form10qaplaybox.htm
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q/A
Amendment No.1
 
[ x ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
for the quarterly period ended June 30, 2008
 
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
for the transition period from _____to _____
 
Commission File Number: 000-52753
 
PLAYBOX (US) INC.
(Name of issuer as specified in its charter)
 
NEVADA
N/A
(State or other jurisdiction of incorporation or
(IRS Employer Identification No.)
organization)
  
 
Suite 3.19, 130 Shaftesbury Avenue, London, England WID 5EU
(Address of principal executive offices)
 
+44 (0) 20 7031 1187
Issuer's telephone number
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[ x ] No[ ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
Smaller reporting company x
(Do not check if a smaller reporting company)
  
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes[ x ] No[ ]
 
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
 
54,186,293 shares of common stock as of April 28, 2009.
 

EXPLANATORY NOTE:

We are filing this first amendment to our quarterly report on Form 10-Q for the nine months ended June 30, 2008 to restate our consolidated financial statements for the nine months then ended. In the course of preparing our financial statements for our annual report on Form 10-K to be filed with the Securities and Exchange Commission (“SEC”) for the year ended September 30, 2008, we discovered an unrecorded obligation resulting in a material misstatement of our 2008 interim financial statements for the previously reported quarter ended June 30, 2008. Furthermore, after reviewing comments from the SEC in regards to this misstatement, we concluded that the previous reported quarter ended March 31, 2008 also was affected by this unrecorded obligation. The restatements to include this unrecorded obligation has had a significant impact on our previously reported consolidated balance sheets and consolidated statements of operations contained therein.
 
The restatement of our consolidated financial statements as a result of the error described above has led our management to conclude that a material weakness existed in our internal control over financial reporting as of June 30, 2008, and that Management’s Report on Internal Control over Financial Reporting should also be restated. Accordingly, this amended filing includes a revised “Item 4. Controls & Procedure”s that reflects management’s conclusion that our internal control over financial reporting was not effective at June 30, 2008 for reasons in addition to those previously discussed.
 
No attempt has been made in this Form 10-Q/A to update disclosures presented in the original Form 10-Q as filed except those affected by the recognition of the previously unrecorded obligation. Furthermore, this Form 10-Q/A does not reflect events occurring after the original filing except as disclosed in the original Form 10-Q, including any changes to the exhibits affected by subsequent events. Therefore, the exhibits have not been included with this Form 10-Q/A with the exception of  Exhibits 31.1, 31.2 and 32.1 new certifications by our principal executive officer and principal financial officer as required by Rule 13a-14 promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the original Form 10-Q, including any amendments to those filings.
 
FORWARD-LOOKING STATEMENTS
 
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding our ability to achieve commercial levels of sales of our PLAYBOX online music application, our ability to successfully market our PLAYBOX online music application, our ability to continue development and upgrades to the PLAYBOX online music application, availability of funds, government regulations, common share prices, operating costs, capital costs and other factors. Forward-looking statements are made, without limitation, in relation to our operating plans, our liquidity and financial condition, availability of funds, operating costs and the market in which we compete. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
 
 
PART I – FINANCIAL INFORMATION
 
Page 
Financial Statements
4
   Item 2.
Management’s Discussion and Analysis
13
Quantitative and Qualitative Disclosures About Market Risk
20
   Item 4.
Controls and Procedures
20
 
PART II – OTHER INFORMATION
 
  
   Item 1.
Legal Proceedings
21
Risk Factors
21
   Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
21
   Item 3.
Defaults Upon Senior Securities
21
   Item 4.
Submission of Matters to a Vote of Securities Holders
21
   Item 5.
Other Information
21
   Item 6.
Exhibits
21
 
PART I – FINANCIAL INFORMATION

Item 1.
Financial Statements
 
The following unaudited consolidated financial statements of Playbox (US) Inc. (the “Company”) are included in this Quarterly Report on Form 10-Q:
 
 
Page
   
Restated Consolidated Balance Sheets as at June 30, 2008 (unaudited) and September 30, 2007 (audited)
F-2
   
Restated Consolidated Statements of Operations for the three and nine months ended June 30, 2008 and 2007 and for the period from incorporation (August 21, 2003) to June 30, 2008
F-3
   
Restated Consolidated Statements of Cash Flows for the nine months ended June 30, 2008 and 2007 and for the period from incorporation (August 21, 2003) to June 30, 2008
F-4
   
Restated Notes to Consolidated Financial Statements
F-5

Playbox (US) Inc.
  
(A Development Stage Company)
  
Consolidated Balance Sheets
  
(Unaudited)
  
   
As of
        
   
June 30, 2008
    
As of
  
   
(Restated)
    
September 30, 2007
  
ASSETS
            
             
Current Assets
            
Cash
   $ 13,643     $ 5,909  
Accounts receivable
     1,391       322  
Total Current Assets
   $ 15,034     $ 6,231  
                 
LIABILITIES
                
Current Liabilities
                
Accounts payable
   $ 98,374     $ 100,207  
Accrued liabilities
     3,041       35,646  
Due to related parties
     325,631       201,231  
Amounts owing pursuant to agreement  for acquisition of Delta Music Limited
     199,540       0  
Total Current Liabilities
     626,585       337,084  
                 
Long Term Liabilities
                
Loan payable
     0       18,100  
Total Long Term Liabilities
     0       18,100  
                 
TOTAL LIABILITIES
     626,585       355,184  
                 
STOCKHOLDERS’ DEFICIENCY
                
Capital Stock
                
Preferred Stock
                
Authorized:  5,000,000 shares with $0.001 par value. Issued: Nil
     -       -  
Common Stock
                
Authorized: 100,000,000 common shares with $0.001 par value
          
      Issued:  29,663,293 (June 30, 2008)
     29,663       28,845  
                  28,845,139 (September 30, 2007)
                
       Obligation to issue shares
     2,000       -  
Additional paid-in capital
     3,105,212       2,906,055  
Accumulated Comprehensive Loss
     (11,943 )     (12,168 )
Deficit - Accumulated during the development stage
     (3,736,482 )     (3,271,685 )
      (611,550 )     (348,953 )
    $ 15,034     $ 6,231  
                 
The accompanying notes are an integral part of these consolidated financials statements.
    
