all.




We expect to continue to use cash in our operations during 2014 as we seek to grow our business.  If our cash and cash equivalents and cash inflows are insufficient to meet our cash requirements or if we wish to strengthen our balance sheet, we will need to seek additional capital, and we may be unable to do so on terms that are acceptable to us or at all. Equity financings would dilute our existing stockholders, particularly given our current stock price, and the holders of new securities may receive rights, preferences or privileges that are senior to those of existing stockholders. Alternatively, we may wish to enter into a credit facility or other debt arrangement, and we may be unable to procure one on terms that are acceptable to us, particularly in light of the current credit market conditions.  If we require new sources of financing but they are insufficient or unavailable, we would be required to modify our operating plans to align them with available resources, which would harm our ability to grow our business.





Our acquisition activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions.




We may acquire companies, products and technologies that complement our strategic direction. Acquisitions involve significant risks and uncertainties, including:




•
diversion of management time and a shift of focus from operating the businesses to issues related to integration and administration;•
inability to successfully integrate the acquired technology and operations into our business and maintain uniform standards, controls, policies and procedures;•
challenges retaining the key employees, customers and other business partners of the acquired business;•
inability to realize synergies expected to result from an acquisition;•
an impairment of acquired goodwill and other intangible assets in future periods would result in a charge to earnings in the period in which the write-down occurs;•
the internal control environment of an acquired entity may not be consistent with our standards and may require significant time and resources to improve;•
in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries; and•
liability for activities of the acquired companies before the acquisition, including violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities.




In addition, if we issue equity securities as consideration in an acquisition, our current stockholders’ percentage ownership and earnings per share would be diluted. Because acquisitions are inherently risky, our transactions may not be successful and may, in some cases, harm our operating results or financial condition.


23
 If we fail to deliver our games at the same time as new mobile devices are commercially introduced, our sales may suffer.




Our business depends, in part, on the commercial introduction of new mobile devices with enhanced features, including larger, higher resolution color screens, improved audio quality, and greater processing power, memory, battery life and storage. For example, the introduction of new and more powerful versions of Apple’s iPhone and iPad and devices based on Google’s Android operating system, have helped drive the growth of the mobile games market. In addition, consumers generally purchase the majority of content, such as our Slots-O-Luck Adventure HD game, for a new device within a few months of purchasing it. We do not control the timing of these device launches. If we do not adequately build into our title plan the demand for games for a particular mobile device or experience game launch delays, we miss the opportunity to sell games when new mobile devices are shipped or our end users upgrade to a new mobile device, our revenues would likely decline and our business, operating results and financial condition would likely suffer.




Our business and growth may suffer if we are unable to hire and retain key personnel.




Our future success will depend, to a significant extent, on our ability to retain and motivate our key personnel, namely our management team, particularly Jason Deiboldt, our President, as well as experienced game development personnel.  To grow our business, execute on our business strategy and replace departing employees, we must identify, hire and retain qualified personnel, particularly additional monetization, live operations, server technology, user experience and product management personnel to support our company. Competition for qualified management, game development and other staff can be intense. Attracting and retaining qualified personnel may be particularly difficult for us if our stock price remains relatively depressed, since individuals may elect to seek employment with other companies that they believe have better long-term prospects. Competitors have in the past and may in the future attempt to recruit our employees, and our management and key employees are not bound by agreements that could prevent them from terminating their employment at any time. In addition, we do not maintain a key-person life insurance policy on any of our officers. Our business and growth may suffer if we are unable to hire and retain key personnel.




If we do not adequately protect our intellectual property rights, it may be possible for third parties to obtain and improperly use our intellectual property and our business and operating results may be harmed.




Our intellectual property is essential to our business. We will rely on a combination of copyright, trademark, trade secret and other intellectual property laws and contractual restrictions on disclosure to protect our intellectual property rights. To date, we have not sought patent protection, so, we will not be able to protect our technologies from independent invention by third parties. Despite our efforts to protect our intellectual property rights, unauthorized parties may attempt to copy or otherwise to obtain and use our technology and games. Further, some of our competitors have released games that are nearly identical to successful games released by their competitors in an effort to confuse the market and divert users from the competitor’s game to the copycat game. To the extent that these tactics are employed with respect to any of our games, it could reduce our revenues that we generate from these games. Monitoring unauthorized use of our games is difficult and costly, and we cannot be certain that the steps we have taken will prevent piracy and other unauthorized distribution and use of our technology and games, particularly in certain international jurisdictions, such as China, where the laws may not protect our intellectual property rights as fully as in the United States. In the future, we may have to litigate to enforce our intellectual property rights, which could result in substantial costs and divert our management’s attention and our resources.




In addition, although we require our third-party developers to sign agreements not to disclose or improperly use our trade secrets and acknowledging that all inventions, trade secrets, works of authorship, developments and other processes generated by them on our behalf are our property and to assign to us any ownership they may have in those works, it may still be possible for third parties to obtain and improperly use our intellectual properties without our consent. This could harm our brand, business, operating results and financial condition.


24
 We may become involved in intellectual property disputes, which may disrupt our business and require us to pay significant damage awards.




Third parties may sue us for intellectual property infringement, or initiate proceedings to invalidate our intellectual property, which, if successful, could disrupt our business, cause us to pay significant damage awards or require us to pay licensing fees.   In the event of a successful claim against us, we might be enjoined from using our intellectual property or licensed intellectual property that we use in our business, we might incur significant licensing fees and we might be forced to develop alternative technologies. If we fail or are unable to develop non-infringing technology or games or to license the infringed or similar technology or games on a timely basis, we may be forced to withdraw games from the market or prevented from introducing new games. We might also incur substantial expenses in defending against third-party claims, regardless of their merit.




In addition, we plan to use open source software in some of our games that are in the development phase. We may face claims from companies that incorporate open source software into their products, claiming ownership of, or demanding release of, the source code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our games, any of which would have a negative effect on our business and operating results.




Our business is subject to increasing governmental regulation and if we do not successfully respond to these regulations, our business may suffer.




We are subject to a number of domestic and foreign laws and regulations that affect our business. Not only are these laws constantly evolving, which could result in their being interpreted in ways that could harm our business, but legislation is also continually being introduced that may affect both the content of our products and their distribution. In the United States, for example, numerous federal and state laws have been introduced which attempt to restrict the content or distribution of games. Legislation has been adopted in several states, and proposed at the federal level, that prohibits the sale of certain games to minors. If such legislation is adopted, it could harm our business by limiting the games we are able to offer to our customers or by limiting the size of the potential market for our games. We may also be required to modify certain games or alter our marketing strategies to comply with new and possibly inconsistent regulations, which could be costly or delay the release of our games. For example, the United Kingdom’s Office of Fair Trading issued proposed principles in September 2013 relating to in-app purchases in free-to-play games that are directed towards children 16 and under, which principles are expected to become effective in the first quarter of 2014. The Federal Trade Commission has also indicated that it intends to review issues related to in-app purchases, particularly with respect to games that are marketed primarily to minors. If the Federal Trade Commission issues rules significantly restricting or even prohibiting in-app purchases, it would significantly impact our business strategy. In addition, two self-regulatory bodies in the United States (the Entertainment Software Rating Board) and the European Union ( Pan European Game Information) provide consumers with rating information on various products such as entertainment software similar to our products based on the content (for example, violence, sexually explicit content, language). Furthermore, the Chinese government has adopted measures designed to eliminate violent or obscene content in games. In response to these measures, some Chinese telecommunications operators have suspended billing their customers for certain mobile gaming platform services, including those services that do not contain offensive or unauthorized content, which could negatively impact our revenues in China. Any one or more of these factors could harm our business by limiting the products we are able to offer to our customers, by limiting the size of the potential market for our products, or by requiring costly additional differentiation between products for different territories to address varying regulations.




