Asia Atlantic Resources (AARS) 10-Q 2009 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

_________________

(Mark One)

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

For the Quarterly Period Ended October 31, 2008

or

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

For the Transition Period from                     to                     

Commission File Number 333-146572

ASIA ATLANTIC RESOURCES

(Exact name of registrant as specified in its charter)

Nevada	00-0000000
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

1543 Bayview Avenue, Suite 409

Toronto, Ontario, Canada  M4G 3B5

(Address of principal executive offices and zip code)

113 Warrick Street, Coquitlam, British Columbia, Canada V3K 5LC

(Former name, former address and former fiscal year, if changed since last report

Registrant’s telephone number, including area code: (212) 231-8171

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

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

Large accelerated filer  ¨ Accelerated filer  ¨

Non-accelerated filer  ¨ (Do not check if smaller reporting company) Smaller reporting company  x

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

The number of shares of the registrant’s common stock outstanding as of December 12, 2008 was 11,600,000.

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PART I

Item 1.  Financial Statements.

ASIA ATLANTIC RESOURCES.

(An Exploration Stage Company)

BALANCE SHEETS

October 31, 2008 and April 30, 2008

(Unaudited)

				October 31,		April 30,
ASSETS				2008		2008
Current
	Cash and cash equivalents		$	7,294	$	-
	Notes receivable			-		9,532
Total Assets			$	7,294	$	9,532
LIABILITIES
Current
	Accounts payable and accrued liabilities		$	2,900	$	5,113
	Bank indebtedness			-		79
	Notes payable – Note 6			6,500		-
Total Liabilities				9,400		5,192
STOCKHOLDERS’ EQUITY (DEFICIT)
Capital Stock  - Note 5
	Authorized:
		75,000,000 common shares with a par value of $.001
	Issued and outstanding:
		7,600,000 common shares (April 30, 2008-7,600,000)		7,600		7,600
Additional paid in capital				22,400		22,400
Accumulated deficit				(32,106)		(25,660)
Total Stockholders’ Equity (Deficit)				(2,106)		4,340
Total Liabilities and Stockholders’ Equity			$	7,294	$	9,532

Going concern – Note 2

SEE ACCOMPANYING NOTES

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ASIA ATLANTIC RESOURCES

(An Exploration Stage Company)

STATEMENT OF OPERATIONS

For the three and six months ended October 31, 2008 and October 31, 2007 and

for the period January 22, 2007 (Date of Inception) to October 31, 2008

										Accumulated for
		For the three months				For the six months				from January 22, 2007
		ended October 31,				ended October 31,				(Date of Inception) to
			2008		2007		2008		2007		October 31, 2008
Expenses
	Geological, mineral and prospect costs	$              -		$               -		$                 -		$               -		$                      8,000
	General and administrative	1,475		198		1,460		262		4,022
	Incorporation costs	-		-		-		-		441
	Professional Fees	3,986		3,882		4,986		7,437		19,757
Operating loss for the period		(5,461)		(4,080)		(6,446)		(7,699)		(32,220)
Interest revenue		-		-		-		-		114
Net Loss for the Period		$    (5,461)		$    (4,080)		$      (6,446)		$    (7,699)		$                 (32,106)
Basic and fully diluted net    loss per common share		$      (0.00)		$      (0.00)		$       (0.00)		$     (0.00)
Weighted average common    shares outstanding		7,600,000		7,600,000		7,600,000		7,600,000

SEE ACCOMPANYING NOTES

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ASIA ATLANTIC RESOURCES

(An Exploration Stage Company)

STATEMENT OF CASH FLOWS

For the six months ended October 31, 2008 and October 31, 2007

 for the period January 22, 2007 (Date of Inception) to October 31, 2008

		For the six months ended				From January 22, 2007
		October 31,				(Date of Inception) to
			2008		2007		October 31, 2008
Operating Activities
	Net loss for the period	$           (6,446)		$           (7,699)		$               (32,106)
Cash provided by (used in) changes    in operating assets and liabilities
	Notes receivable	9,532		-		-
	Accounts payable and accrued liabilities	(2,213)		626		2,900
Net cash provided by (used in)    operating Activities		873		(7,073)		(29,206)
Financing Activities
	Notes payable	6,500		-		6,500
	Common stock issued for cash	-		-		30,000
		6,500		-		36,500
Increase in cash and cash  equivalents during the period		7,373		(7,073)		7,294
Cash and cash equivalents,   beginning of the period		(79)		21,869		-
Cash and cash equivalents,   end of the period		$              7,294		$             14,796		$                   7,294
Supplemented disclosure of cash flow   information:
	Cash paid for:
	Interest	$                       -		$                        -		$                          -
	Income taxes	$                       -		$                        -		$                          -