 
F-2
 

Playbox (US) Inc.
  
(A Development Stage Company)
  
Consolidated Statements of Operations
  
(Unaudited)
  
                           
Cumulative
  
                           
From
  
                           
Incorporation
  
   
For the Three
    
For the Three
    
For the Nine
    
For the Nine
    
August 21,2003
  
   
Months Ended
    
Months Ended
    
Months Ended
    
Months Ended
    
to
  
   
June 30, 2008
    
June 30, 2007
    
June 30, 2008
    
June 30, 2007
    
June 30, 2008
  
   
(Restated)
          
(Restated)
          
(Restated)
  
                               
Sales
   $ -     $ 149     $ -     $ 439     $ 1,364  
Cost of Sales
     -       -       -       -       777  
Gross Margin
     0       149       0       439       587  
General and Administrative Expenses
                                  
Accounting and auditing
     8,485       16,217       40,571       56,267       264,807  
Bank charges
     56       51       798       496       2,030  
Consulting and technical support (Note 3)
     3,973       30059       115,783       88,884       263,183  
Depreciation
     -       172       -       552       1,887  
Development
     -       -       199,540       -       228,692  
Filing fees
     1,449       57       2,969       2,532       8,226  
Intellectual property
     -       -       -       -       2,500,000  
Investor relations
     -       -       -       18,000       18,000  
Legal
     5,272       6,154       30,462       24,093       120,463  
Marketing and public relations
     7,513               7,513       -       38,838  
Office and miscellaneous
     3581       530       4,275       4,190       18,265  
Rent
     2,977       2,978       9,013       8,783       47,263  
Salaries and benefits
     24,702       99       54,042       11,645       211,311  
Transfer agent fees
     1,920       50       2,050       135       4,090  
Travel and entertainment
     474       9       474       865       4,038  
      60,402       56,376       467,491       216,442       3,731,094  
      (60,402 )     (56,227 )     (467,491 )     (216,003 )     (3,730,507 )
Loss from Operations
                                        
Other Income (Expense)
                                        
Foreign exchange (loss) gain
     (334 )     (7,138 )     2,585       (6,558 )     (6,817 )
Interest income (expense)
     108       13       108       21       842  
Net Loss
   $ (60,627 )   $ (63,352 )   $ (464,798 )   $ (222,540 )   $ (3,736,482 )
 
Loss per Share – Basic and Diluted
   $ 0.00     $ 0.00     $ (0.02 )   $ (0.01 )        
 
                                        
                                         
Weighted Average Shares Outstanding
     29,284,483       28,225,139       28,991,053       28,561,476          
 
                                  
                                         
Comprehensive Loss
                                        
Net Loss
     (60,627 )     (63,352 )     (464,798 )     (222,540 )     (3,736,482 )
Foreign currency translation adjustment
     (1,689 )     (1,084 )     224       4,875       (11,943 )
      (62,316 )     (64,436 )     (464,574 )     (217,665 )     (3,748,425 )
                                         
The accompanying notes are an integral part of these consolidated financials statements.
 
F-3
 

Playbox (US) Inc.
  
(A Development Stage Company)
  
Consolidated Statements of Cash Flow
  
                   
   
For the Nine Months Ending
June 30,2008
    
For the Nine Months Ending
June 30,2007
    
Cumulative from Incorporation August 21, 2003 to
June 30, 2008
  
   
(Restated)
          
(Restated)
  
Operating
                  
Net Loss
   $ (464,798 )   $ (222,540 )   $ (3,736,482 )
Items not involving cash:
                        
Depreciation
     -       552       1,887  
Shares for consulting services
     50,000       -       56,085  
Shares for intellectual property
     -       -       2,500,000  
Changes in non-cash working capital items:
                        
Accounts receivable
     (1,069 )     620       (1,391 )
Accounts payable
     (1,833 )     27,258       45,798  
Accrued liabilities
     (32,605 )     (16,806 )     (5,821 )
Amounts owing pursuant to agreement  for acquisition of Delta Music Limited
     199,540       -       199,540  
Net cash flows used in operations
     (250,765 )     (210,916 )     (940,384 )
                         
Investing
                        
Cash acquired on purchase –
     -       -       130,626  
  Playbox Media Limited
                        
Acquisition of property and equipment
     -       -       (1,887 )
Net cash flows from investing activities
     0       0       128,739  
                         
Financing
                        
Due to Boyd Holdings Inc.
     -       -       32,170  
Amounts due to related parties
     124,400       101,145       325,631  
Loan from related party
     -       -       159,064  
Loan payable
     (18,100 )     14,100       -  
Convertible promissory note issuance
     20,000       -       20,000  
Share issuances for cash
     131,975       80,000       300,368  
Net cash flows from financing activities
     258,275       195,245       837,233  
                         
Effect of exchange rate changes
     224       (4,875 )     (11,943 )
                         
Change in Cash
     7,734       (20,546 )     13,643  
Cash - Beginning
     5,909       26,433       -  
Cash - Ending
   $ 13,643     $ 5,887     $ 13,643  
                         
Supplemental Cash Flow Information
                        
   Cash paid for:
                        
     Income Taxes
   $ -     $ -     $ -  
     Interest Paid
   $ -     $ -     $ -  
                         
The accompanying notes are an integral part of these consolidated financials statements.
  
 
F-4

Playbox (US) Inc.
(Formerly Boyd Holdings Inc.)
(A Development Stage Company)
Notes to Consolidated Financial Statements
June 30, 2008
US Funds
(Restated)
 
1. Basis of Presentation
 
Organization
 
Playbox (US) Inc. (the “Company” or "Boyd") was incorporated on April 1, 2005 under the laws of the State of Nevada, under the name of Boyd Holdings Inc. On April 12, 2006, the Company changed its name to Playbox (US) Inc.
 