Furthermore, the growth and development of free-to-play gaming and the sale of virtual goods may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours. We anticipate that scrutiny and regulation of our industry will increase and that we will be required to devote legal and other resources to addressing such regulation. For example, existing laws or new laws regarding the regulation of currency and banking institutions may be interpreted to cover virtual currency or goods. If that were to occur we may be required to seek licenses, authorizations or approvals from relevant regulators, the granting of which may depend on us meeting certain capital and other requirements and we may be subject to additional regulation and oversight, all of which could significantly increase our operating costs. Changes in current laws or regulations or the imposition of new laws and regulations in the United States or elsewhere regarding these activities may dampen the growth of free-to-play gaming and impair our business.


25


The laws and regulations concerning data privacy and data security are continually evolving, and our actual or perceived failure to comply with these laws and regulations could harm our business.




We are subject to federal, state and foreign laws regarding privacy and the protection of the information that we collect regarding our users, which laws are currently in a state of flux and likely to remain so for the foreseeable future. The U.S. government, including the Federal Trade Commission and the Department of Commerce, is continuing to review the need for greater regulation over collecting information concerning consumer behavior on the Internet and on mobile devices. For example, in December 2012, the Federal Trade Commission adopted amendments to the Children’s Online Privacy Protection Act to strengthen privacy protections for children under age 13, which amendments became effective on July 1, 2013. In addition, the European Union has proposed reforms to its existing data protection legal framework. Various government and consumer agencies have also called for new regulation and changes in industry practices. For example, in February 2012, the California Attorney General announced a deal with Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion to strengthen privacy protection for users that download third-party apps to smartphones and tabletdevices. In response to developments in the interpretation and understanding of regulations such as these and guidance we make our privacy policy readily accessible to players of our games as required by the California Online Privacy Protection Act. If we do not follow existing laws and regulations, as well as the rules of the smartphone platform operators, with respect to privacy-related matters, or if consumers raise any concerns about our privacy practices, even if unfounded, it could damage our reputation and operating results.




All of our games are subject to our privacy policy and our terms of service located on our corporate website. If we fail to comply with our posted privacy policy, terms of service or privacy-related laws and regulations, including with respect to the information we collect from users of our games, it could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, interpreting and applying data protection laws to the mobile gaming industry is often unclear. These laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with our current data protection practices. Complying with these varying requirements could cause us to incur additional costs and change our business practices. Further, if we fail to adequately protect our users’ privacy and data, it could result in a loss of player confidence in our services and ultimately in a loss of users, which could adversely affect our business.




In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as the 2002 amendment to California’s Information Practices Act, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement. Costs to comply with these laws may increase as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities. The security measures we have in place to protect our data and the personal information of our employees, customers and partners could be breached due to cyber-attacks initiated by third party hackers, employee error or malfeasance or otherwise. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any breach or unauthorized access could materially interfere with our operations or our ability to offer our services or result in significant legal and financial exposure, damage to our reputation and a loss of confidence in the security of our data, which could have an adverse effect on our business and operating results.





Risks Related to our Common Stock and our Status as a Public Company





The relative lack of public company experience of our management team may put us at a competitive disadvantage.





Collectively, our management team lacks public company experience, which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of 2002.  Except for our Chief Financial Officer, Monika Sagar, the individuals who now constitute our senior management team have not had responsibility for managing a publicly traded company prior to joining the Company.  Such responsibilities include complying with federal securities laws and making required disclosures on a timely basis.  Our senior management may not be able to implement programs and policies in an effective and timely manner that adequately responds to such increased legal, regulatory compliance and reporting requirements.  Our failure to comply with all applicable requirements could lead to the imposition of fines and penalties and distract our management from attending to the growth of our business.





We will be required to incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.


26


As a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, we are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”).  Section 404 requires us to include an internal control report with the Annual Report on Form 10-K. This report must include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities.  Management believes that its internal controls and procedures are currently not effective to detect the inappropriate application of U.S. GAAP rules.  Management realize there are deficiencies in the design or operation of our internal control that adversely affect our internal controls which management considers to be material weaknesses including those described below:





i)
We have insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.ii)
We have an audit committee comprised of Monika Sagar, however we do not have an independent audit committee financial expert. While not being legally obligated to have an independent audit committee financial expert, it is the management’s view that to have an audit committee, comprised of independent board members, and an independent audit committee financial expert is an important entity-level control over our financial statements.iii)
We did not perform an entity level risk assessment to evaluate the implication of relevant risks on financial reporting, including the impact of potential fraud related risks and the risks related to non-routine transactions, if any, on our internal control over financial reporting.  Lack of an entity-level risk assessment constituted an internal control design deficiency which resulted in more than a remote likelihood that a material error would not have been prevented or detected, and constituted a material weakness.iv)
We lack personnel with formal training to properly analyze and record complex transactions in accordance with U.S. GAAP. Our current Chief Financial Officer, Ms. Sagar, has been our Chief Financial Officer since our inception in January 2007. She has had limited experience and education in accounting and no training with U.S. GAAP.





Achieving continued compliance with Section 404 may require us to incur significant costs and expend significant time and management resources. We cannot assure you that we will be able to fully comply with Section 404 or that we and our independent registered public accounting firm would be able to conclude that our internal control over financial reporting is effective at fiscal year end.





As a result, investors could lose confidence in our reported financial information, which could have an adverse effect on the trading price of our securities, as well as subject us to civil or criminal investigations and penalties. In addition, our independent registered public accounting firm may not agree with our management’s assessment or conclude that our internal control over financial reporting is operating effectively.





Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a shareholder’s ability to buy and sell our stock.





Our stock is categorized as a “penny stock”. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.


27
 FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.





In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“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. The 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.





Even if a market for our common stock develops, our common stock could be subject to wide fluctuations.





Although our common stock is quoted on the OTCQB marketplace, there is no established public market for shares of our common stock, and no trades of our common stock have taken place on the OTCQB.  Even if the shares of our common stock may in the future trade on the OTCQB, the liquidity and price of our common stock is expected to be more limited than if such securities were quoted or listed on a national exchange.  No assurances can be given that an active public trading market for our common stock will develop or be sustained.  If trading of our securities commences on the OTCQB, the trading volume we will develop may be limited by the fact that many major institutional investment funds, including mutual funds, as well as individual investors follow a policy of not investing in bulletin board stocks and certain major brokerage firms restrict their brokers from recommending bulletin board stocks because they are considered speculative, volatile and thinly traded. Lack of liquidity will limit the price at which shareholders may be able to sell our common stock.





