Invest in iMagic Games

The Company operates in highly competitive industries and its success depends on its ability to effectively compete with numerous domestic and foreign businesses. The Company faces significant competition in their businesses and in the evolving gaming industry, not only from traditional competitors but also from a number of other domestic and foreign providers, some of which have substantially greater financial resources and/or experience than the Company. Many of the Company’s competitors are large, well-established companies, with substantially larger operating staffs and greater capital resources and have been engaged in the design, manufacture, and operation of gaming products for many years. These competitors also compete with the Company in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, competitors may commercialize products more rapidly or effectively than the Company is able to, which would adversely affect the Company’s competitive position, the likelihood that the Company’s products and services will achieve initial market acceptance and an ability to generate meaningful additional revenues from products.

The Company’s success depends in part on its ability to develop, enhance and/or introduce successful gaming concepts and game content. Demand for its products and the level of play of its products could be adversely affected by changes in player preferences. The Company believes that creative and appealing game content will produce significant revenue for its games and will provide them with a competitive advantage, which in turn would enhance revenue and the Company’s ability to attract new business and to retain existing business. There can be no assurance that the Company will be able to create or sustain the success of its planned game content or effectively develop or obtain from third parties game content that would be widely accepted by customers. The Company’s revenues are dependent on the earning power and life span of its games. The Company therefore faces continuous pressure to design and deploy new and successful game themes and technologically innovative products to maintain revenue and remain competitive. If the Company is unable to anticipate or react timely to significant changes in player preferences, the demand for its gaming products and the level of play of its gaming products could decline.

If the Company is unable to protect its intellectual property, the value of its brand and other intangible assets may be diminished, and its business may be seriously harmed. A need to license or acquire new intellectual property, could cause the Company to incur substantial costs. The Company aims to protect its confidential proprietary information, in part, by entering into confidentiality agreements and invention assignment agreements with its employees, consultants, advisors, and third parties who access or contribute to its proprietary know-how, information, or technology. The Company also relies on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect its proprietary rights. In the United States and internationally, the Company has filed various applications to protect aspects of its intellectual property, and it currently holds trademarks and registered copyrights. In the future the Company may acquire additional intellectual property, which could require significant cash expenditures. However, third parties may knowingly or unknowingly infringe its proprietary rights, third parties may challenge the Company’s proprietary rights, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which the Company operates or intends to operate. In any of these cases, it may be required to expend significant time and expense to prevent infringement or to enforce its rights. Although the Company has taken measures to protect its proprietary rights, there can be no assurance that others will not offer products or concepts that are substantially similar to compete with its business. From time to time, the Company may face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that the Company has developed using such software, which could include proprietary source code. Any intellectual enforcement efforts iMagic Games seeks to undertake, including litigation, could be time-consuming and expensive and could divert management’s attention.

The Company has permitted its intellectual property to lapse. Obtaining and maintaining intellectual property protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental agencies, and the Company’s protection could be reduced or eliminated for noncompliance with these requirements. The USPTO and various foreign governmental agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the application process. Although an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of intellectual property include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In particular, the Company has permitted its trademarks to lapse and be abandoned for: “iEntertainment”, “WarBirds”, “Warbirds II”, “Warbirds III”, “Rated I”, “Woogle”, “INetwork”, among others. A dead or abandoned status for a trademark application means that specific application is no longer under prosecution within the USPTO, and would not prevent another party from filing for that same trademark protection.

The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on John Stealey who is a founder and key employee of the Company. The loss of John Stealey or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.

The reviewing CPA has included a “going concern” note in the reviewed financials. Specifically, the CPA has noted that the Company has incurred losses from inception of approximately $49,151,306 which, among other factors, raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's plans to raise additional capital from the issuance of debt or the sale of stock, its ability to commence profitable sales of its flagship products, and its ability to generate positive operational cash flow. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

The Company has not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.

The Parent Company has a complicated operating history which includes being taken public, being taken private, retiring of debt, and the sale of common stock to friends and family of the management team. This has resulted in the Parent Company having several thousand investors which may pose operational challenges to the Company. The complicated history may be an indication of executive mismanagement and may be an indicator of future financial and governance issues.

If the Company fails to implement proper and effective internal controls, disclosure controls, and/or corporate governance procedures, its ability to operate could be substantially impaired. Prior to this offering, the Parent Company has had a complicated operating history, and has, on at least one occasion, failed to implement or maintain an effective system of corporate governance. In particular, on August 13, 2010, the Parent Company was temporarily dissolved pursuant to N.C.G.S. Section 55-14-21 for failure to file an annual report. On November 23, 2010, the Company filed for reinstatement, which reinstatement was granted. This occurrence may indicate ineffective current controls, mismanagement, or failure by executives to perform routine duties. In addition, in the course of producing the Reviewed Financials, which are attached to the Form C as Exhibit B, independent registered accountants found deficiencies in internal controls with respect to the Company’s issuances of equity securities and granting of stock options, as well as the booking of equity and debt. Due in part to these deficiencies, certain issuances of capital stock and option grants were not documented or properly authorized in compliance with all corporate law requirements. The Company has taken actions to remediate the deficiencies with respect to the issuance of equity securities and the granting of stock options. The Company, however, cannot assure that such actions will be successful in remediating the deficiencies.