By letter of intent dated April 18, 2005 and a Share Exchange Agreement ("Agreement") dated May 23, 2005 and as amended June 30, 2005 with PlayBOX MEDIA LIMITED ("PlayBOX"), a United Kingdom corporation, wherein Boyd agreed to issue to the shareholders of Playbox 12,000,000 Boyd shares in exchange for the 2,085,000 shares that constituted all the issued and outstanding shares of Playbox. On March 24, 2006, Playbox completed the reverse acquisition (“RTO”) under the Agreement with Boyd. Immediately before the date of the RTO, Boyd had 100,000,000 common shares authorized and 5,705,139 shares of common stock issued and outstanding. Pursuant to the RTO, all of the 2,085,000 issued and outstanding shares of common stock of Playbox were exchanged for 12,000,000 Boyd shares on an approximate 5.755 to 1 basis.
 
PlayBOX was incorporated on August 21, 2003 and is a technology and marketing company, headquartered in London, England. The accompanying financial statements are the historical financial statements of PlayBOX.
 
The major asset of Playbox is the worldwide license (the “License”) to exploit software that provides an integrated music interface and music collection manager running on Windows, Linux and Macintosh operating systems. This software is currently being marketed to both the end-user music listener and to record industry companies to enable such companies to embed this software into their websites in order to provide seamless access to on-line music for sale. The software has also been developed to enable the end-user to control their music collection being managed by the Playbox software wirelessly from commonly used devices such as the listeners’ music system or cell phone and to be able to synchronize their music cross-platform with portable music players (iPod, MP3 player, or PDA).
 
Unaudited Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principals for interim financial information and with the instructions to Form 10-QSB of Regulation S-B.  They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements.  However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statements for the year ended September 30, 2007 included in the Company’s 10-KSB filed with the Securities and Exchange Commission.  The unaudited interim consolidated financial statements should be read in conjunction with those consolidated financial statements included in the 10-KSB.  In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made.  Operating results for the nine months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the year ending September 30, 2008

2.
Restatement of Previously Issued Financial Statements
 
The Company has restated its balance sheet as of June 30, 2008, and the related statements of operations, stockholders’ equity, and cash flows.  The Company had not accounted for a liability which resulted from a Share Purchase Agreement entered into on March 28, 2008 (a more detailed explanation of this transaction is provided in Note 6).
 
The effects of the restatement are as follows:
 
· Amendment to the Balance Sheet to increase current liabilities by USD 199,540
· Amendment to the Income Statement to increase expenses for “Development Fees” by USD 199,540
· Amendment to the Statement of Cash Flows to reflect the above changes
 
F-5
 
3.
Significant Accounting Policies
 
The following is a summary of significant accounting policies used in the preparation of these financial statements.
 
a)
Basis of Consolidation
   
These consolidated financial statements include the accounts of PlayBOX MEDIA LIMITED since its incorporation on August 21, 2003 and Playbox (US) Inc. since the reverse acquisition on March 24, 2006. All intercompany balances and transactions have been eliminated.
 
b)
Use of Estimates
   
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions.
 
c)
Development Stage Company
   
The Company is a development stage company as defined by SFAS No. 7. The Company is devoting substantially all of its present efforts to establish a new business. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
 
d)
Cash and Cash Equivalents
   
Cash equivalents consist of highly liquid instruments purchased with an initial maturity of three months or less.
 
e)
Revenue Recognition
   
Revenues are recognized when all of the following criteria have been met under SAB No. 104, “Revenue Recognition in Financial Statements”: persuasive evidence of an agreement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectibility is reasonably assured.
   
Revenue arises from the following sources: creation of web-based music interfaces; provision of hosting and bandwidth services; and revenue share services.
   
Revenues from the creation of web-based music interfaces come from set-up fees based on the number of tracks to be uploaded and the number of hours of development time to complete the interface and are recognized when all of the following SAB No. 104 criteria are met: a web-based interface development agreement is signed with an estimate of the total cost based on agreed upon specifications. Revenue from the development of web-based interfaces is recognized in accordance with the completed performance method. Under this method, revenue is recognized at the completion of the web-based interface as the service transaction taken as a whole can be deemed to have taken place on completion of the development. Collectability is reasonably assured as the Company receives the agreed set-up fee prior to allowing access to the web- based interface.
   
Revenues from the provision of hosting and bandwidth services come from a one time hosting set-up fee and monthly fees based on disk space and bandwidth to be provided and are recognized when all of the following SAB No. 104 criteria are met: a website hosting agreement is signed with an initial term of six months and from month to month thereafter until terminated by either party. Each agreement has a hosting price structure where prices can be determined.
   
Revenue from the one time set-up fee is deferred and recognized over the initial term of six months and revenue received from monthly fees is recognized at the end of the month, when hosting services, server bandwidth and customer support was made available to the client for the month. Collectability is reasonably assured as the Company receives a one time set-up fee prior to the provision of the services. Monthly fees are received in advance of each month, which is recorded as deferred revenue, and are recognized when the monthly service is rendered.
   
Revenues from the revenue share services element come from a set revenue share percentage of music download purchases, as set out in each customer’s agreement and are recognized when all of the following SAB No. 104 criteria are met: a distributor agreement is signed with initial and renewal terms determined on a case-by-case basis. Revenue is recognized when the minimum revenue share threshold of British Pounds Sterling (“GBP”) 100, every payment period, is achieved. If the revenue share is less than GBP 100, payments shall be carried over to the next due payment date. Collectability is reasonably assured as the Company collects its revenue share directly from the secure online payment system which it utilizes prior to transferring net revenues to the customer.
 
F-6
 
 
f)
Foreign Currency Translations
   
The Company’s functional currency is GBP. The Company’s reporting currency is the U.S. dollar. All transactions initiated in other currencies are re-measured into the functional currency as follows:
   
i)
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,
   
ii)
Non-monetary assets and liabilities, and equity at historical rates, and
   
iii)
Revenue and expense items at the prevailing rate on the date of the transaction.
   