Even if our common stock will in the future trade on the OTCQB, the price of such common stock could be subject to wide fluctuations, in response to quarterly variations in our operating results, announcements by us or others, developments affecting us, and other events or factors. In addition, the stock market has experienced extreme price and volume fluctuations in recent years. These fluctuations have had a substantial effect on the market prices for many companies, often unrelated to the operating performance of such companies, and may adversely affect the market prices of the securities.  Such risks could have an adverse effect on the stock’s future liquidity.





We expect to experience volatility in our stock price, which could negatively affect shareholders’ investments.





The market price for shares of our common stock may be volatile and may fluctuate based upon a number of factors, including, without limitation, business performance, news announcements or changes in general market conditions.




Other factors, in addition to the those risks included in this section, that may have a significant impact on the market price of our common stock include, but are not limited to:





·
quality deficiencies in services or products;





·
international developments, such as technology mandates, political developments or changes in economic policies;





·
changes in recommendations of securities analysts;





·
government regulations, including stock option accounting and tax regulations;





·
energy blackouts;





·
acts of terrorism and war;





·
widespread illness;





·
proprietary rights or product or patent litigation;





·
strategic transactions, such as acquisitions and divestitures; or





·
rumors or allegations regarding our financial disclosures or practices.





28


In the past, securities class action litigation has often been brought against a company following periods of volatility in the market price of its securities.  Due to the volatility of our common stock price, we may be the target of securities litigation in the future.  Securities litigation could result in substantial costs and divert management’s attention and resources.





Shareholders should also be aware that, according to SEC Release No. 34-29093, the market for “penny stock,” such as our common stock, has suffered in recent years from patterns of fraud and abuse.  Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.  Our management is aware of the abuses that have occurred historically in the penny stock market.  Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the future volatility of our share price.





To date, we have not paid any cash dividends and no cash dividends will be paid in the foreseeable future.





We do not anticipate paying cash dividends on our common stock in the foreseeable future and we may not have sufficient funds legally available to pay dividends.  Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends.  We presently intend to retain all earnings for our operations.





The elimination of monetary liability against our directors, officers and employees under Nevada law and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our company and may discourage lawsuits against our directors, officers and employees.





Our Articles of Incorporation contain a provision permitting us to eliminate the personal liability of our directors to our company and shareholders for damages for breach of fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification obligations under our employment agreements with our officers. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup.  These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors and officers for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and shareholders.





ITEM1B — UNRESOLVED STAFF COMMENTS





Not applicable.





ITEM 2   — PROPERTIES





Our head office is located 123 West NYE Ln., Ste. 129, Carson City NV.





ITEM 3   — LEGAL PROCEEDINGS





There are no legal proceedings to which we are a party, nor to the best of management’s knowledge are any material legal proceedings contemplated.





ITEM 4   — MINE SAFETY DISCLOSURES





Not applicable.


29


PART II





ITEM5   — MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES





Market Information





Our common stock is quoted on the Over The Counter Market under the symbol “GAMZ”.





The following is the range of high and low bid prices for our common stock for the periods indicated.  The quotations  reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.





Fiscal Year Ended December 31, 2013

High


LowFourth Quarter (December  31, 2013)

$
0.58


$
0.02




Stockholders




As of December 31, 2013, there were 55,658,252 shares of common stock issued and outstanding held by 76 stockholders of record (not including street name holders).





Dividends





We have not paid dividends to date and do not anticipate paying any dividends in the foreseeable future. Our Board of Directors intends to follow a policy of retaining earnings, if any, to finance our growth.  The declaration and payment of dividends in the future will be determined by our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements and other factors.





Recent Sales of Unregistered Securities





None





ITEM6   — SELECTED FINANCIAL DATA





Not applicable.





ITEM7   — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Annual Report on Form 10-K. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “should,” “could,” and similar expressions to identify forward-looking statements.




Overview





We were incorporated under the laws of the State of Nevada on January 18, 2007, under the name “Sona Resources, Inc.”, with authorized capital stock of 250,000,000 shares at $0.001 par value.  We were originally organized for the purpose of acquiring and developing mineral properties.





On June 6, 2011, we entered into the Exchange Agreement to acquire Marine Drive Technologies Inc., a corporation organized under the laws of Canada (“MDT”), a developer of scalable m-Commerce applications and services, and on July 6, 2011, we changed our name to “Marine Drive Mobile Corp.”  On August 26, 2011, we entered into a Membership Interests Purchase Agreement for the acquisition of the outstanding membership interests of I Like A Deal, LLC (“ILAD”), a developer of group buying web based software (the “ILAD Transaction”).  On September 12, 2011 we closed the Exchange Agreement with MDT and on October 3, 2011 we closed the Membership Interests Purchase Agreement with ILAD.


30


On September 11, 2013, the Company effected a one-for-one hundred reverse stock split of all of its issued and outstanding shares of common stock.





On October 23, 2013, we entered into and consummated a voluntary share exchange transaction with Gamzio, Inc., a Nevada corporation and the sole stockholder of Gamzio, Inc. (the “Selling Stockholder”), pursuant to a Share Exchange Agreement by and among the Company, Gamzio, Inc. and the Selling Stockholder (the “Exchange Agreement”).





In accordance with the terms of the Agreement, the Company issued 30,000,000 shares of its common stock, par value $0.001 (the “Shares”) to the Selling Stockholder in exchange for 100% of the issued and outstanding capital stock of Gamzio, Inc. (the “Exchange Transaction”). As a result of the Exchange Transaction, the Selling Stockholder acquired 54% of the Company’s issued and outstanding shares of common stock, Gamzio, Inc. became the Company’s wholly-owned subsidiary, and the Company acquired the business and operations of Gamzio.





On November 15, 2013, the Company changed its name from "Marine Drive Mobile Corp." to "Gamzio Mobile, Inc.” and was assigned a new stock symbol, “GAMZ” by FINRA. On February 4, 2014, we changed our fiscal year to begin on January 1 and end on December 31.




The Company operates in the technology industry and has two products:





Social Casino Gaming





The Company's strategy is to innovate Social Casino Games. Our mission is to create the highest quality social casino games with the intent to provide widespread appeal for consumers worldwide. We believe that our games are designed to provide unparalleled social gaming experiences for players and drive optimized earnings for shareholders.





We market and distribute our flagship social casino game Slots-O-Luck Adventure HD for iPhone and iPad through Apple’s App Store.  We advertise on high volume acquisition channels including Facebook order to grow our user-base.  In the future we plan to distribute our games on other high volume distribution channels.





Customer Loyalty Technology





We provide mobile rewards programs, digital coupons, promotions, and deal management solutions (DMS).  We enable our clients to manage sales through real-time transactions, end-user data, enhanced brand marketing strategies, and customer loyalty-reward programs.  Our loyalty engine works across all communication platforms and displays – mobile, tablet, & PC – putting real-time deals in the hands of today’s consumer.





Our goal is to provide businesses with a marketing platform that builds incremental business with their existing clients and introduces new customers to their products and services. We do this by providing merchants convenient access to our m-Commerce applications and services.





Results of Operations





Financial Condition as of December 31, 2013




We reported total current assets of $25,856 at December 31, 2013 being cash in the bank.  Total current liabilities reported of $729,872 consisted of accounts payable of $47,653, accrued interest expense of $232,534, advances from a related party of 27,523, advances from a third party of $59,000 and a note payable of $363,162.  We had a working capital deficit of $704,016 at December 30, 2013.