SEE ACCOMPANYING NOTES

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ASIA ATLANTIC RESOURCES

(An Exploration Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

for the period from January 22, 2007 (Date of Inception) to October 31, 2008

	Common Stock				Additional Paid-in Capital		Accumulated Deficit
	Shares		Amount						Total
Balance, January 22, 2007	-	$	-	$	-	$	-	$	-
Shares issued for cash at $.001	2,000,000		2,000		-		-		2,000
Shares issued for cash at $.005	5,600,000		5,600		22,400		-		28,000
Net loss for the period	-		-		-		(12,072)		(12,072)
Balance, April 30, 2007	7,600,000	$	7,600	$	22,400	$	(12,072)	$	17,928
Net loss for the period	-		-		-		(13,588)		(13,588)
Balance, April 30, 2008	7,600,000	$	7,600	$	22,400	$	(25,660)	$	4,340
Net loss for the period	-		-		-		(6,446)		(6,446)
Balance, October 31, 2008	7,600,000	$	7,600	$	22,400	$	(32,106)	$	(2,106)

SEE ACCOMPANYING NOTES

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ASIA ATLANTIC RESOURCES

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

October 31, 2008

Note 1

Interim Reporting

While the information presented in the accompanying interim three months interim financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America.  These interim financial statements follow the same accounting policies and methods of their application as the Company’s April 30, 2008 annual financial statements.  All adjustments are of a normal recurring nature.  It is suggested that these interim financial statements be read in conjunction with the Company’s April 30, 2008 annual financial statements.

Operating results for the six months ended October 31, 2008 are not necessarily indicative of the results that can be expected for the year ended April 30, 2009.

Note 2

Nature and Continuance of Operations

The Company was incorporated in the State of Nevada on January 22, 2007 and is in the exploration stage.  The Company has acquired a mineral property located in the Province of British Columbia, Canada, and has not yet determined whether this property contains reserves that are economically recoverable.  The recoverability of amounts from the property will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy expenditure requirements and to complete the development of the property and upon future profitable production or proceeds from the sale thereof..

The Company has adopted April 30 as its fiscal year end.

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.  Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At October 31, 2008, the Company had not yet achieved profitable operations and has accumulated losses of $32,106 since its inception. The Company expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.  The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  Management anticipates that additional funding will be in the form of equity financing from the sale of common stock.  Management may also seek to obtain short-term loans from the directors of the Company.  There are no current arrangements in place for equity funding or short-term loans.

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Note 3

Summary of Significant Accounting Policies

Development Stage Company

The Company is a development stage company as defined in the Statements of Financial Accounting Standards (“SFAS”) No. 7.  The Company is still in the developmental stage, devoting substantially all of its present efforts to establish its business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

Financial Instruments

The carrying values of cash and cash equivalents, accounts payable and accrued liabilities and due to/from related parties approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Revenue Recognition

The Company recognizes revenue when minerals are delivered to the purchaser.

Mineral Property Costs

Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified.  From that time forward, the Company will capitalize all costs to the extent that future cash flows from mineral reserves equal or exceed the costs deferred.  The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production.  Costs related to site restoration programs will be accrued over the life of the project.  To date, the Company has not established any proven reserves on its mineral property.

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated.  Generally, the timing of these accruals coincides with the earlier of:

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i)

completion of a feasibility study; or

ii)

the Company’s commitment to a plan of action based on the then known facts.

Basic and Diluted Net Income (Loss) Per Share

The Company computes net loss per share in accordance with SFAS No. 128, "Earnings Per Share".  SFAS 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method.  In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential common shares if their effect is anti dilutive.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Cash and Currency Risks

The Company incurs expenditures in Canadian and U.S. dollars. Consequently, some assets and liabilities are exposed to Canadian dollar foreign currency fluctuations.  As at October 31, 2008, there were no amounts denominated in Canadian dollars included in the financial statements. The Company has cash balances at well-known financial institutions.  Balances in U.S. dollars at Canadian institutions are not protected by insurance and are therefore subject to deposit risk.  As at October 31, 2008 all cash and equivalents represented cash at Canadian financial institutions.

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities – Deferral of the Effective Date of FASB No. 133”, SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities”, and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”, which is effective for the Company as of its inception.  These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

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If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.  The Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes.

Foreign Currency Translations

The Company's functional currency is US dollars. Foreign currency balances are translated into US dollars as follows:

Monetary assets and liabilities are translated at the period-end exchange rate. Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the period-end exchange rate. Revenue and expense items are translated at the average exchange rate for the period. Foreign exchange gains and losses in the period are included in operations.