Gains and losses on re-measurement are included in determining net income for the period
   
Translation of balances from the functional currency into the reporting currency is conducted as follows:
   
ii)
Assets and liabilities at the rate of exchange in effect at the balance sheet date,
   
ii)
Equity at historical rates, and
   
iii)
Revenue and expense items at the prevailing on the date of the transaction.
     
Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss. Upon sale or liquidation of the net investment in the foreign entity the amount deferred will be recognized in income.
 
g)
Income Taxes
   
Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets when it is more likely than not that such assets will not be recovered.
 
h)
Fair Value of Financial Instruments
   
The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and amounts due to related parties. Unless otherwise noted, it is management’s opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted.
 
i)
Segment Reporting
   
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information,” changed the way public companies report information about segments of their business in their quarterly reports issued to stockholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers. The Company currently operates in two segments, Western Europe and United States.
 
j)
Stock-Based Compensation
   
Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment”, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees’ requisite service period (generally the vesting period of the equity grant). Before January 1, 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and complied with the disclosure requirements of SFAS No. 123, “Accounting for Stock-Based Compensation”.
   
The Company adopted FAS 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. As the Company had no invested stock options outstanding on the adoption date the financial statements for the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of SFAS No. 123(R) does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.
 
k)
Comprehensive Income
   
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements.
 
F-7
 
 
l)
Loss per Share
   
The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share”, which requires presentation of both basic and diluted loss per share (“LPS”) on the face of the statement of operations. Basic LPS is computed by dividing the net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted LPS gives effect to all potentially dilutive common shares outstanding including convertible debt, stock options and share purchase warrants, using the treasury stock method. The computation of diluted LPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on LPS. The diluted LPS equals the basic LPS since the potentially dilutive securities are anti-dilutive.
 
m)
Recently Adopted Accounting Standards
     
   
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The Company has not yet determined the impact, if any, that SFAS No. 160 will have on its consolidated financial statements. SFAS No. 160 is effective for the Company’s fiscal year beginning October 1, 2009.
   
In December 2007, the FASB issued SFAS 141R, Business Combinations. SFAS 141R replaces SFAS 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. The statement will apply prospectively to business combinations occurring in the Comapnys fiscal year beginning October 1, 2009. We are evaluating the impact adopting SFAS 141R will have on our financial statements.
4.
Intellectual Property
 
On March 31, 2006 the Company acquired from its majority stockholder, the PlayBOX Technology by issuing 10,000,000 common shares. The PlayBOX Technology is an integrated music interface and music collection manager running on Windows, Linux and Macintosh operating systems. The acquisition is a related party transaction. The value assigned was $2,500,000, being equal to the most recent share transaction of the Company of $0.25 per share. This amount was written-off as the Company determined the PlayBOX Technology was impaired in accordance with paragraph 34 of SOP 98-1 and FASB 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

F-8
5.
Related Party Balances and Transactions
 
a)
The amounts due and/or accrued to related parties of $209,060 for the nine months ended June 30, 2008 are non-interest bearing, unsecured and due on demand. Included in due to related parties are amounts owing to a corporate shareholder, two separate companies with directors in common with a corporate shareholder, and to a company with an officer in common with a corporate shareholder.
 
b)
During the nine months ended June 30, 2008, the Company has accrued $9,013 for rent to a company with directors in common with a corporate shareholder of the Company.
 
c)
By Agreement dated December 14, 2007, the Company entered into an Executive Employment Agreement with Mr. Henry C. Maloney with respect to the appointment of Mr. Maloney as an executive officer of the Company.  The annual salary for Mr. Maloney’s services is $99,865 (GBP50,000).  As of June 30, 2008, $54,042 (GBP27,083) has been accrued.
 
The above transactions, occurring in the normal course of operations, are measured at the exchange amount, which is the amount of consideration established, and agreed to by the related parties.
 
6.
Amounts Payable Pursuant to Agreement for Acquisition of Delta Music Limited
 
On March 28, 2008, the Company entered into a Share Purchase Agreement (the “Agreement”) for the proposed acquisition of UK based Delta Music Limited (“Delta Music”).  The acquisition never completed.
 
However, under the terms of the Agreement, the Company agreed to pay GBP 100,000 (USD 199,540 as of June 30, 2008) to the attorneys of the Sellers to fund certain expenses to be incurred by the Sellers and Delta Music in connection with the acquisition regardless of whether or not the acquisition completed.
 
As of June 30, 2008, this amount has not been paid.

7.
Capital Stock
 
The Company’s capitalization is 100,000,000 common shares with a par value of $0.001 per share and 5,000,000 preferred shares with a par value of $0.001.
 
a)
On April 21, 2008, the Company received $100,000 (GBP 49,192), from an unrelated party, for 2,000,000 common shares at $0.05 per share. As of July 24, 2008, the shares had not been issued.
 
b)
 
 On May 8, 2008, the Company issued 538,154 common shares at $0.06 per share in full settlement of  a $31,975 loan and accrued interest with Karada Ltd., an unrelated third party.
 
c)
On May 8, 2008, the Company issued 80,000 common shares at $0.25 per share in full settlement of the $20,000 convertible debenture with The Capai Trust.
 
d)
On May 29, 2006, the Company issued 200,000 common shares in fulfillment of a Consulting agreement dated November 5, 2007 with Westport Strategic Partners Inc.
8.
Going Concern
 
 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at June 30, 2008, the Company has an accumulated deficit of $3,736,482 and has incurred an accumulated operating cash flow deficit of $940,384 since incorporation. The Company intends to continue funding operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next fiscal year.
Thereafter, the Company will be required to seek additional funds, either through equity financing, to finance its long-term operations. The successful outcome of future activities cannot be determined at this time, and there is no assurance that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. In response to these conditions, management intends to raise additional funds through future private placement offerings.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
9.
Subsequent Event
 
On July 2, 2008, the “Company” received notice of termination of the Share Purchase Agreement entered into by and between the Company and Laurence Adams and Jacqueline for the proposed acquisition of U.K based Delta Music Limited, a United Kingdom company. The terms of the Share Purchase Agreement allowed either party to terminate if the acquisition contemplated thereunder had not occurred prior to June 30, 2008.
 