Stockholders’ Deficiency increased from $ 190,139 at December 31, 2012 to $699,229 at December 31, 2013.  This increase is due primarily to the impact on additional paid in capital of the acquisition.


31


Cash and Cash Equivalents





As of December 31, 2013, we had cash of $25,856. We anticipate that a substantial amount of cash will be used as working capital and to execute our strategy and business plan.  As such, we further anticipate that we will have to raise additional capital of approximately $1,000,000 to fund our operational and research and development needs over the next twelve months.





Comparison of the Fiscal Year Ended December 31, 2013 to the Fiscal Year Ended December 31, 2012





For the fiscal year ended December 31, 2013, we incurred a net loss of $121,985 from operations being a reduction of $75,047 as compared to the fiscal year ended December 31, 2012, when we incurred a net loss of $197,032 from operations.





General and administration expenses for the fiscal year end December 31, 2013 decreased by $83,166 to $113,866 compared to $197,032 for the fiscal year ended December 31, 2012.  The major change was a decrease in game development fees year over year.





Interest expense for the fiscal year ended December 31, 2013 increased by $8,119 to $8,119 compared to $0 for the fiscal year ended December 31, 2012.  The major change was in the cost of servicing the line of credit.





Liquidity and Capital Resources





As at December 31, 2013 we have $30,643 in total assets and $729,872 in current and total liabilities, compared to $0 in assets and $185,994 in total and current liabilities as at December 31, 2012.  Our net working capital deficiency as at December 31, 2013 was $704,016 compared to a working capital deficiency as at December 31, 2012 of $190,139.





For the year ended December 31, 2013, we received net cash from operating activities of $25,856 compared to $0 net cash used in operating activities in the year ended December 31, 2012.





During the past two fiscal years, our operations were funded directly by our CEO and a third party.





Our current cash requirements are significant due to the planned development and expansion of our business.  Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve months.





In order to execute on our business strategy, we will require additional working capital, commensurate with our operational needs.  Such working capital will most likely be obtained through equity or debt financings until such time as our operations are producing revenue in excess of operating expenses.  There are no assurances that we will be able to raise the required working capital on terms favorable, or that such working capital will be available on any terms when needed.





Capital Requirements





There is no historical financial information about us upon which to base an evaluation of our performance.  We are a development stage corporation and have not generated any revenues from operations.  We cannot guarantee we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources.





Our existing capital resources will not be sufficient to meet our current obligations and operating requirements or our aggressive growth and acquisition plans.  Therefore, we will need to raise additional capital in the next 12 months.  We will consider debt or equity offerings or institutional borrowing as potential means of financing, however, there are no assurances that we will be successful or that we will obtain terms that are favorable to us.  Over the next twelve months, management estimates that we will require approximately $1,000,000 to fund our operational and research and development needs.





We have no assurance that financing will be available to us, or if available, on terms acceptable to us.  If financing is not available to us, or on satisfactory terms, we may be unable to continue, develop or expand our operations.  Additional equity financing could also result in additional dilution to our existing shareholders.





Off-Balance Sheet Arrangements





We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties.  We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.  Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.  We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.


32


Critical Accounting Policies





Accounting Method





The Company recognizes income and expenses based on the accrual method of accounting.





Principles of Consolidation





The consolidated financial statements include the accounts of the Company and Marine Drive Technologies, Inc.  All significant intercompany balances and transactions have been eliminated in consolidation.





Dividend Policy





The Company has not yet adopted a policy regarding payment of dividends.





Basic and Diluted Net Income (loss) Per Share





Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidulutive and then the basic and diluted per share amounts are the same. At December 31, 2013 and 2012 we had 7,263,240 and 0 common stock equivalents outstanding, respectively, related to convertible debt.





Evaluation of Long-Lived Assets





The Company periodically reviews its long term assets and makes adjustments, if the carrying value exceeds fair value.





Income Taxes





The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed.   An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.





Revenue Recognition





Revenue is recognized on the sale and delivery of a product or the completion of a service provided.





Advertising and Market Development





The company expenses advertising and market development costs as incurred.





Financial Instruments





The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.





Estimates and Assumptions





Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.


33


Statement of Cash Flows





For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.





Recently Issued Accounting Pronouncements





The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.





ITEM7A— QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable.





ITEM8   — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





Reference is made to the financial statements, the reports of our independent registered public accounting firm, and the notes thereto of this report, which financial statements, reports, and notes are incorporated herein by reference.





Financial Statement Schedules.





The following financial statements are included in this report:





Title of Document
PageReport of Sadler, Gibb & Associates, LLC
F-1Report of Anton & Chia, LLP
F-2Consolidated Balance Sheets as at December 31, 2013 and 2012
F-3Consolidated Statements of Operations for year ended December 31, 2013, for the period January 13, 2012 (date of inception) to December 31, 2012, and for the period January 13, 2012 (date of inception) to December 31, 2013
F-4Consolidated Statement of Stockholders’ Deficiencyfor the period from January 13, 2012 (date of inception) to December 31, 2013
F-5Consolidated Statements of Cash Flowsfor year ended December 31, 2013, for the period January 13, 2012 (date of inception) to December 31, 2012, and for the period January 13, 2012 (date of inception) to December 31, 2013
F-6Notes to the Consolidated Financial Statements
F-7 to F-10





34


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
 Gamzio Mobile, Inc.
 
 We have audited the accompanying consolidated balance sheet of Gamzio Mobile, Inc. (the Company) as of December 31, 2013 and the related consolidated statements of operations, stockholders’ deficit 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. The financial statements as of December 31, 2012 and for the period from January 13, 2012 (date of inception) through December 31, 2012, were audited by other auditors, whose report dated November 14, 2013, expressed an unqualified opinion on those statements.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gamzio Mobile, Inc. as of December 31, 2013, and the results of their operations and cash flows for the year then ended and for the period from January 13, 2012 (date of inception) through December 31, 2013, in conformity with U.S. generally accepted accounting principles.
 
 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 9 to the Company will need additional working capital to accomplish its intended purpose and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 9. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 /s/ Sadler, Gibb & Associates, LLC
 
 Salt Lake City, UT
 April 15, 2014
  
  F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders of Gamzio, Inc.
 
 We have audited the accompanying balance sheet of Gamzio, Inc. (“the Company”) as of the year ended December 31, 2012, and the related statements of operations, shareholders’ equity (deficit), and cash flows for the period from July 2, 2012 (Inception) to December 31, 2012. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our 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 audit provides 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 Gamzio, Inc. as of December 31, 2012 and the results of its operations and its cash flows for the period from July 2, 2012 (Inception) to December 31, 2012 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 had no revenues and income since inception. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2, which includes the raising of additional equity financing. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/ Anton & Chia, LLP
 Newport Beach, California
 November 8, 2013
 
  F-2





GAMZIOMOBILE INC.


