Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of Game Face Gaming, Inc. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Plan of Operation

Since the change of control and the consummation of the transactions contemplated by the Asset Purchase Agreement, we are now in the business of operating a reality gaming social network. We plan to offer a non wagering internet gaming website by incorporating proprietary technologies that will provide players with streaming video, audio and messaging capabilities. We believe that these enhancements will dramatically enhance the players' online gaming experiences. These games include poker, chess, backgammon and others. We believe that these enhancements will dramatically enhance players' online gaming experiences. Management is not aware of any online games sites which offer players the ability to see one another and speak live during game play.

We will require additional capital to develop and expand our gaming platform from beta testing to a full launch. We estimate that within the next 12 months we will need approximately $3,600,000 to fund its expenses over the next twelve months. On a monthly basis, if the Company had these funds it would utilize, among other uses, approximately $125,000 for advertising and marketing, $100,000 for salaries and office expenses and $60,000 for software development. There can be no assurance that additional capital will be available to the Company. The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources, other than the agreement with CDS to lend the Company up to $500,000, of which $85,000 has been borrowed as of February 27, 2012.

Current cash on hand is insufficient for all of the Company's commitments for the next 12 months. We anticipate that the additional funding that we require will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund additional development and expansion of our gaming platform from beta testing to a full launch. We cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. We do not currently have any arrangements in place for any future equity financing.

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If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures or continue to operate.

We do not anticipate any equipment purchases in the twelve months ending December 31, 2012.

Results of Operations

Years Ended December 31, 2011 and 2010

We had $18,325 in cash and cash equivalent as of December 31, 2011, and have experienced losses since inception. We recognized $105,000 in income in 2011 from the sale of the license agreements. We did not generate any revenues from operations during the years ended December 31, 2011 and 2010. Expenses during the year ended December 31, 2010 were $22,837 for a net loss of $22,837 compared to expenses of $743,844 for a net loss of $971,772 for the year ended December 31, 2011. Expenses for the year ended December 31, 2010 were primarily the result of professional and filing fees associated with filing our registration statements, complying with our reporting requirements and general and administrative expenses, while expenses for the year ended December 31, 2011 consisted primarily of general and administrative expenses ($609,607), professional fees ($79,512) and advertising expenses ($52,368) due to expenditures necessary as the Company prepares to launch its first product offering. We have incurred a cumulative net loss of $998,188 for the period December 24, 2009 (inception) to December 31, 2011.

Liquidity and Capital Resources

Our balance sheet as of December 31, 2011 reflects that the Company has $18,325 in cash and cash equivalents. In addition, the Company had a working capital deficiency of $852,428 and stockholders' deficiency of $717,358 at December 31, 2011.

We currently have a total of $826,000 owed to eight entities and individuals, of which $466,000 are due upon demand and $360,000 have specific due dates. Of those loans, 4 are due and payable April 15, 2012 aggregating $275,000 of principal and $85,000 in principal is due on August 27, 2012. During the year ended December 31, 2011 we repaid an aggregate of $195,000 of indebtness. Principal indebtedness owed to two note holders aggregating $75,000 and accrued interest thereon may be converted at the option of the noteholders to shares of common stock by the greater of $0.25 per share or 50% of the average closing bid price for the 10 trading days ending 5 days before the conversion date. Principal indebtedness owed to a note holder aggregating $200,000 and accrued interest thereon may be converted at the option of the noteholder to shares by the greater of $0.05 per share of 50% of the average closing price for 10 days prior to conversion.

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Going Concern Consideration

The Company is a development stage company. For the period December 24, 2009 (date of inception) through December 31, 2011, the Company has had a net loss of $998,188. Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to begin operations and to achieve profitability. See Note 6 of our financial statements.

The Company believes that it will need approximately $3,600,000 to fund its expenses over the next twelve months. On a monthly basis, if the Company had these funds it would utilize, among other uses, approximately $125,000 for advertising and marketing, $100,000 for salaries and office expenses and $60,000 for software development. There can be no assurance that additional capital will be available to the Company. The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources, other than the agreement with CDS to lend the Company up to $500,000, of which $85,000 has been borrowed as of February 27, 2012.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations or liquidity.