F-9

Item 2.
Management’s Discussion and Analysis
 
The following discussion of our financial condition, changes in financial condition and results of operations for the nine month period ended June 30, 2008 should be read in conjunction with our unaudited consolidated interim financial statements and related notes for the nine month period ended June 30, 2008.
 
Overview of Our Business
 
PlayBOX (US) Inc. (“we” or the “Company”) was incorporated on April 1, 2005 as Boyd Holdings Inc. under the laws of the State of Nevada. We operate through our wholly-owned subsidiary, PlayBOX Media Limited (“PlayBOX UK”). We changed our name to “PlayBOX (US) Inc.” effective April 12, 2006 to reflect our acquisition of PlayBOX UK and its business. PlayBOX UK was incorporated on August 21, 2003 under the laws of the United Kingdom.
 
We are the owner of an online music hosting and downloading application targeted at unsigned music acts and small- to medium-sized record labels enabling them to establish their own music downloading or hosting services. The application is offered with a number of supplemental services such as hosting, streaming, e-commerce and digital rights management (DRM) using the latest MP3 and Windows Multimedia technology. We pool these services together to offer our clients a cost-effective and professional platform on which to sell and promote their music products.
 
Our PlayBOX online music application consists of four dynamic interfaces, namely White Label, Aggregator, Bespoke and Jukebox that provide an interface between artists and content owners and their listeners via the Internet. The White Label interface provides artists a way to offer their music for sale to listeners via the Internet by enabling them to download individual songs either directly from our website or from the artist’s own website. The Aggregator interface allows small- to medium-sized record labels with a music catalogue of at least 50 tracks who wish to sell their tracks via an online downloading store with e-commerce, tracking, reporting and billing functions built in. The interface can be operated as a stand-alone website, or can be integrated into the client’s existing website. For our Bespoke interface, we hire independent web designers to create specialized interfaces for particular clients with unique needs and requirements quickly and cheaply. Finally, our PlayBOX Jukebox interface provides music listeners with a unique way to listen to their music and to manage their music collections visually on their personal computer. The PlayBOX Jukebox also lets users submit their personal ratings of the music they have stored on the Jukebox, and the Jukebox can even recommend other music that will match the user’s taste.
 
We have completed the development of the PlayBOX online music application. However, we have only commenced the process of commercializing our technology and we have had very minimal sales to date. While we have achieved initial sales, these sales cannot be viewed as significant in relation to our operating expenses. Furthermore, we are presently not earning any revenues. Accordingly, we are in the early development stage of our business. Further, we will require additional financing in order to complete commercialization of our PlayBOX online music application. As a result of our limited financing, our operations during the past year have been scaled back to reflect our limited financial resources. Accordingly, we have not advanced our business to the extent that we had planned during the past year. We have recently brought in a director of business strategy, Mr. Harry Maloney, to assist us in securing additional clients and advancing our business operations.
 
We have earned only minimal revenues to date. Our plan of operations, as described below, is to generate revenues from the sales of one or more of the interfaces comprising our online music application. Our ability to pursue our plan of operations has been limited during the past year and will be limited during the coming year to the extent that we have not had and will not have sufficient funds with which to pursue our plan of operations.
 
Our principal executive office is located at Suite 3.19, 130 Shaftesbury Avenue, London, England, W1D 5EU. Our telephone number is +44(0)20 7031 1187 and our fax number is +44(0)20 7031 1199.
  
Prospective Acquisition of Delta Leisure Group, Plc.
 
On July 2, 2008, Playbox (US), Inc. (the “Company”) received notice of termination of that certain Share Purchase Agreement entered into by and between the Company and Laurence Adams and Jacqueline Adams (collectively “Adams”), as reported on Form 8-K and filed with the Securities and Exchange Commission on April 3, 2008. The terms of the Share Purchase Agreement allowed either party to terminate if the acquisition contemplated thereunder had not occurred prior to June 30, 2008.
 
Plan Of Operations
 
Our plan of operations for the next twelve months is to continue to seek out acquisition partners and to continue to  commercialize and generate revenues from our PlayBOX online music application, subject to our achieving additional financing. We plan to complete the following objectives within the time periods and budgets specified with respect to our Playbox business, subject to our achieving the necessary financing:
 
1.
We plan to carry out sales and marketing of our PlayBOX online music service with the objective of securing sales of our White Label interface to music artists and our Aggregator interface to record labels. Our Bespoke interfaces will be targeted predominantly towards companies involved in the music industry. We plan to undertake a number of marketing and promotional campaigns over the next 12 months with the objective of establishing sales momentum. We estimate $7,000 per month will be spent on our proposed marketing campaigns and promotions in that 12-month period, for anticipated total annual expenditures of $84,000.
   
2.
We anticipate spending approximately $10,000 over the next 12 months to various third parties to run our PlayBOX service. These parties’ elements are: (i) dedicated server through Open Hosting Ltd., (ii) ePDQ payment interface, provided by Barclaycard UK, and (iii) the administration of these elements in the PlayBOX system.
   
3.
We anticipate spending approximately $17,000 over the next twelve months in continuing the upgrading, development and design of our PlayBOX system.
 
These planned expenditures with respect to our Playbox business total approximately $111,000 over the next twelve months.
 
In addition, we anticipate incurring the following general and administrative expenses totaling approximately $64,000:
 
1.
We anticipate spending approximately $2,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $24,000 over the next twelve months. The general and administrative expenses for the year will consist primarily of rent and office services, technical support and hosting services and general office expenses.
   