(Development Stage Company)


CONSOLIDATED BALANCE SHEETS





December 31,

2013


December 31,

2012ASSETSCURRENT ASSETSCash

$
25,856


$
-Total Current Assets


25,856



-PROPERTY AND EQUIPMENTFurniture and equipment, net of accumulated depreciation of $2,975


2,125



-Computer equipment, net of accumulated depreciation of  $3,727


2,662



-Total Property and Equipment


4,787



-Total Assets

$
30,643


$
-LIABILITIES AND STOCKHOLDERS’ DEFICITCURRENT LIABILITIESAccounts payable and accrued expenses

$
47,653


$
4,145Accrued interest


232,534



-Advance from third party


59,000



-Advances from related parties


27,523



-Note payable


363,162



185,994Total Current Liabilities


729,872



190,139STOCKHOLDERS’ DEFICITCommon stock250,000,000 shares authorized, at $0.001 par value;55,658,252 and 30,000,000 shares issued and  outstanding, respectively


55,658



30,000Additional paid-in capital


(435,870
)


(23,107
)Deficit accumulated during the development stage


(319,017
)


(197,032
)Total Stockholders’ Deficit


(699,229
)


(190,139
)Total Liabilities and Stockholders’ Deficit

$
30,643


$
-





The accompanying notes are an integral part of these consolidated financial statements





F-3


GAMZIOMOBILE INC.


(Development Stage Company)


CONSOLIDATED STATEMENTS OF OPERATIONS





Year ended


From January 13, 2012 (date of inception) to


From January 13, 2012 (date of inception) toDecember 31,

2013


December 31,

2012


December 31,

2013REVENUES

$
-


$
-


$
-EXPENSESGeneral and administrative expense


113,866



197,032



310,898Total expenses


113,866



197,032



310,898OTHER (INCOME) EXPENSE:Interest Expense


8,119



-



21,569Total other expense


8,119



-



21,569NET LOSS

$
(121,985
)

$
(197,032
)

$
(319,017
)NET LOSS PER COMMON SHAREBasic and diluted (continuing operations)

$
(0.00
)

$
(1.97
)WEIGHTED AVERAGE OUTSTANDING SHARESBasic and diluted


30,086,412



100,000





The accompanying notes are an integral part of these consolidated financial statements




F-4


GAMZIOMOBILE INC.


(Development Stage Company)


CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY


Period January 13, 2012 (date of inception) to December 31, 2013





Common Stock


Additional Paid-in


Deficit Accumulated

during Development


Total Stockholders’Shares


Amount


Capital


Stage


EquityBalance as at inception


30,000,000


$
30,000


$
(29,900
)

$
-



100Capital contributions


-



-



6,793



-



6,793Net loss


-



-



-



(197,032
)


(197,032
)Balance as at December 31, 2012


30,000,000



30,000



(23,107
)


(197,032
)


(190,139
)Recapitalization


25,658,000



25,658



(412,763
)


-



(387,105
)Net loss – December 31, 2013






-



-



(121,985
)


(121,985
)Balance as at December  31, 2013


55,658,252


$
55,658


$
(435,870
)

$
(319,017
)

$
(699,229
)





The accompanying notes are an integral part of these consolidated financial statements


F-5


GAMZIOMOBILE INC.


(Development Stage Company)


CONSOLIDATED STATEMENTS OF CASH FLOWS





Year Ended December 31, 2013


From January 13, 2012 (date of inception) to December 31, 2012


From January 13, 2012 (date of inception) to December 31, 2013OPERATING ACTIVITIESNet loss

$
(121,985
)

$
(197,032
)

$
(319,017
)Adjustments to reconcile net loss to net cash (used) in operating activities:Depreciation and amortization


709



-



708Expenses paid by related party


62,254



192,787



255,041Services contributed to capital by related party


-



100



100Expenses paid by third party


59,000



-



59,000Changes in operating assets and liabilities:Changes in accounts payable


17,760



-



17,760Change in accrued liabilities


8,119



4,145



12,264Net Cash Provided by Operations


25,856



-



25,856INVESTING ACTIVITIES


-




-



-FINANCING ACTIVITIESProceeds from third party advances


-



-



-Net Cash Provided (Used) in Financing Activities


-



-



-Net Increase in Cash


25,856



-



25,856Cash Beginning of Year


-



-



-CASH AT END OF YEAR

$
25,856


$
-


$
25,856





SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES


Net assets acquired in acquisition through issuance of common stock

$
387,105


$
-


$
387,105




The accompanying notes are an integral part of these consolidated financial statements


F-6
 GAMZIOMOBILE, INC.


(Development Stage Company)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


December 31, 2013





1. ORGANIZATION





The Company, Gamzio  Inc., began activity on January 13, 2012 and  was formally incorporated under the laws of the State of Nevada on July 2, 2012 to innovate social casino games.





On October 23, 2013, Gamzio, Inc., (the “Company”) entered into and consummated a voluntary share exchange transaction with , Marine Drive Mobile Corp.,, a Nevada corporation (“MDMC”) pursuant to a Share Exchange Agreement by and among the MDMC, Gamzio and the Selling Stockholder (the “Exchange Agreement”).  Marine Drive Mobile Corp. is involved in technology to do with customer loyalty programs.





Effective November 15, 2013, the Company amended its Articles of Incorporation to change its name from “Marine Drive Mobile Corp.” to “Gamzio Mobile, Inc.”





2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Accounting Methods





The Company recognizes income and expenses based on the accrual method of accounting.





Principles of Consolidation
 
 The consolidated financial statements include the accounts of Gamzio Mobile, Inc.  and I Like A Deal, LLC (ILAD). All significant intercompany balances and transactions have been eliminated in consolidation.
 
 Development Stage Enterprise
 
 The Company has not earned any revenue from operations since inception. Accordingly, the Company’s activities have been accounted for as those of a "Development Stage Enterprise" as set forth in ASC 915, "Development Stage Entities." Among the disclosures required by ASC 915, are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.


Dividend Policy





The Company has not yet adopted a policy regarding payment of dividends.





Basic and Diluted Net Income (loss) Per Share





Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. At December 31, 2013 and 2012 we had 7,263,240 and 0 common stock equivalents outstanding, respectively, related to convertible debt





Evaluation of Long-Lived Assets





The Company periodically reviews its long term assets for impairment and makes adjustments, if the carrying value exceeds fair value.





Property and Equipment





Property and equipment is stated at historical cost and depreciated over its estimated useful life.





Furniture and Equipment





The Company acquired office furniture and equipment during the year ended December 31, 2013, of $2,550. Furniture and equipment is depreciated on a straight line basis over 3 years. Total depreciation expense for the year ended December 31, 2013 was $425.


F-7


GAMZIO MOBILE, INC.
 (Development Stage Company)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2013


Computer Equipment





The Company acquired computer and related equipment during the year ended December 31, 2013, of $3,195. Computer equipment is depreciated on a straight line basis over 3 years. Total depreciation expense for the year ended December 31, 2013 was $532.





Income Taxes





The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.





Foreign Currency





The books of the Company are maintained in United States dollars and this is the Company’s functional and reporting currency.  Translations denominated in other than the United States dollar are translated as follows with the related transaction gains and losses being recorded in the Statement of Operations:





(i)
Monetary items are recorded at the rate of exchange prevailing as at the balance sheet date;





(ii)
Non-Monetary items including equity are recorded at the historical rate of exchange; and





(iii)
Revenues and expenses are recorded at the period average in which the transaction occurred.