Income Taxes

The Company follows SFAS No. 109, “Accounting for Income Taxes” which requires the use of the asset and liability method of accounting for income taxes.  Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled

Recent Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date.   Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

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Note 4

Mineral Property

On February 9, 2007, the Company purchased a mineral claim in the Province of British Columbia for $8,000.  The claim has expired on September 17, 2008.

Note 5

Capital Stock

On February 12,, 2007, the Company issued 2,000,000 common shares for $2,000 in cash to the sole director.

On February 15, 2007, the Company issued 5,600,000 common shares for $28,000 in cash.

There are no shares subject to options, warrants or other agreements as at October 31, 2008.

Note 6

Notes Payable

On August 19, 2008, the Company entered into a note payable in the amount of $6,500 that is non-interest bearing and due on demand from an accredited investor.  Each $0.005 of the principal balance outstanding of the note may be converted into one common stock of the Company.

Note 7

Subsequent Events

Subsequent to the period ended October 31, 2008, the Company sold 4,000,000 common shares at $0.025 per share for total proceeds of $100,000.

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Forward-Looking Statements

This Form 10-Q includes "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

All statements other than historical facts included in this Form, including without limitation, statements under "Plan of Operation", regarding our financial position, business strategy, and plans and objectives of management for the future operations, are forward-looking statements.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, market conditions, competition and the ability to successfully complete financing.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Plan of Operation

Our plan of operation for the 12-month period from the date of this report includes:

• We are in the process of seeking a new business opportunity.  We will seek to enter into a business combination or acquisition of assets by which we will become engaged in an active business venture.  There are no present arrangements for such a business combination or acquisition of assets;

• we are engaged in preliminary negotiations to acquire an interest in a mineral prospect located in the Republic of Panama.  This property has had historical operations for the production of gold.  There are no present understandings or agreements with respect to any such acquisition; nor do we presently have sufficient information to form any definitive opinion as to the merits of valuation of the property.  If these negotiations result in an agreement with respect to the acquisition of the property, it will undoubtedly result in our having to acquire additional financing to complete the acquisition and conduct necessary exploration work, and if justified, development work on the property; and

• while our acquisition of $100,000 (USD) from the private placement of 4,000,000 shares of common stock in November of 2008 provided us with capital to cover our present administrative expenses, we will have to raise significant amounts of additional capital to finance any mineral acquisitions and/or exploration programs.  We have no present arrangement for any capital acquisition, and there is no assurance any additional capital will become available.

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Results of Operations for the Three-Month Period Ended October 31, 2008

We had no revenues for the three-month periods ended October 31, 2008 or 2007.  We have no present source of revenue and there is little likelihood we will develop any revenue source during the next 12 months.

We incurred expenses in the amount of $5,461 for the three-month period ended October 31, 2008 as compared with $4,080 for the three-month period ended October 31, 2007.  The increase is due to an increase in administrative expenses for the 2008 period.  All these expenses were for administrative and professional fees.

At October 31, 2008, we had total assets of $7,294, consisting of cash and total liabilities of $9,400, consisting of accounts payable, accrued liabilities and a note payable of $6,500.

We have not attained any source of revenue or profitable operations.  We are dependent upon obtaining capital financing to pay our administrative costs and pursue any mineral acquisition and/or exploration activities.  For these reasons, our auditors believe that there is substantial doubt we will be able to continue as a going concern.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

None.

Item 4T.  Controls and Procedures.

Evaluation of Disclosure Controls

We evaluated the effectiveness of our disclosure controls and procedures as of October 31, 2008. This evaluation was conducted by Patricia Cooke, our chief executive officer and our principal accounting officer.

Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.

Limitations on the Effective of Controls

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

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Conclusions

Based upon their evaluation of our controls, our chief executive officer and principal accounting officer has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.

PART II

Item 1.  Legal Proceedings.

None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

None, except as report in Form 8-K, for November 7, 2008.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Submission of Matters to a Vote of Security Holders.

On November 13, 2008, the shareholders of the Company approved a change of our name from Asia Atlantic Resources to DMG International, Inc., by an Action by Majority Consent which was executed by the holders of 6,000,000 of the 11,600,000 shares then outstanding.  On December 4, 2008, the shareholders approved a change of our name back to Asia Atlantic Resources by an Action by Majority Written Consent which was executed by the holders of 6,000,000 of our 11,600,000 shares then outstanding.

Item 5.  Other Information.

The Company’s Board of Directors does not presently have a standing nominating committee or any committee performing similar functions since the Board presently consists of only one member.

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Item 6.  Exhibits.

Exhibit No.	Description of Exhibits
31.1	Officers Certifications under Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.*

____________________

*

Filed herewith.

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SIGNATURES

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

		ASIA ATLANTIC RESOURCES
Date:	December 12, 2008	By:	/s/ Patricia Cooke
			PATRICIA COOKE
			President, Chief Executive Officer and Director

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