2.
We anticipate spending approximately $40,000 in complying with our obligations as a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the preparation of our financial statements and completing our annual report, quarterly report, current report and proxy statement filings with the SEC.

Further more, we expect to incur the following administrative costs of approximately $200,000 to:

1.
expand our executive management team in order to add a chief financial officer;
   
2.
move our principal office to a dedicated serviced office from our current shared office premises; and
   
3.
bring our management compensation packages up to date and regularize payments under these compensation arrangements.
 
We may also seek to identify additional possible acquisitions in the music and technology industry. Acquisitions would be directed at bolstering our present technology offering and content owners to give us a larger repertoire of music to distribute through our digital channel. In any event, our ability to complete any prospective acquisitions will be subject to our achieving the necessary financing to complete such acquisitions. There is no assurance that we will identify any possible acquisition targets who would agree to be acquired by us or that we will be able to raise the necessary funds to complete any acquisitions if we are able to enter into acquisition agreements. The amounts budgeted in our plan of operations do not include any amounts for the identification of possible acquisitions, the negotiation of any letters of intent or acquisition agreements or due diligence or other associated expenses.
 
We had cash of $13,643 and working capital deficit of $611,551 as at June 30, 2008. Based on our plan of operations outlined above, we anticipate that our planned expenditures over the next twelve months to be in the amount of approximately $375,000 which will exceed our cash reserves and working capital. As a result, our cash and working capital is not sufficient to enable us to undertake our plan of operations over the next twelve months without our obtaining additional financing. We anticipate based on our current cash and working capital deficit and our planned expenses that we will not be able to fund our operations beyond the next few months without additional financing. We anticipate that we will require financing in the amount of approximately $800,000 in order to carry out our plan of operations for the next twelve months.
 
We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. We believe that debt financing will not be an alternative for funding of our planned activities as we do not have tangible assets to secure any debt financing.
 
We have not entered into any financing agreements and we cannot provide investors with any assurance that any financing we obtain will be sufficient to fund our plan of operations. At this time, all potential investors and all discussions are taking place outside of the United States. In the absence of such financing, we may not be able to continue our plan of operations beyond the next few months and our business plan will fail. If we do not continue to obtain additional financing, we will be forced to abandon our plan of operations and our business activities.
 
Presentation of Financial Information
 
Effective March 24, 2006, we acquired 100% of the issued and outstanding shares of PlayBOX UK by issuing 12,000,000 shares of our common stock. Notwithstanding its legal form, our acquisition of PlayBOX UK has been accounted for as a reverse acquisition, since the acquisition resulted in the former shareholders of PlayBOX UK owning the majority of our issued and outstanding shares. Because Boyd Holdings Inc. (now PlayBOX (US) Inc.) was a newly incorporated company with nominal net non-monetary assets, the acquisition has been accounted for as an issuance of stock by PlayBOX UK accompanied by a recapitalization. Under the rules governing reverse acquisition accounting, the results of operations of PlayBOX (US) Inc. are included in our consolidated financial statements effective March 24, 2006. Our date of inception is the date of inception of PlayBOX UK, being August 21, 2003, and our financial statements are presented with reference to the date of inception of PlayBOX UK. Financial information relating to periods prior to March 24, 2006 is that of PlayBOX UK.
 
CRITICAL ACCOUNTING POLICIES
 
Development Stage Company
 
We are a development stage company as defined by Financial Accounting Standards No. 7. We are presently devoting all of our present efforts to establishing a new business. All losses accumulated since inception have been considered as part of our development stage activities.
  
Revenue Recognition
 
Revenues are recognized when all of the following criteria have been met under SAB No. 104, “Revenue Recognition in Financial Statements”: persuasive evidence of an agreement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured.
 
Revenue arises from the following sources: creation of web-based music interfaces; provision of hosting and bandwidth services; and revenue share services.
 
Revenues from the creation of web-based music interfaces come from set-up fees based on the number of tracks to be uploaded and the number of hours of development time to complete the interface and are recognized when all of the following SAB No. 104 criteria are met: a web-based interface development agreement is signed with an estimate of the total cost based on agreed upon specifications. Revenue from the development of web-based interfaces is recognized in accordance with the completed performance method. Under this method, revenue is recognized at the completion of the web-based interface as the service transaction taken as a whole can be deemed to have taken place on completion of the development. Collectability is reasonably assured as the Company receives the agreed set-up fee prior to allowing access to the web-based interface.
 
Revenues from the provision of hosting and bandwidth services come from a one time hosting set-up fee and monthly fees based on disk space and bandwidth to be provided and are recognized when all of the following SAB No. 104 criteria are met: a website hosting agreement is signed with an initial term of six months and from month to month thereafter until terminated by either party. Each agreement has a hosting price structure where prices can be determined.
 
Revenue from the one time set-up fee is deferred and recognized over the initial term of six months and revenue received from monthly fees is recognized at the end of the month, when hosting services, server bandwidth and customer support was made available to the client for the month. Collectability is reasonably assured as the Company receives a one time set-up fee prior to the provision of the services. Monthly fees are received in advance of each month, which is recorded as deferred revenue, and are recognized when the monthly service is rendered.
 
Revenues from the revenue share services element come from a set revenue share percentage of music download purchases, as set out in each customer’s agreement and are recognized when all of the following SAB No. 104 criteria are met: a distributor agreement is signed with initial and renewal terms determined on a case-by-case basis. Revenue is recognized when the minimum revenue share threshold of British Pounds Sterling (“GBP”) 100, every payment period, is achieved. If the revenue share is less than GBP 100, payments shall be carried over to the next due payment date. Collectability is reasonably assured as the Company collects its revenue share directly from the secure online payment system which it utilizes prior to transferring net revenues to the customer.
 
Foreign Currency Translations
 
Our functional currency is pounds sterling (“£”). Our reporting currency is the U.S. dollar. All transactions initiated in other currencies are re-measured into the functional currency as follows:
 
 
i)
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,
     
 
ii)
Non-monetary assets and liabilities, and equity at historical rates, and
     
 
iii)
Revenue and expense items at the average rate of exchange prevailing during the period.
 