Revenue Recognition





The Company earns revenue through consulting fees and from transaction fees it charges customers. Consulting fees are recorded in revenue when the service is completed. Transaction fees are recorded in revenue when a customer completes a purchase on the Company’s website and the related transaction fee is charged to the customer’s credit card. No revenues have been recognized to date.





Advertising and Market Development





The company expenses advertising and market development costs as incurred.





Financial Instruments





The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.





Estimates and Assumptions





Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.





Statement of Cash Flows





For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.




Recent Accounting Pronouncements





The Company does not expect the adoption of any other recent accounting pronouncements will have a material impact on its financial statements.


F-8
 GAMZIO MOBILE, INC.
 (Development Stage Company)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2013


3. BUSINESS ACQUISITIONS





On October 23, 2013, Marine Drive Mobile Corp., a Nevada corporation (the “Company”) entered into and consummated a voluntary share exchange transaction with Gamzio, Inc., a Nevada corporation (“Gamzio”) and the sole stockholder of Gamzio (the “Selling Stockholder”), pursuant to a Share Exchange Agreement by and among the Company, Gamzio and the Selling Stockholder (the “Exchange Agreement”).  In accordance with the terms of the Agreement, the Company issued 30,000,000 shares of its common stock, par value $0.001 (the “Shares”) to the Selling Stockholder in exchange for 100% of the issued and outstanding capital stock of Gamzio (the “Exchange Transaction”). As a result of the Exchange Transaction, the Selling Stockholder acquired 54% of the Company’s issued and outstanding shares of common stock, Gamzio became the Company’s wholly-owned subsidiary, and the Company acquired the business and operations of Gamzio.




4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
 
 The CEO of the Company paid for Company expenses of the Company $62,254 during the year ended December 31, 2013 (2012 - $192,787) for a total of $255,041.  As part of the share exchange agreement, this amount owed to the CEO was contributed to capital.
 
 5. NOTE PAYABLE
 
 On October 23, 2013, as part of the share exchange agreement the Company acquired a convertible note payable of $363,162, plus accrued interest of $219,403. This note payable is convertible into stock at $0.05 per share and bears interest at 12% per year.
 
 The Company accrued interest expense of $8,199 during the year ended December 31, 2013 ($0 in 2012).
 
 6. CAPITAL STOCK
 
 On July 2, 2012, the Company issued 100,000 common shares to its CEO for $100 in services rendered. The December 31, 2012 capital accounts of the Company have been retroactively restated to reflect the equivalent number of common shares based on the exchange ratio of the merger transaction. See Note 3.
 
 On October 23, 2013, the Company issued 30,000,000 shares of common stock to the shareholders of Gamzio Mobile, Inc. in exchange for their 25,658,000 shares as part of the share exchange agreement.


7. STOCK BASED COMPENSATION





As part of the share purchase agreement the Company has the following stock options outstanding:





Common Stock options and warrants





The following table summarizes stock option activity:


Stock Options


Weighted average exercise price per share


Weighted average remaining terms (in years)


Aggregate intrinsic valueOptions and warrants outstanding December 31, 2013


61,000


$
25



6.2


$
0Options and warrants exercisable December 31, 2013


61,000


$
25





F-9


GAMZIO MOBILE, INC.
 (Development Stage Company)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2013


8. INCOME TAXES





The Company has $319,017 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2033.  The tax effect of the significant temporary differences, which comprise deferred tax assets and liabilities, are as follows:




December 31,

2013

$


December 31,

2012

$Net loss before taxes


(121,985
)


(197,032
)Statutory income tax rate


34
%


34
%Computed expected tax recovery


(41,475
)


(66,991
)Change in valuation allowance


41,475



66,991Income tax provision


–



-





The significant components of deferred income tax assets and liabilities are as follows:




December 31,

2013

$


December 31,

2012

$Deferred income tax assetsNon-capital losses carried forward


108,466



197,032Total deferred income tax assets


108,466



197,032Valuation allowance


(108,466
)


(197,032
)Net deferred income tax asset


–



-




As of December 31, 2013 and 2012, the Company has no unrecognized income tax benefits. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the years ended December 31, 2013 and 2012, and no interest or penalties have been accrued as of December 31, 2013 and 2012. As of December 31, 2013 and 2012, the Company did not have any amounts recorded pertaining to uncertain tax positions.




The tax years from 2012 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.





9. GOING CONCERN





The Company will need additional working capital to service its debt and for its planned activity, which raises substantial doubt about its ability to continue as a going concern.   Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding, and long term financing, which will enable the Company to operate for the coming year.





10. SUBSEQUENT EVENTS





On February 14, 2014, the lender has requested the Company to convert an additional $500,000 of debt at $0.25 per share and the Company has accepted their offer and will issue the shares at a future date.


F-10


ITEM9— CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





None.





ITEM9A— CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of December 31, 2013 pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are not effective as of December 31, 2013 as a result of material weaknesses in internal controls over financial reporting.  A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.





Management’s Report on Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework inInternal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.  Management concluded, as of December 31, 2013, that our internal control over financial reporting was not effective.  Management realized there were deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.





In performing the above-referenced assessment, our management identified the following material weaknesses:





·
As of December 31, 2013, we did not have an audit committee which complies to the requirements of an audit committee since it did not have an independent “financial expert” on the committee.





·
We did not perform an entity level risk assessment to evaluate the implication of relevant risks on financial reporting, including the impact of potential fraud related risks and the risks related to non-routine transactions, if any, on our internal control over financial reporting.  Lack of an entity-level risk assessment constituted an internal control design deficiency which resulted in more than a remote likelihood that a material error would not have been prevented or detected, and constituted a material weakness.





·
We have insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.·
We lack personnel with formal training to properly analyze and record complex transactions in accordance with U.S. GAAP. Our current Chief Financial Officer, Ms. Sagar, has been our Chief Financial Officer since our inception in January 2012. She has had limited experience and education in accounting and no training with U.S. GAAP.





We are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the near term, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources and personnel to potentially mitigate these material weaknesses.





Our present management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect  misstatements.  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.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.


35


Changes in Internal Controls Over Financial Reporting





There were no changes in our internal control over financial reporting that occurred during the quarterly period ending December 31, 2013 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.





ITEM9B— OTHER INFORMATION





None.





PART III





ITEM10— DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





Directors and Executive Officers





The following table sets forth the names and ages of our current directors and executive officers, the principal offices and positions held by each person:





Name
Age
PositionJason Deiboldt
33
President and DirectorMonika Sagar
39
Chief Financial Officer, Secretary and DirectorFidel B. Pernites
53
Director





The information below with respect to our sole director includes such director’s experience, qualifications, attributes, and skills that led us to the conclusion that he should serve as a director.





Jason Deiboldt – Director and President





Jason Deiboldt became our President on October 23, 2013. Since July, 2012, Jason Deiboldt has been the Chief Executive Officer, director and co-founder of Gamzio, Inc.  He is also the Chief Executive Officer and director of Commission.Net, Inc., a technology company, since October, 2011 and Chief Executive Officer and director of Undercover Media, Inc., a technology company, since 2008.