The majority of the Company’s projected revenue is based on media partner games which have yet to be released. If the Company is unable to deliver these games to their media promotion partners or if these games are not well received by the market, the Company may be unable to meet its growth projections and may be unable to meet its financial obligations.

The Company’s projections rely substantially on products which have not yet been fully developed or launched, and do not represent revenue from the Company’s current portfolio of games. iMagic Game’s largest game is currently generating approximately $9,000 in revenue each month, substantially less than the projected revenue in its business model. If the Company’s new releases cannot generate more meaningful revenue, the Company may be unable to meet its financial obligations and may be unable to meet its growth projections.

iMagic Games is dependent upon third-party development companies to built its games. These third-party development groups may be unable to meet the Company’s timeline or quality expectations. If the Company is unable to pay these third-party development groups or if these groups experience financial distress, iMagic Games may be left with no product to deliver to its media partners. The Company’s operating results could be adversely affected by an interruption or cessation in the development of this content or a serious quality assurance lapse. The Company may be unable to find adequate replacements for its developers within a reasonable time frame, on favorable commercial terms or at all. Development costs may unexpectedly increase and the Company may not be able to successfully recover any or all of such cost increases.

The Company has a cash position of approximately $17,600, which represents approximately less than two months of runway. If the Company is unable to raise additional capital, it may be unable to meet its financial obligations and may miss its growth projections.

The Company's quarterly operating results have fluctuated significantly in the past and will likely fluctuate significantly in the future depending on a variety of factors, several of which are not in the Company's control. Such factors include the demand for the Company's products and the products of its competitors, the size and rate of growth of the interactive entertainment software market, development and promotional expenses related to the introduction of new products or enhancements, the degree of market acceptance for the Company's new product introductions and enhancements, the timing of orders from significant customers, delays in shipment, the level of price competition, changes in computing platforms, the nature and magnitude of product returns, order cancellations, software defects and other quality problems, the length of product life cycles, the percentage of the Company's sales related to international sales and changes in personnel. A significant portion of the Company's operating expenses is relatively fixed, and planned expenditures are primarily based on expectations regarding future sales; as a result, operating results in any given quarter would be disproportionately adversely affected by a decrease in sales or a failure to meet the Company's sales expectations. Operating results for future periods are subject to numerous uncertainties, and there can be no assurance that the Company will become profitable or sustain profitability on an annual or quarterly basis. Based on the foregoing, the Company believes that period-to-period comparisons of operating results should not be relied upon as indicative of future results.

The Company's success depends on the timely introduction of successful new products. The development of new products is lengthy, expensive and uncertain, and a product's development typically requires six to 24 months to complete from the time a new concept is approved. In addition, product development of online products continues for the life of the product. Many of the Company's proposed products are in early stages of development, and the Company will be required to commit considerable time, effort and resources to complete development of its currently proposed products. The Company has, in the past, experienced significant delays in the introduction of certain new products and there will likely be delays in developing and introducing new products in the future. In addition, because many of the Company's products are developed for it by third parties, the Company cannot always control the timing of their introduction. While the Company maintains production arrangements with its third-party developers, provides them with certain software tool kits to promote quality control and monitors their progress, there can be no assurance that delays in the work performed by third parties or poor quality of such work will not result in product delays. Unanticipated delays, expenses, technical problems or difficulties could cause the Company to miss an important selling season with a corresponding negative impact on revenues and net income or result in abandonment or material change in product commercialization.

There can be no assurance that the Company will be able to successfully develop any new products on a timely basis or that technical or other problems will not occur which would result in increased costs or material delays. In addition, software products as complex as those offered by the Company may contain undetected errors when first introduced. Despite extensive product testing, the Company has, in the past, released products with defects and has discovered software errors in certain of its product offerings after their introduction. In particular, the personal computer hardware environment is characterized by a wide variety of non-standard peripherals (such as sound cards and graphics cards) and configurations that make pre-release testing for programming or compatibility errors very difficult and time-consuming. There can be no assurance that, despite testing by the Company, errors will not be found in new products or releases after commencement of commercial shipments. Remedying such errors may delay the Company's plans, cause it to incur additional costs and adversely affect its reputation.

The level of demand and market acceptance for the Company's newly introduced products is subject to a high degree of uncertainty. Software acquisition and development costs, as well as promotion and marketing expenses, royalties and third-party participations payable to software developers, creative personnel, musicians and others, which reduce potential revenues derived from software sales, have increased significantly in recent years. The Company's future operating results will depend on numerous factors beyond its control, including the popularity, price and timing of new entertainment software products being released and distributed, international, national, regional and local economic conditions (particularly economic conditions adversely affecting discretionary consumer spending), changes in consumer demographics, the availability of other forms of entertainment, critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted. The Company's ability to plan for product development and promotional activities will be significantly affected by its ability to anticipate and respond to relatively rapid changes in consumer tastes and preferences, particularly those of the consumers. A decline in the popularity of software games or in the interactive entertainment software industry generally or in particular market segments could adversely affect the Company's business and prospects. In addition, the success of the Company's strategy to capitalize on online games will depend in part upon market acceptance of online games and a "pay-for-play" model. Online game play is a new and evolving concept, and it is difficult to assess or predict with any assurance the size of the market for online games or its prospects for growth. There can be no assurance that a viable market for online games will develop, that the Company will be successful in developing additional products for online use or that the Company's products for this market will achieve widespread market acceptance.

Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.

Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.

The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.

Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.

You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.

Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.

Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.

Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.