Gains and losses on re-measurement are included in determining net income for the period.
 
Translation of balances from the functional currency into the reporting currency is conducted as follows:
 
 
ii)
Assets and liabilities at the rate of exchange in effect at the balance sheet date,
     
 
ii)
Equity at historical rates, and
     
 
iii)
Revenue and expense items at the average rate of exchange prevailing during the period.
 
Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss. Upon sale or liquidation of the net investment in the foreign entity the amount deferred will be recognized in income.
 
Results of Operations – Three and nine months ended June 30, 2008 and 2006
 
References to the discussion below to fiscal 2008 are to our current fiscal year which will end on September 30, 2008. References to fiscal 2007 and fiscal 2006 are to our fiscal years ended September 30, 2007 and 2006, respectively.
 
                           
Cumulative
  
                           
From
  
                           
Incorporation
  
   
For the Three
    
For the Three
    
For the Nine
    
For the Nine
    
August 21,2003
  
   
Months Ended
    
Months Ended
    
Months Ended
    
Months Ended
    
to
  
   
June 30, 2008
    
June 30, 2007
    
June 30, 2008
    
June 30, 2007
    
June 30, 2008
  
   
(Restated)
          
(Restated)
          
(Restated)
  
                               
Sales
   $ -     $ 149     $ -     $ 439     $ 1,364  
Cost of Sales
     -       -       -       -       777  
Gross Margin
     0       149       0       439       587  
General and Administrative Expenses
                                  
Accounting and auditing
     8,485       16,217       40,571       56,267       264,807  
Bank charges
     56       51       798       496       2,030  
Consulting and technical support (Note 3)
     3,973       30059       115,783       88,884       263,183  
Depreciation
     -       172       -       552       1,887  
Development
     -       -       199,540       -       228,692  
Filing fees
     1,449       57       2,969       2,532       8,226  
Intellectual property
     -       -       -       -       2,500,000  
Investor relations
     -       -       -       18,000       18,000  
Legal
     5,272       6,154       30,462       24,093       120,463  
Marketing and public relations
     7,513               7,513       -       38,838  
Office and miscellaneous
     3581       530       4,275       4,190       18,265  
Rent
     2,977       2,978       9,013       8,783       47,263  
Salaries and benefits
     24,702       99       54,042       11,645       211,311  
Transfer agent fees
     1,920       50       2,050       135       4,090  
Travel and entertainment
     474       9       474       865       4,038  
      60,402       56,376       467,491       216,442       3,731,094  
      (60,402 )     (56,227 )     (467,491 )     (216,003 )     (3,730,507 )
Loss from Operations
                                        
Other Income (Expense)
                                        
Foreign exchange (loss) gain
     (334 )     (7,138 )     2,585       (6,558 )     (6,817 )
Interest income (expense)
     108       13       108       21       842  
Net Loss
   $ (60,627 )   $ (63,352 )   $ (464,798 )   $ (222,540 )   $ (3,736,482 )
                                         
Loss per Share – Basic and Diluted
   $ 0.00     $ 0.00     $ (0.02 )   $ (0.01 )        
 
                                        
Weighted Average Shares Outstanding
     29,284,483       28,225,139       28,991,053       28,561,476          
 
                                  
                                         
Comprehensive Loss
                                        
Net Loss
     (60,627 )     (63,352 )     (464,798 )     (222,540 )     (3,736,482 )
Foreign currency translation adjustment
     (1,689 )     (1,084 )     224       4,875       (11,943 )
      (62,316 )     (64,436 )     (464,574 )     (217,665 )     (3,748,425 )
                                         
Revenue
 
We achieved our initial sales from the PlayBOX online music application in fiscal 2005. We achieved further initial sales in fiscal 2006 and 2007. Our sales continue to be insignificant in terms of our overall operating expenses. We did not generate any sales during the first nine months of fiscal 2008 compared to $149 generated during the first nine month period of fiscal 2007. Our sales have been insignificant in terms of our overall operating expenses. There is no assurance that we will raise the necessary financing to enable us to resume full business operations achieve significant revenues.
 
We are presently not earning any revenues and anticipate that we will not earn revenues until such time as we are able to complete an acquisition, of which there is no assurance.
 
Accounting and Auditing
 
Accounting and auditing expenses are attributable to the preparation and audit of our financial statements.
 
Our accounting and auditing expenses were $40,571 during the first nine months of fiscal 2008 as compared to $56,267 during the first nine months of fiscal 2007. Our accounting and auditing expenses were $8,485 during the third quarter of fiscal 2008 as compared to $16,217 during the third quarter of fiscal 2007. These fees are attributable mainly to auditing, accounting and regulatory compliance expenses.
 
Consulting and Technical Support
 
Our consulting and technical support expenses were $115,783 during the first nine months of fiscal 2008 as compared to $88,884 during the first nine months of fiscal 2007. Our consulting and technical support expenses were $3,973 during the third quarter of fiscal 2008 as compared to $30,059 during the third quarter of fiscal 2007. Consulting expenses during the third quarter of fiscal 2008 were attributable to our engaging consultants to assist us in connection with the Delta Music acquisition transaction and in the process of raising funds to enable us to complete this acquisition.
 
Development Fees
 
Our development fees were $199,540 during the first nine months of fiscal 2008 as compared to $nil during the first six months of fiscal 2007. These development fees were attributable to a commitment to pay GBP 100,000 to fund certain expenses incurred by the sellers in our acquisition of U.K based Delta Music Limited (“Delta Music”).
Legal
 
Our legal expenses are attributable to legal fees paid to our legal counsel in connection with our statutory obligations as a reporting company under the Exchange Act including the preparations and filings of our quarterly and annual reports with the SEC.
 