Monika Sagar - Director, Chief Financial Officer and Secretary





Monika Sagar has been a director and Chief Financial Officer of the Company since inception in January 2007.  After obtaining a B. A., Political Science, (1996) from Punjab University Ms. Sagar worked in a variety of administrative positions.  For the past five years Ms. Sagar has held administrative and loan officer positions.  From 2001 to 2002 she served as an Assistant Loan Officer with HSBC Bank.  From 2002 to 2004 Ms. Sagar was a fulltime student obtaining her M.A. in Political Science from Punjab University in 2004.  From her graduation in May 2004 to the present, Ms. Sagar has been employed by Standard Chartered Bank as a Customer Care Executive, supervising the processing of personal loans for real and personal property.  Since 2004, Ms. Sagar is also continuing her education on a part time basis, working on an MBA degree.  From the Company’s inception in January 2007 to August 2011, Ms. Sagar also served as the Company’s Chief Financial Officer, Chief Accounting Officer and Treasurer.    The Company believes Ms. Sagar’s background, extensive experience as an officer of the Company and familiarity with the Company is of great value to the Board of Directors.





Fidel B. Pernites - Director





Fidel B. Pernites has been a director of the Company since January 18, 2008.  Mr. Pernites graduated from De La Salle University, Manila, Philippines with a B. Science, Geologist (1979) and Master of Geological Sciences (1988).  Since 1989 Mr. Pernites has been a self-employed independent consulting geologist responsible for surveying and testing mineral properties.   The Company believes Mr. Pernites experience serving as a director of public company, running his own business and familiarity with the Company is of great value to the Board of Directors.





Certain of our officers and directors devote a limited amount of their time to the affairs of the Company. As Chief Financial Officer, Monika Sagar spends approximately 8 hours per month on corporate matters.   Fidel Pernites spends a very limited amount of their time on the Company’s affairs, essentially such time as is necessary for them to carry out their duties as directors of the Company, including attending, preparing for and considering matters relevant to the meetings and actions of the Company’s Board of Directors.


36


Involvement in Certain Legal Proceedings





No director, executive officer, significant employee or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.





Term of Office





The Company’s directors are appointed for a one-year term to hold office until the next annual general meeting of the Company’s stockholders or until removed from office in accordance with the Company’s bylaws and the provisions of the Nevada Revised Statutes.  The Company’s directors hold office after the expiration of his or her term until his or her successor is elected and qualified, or until he or she resigns or is removed in accordance with the Company’s bylaws and the provisions of the Nevada Revised Statutes.





The Company’s officers are appointed by the Company’s Board of Directors and hold office until removed by the Board.





Committees of the Board





Our Board of Directors held no formal meetings during the 12 month period ended December 31, 2013.  All proceedings of the Board of Directors were conducted by resolutions consented to in writing by the directors and filed with the minutes of the proceedings of the directors.  Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada Revised Statutes and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.  We do not presently have a policy regarding director attendance at meetings.





We do not currently have standing nominating or compensation committees, or committees performing similar functions.  Due to the size of our board, our Board of Directors believes that it is not necessary to have standing nominating or compensation committees at this time because the functions of such committees are adequately performed by our Board of Directors.  We do not have a nominating or compensation committee charter as we do not currently have such committees.  We do not have a policy for electing members to the board.  Fidel B. Pernites is an independent director as defined in the NASD listing standards.None of our other directors are independent.





We do have a standing audit committee,  however, the only current member, Monika Sagar is not independent.  Below is a description of the audit committee of the Board of Directors.  The Charter of the audit committee of the Board of Directors sets forth the responsibilities of the audit committee. The primary function of the audit committee is to oversee and monitor the Company’s accounting and reporting processes and the audits of the Company’s financial statements.





Ms. Sagar is not an “audit committee financial expert” as defined in Item 401 of Regulation S-B.  The Company does not presently have, among its officers and directors, a person meeting these qualifications and given our financial circumstances, does not anticipate seeking an audit committee financial expert to join the committee in the foreseeable future.





Since inception on January 13, 2012, our Board of Directors and audit committee have conducted their business entirely by consent resolutions and have not met, as such.





It is anticipated that the Board of Directors will form separate compensation and nominating at such time as the Company’s operations have expanded.





Section 16(a) Beneficial Ownership Reporting Compliance





Based solely upon a review of Forms 3, 4 and 5 delivered to us as filed with the Securities Exchange Commission, our executive officers and directors, and persons who own more than 10% of our Common Stock timely filed all required reports pursuant to Section 16(a) of the Securities Exchange Act.


37


Nominations to the Board of Directors





Our directors take a critical role in guiding our strategic direction and oversee the management of the Company.  Board candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the stockholders, diversity, and personal integrity and judgment.





In addition, directors must have time available to devote to Board activities and to enhance their knowledge in the growing business.  Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to the Company.





In carrying out its responsibilities, the Board will consider candidates suggested by stockholders.  If a stockholder wishes to formally place a candidate’s name in nomination, however, he or she must do so in accordance with the provisions of the Company’s Bylaws.





Code of Ethics





The Company is in the process of preparing a Code of Ethics that provides an ethical standard for all employees, officers and directors.




Family Relationships




There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers




Board Leadership Structure and Role on Risk Oversight




Jason Deiboldt currently serves as our principal executive officer and a director. We determined this leadership structure was appropriate for us due to our small size and limited operations and resources. The Board of Directors will continue to evaluate our leadership structure and modify as appropriate based on our size, resources and operations.





ITEM11— EXECUTIVE COMPENSATION





Board Compensation





We have no standard arrangement to compensate directors for their services in their capacity as directors.  Directors are not paid for meetings attended.  However, we intend to review and consider future proposals regarding board compensation.  All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.


38


Executive Compensation





Summary Compensation Table





Name and Principal



















Non-Equity Incentive Plan



All OtherPosition
Year


Salary



Bonus



Stock Awards



Option Awards



Compensation



Compensation



Total(1)Jason Deiboldt
2013

2012


0

0



-



-



-



-



-



0

0Monika Sagar
2013

2012


0

0



-



-



-



-



-



0

0Total
2013

2012


0

0



-



-



-



-



-



0

0





(1)
The dollar value in this column for each named executive officer or director represents the sum of all compensation reflected in the previous columns.





Employment Agreements





We have entered into a Management Contract for Services with Monika Sagar, which provides for the compensation terms set forth below.





Monika Sagar - We are party to a Management Contract for Services with Monika Sagar in connection with her service as an executive of the Company, with term that expires on August 1, 2014.  Ms. Sagar will receive an option to purchase up to 2,000,000 shares at an exercise price of $0.25 per share, which option will vest, subject to Ms. Sagar’s continued employment with respect to 1/8 of the shares on the one year anniversary of the grant date and 1/7 of the remaining shares subject to the option on each subsequent three month anniversary.





Potential Payments Upon Termination or Change-in-Control





SEC regulations state that we must disclose information regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of the company.





Please see the section entitled “Employment Agreements” above for a discussion of management compensation in the event of a termination of employment or change in control of the Company.





Compensation Committee Interlocks and Insider Participation





No interlocking relationship exists between our Board of Directors and the Board of Directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.





Compensation Committee





We do not have a separate Compensation Committee.  Instead, our Board of Directors reviews and approves executive compensation policies and practices, reviews salaries and bonuses for other officers, administers the Company’s stock option plans and other benefit plans, if any, and considers other matters.





Risk Management Considerations





We believe that our compensation policies and practices for our employees, including our executive officers, do not create risks that are reasonably likely to have a material adverse effect on our Company.





39





ITEM12— SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS





The following table sets forth certain information as of January 6, 2014 with respect to the beneficial ownership of our common stock for (i) each director and officer, (ii) all of our directors and officers as a group, and (iii) each person known to us to own beneficially 5% or more of the outstanding shares of our common stock.  To our knowledge, except as indicated in any footnotes to this table or pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to the shares of common stock indicated.


Name and Address of Beneficial Owner(1)

Shares Beneficially Owned

Percentage Beneficially OwnedDirectors and Executive OfficersJason Deiboldt

President and Director

123 West NYE Ln., Ste. 129

Carson City NV

30,000,000(2)

54.00%Monika Sagar

Chief Financial Officer, Secretary and Director

123 West NYE Ln., Ste. 129

Carson City NV

30,000

0%Fidel Pernites

Director

123 West NYE Ln., Ste. 129

Carson City NV

0

0%All Directors and Executive Officers

30,030,000

54.00%5% Stockholders

Gamzio Incubator Trust

3315 Highway 50

Silver Springs, Nevada, 89429

30,000,000

54.00%


_________________





(1)
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act.  Pursuant to the rules of the SEC, shares of common stock which an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be beneficially owned and outstanding for the purpose of computing the percentage ownership of any other person shown in the table.(2)
30,000,000 shares of common stock of the Company are directly owned by Gamzio Incubator Trust.   Mr. Jason Deiboldt is the sole trustee of Gamzio Incubator Trust and by virtue of his position, he may be deemed to be an indirect beneficial owner of such shares.   However, Mr. Deiboldt disclaims that he is a beneficial owner of such shares, except to the extent of his pecuniary interest therein.




40
 Equity Compensation Plan Information





The company has no active equity compensation plans and there are currently no outstanding options from prior plans.





Non-Cumulative Voting





The holders of our shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of such outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose.   In such event, the holders of the remaining shares will not be able to elect any of our directors.





Transfer Agent





Our transfer agent is Action Stock Transfer Corp. The transfer agent’s address is 2469 E. Fort Union Blvd, Ste 214, Salt Lake City, UT 84121 and its phone number is (801) 274-1088.




ITEM13— CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE





Certain Relationships and Related Party Transactions





There are no family relationships between any of our directors or new or former executive officers.  To our knowledge, except for Monika Sagar, who was and continues to serve as one of our directors and executive officers, our executive officers were not directors of the Company prior to the Exchange Transaction, did not hold any position with the Company prior to the Closing of the Exchange Transaction nor have been involved in any material proceeding adverse to the Company or any transactions with the Company or any of its directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC.





On October 23, 2013, the Company entered into and consummated a voluntary share exchange transaction with Gamzio, Inc., a Nevada corporation and Gamzio Incubator Trust, which was the sole stockholder of Gamzio, Inc. (the “Selling Stockholder”), pursuant to a Share Exchange Agreement by and among the Company, Gamzio and the Selling Stockholder.  In accordance with the terms of the Share Exchange Agreement, the Company issued 30,000,000 shares of its common stock, par value $0.001 to the Selling Stockholder in exchange for 100% of the issued and outstanding capital stock of Gamzio, Inc.   Mr. Jason Deiboldt, who is currently the President and a director of the Company, is the sole trustee of the Selling Stockholder.





Review, Approval or Ratification of Transactions with Related Persons





We rely on our Board to review related party transactions on an ongoing basis to prevent conflicts of interest.  Our Board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliation’s of such person’s immediate family.  Transactions are presented to our Board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred.  If our Board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any.  Our Board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.  To ensure that potential conflicts of interest are avoided or declared and to comply with the requirements of the Sarbanes Oxley Act of 2002, on December 31, 2011, our Board of Directors adopted a Code of Ethics that provides an ethical standard for all employees, officers and directors.





Director Independence





During the year ended December 31, 2013, we had one independent director, Fidel B. Pernites.  We evaluate independence by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., The NASDAQ National Market, and the Securities and Exchange Commission.





Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director's immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director's immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director's immediate family is, or in the past three years has been, employed in a professional capacity by our independent public accountants, or has worked for such firm in any capacity on our audit; (e) the director or a member of the director's immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director's immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company's consolidated gross revenues.


41


ITEM14— PRINCIPAL ACCOUNTING FEES AND SERVICES





The following table shows the fees paid or accrued by us for the audit and other services provided by our independent registered accountants for the fiscal periods shown.





December 31, 2013


December 31, 2012Audit Fees

$
7,500


$
5,000Audit — Related Fees


0



0Tax Fees


0



0All Other Fees


0



0Total

$
7,500


$
5,000





Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements.





In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended.  The Board of Directors pre-approved 100% of the audit and audit-related services performed by the independent registered public accounting firm in the past fiscal year.   The percentage of hours expended on the principal accountant’s engagement to audit the Company’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.





PART IV





ITEM15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES





(a)    Financial Statements and Financial Statement Schedules





(1)    Financial Statements are listed in the Index to Financial Statements of this Annual Report on Form 10-K.





(b)    Exhibits





Exhibit No.
Description2.1
Share Exchange Agreement by and among the Company, Gamzio, Inc. and the selling stockholder party thereto (incorporated by reference from registrant’s Current Report on Form 8-K filed on October 29, 2013)3.1(a)
Articles of Incorporation (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)3.1(b)
Amendment to Articles of Incorporation (incorporated by reference from registrant’s Current Report on Form 8-K/A filed on December 2, 2011)3.1(c)
Amendment to Articles of Incorporation (incorporated by reference from registrant’s Current Report on Form 8-K filed on November 15, 2013)3.3
By-laws (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)4
Specimen Stock Certificate (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)10.1
Amendment to Line of Credit Agreements with Quarry Bay Capital LLC (incorporated by reference to the registrant’s Current Report on Form 8-K filed on June 3, 2013)10.2
Security Agreement with Quarry Bay Capital LLC  (incorporated by reference to the registrant’s Current Report on Form 8-K filed on June 3, 2013)14
Code of Ethics (incorporated by reference from registrant’s Registration Statement on Form SB-2 filed on January 31, 2008, Registration No. 333-148959)21
Subsidiaries of the Company:  Gamzio, Inc.31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*101
Interactive Data Files**


*Filed herewith


**To be Filed by Amendment. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.


42
 SIGNATURES





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





GAMZIO MOBILE, INC.Dated: April 15,2014
/s/ Jason DeiboldtBy: Jason DeiboldtIts: President(Principal Executive Officer)





Pursuant to requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:





Signature

Capacity

Date/s/ Monika Sagar

Chief Financial Officer, Secretary and Director

April 15, 2014Monika Sagar

(Principal Financial Officer and Principal Accounting Officer)/s/ Fidel Pernites

Director

April 15, 2014Fidel Pernites





/s/ Jason Deiboldt

Director

April 15, 2014Jason Deiboldt








1Press Release: Mobile Gambling Wagers to Surpass $48bn by 2015: http://www.juniperresearch.com/viewpressrelease.php?pr=204


43