Legal expenses were $30,462 during the first nine months of fiscal 2008 as compared to $24,093 during the first nine months of fiscal 2007. Our legal expenses were $5,272 during the third quarter of fiscal 2008 as compared to $6,154 during the third quarter of fiscal 2007.
 
Rent
 
Rent expense was attributable to amounts paid on account of our rent of shared office premises in London, England. Our rent expense increased slightly in the first half of fiscal 2008 as compared to the first half of fiscal 2007 as a result of a decrease in the foreign exchange rate of the U.S. dollar in terms of the Great Britain pound.
 
Salaries and Wages
 
By employment agreement dated August 15, 2003 and amended July 20, 2004, the Company agreed to pay to the Managing Director $38,450 (GBP24,000) per annum plus 234,785 shares every three months to a maximum of 1,408,720 common shares. When the Company accepted a take-over offer, the balance of the 1,408,720 shares were issued. During the nine months ended June 30, 2008, $Nil was paid to the Managing Director in cash. The Managing Director waived his annual salary for the nine months ended June 30, 2008.
 
Loss from Operations and Net Loss
 
Our loss from operations increased to $467,491 for the first nine months of fiscal 2008 as compared to $216,003 for the first nine months of fiscal 2007. Our loss from operations increased to $60,402 for the third quarter of fiscal 2008 as compared to a loss of $56,277 for the third quarter of fiscal 2007.
 
Liquidity And Capital Resources
 
As at June 30, 2008, we had cash of $13,643 and a working capital deficit of $611,551 and as at September 30, 2007, we had cash of $5,909 and a working capital deficit of $330,853.
 
Plan of Operations
 
We estimate that our total expenditures over the next twelve months will be approximately $375,000, as outlined above under the heading “Plan of Operations”. We will not be able to complete an acquisition or undertake our plan of operations over the next twelve months without our obtaining additional financing. We presently require immediate financing in order that we have the cash necessary for us to continue our operations. In view of our working capital deficit, we anticipate that we will require additional financing in the approximate amount of $800,000 in order to enable us to sustain our operations for the next twelve months.
 
Cash used in Operating Activities
 
We used cash of $250,765 in operating activities during the first nine month period of fiscal 2008 compared to $210,916 during the nine month period of fiscal 2007. Since inception, we have used cash of $940,384 in operating activities. We have applied cash generated from financing activities to fund cash used in operating activities.
 
Cash from Investing Activities
 
We did not use any cash in investing activities during the first nine month period of fiscal 2008 nor during the first nine month period of fiscal 2007.
 
Cash from Financing Activities
 
We generated cash of $258,275 from financing activities during the first nine month period of fiscal 2008 compared to cash of $195,245 generated from financing activities during the first nine month period of fiscal 2007.
 
Going Concern
 
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive business activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
 
Future Financings
 
We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders.
 
We believe that debt financing will not be an alternative for funding of our planned activities because we do not have tangible assets to secure any debt financing.
 
Off-Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
Not applicable.
 
Item 4.
Controls and Procedures
 
We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We conducted an evaluation (the "Evaluation"), under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls") as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. The evaluation of our disclosure controls and procedures included a review of the disclosure controls’ and procedures’ objectives, design, implementation and the effect of the controls and procedures on the information generated for use in this report. In the course of our evaluation, we sought to identify data errors, control problems or acts of fraud and to confirm the appropriate corrective actions, if any, including process improvements, were being undertaken. Our Chief Executive Officer/Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were ineffective and not operating at the reasonable assurance level.

Specifically, we have noted the following material weaknesses and significant deficiencies in our internal controls over financial reporting and disclosure:

·  
we do not have sufficient segregation of duties;
·  
we do not have sufficient documentation for accounting or business transactions;
·  
we have noted material weaknesses in the authorization and posting of general ledger transactions, particularly those related to accruing liabilities resulting from contractual commitments; and
·  
we do not have an Audit Committee;

It is our responsibility and that of our management to identify any deficiencies in internal controls over financial reporting. We discovered certain deficiencies in our internal control over financial reports, which resulted in the restatement of our balance sheets and our statements of operations at March 31, 2008 and June 30, 2008 to properly reflect an obligation.

As a result of the restatements of our financial statements, we have determined that such significant deficiency did rise to the level of a material weakness in our internal control over financial reporting. The restatement was undertaken to properly reflect an obligation after further consultation with our independent auditors.

Moreover, we have implemented measures as part of our internal controls to determine and ensure that information required to be disclosed in reports filed under the exchange Act are recorded, processed, summarized and reported within the time periods specified in the rules and forms including, but not limited to, the following: (i) documentation of processes, performing testing and reviewing our internal control over financial reporting in connection with our assessment under Section 404 of the Sarbanes-Oxley Act; (ii) evaluation and implementation of improvements to our accounting and management information systems; and (iii) development and implementation of a remediation plan to address any perceived deficiencies identified in our internal control over financial reporting. The costs of these additional measures did not have a material impact on our future results or operations liquidity.

PART II – OTHER INFORMATION
 
Item 1.
Legal Proceedings
 
We currently are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.
 
Item 1A.
Risk Factors
 
Not required as we are a “smaller reporting company”, within the meaning of the Securities Exchange Act of 1934.
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
We did not complete any sales of securities without registration under the Securities Act of 1933 during the three months ended June 30, 2008.
 
Item 3.
Defaults Upon Senior Securities
 
None.
 
Item 4.
Submission of Matters to a Vote of Securities Holders
 
No matters were submitted to our security holders for a vote during the three months ended June 30, 2008.
 
Item 5.
Other Information
 
None
 
Item 6.
Exhibits
 
The following exhibits are included with this Quarterly Report on Form 10-Q:
 
 
    
Exhibit Number
  
Description of Exhibit
 31.1(7)
  
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2(7)
  
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1(7)
  
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
SIGNATURES
 
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
PLAYBOX (US) INC.
  
       
       
 
By:
/s/ Gideon Jung
  
   
Gideon Jung
  
   
Chief Executive Officer and Chief Financial Officer
  
   
Date: May 11, 2009